Rank Amateurs - SEO, Google, AI, and Taxes
SEO
Last week, the folks at HouseFresh, the air purifier site we talked about a couple months ago, issued a fresh Google missive. Despite generating some news and buzz, things are much worse for the site:
Within a few days of publishing the David VS Digital Goliaths exposé, I received an anonymous tip from a former Dotdash Meredith employee, who informed me of an SEO content strategy they implement called “keyword swarming.”
Large publishers like Dotdash Meredith (a digital media conglomerate) identify independent sites with strong keyword relevance in popular areas like product reviews and have their staff publish dozens of competing articles to drown out the original site. Swarm articles are, by design, lower quality and often crib content, which HouseFresh surfaced in its prior exposé.
Another example of keyword swarming is Forbes, which has written thousands of articles about house pets. It is not a topic you’d associate with a financial website - though Forbes has become notorious for publishing sketchy content alongside a diminishing amount of real journalism - and is in fact a pure SEO play for Forbes to capitalize on its brand to sell pet insurance:
The Forbes Advisor team published all this content about cats and dogs because they needed to build Forbes.com’s authority in the space to compete with sites such as Dogster or Canine Journal.
For brands who stayed out of the SEO game, savvy digital practitioners can transform them into clickbait factories:
The Money brand is now owned by Ad Practitioners LLC (recently rebranded as Money Group), a company that profits from affiliate links and has developed an ad network.
Money magazine, on newsstands for more than forty years, is now run by a former Google executive who uses its search cache to create affiliate link farms featuring products like - wait for it - air purifiers!
This means, of course, that Forbes and Money and other decaying brands are relying less on journalists and more on low-paid content aggregators combing lists of sites to rewrite their content or - less generously - shitty AI to do the work of a few bloggers, except worse.
These types of sites and companies exist because Google spent years financially incentivizing this sort of behavior. SEO hackers figured out ways to cannibalize journalistic websites and reputable blogs and create affiliate linkfarms with little useful content.
But! Facing public pressure, Google issued a warning back in March, saying that ‘site reputation abuse’ would lead to delisting from its search rankings. May 5th was the deadline, and now that it’s passed, are things any better?
A tweet earlier today from SEO expert Lily Ray--using data from SEO analysts Sistrix--shows that changes Google made between September 2023 and April 2024 have been devastating to sites like NME, Techcrunch, Dexerto, Popsci, Collider, Android Police, GQ, NY Mag and even the Urban Dictionary.
Many popular review and news sites still run by real humans have suffered search visibility decreases by up to ninety percent after the changes.
For sites that depend heavily on Google search traffic, this is an existential crisis. Some have speculated that Google overzealously targeted sites with a lot of affiliate links, but Google has forced this tactic upon the blogs dependent on its traffic. SEO-based blogs can’t make money off subscriptions or traditional media models, so affiliate links are one of the few remaining avenues - the other is, of course, running Google’s own display ads for pennies on the dollar, which the company would undoubtedly prefer.
This ham-handed approach may have cut traffic to Forbes, but it’s also harmed sites like New York Magazine, Popular Science, GQ, and others. The company will presumably roll some of these changes back or make tweaks, but it is not encouraging that the world’s search giant can’t seem to distinguish between spam and legitimate websites.
Perhaps this laissez faire attitude towards search and the websites that make it worthwhile is due to the company’s ongoing attempts to AI-ify it:
The product, dubbed “Search Generative Experience,” or SGE, directly answers queries with complex, multi-paragraph replies that push links to other websites further down the page, where they’re less likely to be seen.
Yup. It’s chatbots all the way down. The problem with SGE is that it’s not creating anything new, it’s just paraphrasing the sites it’s shoving down in the rankings:
Google calls its AI answers “overviews” but they often just paraphrase directly from websites. One search for how to fix a leaky toilet provided an AI answer with several tips, including tightening tank bolts.
[…]
Google’s AI tips lifted a phrase from The Spruce’s article word-for-word.
It is in service to two things - Google’s desire to be seen as an AI-first company so its stock will ride the wave of investor hype, and an internal push to keep users ‘on’ Google for longer, reading chatbot vomit rather than visiting the sites it’s ingested without permission.
And permission really is the key, because site owners have not given Google the OK to rewrite or reproduce their sites’ content. And why would they? A user spending an extra thirty seconds on Google to juice some internal performance metric means practically nothing a two trillion dollar megacorp, while the financial consequences for bloggers could be ruinous:
Raptive, which provides digital media, audience and advertising services to about 5,000 websites, including Easy Family Recipes, estimates changes to search could result in about $2 billion in losses to creators — with some websites losing up to two-thirds of their traffic.
Lest this estimate appear alarmist, recall that ten days ago the company did axe two-thirds of search placements for thousands of websites!
Don’t worry, though, Google is rolling out a new ‘Web’ search feature to make Google look more like it used to before its UI team Frankensteined it:
Like most things Google, this tossed-in afterthought may help its development teams sleep at night, but it will do little to nothing for the blogs under threat from its chatbot army.
AI
Google’s busily puffing up the AI bubble, which has yet to produce anything resembling a sustainable business model.
How big is the bubble? Probably bigger than you think:
Investors have poured $330 billion into about 26,000 A.I. and machine-learning start-ups over the past three years, according to PitchBook, which tracks the industry. That’s two-thirds more than the amount they spent funding 20,350 A.I. companies from 2018 through 2020.
The most ‘successful’ of these start-ups is OpenAI, which earned $1.6 billion dollars last year, though it does not disclose how much it spent, and the company is famously a non-profit which may never return anything to investors or shareholders.
Another company that discloses its earnings provides a window into just how capital intensive the AI business is:
Anthropic, which has raised more than $7 billion with backing from Amazon and Google, is spending about $2 billion a year but pulling in only about $150 million to $200 million in revenue, said two people familiar with the company’s financials…
Not great! Even that pales in comparison to some of the biggest duds:
Inflection AI, a chatbot start-up founded by three A.I. veterans, had raised $1.5 billion from some of the biggest names in tech. But a year after introducing its A.I. personal assistant, it had almost no revenue, according to one investor.
We have talked about AI chatbots and how they don’t appear to be getting any better - what they do appear to be getting is more expensive. Typically, the goal of a tech company is to spend heavily on R&D to build out a product that becomes less expensive at scale. The opposite is true of AI - as models become bigger they cost exponentially more to run, and need to be run more often to stay current.
So who is making money off this mess? Conveniently, the companies investing heavily in AI startups - Google, Microsoft, and Amazon - are the biggest operators of datacenters in the country. Microsoft is ‘investing’ billions in OpenAI, much of which flows back into its cloud computing coffers as OpenAI uses those billions to build new chatbots.
To illustrate the size of this new cash ouroboros, Microsoft’s AI blitz has reversed its climate commitment to become fully green by 2030:
The three tech giants who control most of the cloud infrastructure are pouring money into AI startups, which is leading other investors to pour their money into AI startups, much of which ends up in the pockets of three tech giants. It also strengthens their stranglehold on the cloud business, allowing them to vastly expand their footprints while credulous VCs foot the bill.
All of this is terrible for the environment and, as every consumer software company stuffs their products full of useless AI, society as a whole. We are spending hundreds of billions of dollars to make computers dumber, at the cost of cooking the planet and evaporating piles of money that could be used to do literally anything else to improve humanity.
Taxes
When publications interview lawyers and accountants about legal liability they tend to couch their language carefully while ruminating on what is quite obviously illegal behavior.
Anyhow, here is a story about Donald Trump’s ‘dubious’ tax ‘maneuvers’ that may not ‘withstand’ IRS scrutiny:
The first write-off came on Mr. Trump’s tax return for 2008. With sales lagging far behind projections, he claimed that his investment in the condo-hotel tower met the tax code definition of “worthless,” because his debt on the project meant he would never see a profit. That move resulted in Mr. Trump reporting losses as high as $651 million for the year, The Times and ProPublica found.
There is no indication the I.R.S. challenged that initial claim, though that lack of scrutiny surprised tax experts consulted for this article. But in 2010, Mr. Trump and his tax advisers sought to extract further benefits from the Chicago project, executing a maneuver that would draw years of inquiry from the I.R.S. First, he shifted the company that owned the tower into a new partnership. Because he controlled both companies, it was like moving coins from one pocket to another. Then he used the shift as justification to declare $168 million in additional losses over the next decade.
It is worth noting that Trump only invested around $94 million dollars in the project himself, and most of the losses he declared were on loans and investments from other people. By 2008, the project continued to try and sell condos to offset its losses, so he was also declaring a loss on loans that might some day be paid back through revenues.
Loosely speaking, it is legal to write off an investment as a complete loss if there is no hope of recovering what you put in it, and it is even legal (though it should not be) to use tax losses to offset tax gains of forgiven loans, which are counted as income by the IRS. That is not what Trump did, because he is fundamentally incapable of assuming either tax liability or responsibility for any of his many business disasters.
Not content to defraud the tax authorities to the tune of half a billy, Trump fabricated an additional $168 million in losses because, thanks to The Apprentice, he’d finally started to make money in 2011. The $184 million he took in from the show over six years was almost entirely offset by his double-dip tax loss.
All of this happened more than a decade ago, and despite talk of audits and IRS investigations, Trump has yet to be held accountable for any of his tax dodging shenanigans. When you have a team of tax lawyers and are also willing to flagrantly lie to the IRS, apparently you can get away with it?
The NYT did find a single law professor brave enough to describe to the obvious:
“I think he ripped off the tax system,” said Walter Schwidetzky
If the IRS ever decides to get its shit together, Trump could be on the hook for $100 million dollars’ worth of tax liability, plus fines.
Elsewhere, the tax auditor Trump’s fake media company used has been fined and shut down by the SEC for widespread fraud. It was called BF Borgers, which is an objectively funny name, and it was run by one guy named Benjamin Borgers and a handful of auditors. The firm was also one of the nation’s largest audit firms despite or perhaps because of its small size and relative obscurity, because it happily submitted fraudulent audit reports for hundreds of public companies for years.
Taxes, and apparently public financial disclosures, are treated by the wealthy and well-connected as a mild inconvenience, whereas the rest of us can suffer real consequences for not playing by the rules.
Short Cons
Reuters - “Neuralink's disclosure last week that tiny wires inside the brain of its first patient had pulled out of position is an issue the Elon Musk company has known about for years, according to five people familiar with the matter.”
WaPo - “Trump’s response stunned several of the executives in the room overlooking the ocean: You all are wealthy enough, he said, that you should raise $1 billion to return me to the White House.”
WSJ - “Disney said it spent almost $800,000 for Bob Iger to use company aircraft for personal trips in the last fiscal year. Taking similar trips at his own expense would have cost the chief executive more than $2 million, a Wall Street Journal analysis found.”
WSJ - “In a desolate stretch of desert spanning West Texas and New Mexico, drillers are pumping more crude than Kuwait. The oil production is so frenzied that huge swaths of land are literally sinking and heaving.“
CBC - “A Shell-operated plant registered millions of carbon credits for reductions in greenhouse gas emissions that never happened, allowing the company to turn a profit on its fledgling carbon capture and storage project, according to a new report by Greenpeace Canada.”
CNN - “Walmart, the largest retailer in the United States, will close all 51 of its health care centers in six states and end virtual health care services, the company said Tuesday.”
WaPo - “A group of billionaires and business titans working to shape U.S. public opinion of the war in Gaza privately pressed New York City’s mayor last month to send police to disperse pro-Palestinian protests at Columbia University, according to communications obtained by The Washington Post and people familiar with the group.”
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