Dangerous degree of arrogance backfires
You know it’s bad when you start to feel sorry for the person on stage. Hal Bailey must have wondered what the hell happened. Coming to DOMAINfest Hollywood as the man in charge of AdSense for Domains, Hal was here to tell the assembled masses that Google was going to allow them to make money while sitting on their arses.
This incredible gift was going to come with some rules though: domainers would have to clean up their game. They would have to post original – i.e. not stolen – content on all the domains they owned, and they would have to provide a valuable informational service to their fellow Netizens. If they did that, they would find Google warm in their embrace; if they did not then Google would not help them and they would be out in the cold.
You can imagine Hal planning out this gentle lecture in his head before taking the stage with fellow Google employee Matt Parry: tough love but they would thank him for it later. It didn’t quite pan out like that.
Instead, the one-hour “Google Perspective: Winning over the Advertiser and Optimizing Site Performance through Analytics” was a lesson that Google executives would do well to learn from. Customers are customers and not just grateful users of services – no matter how much market share you have.
The whole thing started badly when Matt Parry used his presentation on Google’s Analytics tool as no more than an advertisement for the service, running through a series of slides that showed its features and telling everyone why they should use it. The problem was everyone in the room was already using Analytics, alongside one of the many other tools out there that help you find out who is visiting your websites and what they do there (Mint, Performancing, Quantcast, SlimStat, and so on).
He did slightly better while promoting another service – Google’s Website Optimizer – by at least giving some real-world indications for why this might be useful. But he had horribly misjudged the audience. The people in the room make a living from following, gathering and analyzing traffic and design on their multitude of websites. If they weren’t good at it they would never have paid the $995 conference fee. So why was Google taking up their valuable time telling them that if a webpage looks nice and the links are friendly that more people will click on them – and that will make them more money. Was this guy serious? Is that the best Google can offer?
Parry sat down and Hal Bailey – the man who leads the partner management team for Google AdSense for Domains – proceeded to leap straight into a snake pit. In the US, the expression used most often for describing people that have been brainwashed by their own corporate hype is “drinking the Kool-Aid” (Wikipedia will tell you more).
Well as Hal got on stage and told his audience that to his mind cloud computing is the way forward (“If I was a student, I would be thinking to myself ‘why spend $600 on software when you can have free office tools online?’”) you could practically see the Kool-Aid dripping out his ears.
AdSense, he told us like only a true believer could, is a “very powerful revolution for the world”. It has brought users and advertisers and domain property owners together. Online advertising has changed people’s lives – and Google was to thank for it. “People can make a living doing what they love,” Hal revealed. “Five years ago that would have been impossible.”
Welcome to Google World™
Of course in many respects, Hal is right, Google’s AdSense program was a leap ahead of the previous ad-serving services and so it still retains a first-mover advantage. But in Google World™, AdSense didn’t build on years of innovation from a range of companies and industries (the porn industry of course was the true innovator). No, instead online advertising is something that Google created. Sort of like how God created Man.
With this awesome power comes responsibility, so Hal embarked on his lecture: “Google’s role in domain world is trying to educate people about quality – to provide a positive user experience to users.” What Google was looking for was “stability and integrity”. Not only that but Google has a vision. It is “providing the world’s information”. And in case you were wondering how grand this vision was, Hal explains: “And when we say the world, we truly mean the world – not just the United States.”
Hal then informed the room how to create websites that please the Google God. “If there’s something you’re excited about and want to teach everyone about it, we encourage everyone to do that. But if you are planning on scrapping content – with no end value to end users – that is probably waste a lot of time and effort for not a lot of return.”
We were also let in on the Google secret for how it values websites: “If have a growing number of people visiting your site, you’re probably providing value.”
And then it was back to how great Google was and how it was helping domainers to help themselves. “We have helped improve the domain space as a whole. Years ago domains were seen as a bad place to be. So we provide value to the Internet as a whole and we expect to continue to go down that path.” And Hal leaned back to enable the lucky benefactors of Google’s patronage to ask questions of its wisdom.
Clearly these words and this Google God vision is a very popular concept in Mountain View. The problem is that it is also nonsense. And arrogant, self-serving nonsense at that. Google provides a service and it provides that service for a fee. And, as Hal was just about to find out, that means that people aren’t quite ready to accept the world as painted by the Big G.
“I wonder if you could tell us what the revenue cut is that Google takes from Adsense?” was the first question posed from the floor. “I’m afraid that revenue share is not disclosed,” was Hal’s response to a few snorts in the room.
“What are Google’s plan for the domain channel?” asked the next speaker. Hal couldn’t speak from AFS (AdSense for search presumably) because that was a different department but in terms of AdSense for Domains, well that was proprietary information.
Will Google add all the books it is scanning to the Google main search and “flood the Google database”? (From the domainers’ perspective this would like the sudden arrival of millions of high-level websites competing with their own). Hal’s not going to take that one either. “Book search is a separate product at the moment so I don’t know about that.”
With Hal giving a series of non-answers, the questions started getting a little more aggressive. “You say that you want transparency for the advertisers, but when you are asked for any information, you say it is proprietary. Shouldn’t people know what you are making?”
Hal had nowhere to go. “Well, that’s a different product and a different group. But all of them have a non-disclosed web share. But I am pretty sure that that share has not been changing.”
“People should know!” exclaimed the speaker to applause in the room.
The next question: is Google aware of how much money different domains make? Another risky pass. “There are confidentiality agreements with respect to that so I can’t go into details about what information we do and do not share with partners.”
The questioner asks again: can Google tell how much a domain making? “We don’t talk about that,” Hal insisted.
So, to recap, Google has so far told the people that it makes very large sums of revenue from that:
a) They have to change their behaviour if Google is going to allow them to give it money
b) They don’t have a right to know how much Google is making from their work
c) They aren’t allowed to know any aspect of the information that Google has built up from code running on their websites
This prompted the next question: “Would it motivate Google to be a little more open if all the domainers boycotted them?”
It was at this point that Hal’s realized that something had gone very badly wrong. To his credit, he tried to joke his way out of it. “Er, yes, we did a calculation and it would take 16 days.” He got some laughter and leapt in fast. “We’re here to support the domain industry. A year ago, advertisers were calling us saying ‘get us off the domains’ – so we put a lot of effort into working with community.”
Hal then also remembered a piece of Google messaging designed to persuade Congress that it doesn’t need to investigate the company for abuse of market power: “You are more than welcome to try out other programs.”
The next questioner then tried to throw Hal a lifeline: “It is quite clear that you don’t want to say anything about transparency – but do you think the market will be more transparent in future?”
Hal was too flustered to see the route out though. “For our large partners that we have contracts with, they know what cut they receive. But for online, for different compartments, I don’t think they will change that.” The questioner tried again: Google for Domains for example is a step forward for more transparency. “I don’t know what plans are there,” Hal responded desperate to get off the stage.
And there it ended, much to Hal’s relief and to Matt Parry’s, who had sat there praying that no one asked him any questions. The session was billed as “Google executives share their knowledge of the evolving analytical tools available.” A more accurate description would have been “Google executives get roasted by the domainer community for their dangerous arrogance.”
That won’t be the end though: we can expect many more of these confrontations until Google lifts the lid of secrecy of its main revenue source. When it does reveal its percentage cut on online advertising, it already knows that every single AdSense competitor will advertise madly that they charge less, and as a result a huge slice of Google’s market share will vanish overnight.
Until then, Google will just have to calculate how much the domainer community’s anger is worth to them.