Monday, September 04, 2006

Prosper with Virtual Real Estate and Digital Assets – Part 2.

By Kamau Austin, Stay-at-Home Dad and Searchpreneur©

In the first article part of this article we described the burgeoning virtual real estate market (VRE). We explained that this industry was spring-boarded by Google’s business strategy to allow website owners (resellers) to get a cut of the commissions from pay-per-click (PPC) ads displayed on their sites. This program is known as Google Adsense™. I also alluded to the fact that Google generates almost 40% - 50% of its 7.5 billion dollars ad revenues with the Adsense™ program.

With close to 3 billion dollars being generated in ads posted on publisher’s websites Google’s Adsense program is more than just a cottage industry. In fact it is probably the first true sales channel in which Internet advertising will ever get its share of the 175 billion dollar ad industry along the side the likes of television, radio, cable, and print advertising.

Despite its potential to further its profit at least on the surface Google seems to have ambiguous feelings towards the rapid growth of VRE sites. In its canned corporate responses on this topic Google forbids creating sites just to make money with Adsense™ revenue.

The Two Dueling Souls of Google

Borrowing a social construct and applying it to Google’s corporate culture of W.E.B. Dubois (the first African-American to get a PhD from Harvard), Google seems to have two warring souls. This especially seems to be the case after the IPO and it going public.

On one hand Google is the “do no harm” company that wants the web to be an innovative place to facilitate the research, organization, communication, and retrieval of information. In this the company is one of the Internet’s and worlds most respected and almost deified brands with a loyal almost rabid fan base.

On the other hand Google is the iconic business powerhouse that dares to shape the world to its image and will. Google is seen as full of arrogant hubris in issues on privacy, copyright, and business issues. Many feel Google is becoming the next Microsoft. In my opinion Google is far more of a potentially intrusive business concern.

To quickly make my point it was reported in the New York Times that the US and other national governments throughout the world had to seek relief from Google Earth from showing aerial shots of their capitals. Their fear was these photos could be used by terrorist in their planning.

Organizations of publishers and writers are currently involved in disputes with Google over their scanning efforts of books and other copyrighted information. Google is challenging their rights to scan certain works under fair use legal loop holes. But more to our immediate concerns Google is becoming a challenge to web marketers and even their core advertisers. It started with Google attacking popup ads with its toolbar and restrictions on advertisers not to use them.

Even one session pop-ups with a cookie to regulate them was a no-no for Google. Any net marketer knows that pop-ups used in a responsible way are the most effective way to get new subscribers. Although many people were abusing the popup there were many who only use them once per session. However Google and its supporters argued usability being the long term good of killing pop-ups. Since know one but web marketers like pop-ups the objections are muted. I don’t like TV commercials either but it is the price I pay for free or cheap content delivery.

In the last year it is making SEO, blogging, and RSS visibility in its search engine more difficult. It is really cutting down on duplicate content and has strengthened a time based delay filter commonly known as the dreaded "Google Sandbox" to stop the get rich quick gold rush mentality of many Adsense(tm) entrepreneurs. For example if you start a new site it will usually take your 6 months to a year to get any decent rankings in Google.

Finally Google finally added insult to injury with the latest modification to Adwords criteria. This latest round of restrictions cut to the core of some of the most profitable practices of web marketers. In a round about way Google is attempting to marginalize the squeeze page, the sales page, and Adsense Arbitrage sites. These sites are effective ways to get visitor conversion.

The squeeze page is a page where the sole focus is to get a site visitor to opt-in to an email list before getting information. Google doesn’t like this type of site because it makes their search engine less user friendly and relevant for searchers.

The sales page or mini-sites primary focus is to sell a product (usually info product) with the secondary focus to get people to sign up for an email list. Google doesn’t care for these sites because they offer little useful information to searchers other than to sell products.

Adsense™ Arbitrage sites are bidding on low cost search terms to draw traffic to your site in order to show more expensive ads with hopes site users will click on those ads. The term arbitrage is taken from a term in the financial markets of buying undervalued or under priced stock or assets and selling them for a simultaneous profit in other markets. Google doesn’t like this practice because it encourages the development of low quality magnet sites that draw traffic but offer any useful content. Why would you create useful content if you only want people to click on ads?

All the resistance from Google to these sales and money making tactics raises the question whether VRE - infoproduct and affiliate sites really have a future for new net marketers and website business owners. But enough about Google it isn’t the only player to consider in the VRE market.

Despite the fact the YPN network was late to the contextual ad potential of the online real estate of millions of partner reseller or affiliate sites it is making up significant ground.

John Reese rumored that from his own testing and others in his circles YPN pays a better percentage than Google. Since both these companies cloak their payment policies without full disclosure it is hard verifying these facts. However it is something you should test on your pages.

Although an Internet business can be started cheaply it is very time consuming building and developing your site into something profitable. This is especially true given Google's tough filters and algorithms. Despite a lot of Internet hype to the contrary most people won't run a business on the Internet that makes a fortune over night.

Since Google is such a schizophrenic partner in business and YPN still such a newbie in the VRE space is the ad reseller path worth going down for the average website owner. Sure people with long standing websites might make a fortune with VRE sites like Joel Comm. But what about the average new website owner, can they ever make significant income doing VRE sites? I illustrated building profitable VRE sites will not be easy, given the major search engine vigilance to protect their most prized real estate - the first 3 pages of the search engine result pages (SERPs). Google and other search engines are increasingly viewing VRE sites as a threat to the integrity of their search results. We will explore these and other critical questions on our journey to find solutions to build profitable VRE sites and digital assets.

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