Mario Fantoni's Blog

Google needs some ad sense

Google is secretive. This started as a deliberate marketing mystique, but endures today more as a really annoying company habit. Google folks don't understand why the rest of us have a problem with this, but then Google folks aren't like you and me. The result of this secrecy and Google's "almighty algorithm" mentality is that the company makes changes -- and mistakes -- without informing its customers or even doing all that much to correct the problems. It's all just beta code, after all. But the business part is real, as is the money that some people have lost because of Google's poor communication skills combined, frankly, with poor follow-through.

First there is click fraud. Google makes its money when people click on Google ads, but some of those clicks are fraudulent -- are not honestly intended to gain information or to buy products. Click fraud generally comes in two varieties that I'll call "buy" and "sell." An example of buy-side click fraud would be my little sister religiously clicking on every Google ad on this page (What? We have no Google ads?) in the mistaken belief that doing so would make me some money. It is mass clicking by a single person without an intention to actually buy or even to gain information. Sell-side click fraud would be one advertiser clicking on the ads of a competitor with the intention of costing that competitor money without increasing their sales. Both types of click fraud ought to be detectable, and in fact, Google says it already detects the 10 percent or so of clicks that are fraudulent (Business 2.0 magazine says it is more like 30 percent), and adjusts the bill before the advertiser even knows what is happening.

But not all click fraud is detected automatically. It is one thing to notice the same IP address being used to click 30 ads in three seconds (that is obviously fraud), but quite another if the clicks are spread out or come from what appear to be a variety of users. There, too, Google pledges to make things right, though it may take some time -- too much time, I think.

I was a victim of click fraud, which in this case is simply defined as my Google AdWords bill climbing from $250 one month to $4,000 the next with no change in the campaign or increase in sales. Mario contacted Google, which, after an "investigation," decided that I was, indeed, a victim of click fraud. Good for Google! But that was seven weeks ago and I ammy still waiting my credit card to be reimbursed for $3,750. Google has yet to explain why it is taking so long for me to get my money back. For that matter, Google has yet to actually say that I will GET my money back. They are still "investigating," which could mean anything because the company will not explain what it means.

It all comes down to the AdWords algorithm and its intent, which isn't to help customers, but to simply maximize profit for Google.

Google: An advertising slot machine

Like most people in business, I use Google AdWords. A month or so ago I started to see that Google was asking me to pay more and more money for my keywords every month. Initially I was paying a dollar to be on the first position, however, on the following week, I was on the second position. Soon after I discovered I had to pay almost five dollars to be at the top. Surprised, I started to test the system deeply. Then I realized that no matter what I did my position would be changing all the time.

Next, I gathered a lot of information and gave it to Dr. Genichi Taguchi, the creator of the statistical method named after him. After some days this Japanese engineer reached an astonishing verdict: according to him, Google was using the famous theory of games of John Forbes Nash Jr., the recipient of the Noble Prize in Economics in 1994. This theory refers to the search of an "equilibrium point". If a gambling house gives a lot of money to its players, it will end up losing lots of it. If, on the other hand, does not give away enough, people will stop betting money. Nash equation would help meeting the famous equilibrium point.

In order to know more, I decided to talk to a specialist in game theory in Florida, and presented the same numbers to him not explaining what the thing was about. After three days, the specialist gave me his answer: "This is a casino!"

Chance or coincidence? In any case, I came to the conclusion that the system works according to a basic rule: It maximizes Google profits according to a method that is the same one used by the lotteries and gambling places.

Suddenly I remembered Google's motto: "Don't do evil". Oh, C'mon….what kind of evil can a search engine do?

Google: the mother of all evil

Elinor Mills, a reporter with the tech news service CNET, ran a search on Google CEO Eric Schmidt and published the results: Schmidt lived with his wife in Atherton, California, is worth about $1.5 billion, had dumped about $140 million in Google shares last year, is an amateur pilot, and had been to the Burning Man festival. Google threw a fit, claimed that the information was a security threat, and announced it was blacklisting CNET's reporters for a year. (The company eventually backed down.) It was a peculiar response, especially given that the information Mills published was far less intimate than the details easily found online on every one of us. But then, this is something of a pattern with Google: When it comes to information, it knows what's best.

From the start, Google's informal motto has been "Don't Be Evil" . But make no mistake. Faced with doing the right thing or doing what is in its best interests, Google has almost always chosen expediency. In 2002, it removed links to an anti-Scientology site after the Church of Scientology claimed copyright infringement. Scores of website operators have complained that Google pulls ads if it discovers words on a page that it apparently has flagged, although it will not say what those words are. In September of 2006, Google handed over the records of some users of its social-networking service, Orkut, to the Brazilian government, which was investigating alleged racist, homophobic, and pornographic content.

Google's stated mission may be to provide "unbiased, accurate, and free access to information," but that didn't stop it from censoring its Chinese search engine to gain access to a lucrative market (prompting Bill Gates to crack that perhaps the motto should be "Do Less Evil"). Now that the company is publicly traded, it has a legal responsibility to its shareholders and bottom line that overrides any higher calling.

You see, every search engine gathers information about its users — primarily by sending us "cookies," or text files that track our online movements. Most cookies expire within a few months or years. Google's, though, don't expire until 2038. Until then, when you use the company's search engine or visit any of myriad affiliated sites, it will record what you search for and when, which links you click on, which ads you access.

And Google knows far more than that. If you are a Gmail user, Google stashes copies of every email you send and receive. If you use any of its other products — Google Maps, Froogle, Google Book Search, Google Earth, Google Scholar, Google Talk, Google Images, Google Video, and Google News — it will keep track of which directions you seek, which products you shop for, which phrases you research in a book, which satellite photos and news stories you view, and on and on.

So the question is not whether Google will always do the right thing — it hasn't, and it won't. Google has become the greatest threat to privacy ever known, a vast informational honey pot that attracts hackers, crackers, online thieves, and - worst of all - unscrupulous sales reps and head hunters.

If companies like Jigsaw are evil, Google is the mother of all.

Jigsaw is evil - Part 2

I wrote about Jigsaw, the contact information marketplace, on my May 05 post. I said that Jigsaw is evil and that "every Jigsaw employee and investor has dirty hands and they should be ashamed of themselves". Well, this week it got even worse. Jigsaw announced the so-called "Open Data Initiative" and declared June 4th, 2008 "Data Independence Day". Jigsaw's "Founding Fathers" Garth Moulton and Jim Fowler even recorded a clip dressed in 1776 fashion. Oh my gosh, that's so tacky! Anyhow, better get ready - your business information is now in the hands of millions of sales people ready to sell you anything from Viagra to condos in Jamaica. As Scott McNealy pithily said a while ago about the loss of privacy in the internet era, "Just get used to it".