The Effects of Inflation in the Pagerank Economy

pagerank-inflation

In a capitalist economy, individual prosperity is measured by individual wealth accumulation. Communal prosperity (the health of the system) is measured by communal wealth accumulation and currency changing hands — i.e. cash flowing frequently and in legitimate, natural ways.

In the pagerank economy, individual prosperity is measured by individual pagerank accumulation. Communal prosperity (the health of the system) is measured by communal pagerank accumulation and pagerank changing hands — i.e. link juice flowing frequently and in legitimate, natural ways.

If we can think of Google’s index as the economy, pagerank is the currency. Black hat is the… black market? Okay, maybe I’m pushing it there.

Anyway, new sites are being added to the web all the time. A bit like new people being born. After a brief childhood, they’re vying for the same currency as everyone else. Except web sites don’t really die in the same way that people die. People, for the most part, are buried and survive only in memory and the odd legacy. A dead web site can be a functional and SERP-leading mauseoleum. In fact, age is respected and is a marker of rankworthy trust.

One of the classic SEO questions is how much is a good amount to link out? There are those that stick to a rigid policy of “not at all”, but the unnaturalness of that kind of setup seems wrong, especially since it goes against a healthy pagerank economy. Just as cash must flow, so must pagerank, for there to really be a proper system at all — at least one where links are still such a core currency (i.e. ranking factor).

In a healthy pagerank economy, juice changes hands. On a very general level, Google has an interest in the webbiness of the web. Otherwise, relevance becomes the only ranking factor, and that just can’t work (at least not for Google’s link-driven algorithm).

Every transaction, however, inflates the total pagerank supply. On a web with new content and new links every day, the value of a link must decrease, with a constant state of pagerank inflation. This is especially the case with a SERP list being only ten entries long, and the fact that so many searcher clicks falling on the first page of results (and many above the fold).

But just as the amount of links out on the web grows, so do their destination pages. If there are always more sites to link out from, and also more sites to link out to, might there just be a balance?

Black Holes

Just as money tends to generate money, pagerank tends to generates pagerank. This is because the main asset generated by pagerank is traffic, and traffic generates pagerank by an increased viewership resulting in more backlinks.

Think of traffic really as an asset – a resource, a product – that tends to attract more of itself. Over time, this leads to individual entities growing and growing in value.

When coupled with pagerank inflation, the gap between the pagerank-rich and the pagerank-poor widens. The traffic pool gets deeper with more and more people on the web, but doesn’t get much wider with more sites because there are limited ranking spots (in the SERPs) of any real value. The consequence is the emergence of pagerank monoliths, or black hole sites — Wikipedia being the prime example.

Fortunately, though, this system would never necessitate a massive pagerank bailout (as we saw during the credit crisis).

But for discussion’s sake, what if Wikipedia disappeared tomorrow, and its links removed as if they never were? Because the total pagerank supply would drop, every site’s pagerank would buy a little more, and the results would adapt in the rest of the web’s favour.

Like disappearing a rich family and burning their money. They have to have quite a lot of the relative money supply to have a noticeable effect, but by allowing between 10-20% of many SERPs to free up, the effect would be significant.

I suppose another question would be what if Wikipedia took it upon themselves to change their role in this economic system? With the amount of pagerank that could be pushed back out, if Wikipedia strategically re-followed their links, the result could tremendous, depending on how they did it. The sites they link to in a nofollow manner make natural sense, so if they were re-followed, the effects wouldn’t be terrible, but they could be very noticeable.

Fortunately (unfortunately?), Google can turn off whichever taps it chooses. But it’s still scary to think of a Wikipedia as a kind of economic monster. I’m sure that with Wikipedia being one of the highest few ranking domains on the planet, Googleian and Wikipedian folk have surely shared words.

At least sites in a pagerank economy can’t be too big to fail! There is, of course, a system to maintain, but no real precarious balance to potentially upset.

Net Neutrality and Economic Policy

The black hole effect has the potential to be exaggerated even further by the impending collapse of net neutrality. If sites are able to invest in primo exposure within a tiered system, that traffic will eventually result in more backlinks, and more rankings.

Sites that can’t afford to compete won’t have the visits that bring the natural links. As with the real economy, the rich get richer and the gap between rich and poor widens, which tends to not quite bring about tears in those that are already doing well.

Thriving Within An Inflated Pagerank Supply

What does the pagerank supply mean for aspiring SEOs? As is always the case with web stuff, you should have gotten in ten years earlier, but that being said, hurry up and get started. There are still plenty of niches within which hard work can lead to ranking spots. But it isn’t getting any easier. It will never really get any easier, so get moving.

The total number of links within the system is going up, and while the value of an individual link within the web pagerank economy goes down (given the limited number of spots for rankings), that doesn’t mean its per site relative value has to go down so much. Not all the new links are necessarily going to the same place.

Black hole sites exist, but extra sites could potentially just link to newer sites.

I’d be curious to know the rate of growth of legitimate, unique web content in comparison with the rate of growth of legitimate links on this content (including and excluding black market links). I’d also like to know the rate of natural link growth for old sites versus new sites. Depending on how it all happens, you might naturally grow in proportion with pagerank inflation, like getting raises to keep up with inflation in the normal economy.

As far as rankings on the first page go, backlinks might become less and less of the full story. The recent changes to Google’s Local Listings shows their Places ranking mixed with natural organic results. So, even if you’re having trouble keeping up backlink-wise, you might sill have other means of reaching a high profile spot.

The Future

Where will search results be in 5 years? Universal search has already changed SERPs in significant ways, allowing newcomers to step into what is now a bigger front page, but there’s a limit as to how far this can go.

How much fluctuation will there really be for the core results? Will they be more static as time goes by — considering the link leads the top sites will have? Will freshness be a factor? Should freshness be a factor, even if it doesn’t really seem like a QDF search? Just to give other people a chance? Would that be fair?

Maybe Google’s fine with this, and doesn’t consider it a problem at all. SERPs are already tweaked in relation to user behaviour, so they will re-adjust somewhat on a user level. Besides, if you want a chance at first page visibility, all you really have to do is bid enough per click…

The way to traffic is getting and will continue to get increasingly social — especially with Twitter followers being a potential ranking factor and Bing factoring in Facebook likes. While search engines are going to likely include more and more social content into SERPs, the real meat of the top ten spots will likely go to those that got in the ranking game early. Unless links stop being the main indicator of popularity (not any time soon!), I don’t see how this can change.

In the physical, real world economy, factors like location are key to getting new visitors to newcomer places. While local search engine results have an element of this for the right niches, there is no real equivalent to 40 stores shipping the same products nationwide. I guess I’ll try to get my foot in the door into whatever’s left while I still can, or save my pennies for some sponsored listings…

This article was originally written by Simon Abramovitch.

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3 Comments

  1. Because websites rarely die, unlike people, their role in the pagerank economy reminds me of that of the corporation in the real economy: they survive for generations, affecting the flow of fiat through (1) goods/services rendered, (2) goods/services consumed, (3) salaries paid to employees, and (4) taxes paid.

    Of course, this only underscores why I think your analogy of a “PageRank Economy” is so appropriate.

    I suspect, though, that links will become a less important factor more quickly than you think. And I don’t think this so much because of social factors (such as Tweets and Likes), but because of social is changing the way users discover content. In other words, I can see users relying less on conventional search and more on social-search (such as an FB search engine) to find what they’re looking for.

    Of course, I don’t think that such a social search would produce better quality results. I think those results would be completely subjective (based on my personal network), whereas Google’s results are somewhat more “objective” in their own right — but that’s another discussion altogether.

    Suffice it to say, I see social as being a major economic disruptor in the pagerank economy, much like how China, a communist country, has (1) become the world’s 2nd largest economy, and (2) has surpassed the World Bank in loans to third-world countries (http://reut.rs/i7RZ5I)

    Sent on January 20, 2011 by CT Moore