Google has been the target of lawsuits before over Google Images. There recent redesign of Google Images is sure to raise more than eyebrows.

In an attempt to be more like Pinterest Google Image now displays nearly full-sized images within Google Images. Users who wish to see an even larger image can simply click “View original image”, bypassing the original publisher’s attributes or methods at generating income from those images. Unlike Pinterest, Google’s users did not submit these images but rather Google’s own hardware retrieved them on command. There is no fair use defense here.

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In an attempt to reduce the damage to their brand Google displays a more prominent “SafeSearch” message when confronted with explicit results (with a transparent overlay leaving those results plenty visible.) However, the damage may done as it the lines between Google and publisher evaporate save for an often ignored URL string when those users need to see every last pixel.

One could briefly imagine the war over content distribution has ended as the once vilified Metallica seems to let the mountains of content available on YouTube slide. Mobile phones, tablets, and Pinterest have led to a world where archaic legacy web sites live somewhere in the border between obnoxious and hideous. The user experience now begins to tower over the law, even at small start ups, as evidenced by Uber.

Publishers who wish to continue to own their content must do so in more than DMCA barrages. To truly own your content it must be unquestionably identifiable to your brand. If not, you are just serving as a free extension to someone else’s.

I’ve seen a lot of wacky tricks pulled by online marketers, but this phishing scam might top them all. Someone has been registering domain names of mobile providers and offering hundreds of dollars for free simply by visiting their fake site.

Telecommunications continues to behave like the wild west, with mobile providers letting a lot of stuff slide. The continued erosion of trust between customer and service provider, combined with dirt cheap communication alternatives (sending an IM vs SMS, online voice vs mobile call) raises questions about brand longevity for AT&T, Verizon, and others.

att650.com

Whether you are trying to figure out where your 99 designs entrant jacked the graphics from, or if the girl you hired off of ModelMayhem as your new company spokesperson is a hooker (I’ll leave the example off of that to be nice), reverse image search is a must have tool for any business owner.

I am somewhat amused at how many people are surprised when I mention Google’s reverse image search tool (Tineye has been doing this for a long time too, to be comprehensive use both.) Reverse image search doesn’t just parrot back to you other locations the image have been used, but you it finds images that have been altered or are a derivative of the source.

Without using reverse image search on design work you could be leaving yourself open for an expensive copyright lawsuit at worst, or at least a little embarrassment.

Neither Google nor Tineye offer a public reverse facial recognition search yet but I expect we will see it in the near future. It will be really embarrassing, probably illegal in the EU, but it is inevitable.

(amusingly, yes, this logo is also spelled wrong)

In order to compete with jobs from international workers, Americans are selling their labor on freelance job sites for several dollars per hour.

On a recent job I posted, I noticed a woman in the US bidding a couple of dollars per hour of labor. When I asked her why was bidding at below minimum wage she said it was to log hours on her new account. Presumably, a worker with hours is more qualified for a contract than one without. (based on contracts I have initiated across oDesk, Freelancer, and others, this has not been a factor in determining quality.)

The freelance labor market works like any contract auction. The auction holder balances qualification and bid price to select a winner. The only gain an American receives is English proficiency and cultural habits.

Fortunately for most Americans today, offshore workers bidding $3 an hour labor often have minimal English skills. The more proficient ones, American and otherwise, seem to gravitate around minimum wage.

The mark for non-specialized knowledge work could bottom out if more Americans try to sell their labor online and the English proficiency of foreign works increases. Americans have been benefiting from the pressures of technology driven hyper deflation for decades now; are they ready for a future that places them on the same level as the other 95%?

How does your page load time influence your conversion rates?

No idea? A service I have found useful is Torbit. It provides a simple way to monitor your site load times. Their code initiates a timer which completes when all site assets are loaded.

The premium version allows you to break down your conversion rates by page load time. If you have never seen this before, you may be in for a surprise.

The positive — they have a free account. If your curious of your page load time distribution, you can see this for no cost. The free version also has a live feed instantly showing you user load times as they occur. Very helpful for identifying problems.

The big negative, premium costs $499 a month. I used it initially to see my conversion rate curve, but ended up downgrading it back to free. Jumping from free to $499 ($399 billed annually) seems like an unusual price jump. In their defense, I think Torbit accounts are priced to handle sites with a ton of traffic. Their page lists Cheezburger and Cafepress as customers.

How much is search worth? In September of this year job search engine Indeed.com was purchased by a Japanese company for a price estimated to be around $1 billion. Right now you can utilize search-as-a-service with Searchify, starting at $0 a month. The link between the two companies is Searchify’s founder, Chris Lamprecht, one of the guys that build Indeed.

I have been using Searchify since spring of 2012. Searchify’s support has been great, even making some adjustments to their code to better fit our needs. Billing is by indexed documents rather than searches. This is a big plus since our business model requires a lot of volume. On the flip side, if you have a massive database growing at an exponential rate, you may wish to look elsewhere.

Providing instant result search for your customers is a big deal. Offloading your searches to Google or returning results slowly is not acceptable for a modern start up. It will cost you users and investors.

Today as Google faces serious inquiries from regulators on both continents, it is a good time to run an alternative, no matter how niche it may be.

It has been a busy past few weeks, I am a little behind on my writing. Yesterday afternoon I cracked open Ray Kurzweil’s new book “How to Create a Mind.” As expected, it is full of absolutely brilliant and well articulated writing. A blog post for that book is upcoming, so I wanted to clear this long overdue one out of my brain first.

About Borrowing

Debt — it is the ability to consume, at once, something that should take an individual a far greater time period to reach the ability to consume. Debt can be assumed by transferring another individual’s wealth or through thin air, aka fractional reserve lending (functionally we should consider fractional reserve lending as involuntary lending on behalf of all participants in a specified monetary system.)

Because of the nature of debt, and the ability to spend something one really does not have, it creates some very unique economic behaviors. Namely, it allows for over consumption.

Value Inflation

This has a very direct impact on online advertising. As an example, a consumer whose liquid purchasing power may be $75 suddenly jumps to $25,000. What does that mean? The baseline value of what should be marginal inventory suddenly moves up to a more premium level. In some instances, that premium level exceeds the value of a well off consumer.

The specific market I am thinking of here is for profit education leads. A consumer with almost nothing to their name suddenly is capable of purchasing a product worth tens of thousands of dollars.

Wipe the drool off your face, as the market based nature of the online advertising (and the relationship requirements with the schools) doesn’t leave much low hanging fruit. However, web site publishers in general benefit from advertisers targeting $100+ CPAs from their otherwise “broke” visitors.

Market Distortions

There is a big downside to this. A consumer’s ability to take on this debt saps their ability to spend in the future. The nature of interest means they will have less than they borrowed to spend in the future. Disturbingly, many consumers don’t understand this. When taking in to account interest, late payments, and penalties, $10,000 of debt can easily triple or quadruple. That means a consumer who purchases something expensive today will be purchasing much, much less in the future.

Before for profit education, online mortgage leads filled a similar niche. Consumers were buying something very expensive. Much like for profit education, it was in hopes that they would make even more money in the future. Unlike for profit education, mortgage incurred debt may be discharged in bankruptcy.

Whether it is content farms or complex incentivized offer schemes, debt driven consumption adds fuel to online advertising growth. While this increases revenues in the short term, as consumers are drained, in the long term it should reduce revenue from that segment.

Shouldn’t the money just flow right back?

One of the assumptions in government policy that both allows and encourages reckless borrowing is the belief that the money simply flows in a virtuous circle.

During the cycle of spending, the $10,000 a consumer borrowed went to multiple people. A big chunk went to an ad network — say Google, some went to a lead aggregator, a big chunk went to the for profit school, another chunk went to the faculty, some to vendors, and so on.

This money should simply just flow back through the economy. In practice, it does, but not “simply.” In a global economy it could take a very long time for $1 you spent in the United States to return back to you.

However, there is a bigger problem:

Debt Distortions Create Waste

Economic activity is generally divided in to three areas – consumption and investment and savings. If I consume, I use something. If I invest, I “consume” resources in such a way that should return its value to me, and more, in the future. If I save, I sit on the money, or assets, preventing anyone from consuming them.

These words are tossed around loosely. I believe that many things that are being classified as savings and investment are in fact consumption. That is, they are the destruction of value rather than the creation of it.

If I, a saver, “invest” my money by lending it to a borrower with minimal income who purchases a vastly overpriced home, and that borrower goes bankrupt, did I really invest my money, or did I simply transfer it for consumption?

As money “saved” in a bank account is “invested” by the bank, we must question the nature of “savings” as well.

What if I knew with certainty that the borrower is simply consuming what I give them, immediately, and their ability to pay me back is based on borrowing more money from other people?

The nature of fractional reserve lending allows debt-driven consumption beneficiaries to use debt on their own to leverage themselves in to a larger market position. Competitive capitalism often means if a company doesn’t use large amounts of debt they can not even become a meaningful market participant.

This was demonstrated spectacularly when the mortgage market went bust. Investment banks in particular used huge amounts of leverage to magnify their profits. Without that leverage, they would have been a fraction of the size.

As such, debt impacts all participants. Investors allocate assets, owned or borrowed. Employees redirect their careers and skill sets. Web site publishers shift their resources to emphasize areas that the debt driven cash flows to. Then, when the bubble deflates, many participants find they have over-allocated themselves to an area worth much less. In some cases, participants whose leverage demanded continued market growth simply go bankrupt.

Proceed With Caution

By treating debt as gasoline, market participants can use it to extract value for themselves without risking their own solvency.

When one market or another ends, it creates new pockets of opportunity online. When a group of strong inventory bidders exit, suddenly a different business model suddenly may become profitable for that particular segment or channel.

As such, I do not view boom or bust cycles as “all in” or “out.” Rather, they provide opportunities to re-calibrate or pivot your existing businesses.

The nature of excessive debt is certainly not a virtue. Perhaps much of the most brazen, and possibly irreversible, damage to the earth’s ecosystem can be attributed to rapid and consequently careless industrialization driven by government subsidized debt. From this party of gluttons little but trash heaps will remain. Without the fuel of debt, industrialization would occur in a slower manner, allowing for more thoughtful planning both by the builder and environmental regulators. (Anyone who has lived in a condominium or home built during the last real estate boom can attest to the shoddy craftsmanship which occurred, though it was not universal.)

As cautious participants, we should view debt driven markets as a tool to re-allocate wealth to that which create long term value. The hyper deflationary nature of information technology leads me to believe that a future of sustainable consumption, which does not require destructive debt, is very possible.

As a young child I had a pretty good idea of what the future should be like — less and less work. No one liked work or school, they liked to relax and play. After a few more years of early formal education, that idea faded away for a while.

It is pretty clear to me that this is indeed the direction we are headed in. Despite the vast libraries of government policies, past and present, aimed at minimizing unemployment — most people don’t want to work! With exceptions, work is a means to an end, to a broader lifestyle aspiration. The good, and bad, news is that the market for human labor will continue to face pressure from technology, and eventually, it will vanish.

Consider a business, Uber, one of my favorite iPhone apps. Uber strips a vast amount of waste from the transportation process. I take out my phone, see a map and an estimate of how quickly a driver can reach me. I make the decision right then if that time is acceptable to me and either call the car or go do something else. To call the car I press a single button, and watch the map update until it arrives. I tell the driver where I am going, and when we arrive I get out and that is it.

The other alternatives for transportation are vastly more complicated than this – from parking and maintaining a car in a dense urban environment to having a personal assistant call a town car dispatcher a day or two ahead of time (and having a driving swipe the credit card with one hand as he drives with the other.) In terms of $ Uber is a little expensive, in terms of time and effort nothing is cheaper.

Uber, and similar services, will continue to innovate. Prices will drop. Eventually drivers too will be stripped from the equation either because of price or law (prediction: 100% human operation of a vehicle on public roads will become illegal in 10 years or so, depending on your country of residence.)

Creating a waste-stripping business is difficult. You have to be really good at what your doing. You have to be new, because waste stripping, in a legacy business, means cannibalizing existing revenue streams for smaller ones.

The end goal of waste stripping is for you and your customers to do as little work as possible. With this philosophy in mind, you will question every extra button and check box on your mobile app. People who don’t believe this do not design things this way. Someone who asks, how do we create more jobs even if they are unnecessary, rather than how do we avoid wasteful ones, will struggle with designing efficient systems and interfaces.

If you don’t know what direction to take your business, pick the inevitable, stripping waste.

Coming soon, business models that make money by adding waste..

As internet publishers seek to increase their revenue the easiest choice is often: more ads.

Google has replaced enough of their search results with paid listings that their search engine now resembles more of a pay-for-placement yellow pages than an advanced search engine.

Google is hardly alone here. Below I have an example of a news web site, CBS San Francisco. The amount of ads relative to content is so overwhelming one wonders if it is even worth reading the news.

Indeed, many news web sites today have more in common with porn than first rate journalism (Gawker even likes to embed hardcore porn in their stories, I’ll leave the links omitted here.) I have run across a few instances where TV news sites have had multiple videos auto play on page load. Others have on exit pop unders. In the example below, CBS San Francisco is publishing non-labelled advertisements delivered by OutBrain (I doubt we will see the FTC to hand multi-million dollar fines out to AARP and ExxonMobile for publishing non-labeled advertorials.)

Screenshot I jacked off the official site because I’d have to blur out half of my own geckboard set up

In the past few years my business has gotten a lot more complicated. With so many servers, sites, advertisers, and ad campaigns it gets really hard to track what the heck is going on.

When a server goes down you notice (an SMS alert from a tool such as Website Pulse, Monitive, or Pingdom lets me know instantly.) When we change something with how a site functions, sometimes the more subtle changes aren’t noticeable. We’ve put lots of checks in place but problems still occur.

One way to stay on top of things is to use a dashboard. Its kind of like a Bloomberg terminal of just stuff from your own company. You take a dedicated monitor and slap up a screen full of all of the important metrics you need to keep an eye on. Examples of use would be how much money you’ve spent on your advertising accounts today, unique users who have visited by email, conversion rates for new user registrations, and total gross purchases by customers.

I have been experimenting with Geckboard for about a week or two here. Its running on a dirt cheap 27″ Korean IPS I picked up off eBay. With one glance I can tell if we are on track for the day, or if some particular metric is off.

Geckoboard has easy to use plug ins for popular web services. All you have to do is plug in your account info and it pulls the data you want out and sticks just it on your screen.

For internal systems or tools that aren’t supported with their plug and play widget system, you just need to populate a simple XML feed. If you use Google Analytics or Mixpanel, you may be able to just feed the data through those accounts.

Figuring out exactly which metrics I need to watch moment to moment will take some trial and error. But, I’ve already had a couple of instances where I caught a mistake before it became a problem thanks to this thing.

Oh yeah, and its $19 a month for 20 connections/widgets — much more than that and your showing yourself way too much data to be useful anyways.