Google and the Atomic Fly Swatter

Originally published in ruminations on Friday, July 28, 2006, 02:03 PM

Once again the search engine giant is causing an uproar. This time it’s webmasters who have been happily bidding on adwords phrases who are feeling the pain.

Seems like Google figured out that some publishers were using a famous stock market strategy (buy low, sell high) for their adsense accounts. In the trade, it’s called arbitrage. In the adsense/adwords area it works like this:

Bid on adwords phrases that will let you list your link for, say, $0.15 per click. Make your pages with some content, that fetches high returns per click (say $0.50), and place an adsense unit on it.

The surfer sees your inviting ad in the results pages, clicks thru to your site, reads the content, then clicks on the adsense unit. Result, $0.35 profit.

Well, Google doesn’t like that sort of thing (anymore). The Google solution was to use one of their high caliber algo’s to sort thru all the pages that are linked from an adwords campaign. The robot decides if the content is worthy or not. If it is not worthy, then the adwords bids for the terms used on the offending ads are raised right up thru the stratosphere! $10.00 or more per click.

This is a highly effective method of eliminating the arbitrage problem. It also eliminates a whole slew of otherwise worthy sites that aren’t involved in arbitrage.

Merchants, affiliates, bloggers, and lots of other categories of webmasters who previously used adwords to drive traffic to their sites are now out in the cold.

So, you say, what could Google have done differently and still achieved the expected results?

Well it seems pretty clear to me. Five or six lines of code in the application that redirects the surfer to the adsense site would do it. And, there wouldn’t have been any harm done to the innocents.

Here’s what I mean (in my kind of psuedo code): Add these lines to the application.
if search.click == adwords.ad
and destination.adwords.ad == adsense.units
show.adsense.psa_ads
else exit()

The effect of those simple lines of code would be that any webmaster who bid on adwords phrases would only have Public Service Ads shown on their adsense ready destination website.

End of problem. No publisher will be willing to bid on adwords phrases when they will get absolutely no return. No legitimate sites are penalized. Problem solved.

Google instead used what I’m going to call their “Atomic Fly Swatter”. The problem was that there was a fly in their listings. They dropped a nuke on the fly. No more fly. End of problem.

Collateral damage was huge. But no more fly.

Wise up Google. Fire four or five hundred of your high-dollar PhD’s and hire a dozen or so hackers that have some common sense. Things will be a lot better if you do.

!dink