The Near Memo, Episode 8

Episode 8: Google fights with Rand Fishkin over “zero-click” searches. Can a rating only review ever be defamatory? Will Yahoo’s brand rise from the ashes as a Verizon subscription service?

The Near Memo, Episode 8

Greg: Okay, welcome to the Near Memo episode 8. It's March 26th, Friday, March 26th and all the days are still continuing to bleed into one here and as always it's David Mim and Mike Blumenthal and me, Greg Sterling. And we're going to be talking about the news of the week.

Mike: Although one big change this week, Greg is your hat.

Greg: Yes, as I said to you earlier, this is in honor of the congressional hearings where Jack Dorsey appeared with Sundar Pichai and Mark Zuckerberg. SoI I'm striving to emulate him in my life in many ways.

Mike: Are you moving to Africa?

Greg: That's what I was about to say, you know, it's on the, on the roadmap for me.

Okay. So I think David is up first with the big story of the week.

David: Well, at least for the three of us, I think. Rand Fishkin published his quasi-annual report on the number of zero click searches from Google or the percentage of zero clicks searches from Google, which is up to almost two thirds across both mobile and desktop. And over three quarters, 77% on mobile.

We should note as you did, I think in your piece, Greg, for Near Media, that "zero click" doesn't necessarily mean zero click. It means that the clicks stayed on Google or that the user gets the information they're looking for just from the search. So a huge, huge increase in that in that number, the methodology did change versus the last time that Rand ran this survey, which was one of Google's criticisms in their very direct response to him.

Pretty surprising to see Danny Sullivan on a Google company blog, responding directly to this story. Which certainly makes me think that Google is taking the scrutiny even more seriously with the ongoing antitrust investigation by the DOJ.

I thought Google's response was incredibly disingenuous. It essentially criticized, or it didn't even criticize it highlighted others criticism of Rand's methodology. And simply said that they were sending more traffic through clicks to the open web every year. Without addressing the percentage of clicks they were sending.

So I thought it was a non, a non denial--or a denial of a non-denial I guess.

Greg: You might call it an ad hominem attack of sorts, kind of addressing Rand rather than the underlying issue. Although it does, I think to some degre--

Mike: But there is nothing intrinsically wrong. I mean, surely Google is monopoly, but there is nothing illegal about them using their search engine the way they want to use their search engine under current law.

Now, again, it may be because they are a monopoly, maybe it requires scrutiny, but for the most part, they're doing what's in their self-interest, which is how capitalism, for good or bad works.

Greg: Well, and in fact there was one of the cases in the long case history of ranking lawsuits that said, I think it was King is the name of the case, specifically that you Google is essentially a publisher that can order things and display things in whatever way it wants. And that's part of it's first amendment speech.

That was rendered a few years ago, so now in the light of all the antitrust stuff, that might be a different story, but basically just supporting what you're saying in a sense.

Mike: What I did find fascinating was just the numbers that Danny Sullivan used, because they don't elucidate local search that often, they noted that it drove more than 4 billion connections (monthly). Local search did, including more than 2 billion visits to websites, which means that 50% or so end up staying on Google for driving directions, phone calls, food, ordering reservations.

And that they connect people to more than 120 million local businesses without websites, which also elucidates this question of how many local businesses are on Google, because if 120 million don't have websites globally and they have 200 million entities we can now establish that there are somewhere in the order of 150 or 160 million local businesses in their global database. So both interesting factoids to me.

Greg: Well, the question in my mind is how much of this zero quick activity, if that's not an oxymoron, is really focused on local. I mean, that's, that's what one would have an infer that a substantial amount of w it's really about Google my business and interacting withGoogle, and the data there.

Mike: Yes. And this is something that local has been dealing with as a practice for close to 10 years, right? It's not new in the local space. All the people in local expect it and have developed protocols and processes around it and have used the opportunity to change their metrics from ranking to conversions, which I think in the end is probably a valuable change on the part of the SEO community.

Finally, 10 years late, but better late than never.

Greg: Before we move, I want to come back to something David said about the antitrust stuff. And let's go ahead, David. You were going to say something else.

David: Well, I was going to say it's interesting to see both Google and Facebook, in light of antitrust scrutiny, sort of hiding behind the macro good guy of the small business, right?

That Google is defending its zero click behavior by highlighting all of the direct connections to small businesses, which as an aside, I fully support. I think it's a component of zero click search, that I think does benefit small businesses in the end, as opposed to sending them those clicks to somewhere like Yelp or other places where they might have to continue to pay for visibility.

Greg: Totally. I mean, that's the kind of paradox of all of this is that we decry the sort of the dominance of Google on the one hand, but they are cutting out the middleman, which has always been a very dubious proposition from a small business standpoint.

So I think that it's a very kind of double-edged thing. I just want to say one quick thing about the antitrust piece. To your point about why Danny responded to it directly, because this is really one of the single most damaging statistics that exist for Google from an antitrust standpoint.

I think the idea that two thirds, at the highest level of the narrative,it's just very powerful, very potent narrative that two-thirds of web traffic stays on Google and doesn't go to other sites is really damaging from just a PR standpoint, I think.

David: And that's what I said on Twitter that the one of the first actions that the DOJ might take is to compel Google to reveal its own version of this number, which Danny absolutely did not do in his response on the Google corporate blog.

So I would say if you have a problem with the data don't point to others’ criticism of the methodology, come back with your own apples to apples, set of facts on what that data is presenting.

Greg: So, okay now on to you, Mike with reviews and defamation.

Mike: What caught my eye was the state of Michigan Court of Appeals that I think Eric Goldman highlighted and I went and read the rulings around Stephen Gersten & Michigan Auto Law, where Michigan Auto Law had some, a competitor apparently, or at least they claimed it was competitor left, probably up to three, one star ratings.

In the lower courts it was categorically dismissed that it wasn't defamatory, that a rating could not be defamatory by its nature, that it was an opinion and couldn't be anything else. They took it to the Appeals Court. The Appeals Court affirmed the lower court ruling and that said that a rating can't be defamatory, even if it's from a competitor and meant for malicious purposes.

And they also stated that every consumer understood that reviews at Google were not objective fact, but we're just opinions. And there was a minority opinion that stated that there was case law that supported the idea that just because it was an opinion, didn't isolate it totally from defamation. They (the minority opinion) felt they had used the wrong case law in deciding.

I thought it set several dangerous precedents. One is that if you do have a ratings attack, which is very common on Google these days and it is precipitated by a competitor that is trying to ruin your reputation, is there no recourse given that any rating is just an opinion and is protected by first amendment?

So I thought that was kind of dangerous. And I thought the assumption that consumers all understand that it's just opinion is not true. I think when consumers look at Google's aggregate rating numbers, they take that as a relatively important assignation of quality. And so I think there are subtleties that weren't addressed and I think it opens up dangerous precedents in terms of not reigning in the abuses in the review space.

David: I would agree with both of those statements, Mike. I think we've seen data historically, not specific to reviews, but specific to the quality of. Location information, Greg, I think Uberall might even have published this years ago. around the damage to brand value from bad NAP information essentially.

And consumers do not blame the search engine where that bad information appears. They blame the business. And so there's this notion that Google is essentially infallible information that Google presents is, is factual. So I agree with that, Mike and, and I think  it definitely opens up a potential sort of DDoSs style  competitive one-star rating abuse that we haven't seen a ton of be widespread, but the ruling certainly makes it harder to reign that stuff in over time because Google clearly isn't doing anything about it themselves.

Mike: All right. Greg, so now you as a lawyer have to defend the first amendment rights of a rating only.

Greg: Okay. So, so unlike you, I didn't spend time reading the opinions verbatim, but I think you do need to cast a broad net about when people are expressing opinions. I mean, it would chill reviews if you could sue for defamation every time you got a bad review.That has been, denied by courts consistently.

I largely agree with what you're saying. I think that consumers do understand that there's a collection of opinions behind these ratings, but in the aggregate, I think they do take on a quality of fact and what the court seems to be doing is kind of punting, because I think there should have been an opportunity for the Plaintiff to prove that the rating was from a competitor and there was an intent to defame. And I think that it should have gone forward. If you can prove it where you've got a malicious intent and you've got a competitor, who's not a customer doing this, then there should be some legal recourse.

Now it's all up to Google and review flagging and moderation and, you know with Google, it becomes essentially this sort of you know, like the company town, right? Where the, where there's no legal authority. It's really just all about Google. And so there will be some people running around with impunity, seeing what they can get away with. I think

Mike: They were denied discovery in the lower court. That's why it went to appeal. They were not given any opportunity for discovery. So at what point does it, should it, engender the right to go to discovery? I mean, on a default basis it makes sense, it's protected speech, but at some point it becomes abusive.

David: This ties in actually with a great long article that I read a couple of weeks ago by Anne Applebaum and a co author whose name unfortunately escapes me on the Atlantic about the implications of anonymous digital media usage on democracy. And this isn’t rising to the level of the threat to democracy, but sort of the same thing where you can have anonymous aggregate opinion, sort of feeding on themselves and, and presenting as fact in a search result. I just wonder if that's the remedy.

Greg: We would hope that most people are good. This is like a human nature question. You know, most people are good, most people are going to be honest, and you're only going to get a very small number.

If you build up your reviews and you have a sort of an ongoing program, you're, you know, you may have a few of those, but it's not going to drag you down. You know, hopefully people are honest and not going to do that.

But I think the most common kind of review fraud is a business writing a positive review or soliciting friends and family to write positive reviews for themselves. Then I think number two is the competitor scenario. If I'm not mistaken

Mike: I just started reading the FTC researcher’s report on “Do bad businesses get good reviews, Evidence from online review platforms”.

I've just was reading it in depth. So I may even write a blog post on it, Greg, just to beat you to the punch,

Greg: You gotta be really careful about what you say in front of me. I'm just like a child in that way.

Mike: It’s okay. I need someone to crack the whip occasionally.

Greg: Right? So, I need to crack the whip on myself here. So the third thing, there's a lot of interesting stuff going on. One thing that we won't talk about is just the pent up spending that looks like it's waiting to be unleashed, which is pretty interesting. There are two pieces on that basically recently, but I want to talk about Yahoo.

So Verizon came out and said, we're going to build a bunch of new subscription revenue products, and we're going to rebrand most of our, or substantially all, of our consumer media properties with the Yahoo brand. And I thought that was really fascinating. And many of these will be Yahoo Plus, Yahoo Mail Plus, Yahoo Finance Plus.

So I guess there'll be some tiered approach with some freemium kind of thing. But what's most interesting to me, there's two things that are interesting about this one,

Mike: "Yahoo Hacked Email Plus"

Greg:. Well, one, one thing that's interesting is just the Yahoo brand, which has been so neglected over the years. And especially after Verizon took over, they just didn't do much to keep it going. I mean, it's sort of going on its own. Once Yahoo was in the position of Google.

It was like AOL and Yahoo in the early days, and now it's Google and Facebook.

Can they revive the brand? It'll be interesting, sort of as a case study.

And then the other one David, we just talked about a few minutes ago, was the idea of now, in this first party data world, Verizon has a really interesting trove of email addresses and cell phone numbers.

Mike: And user locations and massive amounts of user data that is incomprehensible.

Greg: And then, you know, and they have an ISP also, which sort of adds in there too.

David: Yes and they still have, as we were talking about earlier as well, they still have a handful of very compelling consumer properties of which I'm an active user for four months a year in the fantasy football world.

So I, you know, it's there. I think Yahoo has turned out to be a very good buy for Verizon, whether or not they saw this “death of the third party cookie” coming, or it's sort of worked out in their favor, but I do think that Yahoo is still clearly very much an asset that can be leveraged to great effect by Verizon.

Mike: It'll be interesting to see if the name can ever be burnished once again, to take on some patina of respectability. I mean, in my mind, it is so associated with hacked emails and old people not knowing how to use email, et cetera, that I just have a hard time thinking about it in any respectful way.

Greg: Well, if you think about how many brands are there online, sort of true internet brands, you know, there aren't that many that you can name off the top of your head and Yahoo is one of them.

Mike: It's true. Aalthough you asked the other day, when's, Ebay going to go away.

Greg: Yeah. I am amazed by eBay's sort of survival.

It's the number two e-commerce company, according to the piece we did today and, this is a digression, but I'm really surprised that eBay has hung on as it has, you know?

Mike: It will be interesting to see whether Yahoo can can as a brand, reclaim its former position, certainly as an advertising context, it's kind of, it, it is going to be a powerful.

Greg: Well the Yahoo portal was over monetized.

They just crammed way too much advertising into it. They could clean that up, really make that a better user experience and then they could do a campaign on behalf of Yahoo and it's possible that they could revive the brand.

I think they're going to have to do something like that if they want to push all these subscription products, you know, other thanto the installed base of the fantasy football players or Yahoo Finance users.

Mike: It could just show up as bloatware on Verizon phones.

Greg: Unfortunately that may turn out to be the case. Yeah. David, what were you going to say?

David: I was just going to say they also have, it's not just fantasy content, right?

Yahoo sports is also a very popular portal. They have one of the top NBA reporters,Chris Haynes, who breaks all kinds of terrific inner player interviews and GM interviews and all that stuff. So I think that they have, theoretically, they're pretty well positioned as a horizontal content play, as well as a couple of deep, deep, vertical sort of expertise in products

Greg:.The news used to be really good too. I mean, there was a lot of really good content on Yahoo news. They have all these, these, these media properties, although I can't name them off the top of my head. I mean the AOL stuff, all the AOL stuff. So they could funnel that into behind a Yahoo news brand.

That would be kind of interesting as well.

Okay. We're out of time for this week. Any final thoughts or self promotional comments you want to make?

David: Not necessarily I'll say thank you to the folks at SIINDA who hosted me for a round table discussion earlier this week. So thank you SIINDA, for that.

We do still have two events coming up that multiple, multiple of us are involved with LocalU Advanced, as well as the Street Fight Summit. So take a look at both of those if you're interested in more great local and digital content.

Greg: Okay. And Mike, nothing to add there, nothing to add. Okay. So everybody have a great weekend. Read and subscribe to the Near Memo and we will be back next week at the same time with more scintillating, provocative and controversial remarks as always.