Threadwatch published a post from Todd Sims of Business.com, with Tom stating that Business.com is removing the nofollow attributes from all Business.com listings effective immediately. I tend to agree with some of the TW comments; that business probably dropped quite a bit when they added those nofollows, creating concern within Business.com about the value of the use of that attribute. Why muddy the waters if the gains are not sufficient to justify the risk?

Let’s just say rel=nofollow is yet another Google beta program. Do you adopt things when they are still in beta? Should you?

Business.com’s use of nofollow was reported previously:

• Business.com gets competitive with nofollow attribute
• Business.com use of nofollow clarified. Has Google spoken?

Lane Soelberg, the Vice President of Marketing for Business.com, has responded and clarified the use of nofollow on Business.com. Lane posted to Threadwatch that:

• Featured Listings are operating under a pay-per-click model on Business.com, and have been tagged with the nofollow attribute.
• Paid Inclusion listings are reviewed by editors, and so deemed “trusted”, and not tagged with nofollow.
• Free listings are gathered by editors, but reviewed over time. They are tagged nofollow until approved

From this, an SEO might assume that:

• You can get into Business.com for free but you will always get a nofollow unless you pass an editorial review. No telling if that involves sales calls, but it could certainly be leveraged by Business.com to motivate hesitant buyers.
• This establishes that (according to Business.com) paid inclusion directories are not purchased links.

Does Google have to state clearly whether or not this is true? No. It is true, until we learn otherwise. A web page that proclaims itself to be a paid-inclusion web page can sell links without putting a nofollow attribute. Woohoo. I would guess that Google put some pressure on them to use the nofollow. Otherwise, they were a blatant case of selling links that distribute page rank and therefore manipulate the search engines. Of course such pressure would carry a scent of impropriety given the status of Business.com as a Premium AdSense publisher, but I have to leave those issues to the lawyers.

Google reserves the right to devalue links as it pleases. All of this is meaningless unless we can determine that Google devalues paid inclusion links, or does not. Until we see some data from the SEO community on this, the whole business.com nofollow issue is of little competitive value.

Today the SEO world noticed that Business.com has added “no follow” attributes to many of their listings. Since Business.com is a major player in the “important back links” game, this is significant. A nofollow attribute is read by Google as a signal that the link is not to be trusted as a recommendation for the site. Practically, it means that hyperlinks with a nofollow attribute are worthless as back links if you need back links to improve your Google relevance.

While today’s discussions are certainly colorful, they demonstrate a bigger issue in the web marketing world than Business.com adding nofollow attributes to hyperlinks in its directory. The discussions demonstrate how little webmasters seem to understand about competitive webmastering, and how little effort many of those so-called webmasters/bloggers actually put into their writing. Many of them got it wrong, and many completely missed the significance. If you are a business owner of a webmaster trying to understand today’s competitive web environment, you will likely be misled by the discussions. While I won’t go into great detail here about nofollow and it’s use, I will try and explain what is important and why it is important. I’ll stick to the places where I felt the discussion was accurate or meaningful: highrankings and threadwatch.

Business.com is a business directory and has been recommended for years as a good place to buy a listing, because it has such high PageRank (PR). Google distributes that PR outward to the destination pages of any outbound hyperlinks on the Business.com page. So if you are the only outbound link from a high PR page on Business.com you will get a nice boost of PR from Google, and that will help you outrank other web pages in the Google SERPs. Multiple outbound links share that PR distribution by some algorithm. Page Rank is not the only benefit of a link on Business.com, however. Because it is a natural type-in domain name, and because it is an active business which itself has high PR pages and many incoming links, it directs a good deal of traffic around the Internet. Even if you don’t benefit from a PR distribution, you may get quite a bit of value out of a back link from Business.com.

And that is why a back link costs $199 per year. To put it into perspective, that’s about $17 per month for the back link. From the Business.com sales page:

Our users work for small, medium and large companies from a wide range of industries. Many are senior-level executives who hold the decision making power to make business-related purchases on behalf of their organization. Almost 70% of Business.com’s users are full-time workers, 60% are college graduates and approximately 70% earn over $100,000 a year. Business.com reaches more than 38 million business users through the Business.com Network.

Of course like most directories, Business.com includes many non-paid listings. They need to do that in order to present a useful product to viewers. If they limited the directory to paid listings, it might not be comprehensive enough in every category to be useful. Before the nofollow attribute was introduced by Google in 2005, there was no way to know for sure which entries were paid and which were free. An optional “extra four mini-links” was available to paid subscribers, and many made use of it, but otherwise there was no way to tell a paid listing from a free listing. There was also no way to selectively share the benefits of the listings (such as page rank distribution). That was all part of the game.

Today’s discussion started with Jill over at the High Rankings Forum. As usual, there is a quality discussion over there with some detailed observations, but the level of discussion on High Rankings is fairly centered around search marketing and “textbook SEO”, and at a level not always easily understood by novices. Jill notes that adding the nofollow attribute to paid links would be in line with Google’s stated purpose for the nofollow attribute. Yet it seems that Business.com has only added the nofollow attribute to the free listings. This appears to be directly contrary to Google’s intent. It rewards paying customers with Page Rank distribution, and limits the benefits of a free inclusion. Interesting observations.

Let’s consider the Business.com business model. They sell placement in a directory, and they present an information resource to the public via the Business.com web site. To achieve a quality (competitive) directory, they have to offer a quality listings at a value price. In order to present a meaningful product to the web visitor, they have to present a comprehensive and easy to use resource. Telephone directories have juggled those two competing priorities for a hundred years. The winning solution is to create an arena where “you have to be in it” in order to compete in your business market. Can the local accountant afford to NOT appear in the local Yellow Page directory?

When there was but one Yellow Pages, with every accountant in town listed, he simply had to pay to play. Of course the cost of a display ad in that case can be very high. The directory enjoyed a virtual monopoly, and could price the ad just shy of the value it brought to the local business. I have worked with small businesses that paid $6k per year for a single display ad in a city telephone directory, and they considered it a good value. Did telephone directories keep an edge by including free listings? Sure they did. They knew every phone number assigned by the (monopoly) telephone company. In fact, that is how the directory business started. BECAUSE the phone company knew in advance every new business opening up in a town (since those businesses ordered phone service prior to opening), the telephone company had a competitive advantage over any else looking to produce a local business directory.

Now back to Business.com, the standard for business to business online directories. What happens when the directory becomes adequately populatd, so it is really comprehensive? Just about every meaningful business entity has a listing, either free or paid, or at least enough to make the directory comprehensive. In order to grow the market, Business.com has to either expand it’s service offerings or convert free listings to paid listings. Let’s consider each of those options.

In order to expand service offerings, Business.com will have to innovate. Maybe contextual ads within the directory, with premium placements? Well, Google already does a great job of that via the Google AdSense program. Is Business.com in the program? Sure. They would certainly qualify for the Premium program at Google, which provides contextual ads without an obvious Google branding. A look at a Business.com page shows “sponsored links” that could be Google AdSense. An examination of the http headers when one of those ads is clicked reveals the Google servers are behind the scenes, serving up the ads. Of course that makes sense. A premium business choosing a platinum partner for contextual ads. It also means Business.com has already exhausted that extra service offering model. The market opportunity is already being exploited.

Are there other avenues? Sure, but they may take some work and some research. For example, how about charging more for more competitive ads in certain competitive markets? It worked for the Yellow Pages, but on the Internet there is a good chance it would create opportunity for niche directories to steal customers away from Business.com. So then how about converting the free listings to paid listings?

Bingo. Business.com has access to those potential customers, and can now incentivize them to pay to play. The typical online directory model suggests dropping those who don’t play, because quite frankly how else can you motivate them? Well, Google has provided the tool - the nofollow attribute. A directory can now incentivize the free listing to convert, without bluffing about dropping them (and potentially hurting the directory’s comprehensiveness). Is this a smart play? Sure it is. And it will only get better over time.

First, Business.com is a premium AdSense partner. Google is getting paid big bucks to send traffic to Business.com, where Google ads get clicked and Google publishers pay Google for those clicks. Will Google penalize Business.com for using the nofollow attribute in a way that clearly supports the Business.com competitive directory business model, which ensures their continued success, while at the same time providing Google with a revenue stream from contextual advertising? I doubt it. It would be silly to do things any other way.

Does the business owner see the value in the Business.com paid listing? Maybe not today, but I think we can rest assured that down the road Business.com will be increasingly showing businesses how well the paid listings are doing. Web site owners will learn more and more about the value of direct links, not less. Maybe Business.com will have to tread carefully when suggesting that paid listings pass page rank, or add value for search ranking, but I suspect that would not be much of a challenge for the marketing department. And as long as business keeps growing, and Google keeps getting paid, and there is no other reasonable option, Business.com has found a clever use of the nofollow attribute. Yesterday the price of a direct link from Business.com that boosts your page rank was $199 or free if you were already in it. Today, the price of a direct link from Business.com that boosts your page rank is $199, no matter how you get in. Sounds like a smart move to me.
The remaining question is how Google will handle the publicity this brings to the use of the nofollow attribute. I think the folks at Threadwatch.org concluded correctly on this one. Aaron (seobook) looks at from a Google search engineer perspective, and sees that the only live links in Business.com now are paid links, and so Google can can safely devalue those en-masse with respect to passing page rank. Todd (Stuntdbl) notes that this is another case of one business’ decision causing potentially disruptive changes across the whole Internet marketplace (and I infer that to suggest Google has too much market influence). If I infer corectly, I agree.

Update 7/7/2006 - Lane Soelberg, the Vice President of Marketing for Business.com, has responded and clarified the use of nofollow.
And so I conclude it is more important than ever, competitively speaking, to stay close to seo events if you expect to remain competitive on the Internet.
Images:(click on an image to see a larger version)

Business.com directory page showing listings, some with optional “mini links” which suggests they are cleary paid listings.Same directory page with the nofollowed links highlighted in red. Not all paid listings, but most, are not nofollowed.