May 1, 2008

Google is Venice; Webmasters are Constantinople

by Brian Turner

Google is Venice; Webmaster are Constantinople: Or, How Adsense is destroying the webmaster economy and making webmasters subservient to Google.

Timothy at Marketocracy has recently finished reading John Julius Norwich’s “A History of Venice”, and as an investor draws parallels between Venice’s defensibility and Google’s defensible market lead on the internet.

Aaron Wall extends the comparison by detailing just how established Google’s lead is in terms of service provision:

Their protective moat extends out from that position with the following assets

* the default video hosting platform
* the default display & contextual ad networks
* the default blog feed management company
* the leading feed reader services
* the default web analytics service
* the default mobile operating system
* the default standard for map sharing
* free payment processing for non-profits (good for public relations and a cheap way to buy market exposure)
* (soon to be) the default web development platform – Google App Engine

However, John Julius Norwich is more famous for his history of Byzantium, which originally covered three excellent volumes and a single abridged volume.

As someone with a strong amateur interest in Byzantium, I can extend the Google = Venice parallel further, by analogy: as webmasters = Constantinople.

It’s not a flippant comparison – Venice had a very destructive influence on Constantinople.

And if the Google = Venice analogy is accepted, then the Webmasters = Constantinople analogy is especially worrying, as this piece illustrates.

How webmasters = Constantinople

In a nutshell, the Byzantine Empire succeeded the Roman Empire, taking control of all former provinces excepting for Western Europe. It was a wide, extensive, and diverse empire.

On top of this, the capital city, Constantinople, sat astride an enviable position between the Mediterranean and Black Sea – it was highly defensible, and ensured prosperous trading opportunities.

Here’s where we can draw the analogy roughly with webmasters:

1. Content

Just as Constantinople owned its own empire, when webmasters publish their content they are creating and adding ownership of the internet. Because there are so many webmasters, like Constantinople, their reach and coverage is both huge and diverse

2. Traffic

Constantinople covered a range of major trade routes, as well as a key strategic position on the Bosporus. Likewise, once webmasters have content that generates traffic, they also have some degree of control on how that traffic behaves

3. Monetisation

Because of the above two pointers – reach and traffic, Constantinople could derive considerable trading incomes via various tax levies. Likewise for webmasters, there are various monetisation models available.

4. Defensible

The position of Constantinople appeared wholly defensible – the massive Theodosian Walls on the landward side had been impregnable for successive siege attempts by Muslim armies over the centuries. Likewise for webmasters, if you control the content and traffic, the presumption is that the position is defensible.

However, this presumption could be dangerously illusory.

How it all went wrong for Constantinople

In 1453 Constantinople was eventually conquered by the Turks, and assimilated into the Ottoman Empire.

However, over the previous centuries, Constantinople had fallen from being one of the richest, most powerful, and magnificent cities in the world, to being a weak walled village with few resources at its disposal, including little ability to defend itself.

What had originally weakened and eventually destroyed Constantinople – and the Byzantine Empire – was rooted in a single decision: to give the Venetians exclusive trading rights in the city.

The decision meant that Constantinople lost the ability to profit from direct trade – instead taking tax revenues from Venetian trade.

By no longer having direct control over its income, the result was a massive power shift – enrichment of Venice on a grand scale, and the impoverishment of Constantinople’s revenues.

By the time the rulers of Constantinople realised their predicament it was too late – any attempt to reverse the decision resulted in punitive reaction – the Venetians were simply too strong to remove.

Eventually, the only way that Constantinople could remove the Venetians was by siding with it’s growing rival of Genoa.

However, moving trading privileges from Venice to Genoa still left Constantinople without adequate control of its income, resulting in continued, unstoppable, decline.

The analogy to webmasters is especially worrying when considering how this could easily reflect the influence of Google Adsense on the webmaster economy.

Google = Venice

So far the history lesson may seem obtuse to the promised analogy, so here’s the point: when webmasters stop looking at direct advertising relationships, and instead place their revenue streams mainly in the hands of Google, they are in danger of repeating the same process of self-destruction of the Constantinople – Venice relationship.

And the key to that is ensuring full control over revenue generation.

1. Content

While webmasters may publish and own their content, Google has made it clear that it reserves the right to be increasingly picky with what it syndicates – whether algorithm rankings in natural search results, news submission, and even the presence of natural listings via Google Universal.

In addition, Google have tried to push on owning content directly through Google Pages, Base, and the soon to be Google Apps.

2. Traffic

On top of this, webmasters are increasingly – and dangerously – reliant on Google for traffic. And that means if Google makes any kind of decision which adversely affects your site traffic, there is little you can do to immediately repair it. Without traffic, you have no revenues, and risk running at a loss.

3. Monetisation

Google Adsense is the most accessible, reliable, and best paying source of revenue for many websites. In this regard, it is like when Constantinople signed away it’s trading rights to Venice.

Google has already made it plain that affiliate sites are to be frowned up, whether in natural search or via Adwords, arbitration is out, and that attempts to set up direct advertising relationships that result in search-friendly links are subject to punitive action.

In short, Google is keen to ensure monetisation of the internet in general is focused on Google’s own products, which serve it’s own company interests. While those company interests may not be inherently “evil”, they most certainly should not be presumed to align fully with every webmaster.

4. Defensible

The defensibility of most webmaster positions it increasingly illusory – their content appears online only if Google indexes it, traffic is only generated if Google ranks it, and monetisation often only occurs if Google has its own ads on it.

Before 1453, the only army to ever breach Constantinople’s impressive defences was that of the Fourth Crusade (1202-1204) – ironically, European knights, led over the walls of Constantinople by Venetian nobility.

And with trading rights out of Byzantine hands, Constantinople would never be in a position to recover.

When webmasters focus revenue generation via Adsense, they are in danger of likewise repeating the same mistake.

The lessons to be learned

This isn’t intended to be a Google-bashing post – the intention is to take an historical analogy and apply it to a situation familiar to many of us.

From a business perspective, Google’s interests remain its own, and the more webmasters submit their own interests to Google’s, the least control they have over them.

Therefore webmasters needs to seriously consider a range of issues to protect their own interests:

1. The segmented web

The advent of social media has created an increased segmentation of the internet, of which search is now but one segment among many, with a raft of others coming under the heading of social media. Therefore closer and continued integration with different web segments is essential for longevity.

2. Revenue models

Affiliate marketing can still be built into content-strong sites, and Adsense remains a flexible option in many circumstances. However, direct advertising relationships should be sought where possible, in order to keep revenue interests independent

3. Independent interests

In short, webmasters need to evaluate what their own interests are, and ensure these remain independent of anyone else’s agenda.

While Google’s focus on user experience is definitely to be recommended, webmasters need to ensure they don’t fall into the trap of equating: user experience = Google, internet = Google, monetisation = Google.

Overall

Marketocracy highlighted the defensibility of Google’s position on the internet – I’ve highlighted the vulnerability of the webmaster position on the internet.

While companies such as Yahoo and Microsoft categorically fail to properly develop products which can seriously rival Google, webmasters are left having to align themselves with Google’s interests.

And all the time that they do, webmasters leave themselves increasingly vulnerable.

After all, by historical analogy, if Google are like Venice, then webmasters are like Constantinople.

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Story link: Google is Venice; Webmasters are Constantinople

 

Posted in: Webmaster