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This 38 message thread spans 2 pages: 38 ( [1] 2 > >     
Demise of internet-based small businesses?
Google causes cost of marketing to go up.
IITian

10+ Year Member



 
Msg#: 14091 posted 5:01 pm on Jun 8, 2003 (gmt 0)

My forecast! ;)

Because of The Dominic Effect, many small marginal businesses, which relied on free traffic generated by Google and can't afford to pay for marketing tools like AdWords, PPC and so on, will die first.

Google will have some initial partial victories against amateur spammers. After all the spam filters are in place, big businesses will turn to hiring professional spammers. Google has almost no chance of winning against them unless its algos are rewritten entirely. All top SERPS results will be dominated by spam. There is no chance small businesses can face up to that challenge.

I can see future building of internet equivalent of Walmart and Home Depots in the horizon.

Thanks Google. Internet is maturing.

 

lazerzubb

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 14091 posted 5:07 pm on Jun 8, 2003 (gmt 0)

which relied on free traffic generated by Google and can't afford to pay for marketing tools like AdWords, PPC and so on, will die first.

The day i can get money for free, is the day i will celebrate, NOTHING is free in business, except the air your breath!

IITian

10+ Year Member



 
Msg#: 14091 posted 5:11 pm on Jun 8, 2003 (gmt 0)

lazerzubb:

I used the "free traffic" phrase because I saw it used on this board. Because of the work we put on our sites to be Google-conformable to show up high on the searches, I don't think it is "free." Cost of our labor should be included in the cost.

However, some of us don't have cash money to spend to promote our sites. They are in trouble in my view.

lazerzubb

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 14091 posted 5:16 pm on Jun 8, 2003 (gmt 0)

"If you don't have cash to run a business, don't run a business!"

There will always be problems with running a business, BUSINESSES GO BUST! that's a fact!
It aint different in the online world.

Work on conversions instead, that's the golden nugget.

Chicago

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 14091 posted 5:27 pm on Jun 8, 2003 (gmt 0)

Internet is maturing

yes, and in the end, the strongest prevail. one of the most damaging and unfounded presumptions of the Internet of 1997-2001 was the idea that the Internet took away the advantages of big business. you know...supply chains will be broken...middle man would go away. etc. etc.

yet, although the Internet is far from the vehicle that would turn the business world on its head, it has proven to be an important way for a business to augment various aspects of their value chain - customer acquisition, marketing etc. Therefore, there are a number of important ways that small business can form strategic advantages by utilizing the Internet appropriately.

We are all smarter and more rationale. What in the world ever made us think that a small business could ever displace big business in the first place? The more we mature, the more we will see that comparitive advantages, capital structure, margins, mgt, and brand have and will continue to be the most important factors in the success of businesses, off-line and on. In the traditional world of small business, 95+% fail within 2 years. The Internet and search engines will make no exception to that rule.

skipfactor

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 14091 posted 5:39 pm on Jun 8, 2003 (gmt 0)

can't afford to pay for marketing tools like AdWords, PPC and so on...some of us don't have cash money to spend to promote our sites.

I think that's a cop-out. If you do a little homework, PPC can be affordable to any business IMO. Keep the throttle low and target obscure (cheap) SERPs that convert.

IITian

10+ Year Member



 
Msg#: 14091 posted 5:48 pm on Jun 8, 2003 (gmt 0)

I think all of you are right about the point that big businesses have advantages and smaller businesses should strive to increase the conversion rate.

However, unlike land-based businesses where short to medium term predictions are generally possible and gives businesses plenty of time to plan their survival strategies, last two months must have been bad for many businesses because it was so sudden and unexpected.

It's like one owns a gas station by the side of a busy freeway and one day when she wakes up, there is another freeway far from her gas station serving the same traffic!

Chicago

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 14091 posted 5:54 pm on Jun 8, 2003 (gmt 0)

Yea, it sucks.

Small business is MORE vulnerable. Period.

Unfortunately, there is nothing that can be done other than being a *smarter* business owner that can better protect cash flow downturns and better create diversified customer acquisition strategies. Many won't or can't ......so it goes..

nirelan

10+ Year Member



 
Msg#: 14091 posted 6:00 pm on Jun 8, 2003 (gmt 0)

Well if it kills enough businesses Google will be gone.

IITian

10+ Year Member



 
Msg#: 14091 posted 6:05 pm on Jun 8, 2003 (gmt 0)

>Well if it kills enough businesses Google will be gone.

Not really. Businesses that survive will need some "freeway" to bring their customers. Google will be a well-respected neutral "freeway operator" basing its existence upon its revenues from those businesses.

Essex_boy

WebmasterWorld Senior Member essex_boy us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 14091 posted 6:14 pm on Jun 8, 2003 (gmt 0)

I agree with the first post the nets going to look like a high Street with all the big names up there first.

this is my second google 'improvement' that ive been through and im sick of it. On both occassions the results were negative in the extreme. The only gainers I could see were spammers.

Chicago

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 14091 posted 6:15 pm on Jun 8, 2003 (gmt 0)

Well if it kills enough businesses Google will be gone.

disagree, this thread topic has nothing to do with long-term viability of G search. Other factors dominate your coorelation.

on the contrary, as those businesses less capable of competing loss ground on G, the user benefits in that they are now accessing more reputable and stable businesses with sound business operations.

one of the things that has set e-commerce back over the last several years is the lack of credable businesses to buy from when searching for product via the Internet. If I had a dollar for everytime over the years someone has said to me, "would you buy from this company, they were page one on G". People like to buy from places that they know and trust or are referred to. The do not like to put there credit card number into a site run out of someones garage when for $2 more, they could be buying from a name brand.

some small business will survive the Internet in a very good position, in fact the Internet has made that a possibiltiy that was much harder in the past, but the businesses that will win, in the end, in a Google serp PG 1 - 10 Default listings , are the better equipt businesses from product to operational standpoints. As this unfolds, search results will become better. What do you think link popularity and authority sites are all about anyway?

[edited by: Chicago at 6:22 pm (utc) on June 8, 2003]

mfishy

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 14091 posted 6:19 pm on Jun 8, 2003 (gmt 0)

Excellent post Chicago.

As more and more established brick and mortar businesses make there web presence felt, naturally, small businesses will suffer both in the search results and in winning over customers. This is just the way business tends to work.

On the other hand, well thought out small businesses will continue to flourish and enjoy the efficiency and profitability that the Internet allows for.

martinibuster

WebmasterWorld Administrator martinibuster us a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month



 
Msg#: 14091 posted 6:24 pm on Jun 8, 2003 (gmt 0)

can't afford to pay for marketing tools like AdWords, PPC and so on, will die first.

It's only a nickel, costs as much as advertising in the back of your local church flyer and returns better results.

If they can't handle that, it's not a viable business- they should just let go and take a walk toward the light.

nell

10+ Year Member



 
Msg#: 14091 posted 6:35 pm on Jun 8, 2003 (gmt 0)

"money for nothin' and clicks(chicks) for free" (MTV song)

We have a site where the PPC keywords are very expensive. We found allied products with much cheaper keywords. We created a site for each of those products and added our product to them. We attract visitors to these sites via promoting only the allied products.

We increased prices on the original product as the visitors we get are not just a click away from our usual competitors. The combination of increased profit from sales and lower promotion costs make this a very viable business model.

Do a search for affiliate products allied to your product. Set up a domain for each affiliate and ADD your original product to those sites. The affiliate commissions pay the promotion costs and you have a great deal more of the web covered than any of your competitors. The great part, if the affiliate product doesn't pull it's weight drop it for another.

No matter what Google does we always have ranking sites out there working for us.

bobmark

10+ Year Member



 
Msg#: 14091 posted 7:03 pm on Jun 8, 2003 (gmt 0)

To take the opposite view, I have not experienced (so far, fingers crossed, knock on wood) the Dominic Effect in terms of traffic.
On a medium size site (2,000+ static pages) I find with hard work at keeping Google friendly pages (and I do not mean spamming) and using legitimate techniques to attract freshbot my referrals continue to increase (the only drop I had was March which was an industry wide pattern in my area and a function of a general drop in consumer interest).
I find that the best advertising investment I have ever made is the trivial annual sum for Inktomi inclusion and that effort put into optimization generates a steadily upward traffic trend from Google/MSN/AV, etc. on this 9 month old site.
I think as long as there is money to be made in the SE business from re-sale, etc. you will see "free" or minimal cost inclusion engines that can generate excellent traffic.

Zapatista



 
Msg#: 14091 posted 7:17 pm on Jun 8, 2003 (gmt 0)

One alternative to Nells post, if you don't have affiliate products, is to build informational "helper sites" that drive traffic to your main site. Helper sites, of course, have original content related to the subject of your main site but not necessarily the EXACT topic.

My helper sites have been my savior and send reliable traffic to my main site.

IITian

10+ Year Member



 
Msg#: 14091 posted 7:20 pm on Jun 8, 2003 (gmt 0)

>I think as long as there is money to be made in the SE business from re-sale, etc. you will see "free" or minimal cost inclusion engines that can generate excellent traffic.

My guess from watching businesses is that non-competitive fields can still be quite lucrative for internet-based businesses. Highly specialized products which don't face much interest from big businesses can get good "free" traffic from internet.

Chicago

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 14091 posted 7:40 pm on Jun 8, 2003 (gmt 0)

non-competitive fields can still be quite lucrative for internet-based businesses. Highly specialized products which don't face much interest from big businesses can get good "free" traffic from internet.

YES! IITian

Interestingly, 95% of small business fail *YET* 95% of business is small business. hmmm.

I believe strongly in the darwinistic characteristics of a capitalistic [Internet]market. That doesn't mean, however, that small business cant's flourish amongst big business.
Like most else in this world it is about having realistic expectations.

bobmark

10+ Year Member



 
Msg#: 14091 posted 8:05 pm on Jun 8, 2003 (gmt 0)

Agreed, chicago, IITian.
Another variation on this is to use a niche as a wedge into a highly competitive market.
I have a site that is optimized as a blue widgets site but contains a lot of just plain widgets (the competitive field I can't afford to buy my way into as yet). To date, most of my sales are plain old widgets made to site visitors who came looking for blue widgets and decided to purchase their plain old widgets while they were there.
This is a pretty old advertising strategy - make your name in exotic products but make your money on the mundane.

c1bernaught

10+ Year Member



 
Msg#: 14091 posted 8:06 pm on Jun 8, 2003 (gmt 0)


I was having an interesting discussion with a friend who makes quite a bit of money on the web.

A couple years ago he was espousing the virtues of the webs ability to let even the smallest business participate and make money. He himself started with virtually no money and built quite a good income for himself.

Today he argues that allowing "just anybody" to build a website and make money is bad. He likes the idea of the web becoming too expensive for the little guy to compete.

I never believed the web would cut out big business or eliminate the middle man. I did see the web as a place where anyone willing to "learn the ropes" could make some decent money for themselves.

It looks like the web will simply become another market segment for those with the money to compete. That's really too bad.

mrguy

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 14091 posted 8:22 pm on Jun 8, 2003 (gmt 0)

Yup, and the skies going to fall tomorrow.

The web will always have a place for the small business.

How a small business effectivly uses a web site will determine whether they make it or not on the Internet.

As with any business venture whether web based or not, there is no guarantee of success.

c1bernaught

10+ Year Member



 
Msg#: 14091 posted 9:00 pm on Jun 8, 2003 (gmt 0)

mrguy: Please point out a few examples for me of a lower cost of entry business than a website getting unpaid traffic.

From the lamenting I've been hearing here, a month or two of severely reduced unpaid traffic can be quite painful.

I'm not saying that all small business would be wiped from the web. I'm simply saying it's cost may become prohibitive for the smallest players.

Richie

10+ Year Member



 
Msg#: 14091 posted 9:14 pm on Jun 8, 2003 (gmt 0)

Google shouldn't bother with an anti-spam algo at all and just take notice of spam reports. Far more accurate and affective.

Chicago

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 14091 posted 9:57 pm on Jun 8, 2003 (gmt 0)

I'm not saying that all small business would be wiped from the web. I'm simply saying it's cost may become prohibitive for the smallest players.

Yep.

As well it should be when the ad spending shows ROI. Of course the players will eventually buy up most roi tactics thereby increasing mkt cost and decreasing return on marketing dollar. This will force small business to become ever more adaptive, nimble, smart, innovative, and resourceful. A game - few win.

I have been playing for seven+ years. I've failed three times. On my fourth time around (fourth company), I feel as if I am closer than ever. You think I feel sorry for myself or think I *deserve* better? Hell no, I haven't been good enough yet.

Why should *you* be the best? Why should *you* be on page one G SERP? Long term, if you can't answer that question, than you will *not* be there. This will affect sbiz the most. This is natural free market tendencies at their finest.

europeforvisitors



 
Msg#: 14091 posted 10:39 pm on Jun 8, 2003 (gmt 0)

After all the spam filters are in place, big businesses will turn to hiring professional spammers.

A Land's End, L.L. Bean, or Best Buy can't afford to get caught using the kinds of tricks that an anonymous spammer with a hundred affiliate sites might use. If Bestbuy.com is banned by Google, what's it going to do--launch another domain the way bobs-cheap-discount-hotels-in-buffalo.com might do?

Tropical Island

WebmasterWorld Senior Member tropical_island us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 14091 posted 10:55 pm on Jun 8, 2003 (gmt 0)

To the original topic - demise of small businesses.

We have been on the web since 1999 and 95% of our business is straight from the Internet. We use a combination of AdWords, Overture, FindWhat & Sprinks in addition to SEO of our sites. We have highly placed "free" listings in many search terms however we would never consider eliminating the few hundred dollars a month we spend on PPC. We compete in a very competitive field (tourism) and have done business when many of our competitors have had none or little due to internal problems in the country and external problems like 9/11 and SARS.

Are we a large business - absolutely not. We are a family run small business. It annoys me somewhat when I hear some posters here complain that they can't afford PPC. If you are selling a service or product 5 - 10% of your gross should go back into promotion. I learned this as a Yellow Pages sales rep in the 70's & 80's. If you can't afford to spend this amount your business model is faulty. No business can depend on the "luck" of free placement. The end of that band wagon started with GoTo PPC and Yahoo paid placement years ago. For every search term that has 1000's of free listing there are only a very few that will ever benefit on a long term basis. The rest of us MUST seek the viable alternatives and that includes PAYING for it!

Small business can suceed on the Internet.

merlin30

10+ Year Member



 
Msg#: 14091 posted 10:59 pm on Jun 8, 2003 (gmt 0)

"This is natural free market tendencies at their finest"

Couldn't agree more.

The irony of the "new economy" rubbish from a couple of years ago is that the Internet is the re-incarnation of a very old economy - the laissez faire economy suggested by the likes of Adam Smith hundreds of years ago.

The Internet is probably the most powerful vehicle that such an economy has ever been given. (Hence the plethora of anti-capitalist hate sites actually campaigning for the destruction of the Internet!)

Because of this I think the Internet is an even greater opportunity for small business to flourish than existed before the (commercial) Internet. However market principles are in fact now in sharper focus so you need to be offering real products/services that actually bring value to the consumer. Not everyone who owns a website can win; but remember big business has created huge markets, and within those markets there are thousands of niches that can be exploited. Big business has supplied the canvas, small business can paint it. And remember, people appreciate the painting NOT the canvas.

That is why it is absolutley imperative that Google takes out the "fake" commercial sites offering no added value to the consumer but taking from the revenue stream. That situation is economically unsustainable. It is for these reasons that I passionately believe that search should be left to the markets - not the politicians.

IITian

10+ Year Member



 
Msg#: 14091 posted 11:47 pm on Jun 8, 2003 (gmt 0)

>A Land's End, L.L. Bean, or Best Buy can't afford to get caught using the kinds of tricks that an anonymous spammer with a hundred affiliate sites might use. If Bestbuy.com is banned by Google, what's it going to do--launch another domain the way bobs-cheap-discount-hotels-in-buffalo.com might do?

Professional spammers are diffrent from spammers who get caught. In worst case, if a company like Amazon is caught blatantly spamming, the CEO of Google will likely personally go to Bezos country club to request him to be less obvious, or Sriram a major investor in Google who made his fortune from Amazon will deliver the message. Rules are different for rich people and rich corporations.

Moreover, if you look at the major investors in Google, it's they and their friends who are investors in other big internet companies.

tommyleef

10+ Year Member



 
Msg#: 14091 posted 12:08 am on Jun 9, 2003 (gmt 0)

It was either the George Bush Economy or the Google Bush-wack that will take out the little guys...George Sr and Jr have combined to lose over 3 million jobs...Google has a long way to go to top those figures.

Then again, Google loves to tout big numbers, knowing that a lot of the counted pages are flawed...hmmm, maybe Google is trying to tout: 'Over 3 million Small Businesses Ruined'

I say this tongue-in-cheek. Thankfully I can afford to hold out until more content reliable results can be provided by Google. The guys that just started new online businesses in the past 5 months or so may be in trouble. This should have been about the time for their rankings to settle in good spots if they did good linking and content.

Oh well, my hat's off to all the Big GGGs George Sr, George Jr and Google. Way to gggo ggguys.

Hail to the Almighty Dominic, you have brought up-starts to their knees!

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