If you want to begin to understand the way Google is reconfiguring its pack of algorithms — much to the despair of its smaller commercial customers — you could do a lot worse than read I, Cringley’s latest article on PBS. It portrays the Mountain View operation as a giant can of worms.

[A] problem at Google right now is algorithmic optimization gone mad with the probable result that many of Google’s smaller AdWords customers will go broke this Christmas. Killing longtime customers is not a good corporate policy.

The upshot seems to be that Google is subject to the Law of Unforeseen Consequences, a well-known byproduct of increasing complexity. Worse, Google does not address these problems directly for fear of crashing its already wobbly customer service system. Now there’s a real bind.

We’re used to governments getting into hot waters like this, but they are operated by rather stupid people. Google is run by whizz kids with Stanford PhDs and brains the size of a minor moon of Jupiter.

What’s really going on here? “Algorithms — the smarter the better — are at the heart of Google’s success. But Google’s major failing nearly always comes down to confusing algorithmic efficiency with moral, ethical, or even business correctness. Sometimes good algorithms do bad things and the tendency at Google is to simply not care: it was the ALGORITHM’s fault.”

I’ve always suspected that Algy the Algorithm was a thoroughly nasty cartoon character. Like all such characters, he’s completely indestructible. Even if you flatten him to the floor he just pops up again worse than ever.

As Cringely puts it : “… recently Google started messing with AdWords, modifying algorithms and launching new programs that make the company look good to Wall Street, which is always seeking at least the appearance of improvement, but not to Google’s AdWords customers.”

At $700 a share it may be easy to break with its original customer base, but with the U.S. and world economies going sharply south, even Google may need the support of anyone it can get … maybe even those small-scale, under-capitalized guys who built their businesses alongside its growing infrastructure.

I’ve just noticed that Techmeme has got a PR4. The site probably has hundreds of thousands of links in its archives. Its business is to link readers to the most relevant and authoritative technology news around the world.

Why doesn’t the new Google algorithm distinguish between that model and paid linkage? So far as I’m aware inclusion in the body of Techmeme is not based on any monetary transfer. Syntagma is often included and no payment is asked.

The only exceptions are the webclips from posts of Techmeme’s sponsor sites. Do they count as text link ads too? If so, Google is now attacking the basis of the citation system it set up in its early years and is ominously beginning to confirm a suspected lack of tolerance of any online monetizing scheme other than its own.

We sometimes forget that Google is a business like any other. To own both the largest search engine and the most extensive advertising program on the internet must offer great temptations for muscle flexing to its management.

However, the use of monopoly powers is always counter-productive in the end. Without keen competition a company quickly loses force in the marketplace and the respect of its customers.

One wonders how far this downgrading process will go. There are hints that the company miscalculated this move and is having to put back rankings to many sites. Not here yet though.

So what is the new gold standard? What now counts as a penalizable link in the Google dispensation? In the age of information, the facts of this case are not easy to come by.

We have fielded a lot of emails in the past three days about the still developing situation between internet giant Google and text-link buying agents, like TextLinkAds.com.

To recap, Google has conducted a manual search of mainly networked sites to penalize commercial publishers who sell links via the agencies, or who have hand-rolled ads without rel=”nofollow” in the code. The code stops Google’s robot from following the link to its source, thus avoiding clocking up a backlink for the buying site.

The more ranked backlinks a site has, the higher its PageRank. Google has been progressively lowering the rankings of sites on which perceived mal-dispositions are found.

For example, Syntagma — which we expected to rank 6 by now — has dropped to 3 in the latest round of carnage. Our site Fifty-Something Women — which has around 20 text links of various sorts — has fallen from 5 to 2. This gives the artificial impression that the site has low traffic and puts off some ad buyers who respect Google’s approval.

Google claims the ads are skewing the results of its search engine, replacing relevancy and authority with the ability to purchase links, i.e. buy authority and relevancy rather than earn them through merit.

There is some force in that argument, although the contrarian view is that Google itself is now skewing its own results by retreating from its pure search criteria.

Also, many observers believe Google is attempting to crush the businesses of the astonishingly successful agencies that sell the links. Its own text-based system Adsense, has undoubtedly taken a knock from TLAs in recent months, especially on low-to-medium trafficked sites, which do poorly on the Google system.

Whatever the facts in this case, Google has created the monster from which it is now suffering.

Background
A mere 15 years ago, at Silicon Valley’s Stanford University, founder Larry Page saw literary citations as a software opportunity for the web. Nowadays, it’s hard to see beyond the system he produced, first BackRub, a way of measuring backlinks to articles and sites, and then PageRank, the most addictive element in web oneupmanship. Has that system really served us well?

To generate Googlejuice you have to cite and cite regularly and relevantly. The blogosphere, in particular, is a madhouse of clickability. The genius of Google is that it didn’t just transfer the bane of academic publishing, the citation system, onto the web, but that it discovered how it could profit enormously from the process.
/Background

Is it now pulling the rug from under other companies who are using its innovative scheme to build businesses on the web?

The link, or citation, system is behind the present controversy in the search business. The wonder is that Google tolerated the SEO — or Google gaming — system for so long. The sudden rush to penalize publishers has a rather thuggish feel about it, particularly as the broken bit in this chain lies within the software of the companies that broker the ads.

Jason Calacanis, formerly chief of Weblogs, Inc, which sold to AOL for a reported $30m, has put up a good piece in which he explains how he created the interlinking system between blogs and also hosted the first text link ads.

Where are we now?
We are now at the point where we have to decide. Do we take the ads down, or leave them up and suffer the consequences, the extent of which is not yet clear?

At Syntagma, we have sites which are 90 percent plus dependent on text links. We are therefore going to sit this out and observe what happens. We will keep faith with our advertisers. Business as usual.

However, we strongly urge the brokerage companies of text links to do deals with Google on this matter. Not only is their business model in grave danger of being blown out of the water, but it may be that small tweaks in their software will be enough to allow Google room to compromise.

After all, there are a lot of enraged publishers out there, who feel they have been badly let down by the giant of the internet. Uncle Google has suddenly turned into the wicked stepfather.

As I look up from my desk here at Syntagma Towers I can see the full moon glistening fiercely above the distant pine forest from where wolves are howling fitfully into the night.

I shudder slightly and turn back to the work on my desk. Suddenly, the doorbell rings.

When I open the door, expecting to see a familiar figure, I am surprised by the presence of a tall, young man in a black suit holding an enormous book. I can’t quite make out the title of his tome, but I guess I’m being cold-called by an encyclopedia salesman.

“Good evening, Mr A. N. Other,” he says brightly in a rich Californian accent. He knows my name, then, I think glumly.

“I’m here to introduce you to The Gurgle Encyclopedia of All the World’s Knowledge in 1000 easy-to-manage volumes.”

I see my escape route at once. “Ah, 1000 volumes. I couldn’t afford them, I’m afraid.”

He grins. “No problem, Sir, they’re free.”

“That’s incredible,” I say, genuinely taken aback, “But in any case there’s no room for them here.”

“Not a problem, either,” he continues, “We’ll extend the back of your house so the books will be displayed in a long gallery. A real talking point for your friends and neighbors.”

I’m about to interject again when he hits me with his second pitch. “And that’s all free too.”

Suddenly, I’m beginning to take him seriously. I look up at his face, now shaded by the growing darkness. The full moon is behind his head, glowing strangely like a corona around his features. The wolves are silent at last. “What’s Gurgle?,” I say almost inconsequently.

“It’s a Californian corporation made up of bright young graduates from Stanford University. We have a motto, ‘Never do anything evil to anyone at any time’. ”

You have to be impressed by his schpiel. But it’s really sounding too good to be true. I begin to feel slightly overwhelmed and look for another way out. “They will go out date very quickly,” I say hopefully.

“These are no ordinary books.” he grins. “They look normal, but actually the pages are filled with electronic circuits so that we can remotely update them every day.”

I gaze at him in wonderment, picturing these vast, magical books stretching in a long line right out into the garden. “There must be a catch,” I say, finally.

“Only one paragraph of small print. If you have any media online, websites, blogs, etcetera, you must promise never to use text link ads … ever.”

My brain is now working overtime. What if I sold the encyclopedias to compensate me for loss of earnings.

“And you must swear never to sell the books to anyone.”

He smiles triumphantly just as a passing car illuminates his face with its headlights.

In his open mouth, I can see two sharp vampire fangs hanging down from the upper jaw. I close the door hastily and rush to the kitchen for some garlic.

So what we’ve been experiencing for some months now has reached its apogee. Google PageRank values right across the blogosphere are tumbling like nine-pins in a storm. Some sites have fallen from highs of 6 or 7 to new lows of 2.

At first I thought this might be a general rebalancing of the system, getting everyone used to lower rankings and allowing more scope for megasites at the top end. But it seems it goes beyond that.

Darren Rowse at Problogger has seen a drop in his seminal site from 6 to 4. The belief of many commenters is that Google is attempting to crush the trade in text link ads.

However, since Google’s own Adsense is mostly a form of text links, albeit (presumably) with a no-follow hard-coded in, this does seem to be a restraint of trade for commercial websites competing with Google’s overarching system.

PageRank is awarded on the basis of backlinks, rather than raw traffic data. Nevertheless, traffic and backlinks often go hand in hand. A popular site will have both to some extent.

The Google Dance has changed in recent months. We now get a monthly update instead of the variable quarterly adjustment that reigned previously. What, though, persuaded Googleplex chiefs allegedly to attack a legitimate commercial operation that just happens to have an impact on the Adsense/Adwords system?

Text links usually have anchor text advertising a commercial service of some kind. Why should that be any different from Adsense text blocks? Except in obvious cases, how can the algorithm distinguish between links posted for PR enhancement and those genuinely seeking extra business by an online form of classified advertising?

It can’t.

Brock Boser, Chief Operating Officer of New York-based Text-Link-Ads.com — an agency selling ads across the internet — tells me they won’t be reducing their prices in response to the current PR meltdown.

Maybe this will do the trick. Or perhaps the current furore across the blogosphere will persuade Google they are not behaving well and should aim to be less imperialist in their business methods.

Has Google become the new Microsoft?

Update : Duncan Riley over at TechCrunch is comparing blog networks that interlink with link farms and seems to approve the “crackdown”. Come on, Duncan, you’ve owned a blog network and were a founder member of another. Pots and kettles, surely?

Update : Danny Sullivan at Search Engine Land has cleared up a lot of fog on this subect — “I pinged Google, and they confirmed that PageRank scores are being lowered for some sites that sell links. … In addition, Google said that some sites that are selling links may indeed end up being dropped from its search engine or have penalties attached to prevent them from ranking well. … Google stressed, by the way, that the current set of PageRank decreases is not assigned completely automatically; the majority of these decreases happened after a human review.”