I had a very interesting conversation with Josh, a friend who owns a couple health food stores. Josh has decided to go online and found some friend to setup his web site. (Josh did not consider asking a consultant and was not aware of my involvement with the internet and web marketing). Similar to many business owners and executives Josh knows very little about business planning and even less about running an online business. They think all you need to do is put up a site, and customers will start buying. No thought is given to where the customers are coming from or the kind of products to sell online.

They understand having a store in a prime location in a busy mall will generate many potential customers who will pass by the shop window. Having an eye-catching window display will entice customers to enter the store and convert into paying customers. However, In the online world most customers will never know you exist and it is very unlikely the site will show in the top 2 pages of search results. Research shows must searchers only look at the first two pages of search results. As David Viney reports in his new book Get to the Top on Google

“84% of searchers never make it past the bottom of page two of search engine results”.

Getting to the top two pages requires a lot of time, patience and hard work. Josh has heard of Google, but has no understanding of search results, ranking, PPC(Pay Per Click) or SEO (search engine optimization). The whole process of site development, optimization and web marketing are completely unknown to him.

Josh’s approach is typical of many business owners and managers and is unlikely to lead to success. Most likely they will come running to consultants in 6-12 months when the site is not working out as “planned”.

Here are a few questions I asked him.

Shia: Does the “friend” who is setting up your site have experience? Have you seen sites he has created?

Josh: Yes, they are quite “good”.

Shia: How do know they are good? Have you seen sites they have created?

Josh: The sites looked nice!

Shia: Have you compared his prices and experience with other companies?

Josh: No

Shia: Has he setup similar sites with shopping carts and online payment gateways use PayPal?

Josh: No the sites shown were quite simple, just a catalog with no online purchasing.

Shia: Will the site have CMS – Content Management System?

Josh:???? (no idea what a CMS is)

Shia: A CMS – Content Management System is a database where you can add and update details about your products. Items like photos, information, prices. A CMS system allows you the site owner to update without the need of a programmer.

Josh: I will have to ask the guy who is setting up the site!

Shia: How many items are you planning to offer online?

Josh: 2-3000 to start, after which I will increase to 10,000 items.

Shia: Do you have backend setup, ordering, stock control, and shipping?

Josh: I have a few students to help.

Clearly, Josh has no idea about how to start an online business and has done little or no thinking about optimizing his new site or taken the time to investigate how the completion is playing the game. The story reminds me of Webvan an online grocery business that went bankrupt in 2001, read eBoys: The First Inside Account of Venture Capitalists at Work. Webvan had a lot of financing with some highly rated consultants giving advice. However, they decided to expand too fast and offer a huge range of products. If they were a little more conservative and adopted a more modest plan they may have succeeded.

Josh runs a couple health stores, he has no idea how online customers will buy, and is not even aware of the cost of a conversion. (Conversion Rate). Josh should plan to start selling only a few items on line to test his system No more than 50 items to start. Sounds bad advice? Especially when he already has 2000 items in stock in his stores? Josh needs to understand buying online is not the same as selling to walk in customers. They will behave differently and their expectations are not the same as selling to customers in a store. Josh needed to consider whether he wants to sell to the local market, or aim for the national or even international market.

There are many online health stores, why should a customer buy from Josh? Josh should find reasons why customers will want to buy from his site. Here are a few possibilities:-

• Convenience
• Price
• Quality
• Fast Reliable Delivery
• Expert Knowledge about Health Food
• Recipes

The “End” of Yahoo and the Beginning of the “End” for Microsoft?

The Times Online reports on the latest steps in the Microsoft (MSFT) bid for Yahoo (YHOO). The proposed deal has become more interesting with Google GOOG, Time Warner (TWX) and News Corp (NWS) paying attention to Yahoo’s 137 million visitors a month from the American market.

Google founder Larry Page has said that Microsoft is a “convicted monopolist and has a history of not playing fair”. No question, if Microsoft could dominate the search market they would do everything to squash the competition.

Microsoft will succeed in acquiring Yahoo in the next few weeks, but will they be successful in integrating the two companies into one entity capable of completing with Google? Microsoft is expecting to continue making huge profits from their desktop and operating system software, but these profits will in all probability be reduced as Google lures users away from the desktop. Both Yahoo and Microsoft have failed to beat Google in search, why will a combination of the two companies be any better?

Google

A very good report from the Economist discussing Google’s missing clicks after a survey from Comscore showed a 7% sequential decline vs. December ‘07, in paid clicks for Google. Many see a warning of a weak first quarter for Google and sign of a slowdown in the U.S. economy affecting the online advertising market. However, Comscore reports on their blog Why Google’s surprising paid click data are less surprising. The change “is primarily a result of Google’s own quality initiatives that result in a reduction in the number of paid listings and, therefore, the opportunity for paid clicks to occur”.

A very interesting development reported by CNET and Marketwatch is Yahoo will be testing Google (GOOG) AdSense program. “Yahoo will be testing Google’s AdSense for Search service, which will deliver relevant ads alongside Yahoo’s own natural search results. This is only a limited test, and does not necessarily mean that Yahoo will join the AdSense program,” Google spokesman Daniel Rubin said.

Of course Microsoft (MSFT) quickly called the move anticompetitive. This indicates Yahoo (YHOO) chief executive Jerry Yang is prepared to fight off the Microsoft bid, especially after Microsoft Chief Executive Steve Ballmer set a three week deadline to accept Microsoft’s offer.

Many site owners have great difficulty in getting the search engines to rank their sites. This is not easy for new sites, especially if the domain name is also new. There are many reasons for low ranking, here are a few:

• Age
• Content
• Linking Building and Link Baiting
• Google Sandbox
• Competition

Age

The search engines are suspicious of new sites and need to be convinced the site is not merely a spam site. Google will quickly block a site, if the site pulls in traffic from AdWords for an advertisement for something completely different. This is very common with adult sites. They setup sites with common keywords like mortgage or insurance and highjack your web surfing and lure you to an adult site. They often used misspelled words of well know web sites to “capture” traffic. There are many spam schemes designed to persuade surfers to visit their sites. When the site has been around for a while and ads for the site match the content, the search engines start trusting the site.

Content

Having good quality, interesting content is vital to generate repeat visitors and customers. However, the traffic has to flow into the site first. Updating the site a least once a week will help get your site noticed in the search engines. Here are a few tips:-

• Regularly update News & Events
• Add new products
• Comparison reviews showing advantage of your products over the competition
• Boost about new sales
• Link to your customers sites
• Write interesting articles about your industry.
• Publish in online magazines AND on your site.

Linking

The most important factor in ranking sites is linking. Both incoming and outgoing links are a very important. Having a great site with good content is only part of the battle. Without good links a site has little chance of achieving high ratings.

Before Google (GOOG) came along in 1998 getting your site listed was simple, just register your site with the search engines and build a nice interesting site. Fine with the early search engines, which were directory based and consisted of a list of sites indexed by different categories, the concept of linking was unknown. Google changed the world of search with the introduction of PageRank™. This is how Google describes PageRank™.

“The heart of our software is PageRank™, a system for ranking web pages developed by our founders Larry Page and Sergey Brin at Stanford University. And while we have dozens of engineers working to improve every aspect of Google on a daily basis, PageRank continues to play a central role in many of our web search tools”.

Google is very interested to know who thinks you are friend (inbound links) and who are your friends, (outbound links). Inbound links with high PageRank™ with good authority are worth more than links from lower ranking sites.

Google Sandbox

The Google sandbox effect, where new sites are placed in quarantine for a period of time can be very frustrating for new sites who have invested a lot of time and money in building a site with great content. As explained above age of a site is one of the factors used in the search engine equation. Therefore if you are building a new site, either buy an existing domain name or decide on a new domain name and put up a skeleton home page up on as soon as possible. Then continue to building the rest of the site.

Competition

Unless you are introducing a complete new product or service with little or no competition, there will be many companies who already have established web sites and have good ratings with the search engines. You need a lot of patience and time. It will take at least several months before the site begins to show and maybe a year before your reach the first page!

Yahoo shares rose 2% last Tuesday as reports on expected higher Microsoft bid. Yet Search Engine Land reports maybe the US Justice Department will step against the takeover bid, helping Yahoo fight off the bid.

A interesting report by Seeking Aalpha discussing whether Yahoo!, Microsoft: Edging Closer to a Deal?. A report by Reuters says “Twenty-seven of 28 financial analysts responding to poll expect Microsoft will succeed in buying Yahoo”.

The current opinion is Microsoft’s bid will happen as expected. How Microsoft (MSFT) will handle their new toy, remains to be seen. Many developers are leaving Yahoo (YHOO), partly because of fear and suspicion of Microsoft’s way of doing business. Microsoft have shown no indication they understand the web, in particular the world of search dominated by Google (GOOG). Both Yahoo and Microsoft search engines have been losing market share to Google, combining the two companies with very different technology may result in Google capturing a larger slice of the search and advertising market. There is also the added risk to both Yahoo and Microsoft the merger will actually damage both companies.

Many home users now use web based applications like Google Docs, this trend will almost certainly spread to business users as the web based applications involve and become more sophisticated. Microsoft make very large profits from their many applications a move towards web based applications may create a significant threat to their hold on this market. Yahoo face the additional threat the merge will destroy the company.

MicroHoo – The Microsoft Yahoo Takeover Offer

The general consensus is Microsoft’s bid for Yahoo will eventually go through. There is a very interesting take on the Microsoft Yahoo deal at Marketplace while CIO has a good overview titled Microsoft’s Bid for Yahoo. A report in the Financial Times suggests Advertisers welcome prospect of Google rival, by encouraging price competition and improvements in technology. The article points out Google controls search, but in display Yahoo leads. However, Google’s acquisition of DoubleClick will boost display advertising revenues likely to eat into Yahoo’s market share. A Reasonable Valuation For Google from Seekingalpha shows how Google are well positioned to maintain online advertising growth

Google

A new service from Google called Ad manager will be of interest and help advertisers manage their online sales.

iPhone

The excitement Apple created with the release of the SDK is fading with news Apple To Ban SDK Developers From Accessing iPhone Music Features?

Before analyzing the process of how to build links, here are a few tips and ideas which will help drive traffic to your site.

1) Add a couple of interesting sites or blogs to your blogroll. The search engines like sites that have good friends. If your friends have high ratings and are willing to link back to you, even better. Don’t forget to link to sites relevant to your business or interest. Google does not like links which are not relevant and yes they do check if the content is compatible. This is a very effective way of networking and should result in increasing your leads and contacts.

2) Read the high ranking blogs in your field and leave comments frequently,

3) Review books you read at sites like Amazon, make sure there is a link back to you site. Select the name of the link with care as the name used will be the same keyword used by the search engines. Do I want to use Shia Leigh or Shwebby. The same review should also be placed on your site. Just be aware that some sites might claim ownership of your review. I suggest writing a short review for Amazon and a full review on your site with a link to the review on Amazon where the visitor can buy the book.

4) Conferences, presentations and trade shows you attend should all be reviewed on your site with a link to the conference or event. Talk about the companies you spoke to, with a link to their web site.

5) Customers and Sales. Many companies do not like to discuss their sales and customers on-line for fear the competition will learn the company’s secrets. However, the more information you can reveal will build confidence and encourage potential customers to “buy” from you. Creating an on-line reputation for quality and integrity is a very important step in step in establishing an on-line business. Do not be afraid to be personal and name employees, particularly when they have done something good like “Bill Jones has developed the greatest idea since sliced bread”.

6) Add photos or video clips they attract more interest than plain text.

7) Contribute top online forums will help attract attention and increase your visibility.

These ideas will help establish your online presence and help you gain a reputation as an expert in your field.

This is the first of a study of methods to obtain good rankings in Google, Yahoo and Microsoft search engines.

There are really only four ways of getting good rankings, five if you include the most important ingredient of all patience. Staying at the top is an ongoing process, like top athletes if you stop your ratings will start to fall.

Here’s the list:

1. Good Product
2. Content
3. Linking
4. SEO
5. Patience

Content and First Impressions
First you have to get the traffic to pass your window. Once upon a time the way to do this was position, the location of your shop in the high street and how good your display window looked. The idea was to attract attention and draw the potential customer into your shop. There same principle applies to stores particularly in shopping malls. A good position will bring in a lot of traffic without any advertising, which is why the price of prime locations can be very high.

In today’s internet marketing world a home page or landing is your shop window. You have between 1 to 3 seconds to pull in the visitor before she moves on. You have to get the sales message across very quickly and be very clear and decisive.

1. What are you selling?
2. The benefit over your competition.
3. Why should the visitor buy from you?

The landing page does not have to be the most eloquent design, remember Google’s site is very plain.

The single most important factor is a good product. No matter how good your site content, SEO or linking if you do not have a good product your business will fail. It does not matter if you are selling a product, service, information or just plain you. Is it sellable?

The Youtube videos from Blendtec where they blend Golf Balls and Coke Cans was very good advertising. Blendtec made very good use of Web 2.0 with no advertising budget. The videos have been watched by millions of viewers and sales of blenders have increased dramatically.

However, Blendtec have a very good blender.

If like the majority of products yours is no different from many others, you will have to show the potential customers the advantage of buying from you. If not the potential customer will within seconds be looking for an alternative vendor. It could be quality, price or service. Spend time thinking why a customer will want to buy a product from

So, before you start working on getting those high search engine rankings in Google and Yahoo, make sure you have a good product to sell.

After a very exciting week, with just about everyone having something to say about Microsoft’s $44.6 billion unsolicited bid for Yahoo. The first ever SphinnCon Israel or anywhere else was very inspiring and provided interesting tips and ideas. (see my previous post).

Some nice articles I found about the Microsoft/Yahoo “Merger”

MercuryNews has some good information. Such a takeover might not be good for Yahoo as discussed in the Washington Post Would Merger Demote Yahoo to a Microsoft Front End? News.com gives some reasons why. Not to be left behind, search giant Google Google Slams Microsoft Bid For Yahoo! Is this an attempt by Google to “help” Yahoo stay independent or is Google trying to retain search advertising market, in which Google is the undisputed leader with about 75% of search-ad revenues worldwide. Does Yahoo have what Microsoft wants Forbes.

A few of my own comments

First a little history, I have worked in the software industry for close to 30 years, many of you will not remember the early days.

The story of how Bill Gates came to acquire an operating system is well known. In the early 80’s Gary Kildall’s Digital Research provided the operating system for most of the PC’s and was established as the industry standard. IBM had approached Microsoft a very small company in the Seattle area, to supply an OS for the IBM PC. Bill Gates didn’t have one at the time so he quickly bought DOS for a reported $50,000.

Over the years Microsoft edged out Borland the compiler company, Lotus 123 (the first killer application for the IBM PC), and WordPerfect to name just a few applications. The one area where Microsoft has not been successful is the web. Netscape was the earlier leader in the browser game until Microsoft offered free copies of Internet Explorer with PC’s. Google have raced ahead with their search engine leaving Microsoft with less than 10% of the market and even lost money last year.

Microsoft would love to be king in search and push out Google. However, that is going to be very difficult. Both Yahoo and Microsoft are loosing market share to Google. Integrating the two companies to form a joint search engine good enough to challenge Google will be very difficult.

Even if the integration problems are overcome, how are they going to stop Google dominance of Search and advertising in general. Google are branching out with gPhone and Google Docs. Google Docs is not yet a threat to Microsoft desktop software, but in the future a free application supported by Google may begin to capture a large section of the market. Microsoft have the additional “dotcom” problem of how to compete on the Web while maintaining their current products.

For the rest of us having a dominate company with little competition is not good. Yet it is very difficult to see how the Google juggernaut can be slowed to allow more completion.