November 09, 2005
Google Launches Affiliate Programs
By Eric Goldman
Google has launched 2 new affiliate programs. The first pays $100 for referring a new AdSense publisher who generates $100 in AdSense earnings. The second pays $1 for each new FireFox install containing the Google Toolbar.
When I first heard the announcement, I thought it was a joke. Could Google really be this clueless? Let's consider the likely consequences of Google's affiliate programs:
1) A surge in junk content. Plenty of fraudsters have already found it profitable to create niche sites (splogs, sites that steal RSS feeds from legitimate sites and add no value to that content) that index well in Google, siphon traffic from other sites and then present AdSense listings for a cheap buck. Undoubtedly, an extra $100 bounty will spur the creation of even more of these no-value-added sites.
2) A surge in click fraud. The $100 bounty is effectively an offer to match, dollar for dollar, any click fraud at any newly created site. It's like a 2-for-1 special on click fraud. The sound you hear is a million mouse-savvy workers in India cheering.
3) Allegations that Google "supports/funds spyware." I'm sure Google money will trickle down to adware vendors. For example, some marketers will buy cheap ad space on adware to drive traffic to their site promoting the referrals. Animus from the anti-spyware crowd should ensue.
As I see it, Google's affiliate program is like throwing yet more chum into demonstrably shark-infested waters. There will be countless attempts to game these referral programs, and it will be impossible for Google to adequately police them. Accordingly, I suspect a huge chunk (50%+?) of Google's payments under the referral program will go to fraudsters or others who do not create true value for advertisers or searchers. Once Google realizes that it incited a fraudster frenzy, I predict this program will be short-lived.
One other thing that's bothering me. I haven't yet been able to figure out why the toolbar is so valuable to Google. Does it increase the number of Google searches conducted by each searcher? Does Google get valuable insights about searchers by having it on the desktop? Is the toolbar like the camel's nose in the tent--get it on the desktop and then the searcher will make other software installs? Does the toolbar increase brand loyalty and freeze out competitors? I'm not clear why Google values the toolbar so highly, but paying a buck an install sends a pretty strong message about its role in Google's future.
Posted by Eric at November 9, 2005 08:11 AM | Search Engines
I agree with all of you comments.
I, too, am a little confused as to the purpose of promoting the Google toolbar. I have a couple theories as to the purpose of the promotion:
(1) This is nothing but an effort to increase Firefox's market share (the toolbar is just a gimic) to fight Microsoft.
btw -- I am not sure how the toolbar gets installed since clicking on the ad briefly sends you to an obscure Google site and then directly on the Firefox's site. So, what if the person installs Firefox after clicking on your ad, but not the Google toolbar? I will investigate....
(2) Google is just trying to pre-empt Microsoft. Microsoft's next version of Internet Explorer is probably going to blow most people away; Google is just trying to pre-empt M$'s new features (steal their thunder) (one has to wonder if Google planted the web rumor a couple weeks ago about creating a web-based version of OpenOffice simply to pre-empt Microsoft's announcement of their web-based products).
I think Microsoft's annoucement of creating web-based versions of all their apps has Google a little scared. Web-based Outlook is probably used by 90% of the students at Marquette (which blows my mind because I think web-based Outlook sucks big time), which shows how ready people are to embracing web-based fully-featured applications, like Word.
(3) Google doesn't care about its investors.... ;) Hippy, open-source evangelists are tainting their business. (hmm, where can I stick somebody about Google fighting Microsoft in this point....)
In brief, the business model is definitely not clear to me. If I were a Google stock holder, I would be complaining. Until the proverbial "next big thing" happens, Microsoft and Google will be taking "pot shots" at each other, which probably will have little-to-no effect on each other. The investors lose; the journalists bloggers win.
Posted by: Matthew Goeden at November 9, 2005 08:49 AM
dang it. My neat html "strike" tags got cleansed from my comment. The last sentence reads, "The investors lose; the STRIKEjournalistsENDSTRIKE bloggers win."
Posted by: Matthew Goeden at November 9, 2005 08:50 AM
The Google Toolbar is valuable for two reasons: first, its continuous presence on the desktop means Google owns a piece of that valuable real estate (~2.7% of my screen as I measure it), and second, its continuous presence means it's easier to run searches at any time without having to navigate to a new page. Google's Toolbar has been around long enough that I'd guess their search volume would drop dramatically if it disappeared tomorrow. Not a good thing for their business.
Posted by: Jmood at November 9, 2005 01:53 PM
But the Adsense stuff wasn't the BIG announcement for Wednesday. Breaking news on my website! ;)
Posted by: Sarah at November 9, 2005 07:33 PM
Welcome too the big boys. The tool bar serves one purpose "BRANDING". Web-ops is the future like it or not. Affiliate links provide "one" direction for credit. Even in my business, they click-thru my site, bookmark the info, return later. No credit of sale is recorded.
MS & Google are the modern day:
McDonalds and Burger King - let everyone else fight over 3rd place.
Yahoo backed away from AOL (AOL knows its future), Yahoo business model today is buying market-share or they will be left behind.
Posted by: John Feeney at November 10, 2005 05:00 PM
Yup. Grabbing up desktop real estate while the brand continues to have momentum. It's a long-term play, I'm guessing, designed at broadening the user base and providing less opportunity for Google users to use other search options.
Plus, like it or not, advertising supported software & features are going to become more and more commonplace. I'd bet real money that there's a behavioral tracking component to the toolbar that will come into play eventually.
Posted by: observer at November 15, 2005 02:47 PM