Sourcetools.com, a former business directory, was making $115,000 a month in profit until the summer of 2006, when Google changed its algorithm and spiked some AdWords bid prices for sites with “poor landing pages.” The business model was one employed by many an internet entrepreneur – bid on AdWords and slap some AdSense on the site.
Of course, Google calls this ad arbitrage if all you have is a made-for-adsense site. But Sourcetools provided a service – a business directory not unlike many other directories out there.
Sourcetools spent a ton of money revamping their site to make it to Google’s liking, not that Google was being terribly specific about what that liking is. But they could never get back into Google’s good graces, and now the domain sits service-less, and up for sale.
This is just one of the many complaints being sent to the Department of Justice as they conduct an investigation into Google’s ad deal with Yahoo.
Last week, the Association of National Advertisers sent a letter to the DOJ expressing their opposition to the deal. And the DOJ is taking the concerns seriously. They hired antitrust lawyer Sandy Litvack to consult on the deal.
Whether Google’s actions are an inadvertent breakdown in internal communications or intentional pursuit of power, they do appear to be monopolistic. That along with today’s financial news is a good reminder that to be wary of fast money and to diversify your site’s income!