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.

This is the third and final segment of a recent interview I gave to Gerry Reynolds, a retail analyst, and which is published in Syntagma with permission. Read the other two parts here : #

Gerry : I’d like now to look in more detail at the essence of the business, its income, i.e. advertising. What are the main parameters of online advertising?

John : Online advertising is relatively new, so it still has more than a shade of the Wild West about it. It’s improving all the time, though, and growing very fast.

For small publishers, the breakthrough was Google’s Adsense, which is a text-based system aimed at generating clickthroughs, which in turn produce income linked to the market price of certain keywords sold by auction as “Adwords”. You can see examples of Adsense at the foot of each of the first three posts on any of our sites.

If that sounds complicated, it boils down to “pay-per-click” instead of pay-per-sale. The pay you get per click varies from a few cents to more than $10, depending on the product or service involved.

If you think of Adsense as plain old classified ads with an electronic counter attached, you’ll get the point.

Gerry : But Adsense is going out of favour now, isn’t it?

John : You do need high trafficked sites for it to work, which is why it’s the darling of the Google gamers, the SEO wizards who seed their sites with high-priced keywords to generate traffic and clickthroughs.

Most decent blogs will have traffic of between 10,000 and 50,000 page views a month. That’s not enough to make useful gains from Adsense. Significantly, though, it’s enough to generate hundreds of dollars a month from “text-link ads” which are paid for in advance by actual advertisers. There are now agencies which sell the ads for you and take a 50 percent cut for their pains.

Gerry : Does Syntagma use these agencies?

John : We do, but we also sell our own text-links off our inventory. They tend to give better value to the advertisers because we can be flexible with discounts, especially where a lot of space is available.

Gerry : So text links are the most important form of advertising for you?

John : In our first two years, they have been. The cumulative income from hundreds of text links over 40 to 50 sites, can be very impressive indeed, especially compared with affiliate shareouts, which depend on sales, and CPM ads which give small sums for each ad impression.

Gerry : What other systems have you tried?

John : I’ve tried them all. On high traffic sites, Adsense and affiliate links do well, because they are a numbers game. But the bulk of sites will be below, say, 100,000 page views a month. These need to be monetized in a different way to bring home the bacon. However, if these sites are in the right topic areas, they can generate good monthly incomes from text links.

Gerry : What are the right topic areas?

John : Click through our inventory contents list in the sidebar of Syntagma and you’ll see those that sell out on text link ads positioned below the header.

Gerry : So anyone can do this?

John : In theory, but not quite. Many “blog” networks have closed because the owners didn’t have the stamina to see the job through. Syntagma has a good reputation in the space, which we’ve earned over two years, and is seen as a mature player. That attracts advertisers to us.

In our first year, income was sparse and I funded the operation from my credit card. In the second year, when I had learned the lessons of profilgacy, oneupmanship and other money-draining practices, I slimmed the whole shebang down to an optimum size and reach, which now makes money.

I don’t want to beat my own drum, but it does take tenacity and a great deal of shrewdness to stay in the game when you’re losing funds every day. The secret is to stay in the mainstream in terms of market niches, but to do it differently from everybody else, so you stay ahead of the crowd.

Gerry : You don’t mind giving your secrets away?

John : I’m always glad to help anyone who’s starting out or who is currently not succeeding. There’s enough money in online business for everyone who wants to claim it. Each success story expands the envelope. It’s not a finite pot. It’s a very dynamic marketplace, and we’re all pioneers here.

Gerry : What are the other forms of advertising that you may use in your third year?

John : I’m always experimenting, sometimes below the radar and on sites not part of our list.

Sponsorship of sites by substantial corporations is a possibility, and I’ve had talks with a few such players. Also, Google is developing an ad network with the aim of filling neglected inventory all around the internet with their ads. It’s a great concept, especially if it gets away from the necessity of hosting dedicated ad serving software, which is a nightmare for relatively small operations. That’s the Next Big Thing in the space, and all the other majors are following suit right now.

Gerry : You seem to have an aversion to spending one penny more than you have to on anything.

John : I operate a “blood from stone” policy. In a low margin business, you need to find the sweet spot where profits are generated from minimum costs. So far, I’ve been successful in this. I don’t intend to overreach the limits imposed by basic cash-flow techniques, nor make assumptions that I can’t nail down.

Syntagma’s motto is Dr Johnson’s phrase : “Example is more efficacious than precept”. Which can be translated as “successful actions speak louder than words”, or “A warehouse full of bacon is a better investment than a forestful of wild boar”.

Gerry : What about subscription models of funding?

John : They have been tried, mostly on crack information sites, and usually with disastrous results. The New York Times is coming off a part-sub model right now, and so are many other newspaper titles.

People expect their online experience to be free, for the simple reason that when they click away from a page there’s nothing left, unlike with a newspaper or magazine. It’s fairly simple psychology. That’s why we sell the fleeting use of their eyeballs. There’s nothing else to sell online that has real value.

Gerry : I love that, “the fleeting use of their eyeballs”. Are people aware of what you’re doing to them?

John : Good God, no. Everyone’s very protective of their eyeballs. If they thought we were renting them out, they’d shoot us.

Gerry : And so on to year three.

John : From October 20, yes.

Gerry : Is it going to be a good ‘un?

John : The best so far, undoubtedly, but the words “chickens” and “hatched” loom large in my consciousness.

Gerry : As ever!

John : As ever and a day.

Search9Media is an entirely Irish blog network that has just opened up in Dublin. #

From the list of sites already up it’s clearly dedicated to Irish and local concerns. For example, Irish Jobs, Football, Shoes, DVDs, Bags, Bridal, Gadgets, Mobile etcetera. It’s just the kind of product based network that does really well on advertising, and being local will give it an instant leg-up with Irish internet users.

They are looking for bloggers right now — presumably with a touch of the blarney about their blogging. Here’s what they say about themselves :

I’m very happy to say that Search9Media is open for business! For the past few weeks we have been busy getting our network of websites up and running.

Search9Media is a Dublin based Blog Network (we think the first to launch in Ireland). We’ll be producing quality based content on a number of subjects by extremely talented writers.

We’ll be looking for bloggers in the next few days so make sure you check back if you are interested in writing for Search9Media.

Syntagma wishes Colm and the team great success with Search9Media : #

Continuing into Fall with our summer series of changes at Syntagma Media, we are now incorporating the long-planned print publishing arm into our main Syntagma workstream. This move is on the advice of Gerry Reynolds, our business consultant.

Dial Publishing has been eased into oblivion and its projected print products moved to the Syntagma Media brand. Some of the book titles we earlier had in mind have been syphoned off to a trade publisher, leaving a couple to launch our new imprint.

They are, The Natural History of Nirvana by yours truly, which we hope to have out in the New Year; and The Syntagma Story, which may materialize by May 2008 if there’s enough interest.

Our office move scheduled for October has fallen through, so we are now aiming for November, or at least before Christmas. Our current location is a real property hotspot so it’s no easy matter finding alternative office or residential space. We may have to move out into the sticks, assuming at least 8Mb/s broadband is available.

We are also continuing to develop new sites and topic areas : health and fitness being the probable next launch, followed by a sub-network devoted to the West Country of England. The aim is to transform the inventory into a fully commercial network.

So there you have it, slimming down and expanding out from a solid base is the name of the exercise.

Hot business tip : Float like a butterfly and sting like a bee.

Bzzzzzz!