Google, Defenders of the Internets, part 2
After talking to some friends, and reading some forum posts about this particular issue, I wanted to write a follow-up to this article.
Firstly, one question was raised: Is Adsense arbitrage a bad thing? This is the main issue of debate. people buy Adwords on the cheap, hoping to get more back on people clicking their ads.
Spending money on advertising and making back more than that on your product is a common business model, but what about when your product is more advertising? Is this still a legitimate way to make money, or is it doing a disservice to those who use Adwords, Adsense, and your website? Just because something has a legitimate business model does not mean it is a legitimate business. Drug dealers and prostitutes have good business models too.
Also, people using arbitrage do cause problems for users of the system. This means lots of low-paying ads on sites that could belong to legitimate developers. It could also mean people are paying for ads from traffic that isn’t really targeted to what they are looking for.
My main question about the issue was Google’s stake in the whole thing. While people using this buy low/sell high method may be bad for some of the other people using Google’s advertising, Google is making money both ways on the exchange, so it does seem good for them. Killing arbiters with their Googleslaps seems to be costing them money, so why would Google do it?
My original hypothesis was that maybe Google is actually one of the few large corporations with some kind of moral standard. By limiting this behavior, they are overall making the internet a better place. But I have come to the conclusion that this probably isn’t true, and the real reason Google does it is the same reason any corporation does anything: It will make them more money.
Google, by taking the trash out, is in effect eliminating both bad publishers and bad advertisers. By doing this, they are rewarding their good publishers with more money by helping get rid of low bids on their ad’s CPC, and giving them more relevant advertisers to put up on their site, and getting better traffic to their advertisers, since they are coming from better, more targeted sites. By helping the network, it encourages more people to use Adwords and Adsense, and people who already use it to use it to a greater degree.
In the end, while they are getting rid of some people that they were making money off of, They stand to make even more with their better system.