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.