Why Google and Demand Media Are Headed for a Showdown

There’s been a chorus of criticism recently about Google’s (s goog) spam-filled search results, including pointed blog posts from a number of technology and web luminaries, complaining that the company’s links are in many cases virtually unusable, because they are filled with keyword-riddled ad content disguised as helpful tips. Although such complaints are routine for search engines like Google, there is some truth to them — and trying to stamp out that kind of content is likely to mean pain for at least one giant web company. Demand Media, which is currently planning a high-profile IPO for later this year, is often singled out by critics as the kind of content “farm” that generates a lot of those spammy search results.

The most recent cavalcade of complaints about Google started in mid-December 2009, with a rant from Bloomberg business columnist and blogger Paul Kedrosky about the difficulty of finding information about dishwashers, and how the results displayed what he called “the drive-by damage done by keyword-driven content,” and the work of aggregators and content farms whose business model he described as:

Find some popular keywords that lead to traffic and transactions, wrap some anodyne and regularly-changing content around the keywords so Google doesn’t kick you out of search results, and watch the dollars roll in.

This was echoed a week ago by Vivek Wadhwa, an entrepreneur who is now the director of research at the Center for Entrepreneurship and Research Commercialization at Duke University. In a blog post entitled “Why We Desperately Need a New and Better Google,” Wadhwa said the search engine has “become a jungle: a tropical paradise for spammers and marketers. Almost every search takes you to websites that want you to click on links that make them money, or to sponsored sites that make Google money.” (A new Google competitor called Blekko has created a site called the SpamClock to track bogus web content, which it claims is being created at the rate of about 1 million new pages an hour.)

More recently, Instapaper developer Marco Arment joined the fray with a blog post describing how entire categories of searches seem swamped with spammy results — including those, like Kedrosky’s search for dishwashers, that involve specific products. As he put it, massive numbers of content sites are “generated by penny-hungry affiliate marketers and sleazy web ‘content’ startups to target long-tail Google queries en masse, scraping content from others or paying low-wage workers to churn out formulaic, minimally nutritious pages to answer them.”

Searching Google is now like asking a question in a crowded flea market of hungry, desperate, sleazy salesmen who all claim to have the answer to every question you ask.

Both Wadhwa and Arment — as well as others writing about the same issue — point the finger for much of this quasi-spam at “content farms” such as Demand Media (particularly its eHow.com unit) and Associated Content. The former, founded by CEO Richard Rosenblatt, is working on an IPO that is expected to value the company at more than $1.5 billion, while the latter was acquired by Yahoo (s yhoo) last year for $100 million. As Wadhwa notes, Associated Content produces more than 10,000 new articles a month about topics such as how to change a tire or a diaper, while Demand Media has more than 8,000 writers who produce roughly 10 times that number every month.

Both companies argue that they produce valuable content that people (and companies) find worthwhile, and that they are not “content farms” trying to rig Google’s algorithms. But the reality is that much of their content is produced quickly, is often of fairly low quality, and is targeted — in Demand’s case, by the company’s own algorithms — to match the keywords that people are likely to search for, because those are the ones that will produce the most advertising revenue. Demand Media has noted in the “risk factors” section of its IPO filing that one of the big risks to the content business is that Google might devalue that content by changing its algorithms to make it show up lower in search.

Until recently, Google might have been able to ignore the kinds of criticisms that Kedrosky and Wadhwa and others have raised, because it was so dominant in both search and advertising. But the web giant can’t afford to do so for much longer when it’s already under competitive pressure from Facebook, which is not only growing rapidly and now has a $50-billion market value, but is also seen to be attracting increasing interest from the advertisers who represent Google’s bread and butter. Search results and user loyalty are about the only weapons that the search company has left — and that could make things unpleasant for Demand Media and its ilk.

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