• Click fraud rates went down last quarter (16.0 percent) compared to the previous quarter (16.2 percent).

Other than that, that is about all the good news for PPC advertisers and click fraud.  Here is the bad news:

• Most click fraud happens on Search Engine content networks (Google Adsense and Yahoo! Publisher Network, for example).  On those networks, the fraud rate was 27.1 percent last quarter.
• 27.6 percent of click fraud traffic came from botnets, which is up more than 2 percent from last quarter (25.2 percent).  Another reason for users to protect their computers from hackers.
• Russia (4.9 percent), France (4.8 percent) and the U.K. (3.5 percent) are the coutries most responsible for click fraud traffic outside the U.S.

The sad thing about this is that, according to Tom Cuthbert, president of Click Forensics, a primary reason for the slight decline in click fraud from last quarter is because of the efforts of the ADVERTISERS, not necessarily the Ad networks.  According to Click Forensics, the advertisers have spent more time checking their clicks and filtering out the fraudulent ones before their campaigns were affected.  The Ad Networks have made better strides in doing that automatically, but it is still not enough.  In the end, it is still up to the people who pay to double-check their accounts, which is unfortunate that it has to be left up to them.

With the PPC click fraud rate being 16 percent industry wide, that loosely translates into $16.00 out of every $100 you spend is lining the pockets of some person who is not the least bit interested in your product or service.  If your monthly budget is $100, you are paying a lot per year for fraudulent clicks.  Pretty steep to me.

If you only advertise on Google and Yahoo, that number could climb to $27 out of $100, loosly figured.

This indicates that one should not just jump into Internet Advertising without examining all the angles.  It can certainly provide great benefits, but also presents risks that one should measure first.

It should also be noted about Click Forensics that their data are gathered from their own network called the Click Fraud Network.  That network is made up of more than 4,500 online advertisers and agencies, but it does not include everyone.  So, if you are weighing the pros and cons of PPC advertising, you should review data from multiple sources including the actual Ad Network you are considering joining.

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Microsoft also announced that it was going to be increasing its $600 million/yr European research and development budget.  They are also anticipating employing several hundred including software developers.

The center in Paris is expected to be open in March 2009 and they are getting some pretty nice tax breaks too.  Microsoft will get 30 euros back for every 100 euros it invests.

Speaking in Paris, Balmer said:

We are the challenger, not the leader, in search, but we believe strongly that search is in its infancy and there is so much room for innovation. For companies like Microsoft search is the key for unlocking huge new opportunities in advertising.

In the US, Microsoft barely has 8% of the search market share, compared to Google’s 62%.  But in Europe, Microsoft’s share is even less at 2 percent.

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It was a novel approach to attempt to increase search engine market share.  Currently, Google has a commanding lead at about 63%.  Yahoo! is second with just under 20% and Microsoft is third at just over 8 percent.

The latest “pay to search” program from Microsoft is called SearchPerks and it works pretty simply:

1. Visit the site using Internet Explorer 6 or higher and sign up for SearchPerks.
2. Download and install the tracking program to a Windows PC.
3. Use Microsoft Live Search and earn “search tickets” every time you search – up to 25 per day.
4. Redeem those tickets for prizes.

The first time you signup, you are credited with 500 tickets and the first prize point is 5 music downloads for 525 tickets.  You can even get things like airline miles.

It could be worth a check because it is sort of like Microsoft giving you $5 to use Live Search.  If you download music, typically each song costs about $1 (5 songs = 5 bucks).  So, signup for SearchPerks, use Microsoft Live Search for a few days and redeem your 525 tickets for 5 music downloads .

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Then in June ‘08, the alpha was re-launched.  They knew the results were bad and needed to improve before they could become a real player in the search engine market and they expected the results to begin to show improvement within a few weeks.

So, what do we think now that about 2 months have passed since Alpha relaunch?  Well, wow, it is bad.

Here is what a search for “buy computer online” will show:

1. An article about Best Buy from Wikipedia.  Ok, fair enough if you want to give props to Wikipedia first above all else, even though that does not help me buy a computer online.  Maybe a link to Dell or HP or something like that would be more helpful.
2. A link to ebay’s main search page where I have to retype my search query “buy computer online”.  Well, at least it is possible to actually buy a computer from the site you directed me to.  But could you not at least direct me to the Electronics category or even, *cough* the Computers category?
3. A link to about.com where I can download computer games.  But wait, I have not even bought my computer yet – I am trying to make a purchase first and then I can download and install games.  Proverbial “cart before the horse” I think.
4. A link to Apple’s home page where I can at least see a computer, eventually, after I first wade through the gaudy iPhone pitch and then stumble on the little button at the top that says, “Mac” – assuming I know what a Mac is and am not a complete computer novice.
5. A link to a site that will tell me how to make money online (refer to comments on #3 listing).
6. A link to oreilly.com where I can download PDF files and a bunch of other stuff that is no help because I still do not have a computer yet.
7. A link to the Scottsdale Public Library, which is possibly where I am physically located because I still do not have my own computer and am using one of theirs.
8. I give up…

What’s is more, at the top of my search page is a small graphic that prompts me to see results from Google and Yahoo.  Wait, I thought that was one of the points behind WikiaSearch – to take market share away from Google and Yahoo.

Anyway, I would not hold your breath on a Beta launch of Wikia Search anytime soon.  They are way behind nearly every other search engine in the Internet and the main way the intend on improving is by having you and I edit their search results telling them when we find something irrelevant.  I think the concept is good, but I don’t have time to do that.  A search engine is not a destination; it is a waypoint.  I want to type in my query and move on.

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As one might expect, an announcement of a new search engine has created a pretty good buzz around the Internet, but many searchers using Cuil are less than impressed.  You can easily find comments about it taking minutes to return results and about it returning zero results for popular terms.  Many of the feedback that I have seen has been quite negative, which one might expect in today’s “instant gratification” Internet where you have only seconds to make an impression.

However,  I tend to be ever-so-slightly enthused with Cuil for two basic reasons:

• The are at least trying to come up with a new way of presenting results and are supposedly indexing more of the web than Google (although I have not heard Google making any claims as to how many pages it indexes).
• Their GUI is somewhat refreshing.  I like the colors and I like the “Explore by Category” box that breaks down information related to your search into categories.  I think the entire interface is well done.

Having said that, I certainly think that the returned results leave something to be desired.  Many of the searches that I did returned completely unrelated results on the first page, which would indicate an issue with the ranking algorithms.  I am sure they will sort that out, but I can’t help but wonder how much testing they did before launch.  For example, a search for “cuil search engine” on Cuil will not even list cuil.com in the search results.  Hmm.

Another issue is the slow response time for some searches.  It would appear that their servers are not currently up to the challenge of being a real threat to Google, or even Yahoo! or MSN.

Those last two points make me wonder how much testing they did and how exhaustive it really was.  One would think that success in those two areas would be the very foundation of a modern search engine and, therefore, would be top priority.  But maybe it was just a case of first day jitters.

All-in-all, I think it is unfortunate that there has been so much negative publicity surrounding Cuil.  They have some bugs to work out and that is to be expected.   I think that their algorithm will get smarter and their servers’ response times will improve.  In fact, a few of the searches that I tried early yesterday, which returned woefully unrelated results, were vastly improved when I tried them last night.  That is a step in the right direction and I would expect that things will get better.

Google competitor?  Not at the moment.  Threat to Google?  Not at the moment.  Should Yahoo! and MSN pay attention?  Not right now, but don’t get too comfortable.

TechCrunch and Search Engine Land have some extensive reviews of Cuil.

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Last week Google announced it will sell off the Performics portion of DoubleClick:

It’s clear to us that we do not want to be in the search engine marketing business. Maintaining objectivity in both search and advertising is paramount to Google’s mission and core to the trust we ask from our users. For this reason, we plan to sell the Performics search marketing business to a third party. We believe this will allow us to maintain objectivity and the search marketing business to continue to grow and innovate and serve its customers. While we have not yet identified a buyer, we’ve received preliminary interest from a number of our current partners. Search Marketing will continue to run as a separate entity until the division is sold.

Of course, looking back, it seemed obvious that Google would do that. It was the right thing to do and failure to do that would have shed a bad light on Google. Danny Sullivan was one who openly expressed the desire to see Google do that and is glad they did.

Couple the sale of Performics and the reported layoff of 300 of DoubleClick’s employees and that means about 500 people share the distinction of briefly being Google employees. That fact still looks nice on a résumé…

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And to think that Google had the nerve to penalize US just for selling a few text-links on our blog … wow.

Here is a quote from Performics’ web site that I thought summed it all up pretty well:

Together, DoubleClick Performics and DoubleClick offer clients an unparalleled range of marketing solutions and are uniquely positioned to compare effectiveness across marketing channels for valued clients.

I particularly liked the phrase “uniquely positioned“. THAT is somewhat understating it, I think. Imagine being able to pick up the phone and call Google to find out what to do to get a particular site ranking #1… Why would ANYONE hire any other SEM/SEO firm? After all, if you wanted your brand new site to shoot to the top of the SERPs, wouldn’t you STRONGLY consider the Search Engine Marketing company owned by the number one Search Engine? Of course you would. At the very least, the fact that Performics and Google are related has to carry a ton of clout, even if Google claims that they are not going to give special treatment to Performics’ clients.

Danny Sullivan posted about this today in a post that would have taken me about 5 months to complete – good job, Danny.

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I still do not agree with their whole approach to quashing paid links, but I won’t get into that again. My fingers hurt from all that typing anyway. But, if you are interested, here is a recap:

• Google de-indexing
• Google: “Do as I say, not as I do”
• Random thoughts on Google penalties
• Tech Blog pagerank MIA

Well, horray for us. I’m not a slave to Google pagerank. I just did not want to be de-listed (or de-indexed – whatever you call it).

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Despite that drop, Yahoo! search traffic was actually up. In fact, according to a comScore report, they were the big winner for the month with a 0.5% increase in use and, since they dipped 0.4% in November, that basically put them back where they were in October with a 22.9% overall market share. However, Google is still the big dog with 58.4% share of the Search market. That translates to more than 5.5 billion (yes, billion) searches per month using Google. That number does not include searches performed on YouTube and other Google owned properties, which tracked an additional 1.5 billion results in December alone.

As you can imagine, search traffic on shopping sites climbed quite a bit in December. For example, Amazon sites logged 215 million searches, which was a better than 20% increase over their numbers in November. eBay was up 3.9% and Craigslist was up 6.3%.

Social networking sites saw a decline in use in December. My guess would be the fact that people were actually networking the old fashioned way – fact-to-face at parties. That means they were not spending as much time searching on Facebook (-14.3%) and MySpace (-19.9%). Plus, in many cases, people are accessing those sites while they are at work and, since most workers are using up their vacation time before the end of the year, they were not logging in each day.

At any rate, the numbers should be back to normal starting this month, but Google is still going to be on top.

Check out our Flash graphic in the far right column for a visual .

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The data center is located about a mile away from downtown Lenoir and currently, there are around 500 workers building the complex. This is great news for Lenoir because these workers are eating at local restaurants, shopping in local stores and staying in local hotels and all of that is a big boost to Lenoir’s economy, which has been impacted by slowdowns and layoffs by the area’s furniture industry employers.

As far as what Google is looking in the way of employees, they want a wide range of workers from entry-level technology assistants which will keep the hardware running 24/7/365 to Linux administrators and programmers to experienced data center managers. Google has very extensive list posted in the jobs section of their site. So if you live near Caldwell or Catawba County NC or if you would not mind relocating to the foothills of North Carolina, you should definitely check it out. My wife and I used to live in Statesville, which is about 30 minutes away from Lenoir, and I can honestly say that it is a great area in which to live.

Google has setup an email address whereby people can send suggestions on how they can make their Lenoir data center an even better impact on the community. Send your suggestions to lenoirproject@google.com.

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