In March 2007, we signed a term sheet with Mangrove who wanted to invest in Zlio..A few days after, I met a Google Executive who decided to buy the company. For the little story, Zlio, became blacklisted/sandboxed by Google 6 months after…. It killed the company…
When I’ve taken a job at Zlio.com in 2007 to start their US operations, with Jeremie Berrebi as a CEO, I was really excited by the growth I was seeing. All signals were green : users, revenues, traction, VC funding. They had it all.
A week after I joined the company, Google sandboxed us, and we’ve lost 90% of our traffic. After months and months of work trying to solve our inbound traffic issue, we pretty much all gave up and decided to move on to other things.
Is it possible they were doing blackhat SEO, which got them banned from Google?
Otherwise, this sounds pretty damning for Google. I'm just trying to think of alternative theories. It seems like if Google were willing to act this way, they'd have a history of doing so. Do they?
I don't think Google did anything intentional, but it probably doesn't matter.
They probably were doing something that would raise a flag at Google, but the Googlers knew how to get around that. So they let the app run, then let the system kill it. Meanwhile, they could do something very similar that would not raise the flag, and it'd work.
It's not intentional, but if you work down the hall from the guys who control a ton of web traffic and others who are responsible for app security, it helps. One might even say that it becomes an unfair competitive advantage.
apple is the new ibm. google is the new microsoft. and ironically, microsoft is the new apple (spining cool products that ultimately fail in the market). So it is no suprise google shoves it's weight around to shutdown (or buy, its the same) competitors.
just remember this and you should be fine with your unix beard in the XXI century. :)
Reminds me of Season4's Ep3 (Two Girls One Code) of The Good Wife.
Two startup founders who developed voice recognition software were negatively affected by tweaked search engine page ranking of ChumHum after refused being acquired.
What's interesting is this is a perfect case of having a single monopoly on search is so damning to businesses. This company essentially depended on being indexed by Google - once they were struck off, their fate which was at the hands of Google is sealed.
In reality however, the spam which was being linked by users to their sub-sites should have been hosted on a separate domain name. That was a bad choice by the company. Especially if they weren't going to actively disallow links constantly.
Would Google use their influence to kill a competitor for the own benefit? Definitely. They have a pattern of going against their own rules, their users' interests, and even the law when they stand to gain. To say this situation is any different in the absence of hard evidence, would be naive. (Edit, OP provided the aforementioned evidence that Google did have a competitive reason to do this.)
They have a rich history of stomping on little guys as well as being a masterclass in the, "do what I say, not what I do" sort of hypocrisy that always seems to come from those with great power. In my eyes, they've long lost the benefit of the doubt when it comes to matters like this. Google holds a lot of utility for me and I use their products daily, but I hold no illusions as to their predatory nature.
1) Google has claimed non-existent partnerships with their competitors in direct marketing of a competing product. They were literally calling their competitor's customers on the phone, saying they were a partner of the competing company, and hard selling that company's customers to sign up for their product.[1]
2) Google has the honor of receiving the largest civil penalty the Federal Trade Commission has ever imposed for overriding their user's privacy settings in Apple's Safari browser.[2] For some perspective: this fine was 0.1 percent of Larry Page's net worth, or what Google takes in over the course of about 5 hours.
3) Google search makes a regular habit of scraping other web sites and displaying ads against the content, something explicitly banned by their ToS for Adwords users.[3]
4) Google search also regularly shows upwards of 75% ads on a page. For instance, a search for "Kansas City real estate" returns you nine ads and three organic search results when viewed on a 2560 x 1440 screen[4] (15" MacBook Pro). This is explicitly against their policy, "Publishers should avoid site layouts in which the ads push content below the fold. These layouts make it hard for users to distinguish between the content and ads."[5] This also violates their add limit per page[6] laid out in their ToS.
5) This might be my favorite. If you Google "Scraper Site" they will actually scrape the explanation of the term from Wikipedia and serve up for you[7].
This what I could put together in about 20 minutes. Doing anything more than cursory research on this subject will leave with a very bad taste in your mouth about Google as a steward of the world's information. From convenient banning stories like this to lying about the data they collect in the first place and then lying about how long they keep it.
I think they put majority of the blame on Google, but maybe it was because their SEO team wasn't able to get them higher on Google's pagerank? Or competition?
A good reminder that an "acquisition proposal" without any indication of price is not an acquisition proposal. Asking so much information without any such indication is just crazy.
>A good reminder that an "acquisition proposal" without any indication of price is not an acquisition proposal. Asking so much information without any such indication is just crazy.
I... don't know? I know at the low end, you are completely correct. If I had a nickle every time someone wanted to buy prgmr.com for the ebay value of the servers, well, I'd be able to buy another server or two.
I ended up being pretty free with my revenue numbers... and yeah, most people are just sniffing. I guess I wasn't much of a business person, so i didn't really understand (still don't, really) why those should be super secret.
But on the high end, I would assume (and again, zero experience on the high end) I would assume that if it were worth google's lawyer time to set up the deal that they would come out with a price that was, you know, significant money by my own standards.
Don't agree. There are so many variables to consider, that one usually needs more information to get a good understanding of a business and to understand where the value creation is happening. That obviously doesn't mean you need to hand out proprietary information to everyone who is going on a fishing expedition, but not doing so will absolutely kill any deal before it's even put together.
Consider the following: how would you value a business, if you don't know how it is structured, how it operates, and how much revenues and profits it's generating?
I can potentially see that working for some cool technology startup, or an acqui-hire, but not for an actual business with revenues (and more importantly, profits).
Those small acquisitions, they're not investments for Google, they're expenses. The $500m-$1bn+ ones, those are investments. Big difference in thinking.
Agree that bullshit offers need to be weeded out, but I don't think it would make sense for an Acquiror to propose a price without sufficient information to base that price on. Justin's post mentions bullshit offers as not putting time pressure or promise of term sheet delivery, but the email indicates they're interested in getting it done as soon as possible. Hard to say if this really was a bullshit offer, but don't think an indication of price through an email, especially prior to an NDA, would make sense.
Seems like there are only two ways to go forward with a startup:
1) Shoot for flipping and acquihire. This is where most folks are going. It probably makes the most sense for an early 20-something
2) Stay off the radar because you are uncool, using old tech, doing something stupid, the market's not big enough, or so forth. Bootstrap. Don't do a lot of PR. Don't get attention, because there are a ton of big companies full of guys who ran successful startups who are looking for cool things to work on -- if you don't look the right way, they'll just run over you and do it on their own.
The game-changers like Uber or Facebook probably start out in category 2 and then have such incredible momentum and execution intelligence that by the time they're noticed, it's too late for followers-on. That's a most tricky maneuver to pull off.
(Note: I know nothing about startups except having a few that didn't pan out, talking to friends online that have some, working in SV, and reading a lot about them. I have as much chance of telling you something useful as the psychic hotline. This is tough stuff.)
The Techcrunch article announcing the company was closing sheds some more light[1].
"This decision sentences us... to pay damages for publishing our opinion about Referencement on Twitter. ... This sentence means we cannot go on. "
Ultimately, they were fined 10,000 Euros (it seems) for slandering their SEO company on Twitter. But I am sure the challenge of having an open site where anyone can post anything (and modify their own templates) was the root cause. It's hard to be totally open to user's content and maintain Google's domain trust.
I think people fail to understand how separate teams work inside Google. In 2007 this would probably have been done by the team working on consumer products like Google Sites. A deal of this size would have been led by an eng director and a PM from those teams. These guys are quite separate from search quality and likely wouldn't even interact much or at all unless they were previously acquainted. Same goes for ads - the AdSense team (of which I was a part) wouldn't really ever have input on any search quality decisions and vice versa. The execs would not make some top down dictat for us to collude or anything. It just wasn't really done.
"You should realise that we make absolutely sure that no engineers working on similar areas in Google are involved in the assessment of this deal at this stage so we can avoid tainting"
Didn't they get caught a few months ago doing exactly that? I forget the company but when they got their documents back from Google they had sticky notes all over it asking engineers for workarounds to IP... or am I remember it completely wrong?
The email seems very sloppily written, and while not explicitly threatening, throughout implies Google is the Goliath while Zlio could be a possible David, but probably not.
Poorly worded email, asking a lot of sensitive information, with nothing specific in guarantee, and not following-up on timeline, with non-specific proposals. Seems like a pretty good reason to avoid a proposal.
Lots of execs are crunched enough for time that they write emails a bit sloppily. Also, these opening emails are usually vague (at least in my experience) Not really good reasons to not explore, if you're interested in being acquired.
Seems a bit unsporting to just put their email on front street like that, but I guess on the other hand the way they do these deals is something worth talking about.
"Googlely" would be pronounced as goog-lely, which was obviously not the desired idea or part of speech. Perhaps the author meant "Googley" which would be an adjective describing something as Google-like.
could have been innocent reasons, an algo shift. it happens. sometimes you win the SEO lottery, sometimes they pull the rug out.
my own experience: roughly 3-5 years ago (don't remember off-hand) I woke up one day to learn that Google had listed me as the top search result, first page, for a particular combo of terms. I forget exactly what it was but it was something like "Java Python Flash Linux game developer" or whatever. I had learned about this from an out-of-the-blue client lead who emailed me. I was shocked when he said that's how he found me. I then went around to about a dozen different computers, different types, different geo locations in my state, both auth'ed and anonymous, and sure enough I always came up as top result, first page. It was... an awesome time to be taking on contract/consulting work, let me tell you. So many more leads coming in than before. Not enough hours in the week/month to help them, had to turn down otherwise interesting gigs.
Then it came to an end. Rug pulled out. Woke up one day, rankings changed, no longer on top like that.
Lesson (one anyway): that's a huge eyeball funnel. bazillions of people doing searches. even getting a tiny slice of it means tons of eyeballs stumbling upon you. quality is important, of course, being great at what you do, having the right leads, a good fit, avail, etc. But quantity? That has a quality of its own.
[+] [-] sillysaurus3|11 years ago|reply
When I’ve taken a job at Zlio.com in 2007 to start their US operations, with Jeremie Berrebi as a CEO, I was really excited by the growth I was seeing. All signals were green : users, revenues, traction, VC funding. They had it all.
A week after I joined the company, Google sandboxed us, and we’ve lost 90% of our traffic. After months and months of work trying to solve our inbound traffic issue, we pretty much all gave up and decided to move on to other things.
Is it possible they were doing blackhat SEO, which got them banned from Google?
Otherwise, this sounds pretty damning for Google. I'm just trying to think of alternative theories. It seems like if Google were willing to act this way, they'd have a history of doing so. Do they?
EDIT: Yes, probably spam: https://news.ycombinator.com/item?id=4755386
[+] [-] DanielBMarkham|11 years ago|reply
They probably were doing something that would raise a flag at Google, but the Googlers knew how to get around that. So they let the app run, then let the system kill it. Meanwhile, they could do something very similar that would not raise the flag, and it'd work.
It's not intentional, but if you work down the hall from the guys who control a ton of web traffic and others who are responsible for app security, it helps. One might even say that it becomes an unfair competitive advantage.
[+] [-] gcb0|11 years ago|reply
just remember this and you should be fine with your unix beard in the XXI century. :)
[+] [-] zakelfassi|11 years ago|reply
Two startup founders who developed voice recognition software were negatively affected by tweaked search engine page ranking of ChumHum after refused being acquired.
Coincidence?
[+] [-] Mandatum|11 years ago|reply
In reality however, the spam which was being linked by users to their sub-sites should have been hosted on a separate domain name. That was a bad choice by the company. Especially if they weren't going to actively disallow links constantly.
[+] [-] wmeredith|11 years ago|reply
They have a rich history of stomping on little guys as well as being a masterclass in the, "do what I say, not what I do" sort of hypocrisy that always seems to come from those with great power. In my eyes, they've long lost the benefit of the doubt when it comes to matters like this. Google holds a lot of utility for me and I use their products daily, but I hold no illusions as to their predatory nature.
1) Google has claimed non-existent partnerships with their competitors in direct marketing of a competing product. They were literally calling their competitor's customers on the phone, saying they were a partner of the competing company, and hard selling that company's customers to sign up for their product.[1]
2) Google has the honor of receiving the largest civil penalty the Federal Trade Commission has ever imposed for overriding their user's privacy settings in Apple's Safari browser.[2] For some perspective: this fine was 0.1 percent of Larry Page's net worth, or what Google takes in over the course of about 5 hours.
3) Google search makes a regular habit of scraping other web sites and displaying ads against the content, something explicitly banned by their ToS for Adwords users.[3]
4) Google search also regularly shows upwards of 75% ads on a page. For instance, a search for "Kansas City real estate" returns you nine ads and three organic search results when viewed on a 2560 x 1440 screen[4] (15" MacBook Pro). This is explicitly against their policy, "Publishers should avoid site layouts in which the ads push content below the fold. These layouts make it hard for users to distinguish between the content and ads."[5] This also violates their add limit per page[6] laid out in their ToS.
5) This might be my favorite. If you Google "Scraper Site" they will actually scrape the explanation of the term from Wikipedia and serve up for you[7].
This what I could put together in about 20 minutes. Doing anything more than cursory research on this subject will leave with a very bad taste in your mouth about Google as a steward of the world's information. From convenient banning stories like this to lying about the data they collect in the first place and then lying about how long they keep it.
[1]http://business-ethics.com/2012/08/14/10058-is-22-5-million-...
[2]http://imgur.com/RjiKmOy
[3]http://imgur.com/ehIAsOa
[4]https://support.google.com/adsense/answer/1346295?hl=en#Diff...
[5]https://support.google.com/adsense/answer/1346295?hl=en#Ad_l...
[6]http://www.searchenginejournal.com/google-misuses-mocality-d...
[7]http://searchengineland.com/google-scraper-tweet-185684
[+] [-] hobolord|11 years ago|reply
[+] [-] dmak|11 years ago|reply
[+] [-] ar7hur|11 years ago|reply
I strongly recommend this excellent post from Justin Kan: http://justinkan.com/the-founders-guide-to-selling-your-comp...
[+] [-] lsc|11 years ago|reply
I... don't know? I know at the low end, you are completely correct. If I had a nickle every time someone wanted to buy prgmr.com for the ebay value of the servers, well, I'd be able to buy another server or two.
I ended up being pretty free with my revenue numbers... and yeah, most people are just sniffing. I guess I wasn't much of a business person, so i didn't really understand (still don't, really) why those should be super secret.
But on the high end, I would assume (and again, zero experience on the high end) I would assume that if it were worth google's lawyer time to set up the deal that they would come out with a price that was, you know, significant money by my own standards.
[+] [-] charlesdm|11 years ago|reply
Consider the following: how would you value a business, if you don't know how it is structured, how it operates, and how much revenues and profits it's generating?
I can potentially see that working for some cool technology startup, or an acqui-hire, but not for an actual business with revenues (and more importantly, profits).
Those small acquisitions, they're not investments for Google, they're expenses. The $500m-$1bn+ ones, those are investments. Big difference in thinking.
[+] [-] jber|11 years ago|reply
[+] [-] vikramhaer|11 years ago|reply
[+] [-] DanielBMarkham|11 years ago|reply
1) Shoot for flipping and acquihire. This is where most folks are going. It probably makes the most sense for an early 20-something
2) Stay off the radar because you are uncool, using old tech, doing something stupid, the market's not big enough, or so forth. Bootstrap. Don't do a lot of PR. Don't get attention, because there are a ton of big companies full of guys who ran successful startups who are looking for cool things to work on -- if you don't look the right way, they'll just run over you and do it on their own.
The game-changers like Uber or Facebook probably start out in category 2 and then have such incredible momentum and execution intelligence that by the time they're noticed, it's too late for followers-on. That's a most tricky maneuver to pull off.
(Note: I know nothing about startups except having a few that didn't pan out, talking to friends online that have some, working in SV, and reading a lot about them. I have as much chance of telling you something useful as the psychic hotline. This is tough stuff.)
[+] [-] unreal37|11 years ago|reply
"This decision sentences us... to pay damages for publishing our opinion about Referencement on Twitter. ... This sentence means we cannot go on. "
Ultimately, they were fined 10,000 Euros (it seems) for slandering their SEO company on Twitter. But I am sure the challenge of having an open site where anyone can post anything (and modify their own templates) was the root cause. It's hard to be totally open to user's content and maintain Google's domain trust.
[1] http://techcrunch.com/2011/08/19/social-ecommerce-site-zlio-...
[+] [-] robk|11 years ago|reply
[+] [-] digitalneal|11 years ago|reply
Didn't they get caught a few months ago doing exactly that? I forget the company but when they got their documents back from Google they had sticky notes all over it asking engineers for workarounds to IP... or am I remember it completely wrong?
[+] [-] SoapSeller|11 years ago|reply
[+] [-] zhte415|11 years ago|reply
Poorly worded email, asking a lot of sensitive information, with nothing specific in guarantee, and not following-up on timeline, with non-specific proposals. Seems like a pretty good reason to avoid a proposal.
[+] [-] ericd|11 years ago|reply
[+] [-] garrettgrimsley|11 years ago|reply
[+] [-] cpncrunch|11 years ago|reply
[+] [-] serve_yay|11 years ago|reply
[+] [-] dawson|11 years ago|reply
So, what happened and why did it fall through?
[+] [-] hobolord|11 years ago|reply
[+] [-] lvs|11 years ago|reply
[+] [-] mkramlich|11 years ago|reply
could have been innocent reasons, an algo shift. it happens. sometimes you win the SEO lottery, sometimes they pull the rug out.
my own experience: roughly 3-5 years ago (don't remember off-hand) I woke up one day to learn that Google had listed me as the top search result, first page, for a particular combo of terms. I forget exactly what it was but it was something like "Java Python Flash Linux game developer" or whatever. I had learned about this from an out-of-the-blue client lead who emailed me. I was shocked when he said that's how he found me. I then went around to about a dozen different computers, different types, different geo locations in my state, both auth'ed and anonymous, and sure enough I always came up as top result, first page. It was... an awesome time to be taking on contract/consulting work, let me tell you. So many more leads coming in than before. Not enough hours in the week/month to help them, had to turn down otherwise interesting gigs.
Then it came to an end. Rug pulled out. Woke up one day, rankings changed, no longer on top like that.
Lesson (one anyway): that's a huge eyeball funnel. bazillions of people doing searches. even getting a tiny slice of it means tons of eyeballs stumbling upon you. quality is important, of course, being great at what you do, having the right leads, a good fit, avail, etc. But quantity? That has a quality of its own.
[+] [-] unknown|11 years ago|reply
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