Sunday, 27 May 2007

Watching a Ponzi-scheme implode

Over and over again, people get involved in Ponzi schemes (most likely since before Ponzi's time). The ones who get in early on can profit - sometimes handsomely, if they get their exit timing right.

In Slovakia, we are currently seeing what looks dangerously like a Ponzi scheme unravel and it seems fur is gonna fly...

In November 2006 a company called Duna-Trade, s.r.o. based in Galanta, a small town some 50 km from Bratislava, changed its name to Auto-Reklama, s.r.o (which means "car advertising"). The seat of the firm changed from a run-down Galanta prefab block of flats to an attractive address in the historical centre of Bratislava.

Soon an offer that sounded too good to be true but good enough for those who wanted to fall for it came to light: if you own a car, pay SKK 25,000 (about USD 1,000) upfront, Auto-Reklama will plaster advertising all over your car and pay you SKK 7,000 every month. Or lease a new car through the company and they will pay the same amount towards your leasing. All you have to do is show up once a month so the company can check you are driving the required amount (900 km).

Cars of all makes and ages with aggressive Auto-Reklama stickers proliferated around Bratislava and Slovakia and people started to get paid. More people signed up. The media did a little sniffing - the owner of the company turned out to have debts vis-a-vis the state Social Insurance Agency from other companies. More interestingly, all the ads were always for Auto-Reklama itself. After all, whoever would pay over SKK 100,000 per year (assuming a VAT tax and some minimum fee for the middle-man's transaction costs) to put a sticker on someone's ugly car? Perhaps one of the Miss Auto-Reklama candidates? Or the 82 Bratislava cars featured on the website (notice the licence plates, readable on most cars)?

In May Auto-Reklama missed its monthly payments, the owner disappeared (a spokesman for the company explained only the owner had the right to release payments and the owner was abroad). Auto-Reklama offices in some towns stayed closed, with employees reportedly fearing an angry mob.

Two big questions remain:
1. Where is THE MAN behind all this now (a Mr. Porozsnyák)?
2. Do those butt-ugly stickers come off without trace?

Swimming in the fountain nude

I saw a stag do yesterday in the centre of Bratislava, right in front of the heavily guarded US Embassy. The guys stripped one of them (presumably the stag). He jumped into the rather shallow fountain, swam a little and then rolled around in the grass by the fountain.

People, mainly Bratislava locals, watched on, many somewhat bemused, but nobody looked too upset by the whole 'nude swimming' antics.

Minutes later the police came - in total there were about six men in two cars. We saw them standing around with the group and eventually the now dressed man was led away to a car.

The British Embassy in Bratislava along with the city authorities have been looking for ways to curb excesses of the hundreds of stag visitors for years now. Several leaflets have been published and the overall atmosphere facing the stag groups has changed. A few years ago they were welcome with open arms by businesses throughout the city centre. A few broken statues and naked parades later they are banned from many major bars and most clubs.

Like in other cities with stag tourism most semi-decent hotels will not accept larger all male groups. Now the question is how long till the Brits (and some Irishmen):
a. learn that they are not as welcome,
b. will have 'been there, done that' and move on eastward.

Like Bratislava a few years ago, there are many cities further east, that would both welcome stag tourism (because they hardly get any tourism) and provide stag parties with a great experience (my birthplace Kosice in Eastern Slovakia comes to mind - I believe that with the first direct flight from London, which cannot be that far away, stag party goers will learn that Kosice is cheaper and friendlier than Bratislava).

Sunday, 20 May 2007

Who's gonna cry when the MFA bonanza ends?

Not so long ago it was common to search Google and find pay-per-click ads in the results pointing to sites with nothing but more ads. You would search for something like 'Ohio insurance' and find a number of results with ads such as

Top sites on Ohio insurance
See top web results
on Ohio insurance!

You would click through to a site filled with little but more Google ads - with numerous Adsense blocks throughout. The sites were usually optimised for maximum click-through on ads.

A case of arbitrage - webmasters tried to find cheap terms to advertise on and then have advertisements, which pay more on their own website. While this worked, and it did for a long time, there were apparently people out there making as much as tens of thousand dollars per month (UPS Club, anyone?).

But like with any untapped opportunity, the news spread and ranks of arbitrage and made-for-adsense (MFA) webmasters swelled. Automated software appeared to simplify the task of finding 'untapped niches'. Webmasters would find various ways to obtain cheap traffic (Adwords, organic, other cpc ad systems) and turn into into more expensive traffic by displaying higher quality ads.

What were the effects?
1. for Google, the additional ad-clicking meant the appearance of extra revenue, but not extra profit, since this was simply a transfer from some its advertisers to some of its publishers. In fact, MFA arbitrageurs were taking away money that could have been Google's profit,
2. for regular advertisers an increase in cost and decrease in effectiveness (conversion rates, ROI) of their ads on Google Adwords, likely pushing a segment of potential advertisers outside of the network completely,
3. for clever MFA webmasters, often huge profits with a small initial time investment,
4. for the searcher a decrease in quality of the search engine results pages (SERPs) - they click on ads, which rather than showing the expected content show more ads.

There were calls from the advertiser and searcher communities for Google to stop this practice. In the long term, by souring the quality of results (especially in the content network - ads published on people's blogs and other sites) the MFS arbitrage was probably hurting Google itself. Many CPC experts recommended that advertisers opt out of the content network (ads displayed on sites of publishers outside of Google itself)

According to Andy Beal at, self-admitted MFA webmasters at WebmasterWorld have been discussing notices they received from Google that their Adsense accounts will be suspended as of June 1, 2007. Google apparently deemed their business model unfit (albeit after tolerating it for years).

And for MFA webmasters out there - lucky you, if you have made enough this way to make getting into a new business model easy, start learning about defensible traffic now. Also, there must be a market for your skills in writing those high click-through adwords ads and placing the adsense boxes just right.

In China, all interest rates must be divisible by 9...

A "divisible-by-nine rule was enshrined in accounting standards issued jointly by the central bank and the Ministry of Finance [of China] in 1993," according to Bloomberg (via Harvard professor Greg Mankiw).

Hence the People's Bank of China's raised its benchmark landing rate by 18 basis points (0.18%) on Friday, May 18, 2007. Central banks in most countries would, of course, deal in quarters or tenths of percents.

Interestingly, on the same day the bank decided that
"Reserve requirements on funds held by banks will be hiked by 50 basis points."
The trading band for the yuan, the Chinese currency, was widened by 50 points on that day as well. Perhaps the rule only applies to the rates for consumers?

The Bloomberg story mentions several motivations for the 'divisible-by-nine rule' (I tried to find nine in the story but only counted six):
- Chinese calendar
- a 360-day financial year
- long considered lucky number
- makes calculation with Abakus counting device easier
- avoid rounding of interest
- nine sounds the same as 'longevity'

Now if so many people believe in this, maybe there is something to it?

Saturday, 19 May 2007

May I call you 'Madam', Sir?

Viet Le, a dear friend from my UWC times whose blog I follow (and borrowed the word 'miscellany' in the name of my blog from) has a great entry about doing a double-take after being "Sir'd" by some congresswoman's press spokesman.

'Apparently, my telephone voice has a feminine lilt so it's always "Miss" or "Mam" or even "Veet",' Viet blogs. Got me started thinking about the whole phone voice thing.

I remember in my early teens the frustration, when I answered the phone and everyone thought I was my mother speaking. I also remember the genuine indignation I felt when correcting people. On the other hand, I could make funny calls to people and pretend I am an adult woman, rather than a child of 12.

I remember a few more men whose high-pitched voices were subject to discussion: my male friend working at a travel agency who is always referred to by callers as a Ms. and sometimes doesn't bother explaining and a former classmate of my mother, who she said everyone though was gay due to his high pitched voice until he got married and fathered two kids.

There is evidence (reference, anyone?) that people with deeper voices appear more trustworthy and I think I came across someone mentioning a study of effects of a deep voice on earnings.

Click here, if this text is blue or purple!

Usability consultant and founder Kim Krause Berg points out usability guru Jakob Nielsen’s retraction of an earlier recommendation that for usability purposes hyperlinks should be shown in blue font with an underline for unvisited links and purple for visited.

Kim quotes Nielsen saying in an interview that links can essentially be any colour different from the surrounding text since people have become more experienced in browsing.

Like Kim I've had a personal preference for ignoring this rule with some limited exceptions. I've sometimes viewed the semi-formalised rule as a useful shortcut in arguing for a usable link identification scheme on a site. Also, sites serving markets where users have less experience, older computers or smaller bandwith may sometimes benefit from such a straightforward colour-coding.

The distribution of experience, equipment and bandwith among internet users varies greatly with different internet user demographics. For the sake of maximizing accessibility and improving user experience sometimes sticking to the very standard link identification scheme may be advisable - it may work very well for a site with a less proficient target group.

I showed a website to a friend who is a long-time internet user, a middle-aged proprietor in the hospitality industry. He mainly emails and only browses rarely. He told me the website did not work. When we checked the site together, it turned out he was unable to identify links which used green rather than blue colour.

In most circumstances I feel free to deviate from the now-revoked recommendation, keeping in mind its underlying motivation - that visitors need to be able to see where to click for your site to be a nice place and to accomplish its goals.

As far as other ‘rules’ or 'recommendations' for usability in the area of link identification that I would subscribe to, I would generally argue in favour of 1. consistency (across the site and even related sites), 2. simplicity (avoiding fancy mouseover/javascript weirdness) although I can think of a number of reasonable exceptions.

A proprietary link identification scheme is probably ok for sites working with experienced web users. On sites where you are a return visitor a proprietary link identification scheme may even make your experience more enjoyable, regardless of what colour the links are.

Thursday, 17 May 2007

How to perform problem tree analysis

I worked with students today on creating Problem trees as part of using the Logical Framework (log frame) methodology in my Policy Evaluation class. This was our final class and I was happy to get something quite interactive going for students - they seem to enjoy this and a few even yearn actually doing something.

The technique is a simple one but rewarding (genuine hat-tip to Dagmar of Slovak Evaluation specialist D&D Consulting, who has used it in a training session we did for local policy makers): you use little cards to write down problems you wish to adress with a public policy intervention (this works reasonably well at any level - strategy, policy, programme, project). You tease out additional cards by asking the WHY question - i.e. why does this problem happen.

Now the trick part: on the back of each card you write an objective associated with resolving the problem - often is as simple as turning a "Too little of XY" into "More XY".

You then work hard to arrange problems according to causality - working from an effect at the top through a focal problem somewhere in the middle all the way to problems, which are the underlying causes.

You then simply flip the card over and voila you have a Goals analysis - a hierarchic ordering of goals you can transfer into a logical framework matrix. Neat.

I have (and I imagine my senior colleagues do as well) a few hangups about using interactive methods in teaching. In my Economics MSc. in Scotland we NEVER did anything remotely interactive - no group work, no in-class presentations and believe it or not, not a single essay (other than the dissertation, of course). But then the university gave the world Adam Smith so maybe they knew what they were doing. Our econ programme shared the building (or rather was a guest) of the Edinburgh MBA Programme and the management students were all about interactive methods while seemingly not so much into "substance".

Apparently, despite a lack of organisation to my Policy Evaluation course, the practical bits were very well received by students. Every time I teach or train I relearn the same lesson: students (at least Slovaks) of all ages love interactive teaching. We have been exposed to so little of it in our school system that we are grateful to learn anything practical and get to actually do and say things in class rather than have to listen to lectures and repeat them back in oral exams.

Adwords pet peeves

Wrote an email to Adwords Support regarding my pet peeve - the fact that it is not easy to find out through AdWords and even Google Analytics what actual phrases the people who clicked your ads searched for. I have doubt there is a reasonably easy way of doing this but Google does not seem to promote thins functionality.

On a related note, Google allows all sorts of keyword match types (i.e. you can say you want your ads displayed on searches for Slovakia SEO exact-matched, broad-matched, phrase-matched, as well as negative). There is even an option for all matches together with the exception of exact match - phrase match for [Slovakia SEO] along with broadmatch but with the exact match as a negative.

With this match type, you would be displayed for "shitty Slovakia SEO", "Slovakia SEO cheaply", "Slovakia search engine optimization" but not for the exact match of "Slovakia SEO". Confusing, huh?

Anyway, to make a long story short, a match type that is NOT on offer is something like [Slovakia] SEO, where the word Slovakia would be required, while SEO would be broad-matched. This would allow you to display ads for all searches that contain the word Slovakia and any variation on the words SEO, while not displaying for something unrelated such as Hungary SEO.

Borrowed content

We found someone seemingly planning to use our copyrighted content - a site planning to offer reservations at Bratislava apartments, currently hosted on its Liptovsky Hradok web design company server has a whole bunch of our content - a painstakingly made list of galleries or info on the Bratislava Opera. They also have stuff from some of our friends and clients.

We have seen our unique Bratislava content borrowed over and over again by ignorant and sometimes unscupulous webmasters. I know that most of the time the energy that goes into trying to notify webmasters of copyright violations is a waste of my time - in the same amount of time we could simply write more new content. But sometimes it feels really painful to see your work displayed on god knows who's pages without any credit.

Pizza enjoys Tropical SEO

Andy Hagans pledges convincingly to a lazy SEO lifestyle - if not the whole then a few details definitely spoke to me such as having a personal assistant to take care of pesky details, give his phone number only to very close associates. And some parts I arrived at independently, e.g. taking up to a week to answer emails, "especially if the reply requires effort on my part."

I have enjoyed Andy's writing on Tropical and have definitely taken several points he has made to heart. My favourite points/quotes:
1. "...[I]ndustries with poor underlying economics can make even genius managers seem average,", which leads Andy to conclude that "Managing your career is like investing–the degree of difficulty does not count. So you can save yourself money and pain by getting on the right train," in Warren Buffet's Advice to SEOs.
2. Working as a SEO consultant makes for a poor business model, as your time is much better spent on your own projects in high-yielding lead-generating affiliate areas such as real estate, mortgages, insurance.
3. Once you get into the right area, "[i]t takes strategy, tactics, balls, elbow grease, money, and smart planning" but mostly simply working hard everyday, in tips on building a site you can sell for a million dollars

Andy was a professional link-baiter, and as you can see, he got me. I love the blog and the style, as well as the surrounding "blogscape". I've discovered and enjoyed following a little blogring with Andy Hagans at TropicalSEO, Brad Geddes of, Brian Provost's ScoreboardMediaGroup and several others with a focus on "competitive webmastering".

Slovak real estate sites suck

Seriously, one day I am gonna get just slightly more angry with Slovak real estate sites and I am going to put in the money and effort into building a usable server. The existing sites suck because they are overrun by repeat advertising. I will put in a sensible descriptive database structure and work hard to build a usable search interface.

Meanwhile, I will look at international examples, and there are definitely interesting examples abound. From C2C portals to social real estate, possibilities are endless and a good concept may even scale.

For all your creature comforts

On Joost, I came across an amazingly funny video from the Aardman Animations studios. It's called Creature Comforts and features dead serious sounding interviews with animals in different settings. Really sweet and funny (and I Googled a few more from Youtube) not least because it reminded me of a dear friend, Radda from New York, who I haven't been in touch with for a while.

I watched a few clips and found them hilarious. I also found notable that some of them came from the late 80s - I mean we were still living in the Communist regime here in Slovakia, then.

Joost Blogging

Joost - Dusoft forced-fed me an "invite" to the peer-to-peer internet TV by Niklas Zennström and Janus Friis (of Skype and Kazaa fame). We watched a few car reviews including some pretty neat shows about almost mass market cars such as the BMW 130i and VW R32. Of course, the Porsche shows were neat too.

After troubleshooting an issue around logging off Dusoft's account and creating mine in the downloaded player we made Joost fullscreen. The broadcast was split in the middle by the frames of my two 19'' screens. Seeing the unused potentially monetisable real estate - the dark sides around the image, made me gulp at the though of the advertising potential.

Of course, the Joosters possibly gulped in a similar fashion some two years ago, began development with 150 programmers (or rather software developers in New York, London, Leiden and Toulouse - no word on Tallinn or Bratislava).