50 Shades of Downgrade: Bad to the bone or just bad enough to profit from?

We’ve all heard the news that Google is proposing to downgrade rogue sites in search results. Since the phrase “rogue sites” has had a number of meanings attributed to it, what it seems to mean in this particular case is a site for which Google has received large numbers of credible takedown notices.

Except for YouTube and Blogger, of course. As usual, YouTube is excluded—which makes no sense because YouTube is the one Google property that uses a fingerprint-based filtering system and so has little excuse for receiving large numbers of takedown notices. Aside from being the anchor tenant in Google’s notice and shakedown business model. Blogger is well known as a cesspool of linking sites for cyberlockers, so it should not be surprising that Google excludes Blogger, too.

But I digress.

In addition to Google reportedly acknowledging that it receives one million takedown notices a week for infringing material in its search results, Google also reportedly acknowledged that these millions upon millions of takedown notices were 97% credible.
So this leads to a simple conclusion—despite its death notices, the DMCA is working. It’s just that drafters of the DMCA like Chairman Goodlatte and Rep. Berman never dreamed that the DMCA would result in one part of one company receiving 50 million notices a year. So it’s not the DMCA that is broken—it is Google’s business model that is broken.

Now I realize that on the face of it, you may be skeptical that a company that grosses billions of dollars a year from its worldwide dominant if not monopoly position in Internet advertising has a broken business model. There is a simple answer that I think will start to make sense the more you think about it—the reason Google grosses so much is because their business model is only partially based on providing a superior service that consumers accept.

The other part of their business is based on one of the largest income transfers of all time. And by the look of things, this won’t change with the downgrading program.

Regardless of where the links appear in search results, as far as we can tell Google is still allowing the downgraded sites (what used to be called “rogue sites”) to participate in its various advertising programs—including the advertising exchanges that advertising companies like Google like to put between themselves and the actual downgraded site they split the brand’s money with. The difference now is that Google has acknowledged by downgrading the site that there is a very high probability that the site traffics in illegal stuff and that the probability is good enough to disappear the site.

Google is also fond of saying that sites that traffic in illegal stuff are not suitable partners for Google’s advertising business. So ask yourself this: If Google is downgrading rogue sites, how could the actors be bad enough to downgrade but not also be violating the terms of its ad publisher agreements? And if they are violating the publisher agreements, doesn’t that mean that Google should not only downgrade them but also cut them off from advertising revenue through Google?

And shouldn’t the unsuspecting brand demand a rebate?