Thursday, April 10, 2008

Waltz Rumor Part of Google's Negotiating Strategy with Digg

The social media world was recently rocked by the news/rumor that Google may be planning to punish websites and blogs that are frequently linked to by social media sites. For those not yet familiar with the situation, here are a couple of links to write-ups covering this recent development:

It took me awhile, but I think I've nailed down what this whole thing was really about. The key to understanding this is to bear in mind that these two companies (Google and Digg) have been actively involved in negotiations over a proposed sale of Digg to Google for somewhere in the hundreds of millions. Allow me to elaborate:

Extremely odd timing
The timing of this thing is too perfect to have been a sheer coincidence. This story has gotten a LOT of coverage over the past three weeks. That sort of thing doesn't just happen by accident when Digg and Google are involved.

Jeff Waltz never mentioned Digg by name --- but everyone else did
The first thing that stuck me as odd was the fact that nowhere in the alleged statement by the mysterious Jeff Waltz mention Digg by name, but seemingly all of the coverage by bloggers and journalists alike centered around this one particular social media site. Why could that be? I've seen no less than a dozen examples of this personally. The actual statement made by the person claiming to be Waltz was unmistakably vague and offered not a bit of suggestion that Digg or any other site was being specifically targeted.

Did the Jeff Waltz statement really appear on Google's blog?
Of course, the oddities don't end there. There is still much confusion over whether or not the statement signed Jeff Waltz ever actually appeared on the Google blog. According to bloggers' claims, the statement remained on the blog for about an hour before it was removed. If this claim is accurate, the overwhelming likelihood is that the Google had every intention of publishing the statement. Whether or not the decision to remove it was as calculated remains to be seen. How do I know this? I know this because Google is a larger and more powerful entity than most countries, and there is simply no way one of the company's primary publicly accessible communication mechanisms would be hijacked by fun-loving employees looking to spread serious rumors.

To muddy the water even further, Matt Cutts has publicly stated in the time since this story broke that he has no knowledge of any Google employee by the name of Jeff Waltz.

"Practical joke" theory not believable
That blog is Google's public relations mouthpiece. Nothing goes in to or comes out of that blog that is not extremely calculated, and any employee working for Google is going to be smart enough to know that the blog isn't a toy. If the statement in question did appear on the Google blog, it is because someone at Google wanted it to get out and reach whoever its intended audience happens to be.

This begs the question of why Google would start a rumor like this if the threats of algorithmic changes to punish social media participants didn't actually hold water to begin with? To find the answer, one must remember back until roughly a week or two before the Jeff Waltz story hit the headlines. At that time (just over a month ago), the social media sphere was abuzz with rumors that Google may be close to finalizing a deal to buy Digg.

Big-money negotiations between Google and Digg
The important thing to pay attention to here is that these two corporations are and have been in the midst of a negotiations over a potential transaction that would run into the hundreds of millions of dollars. Why is this relevant? This is relevant because in this mystery statement and more so in the subsequent media and blog coverage, Google was able to effectively communicate to Digg that it not only had all the power in the relationship, but also that Digg's asking price was still unacceptable; and that Google can and will play hardball if Digg refuses to make further price concessions.

The whole thing was a very thinly veiled threat from Google to Digg, and a reminder that a site's value can fall rapidly if suddenly it were to disappear from search.

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1 comment:

  1. I forgot to mention one major detail at the end of the post!

    Google was able to communicate the bargaining position to Digg without having to take credit for doing it. Issuing such a reminder in person would almost certainly be taken as an insult, and an attempt to intimidate.

    Now, Google can deny involvement because no one seems to have a record or proof it ever appeared on the blog to begin with. Whether it actually did or not is irrelevant.

    There are some irregularities in the coverage of the supposed Jeff Waltz statement that seem to suggest Google was somehow involved in shaping the coverage behind-the-scenes. The most notable is the fact that such a vast majority of the coverage mentions Digg by name when the original statement by the mysteryman Jeff Waltz unmistakably did not.

    This of course is contingent upon my initial theory that this whole story/rumor/mystery was a deliberate strategic move by Google for the purposes of increasing leverage in its rumored negotiations with Digg.