In this week's Whiteboard Friday Wednesday, we have something different in store for you. Last week, during SMX, I had the extreme pleasure in having Danny Sullivan come into the MozPlex Studio for an interview. Luckily he let me ask him all kinds of fun questions. I should warn you, this is another long one, but believe me, it's well worth it!

By the way if you missed Danny's epic rant about link building from last week, you really should go listen to it (right after you watch this video, of course). Also, you can keep up with him on his personal blog as well. Now, without further ado, let's chat with Danny Sullivan.

Video Transcription

Rand: Howdy, SEOmoz fans. Welcome to this extremely special edition of Whiteboard Friday. Joining me today is none other than Danny Sullivan.

Danny: Thank you.

Rand: Danny, for those who don't know, you have been living under some sort of huge rock on Mars, in a cave, with your fingers in your ears and your eyes shut, Danny Sullivan's the founder of Search Engine Watch, the founder of Search Engine Land, and of Third Door Media, which runs the SMX conference series. Danny is also in my personal opinion the greatest reporter in the technology field right now. Well, let's say the best quality technology journalist.

Danny: Well, thank you.

Rand: That's how I feel. Danny's agreed to join us for Whiteboard Friday, and we get to ask him some very probing questions. In fact, every question we wanted to ask, he said no problem. Here we go.
First off, lots of people curious about Penguin. What do you think? Is this a success or failure for Google? Are they hitting people fairly or unfairly?

Danny: It's hard to say. I've seen a lot of people complain that this is the worst thing that's ever happened and it's wiping out small businesses and the entire U.S. economy's about to collapse. Literally, that's the way you read it. I feel like the reactions after the Florida update were worse, and I don't understand how if Google's intention was to wipe out all the small businesses across America, back as people said with Florida, how it was that almost ten years later all of them managed to survive.

So I think that Penguin probably hit a lot of the people who it was designed to hit, people who were outright spamming Google. People that you or I or Joe Wayland, we've been saying to Google, it's ridiculous to tell other sites, oh, yeah, do white hat, tactics, build good links, when on, look at this, you just slap on some blog [flitter] links and away you go.
I think that there probably were some false positives that got hit, definitely. I feel for those people, and I hope Google fixes that sort of stuff to the degree that they can. Having said that, there were also, I don't know if you'd call them positive falses. There were people who never were getting to the top because they were not making it past the spam who are now ranking better. They don't of course go back there and say, "Hey, what's happening?"

Rand: Well, they're not yelling on any forums or message boards.

Danny: Right. I think that most people it had no impact. When we did our London show, which was two weeks ago, I had a room full of SEOs and asked how many were hit by Penguin. 3% of the hands went up. How many of you did better in Penguin? Another 3% of the hands went up.
Most people weren't impacted. So I think that what you hear online, especially when you go to the forums, can be much different than the impact on most people.

Panda, which Google said had a bigger impact, certainly I think you heard a lot more people complaining about it.

Rand: A lot of bigger sites, too.

Danny: Yeah. In terms was it a success for Google? I don't know. There's still spam that gets through. You can see it. When you say to Matt Cutts, over at Google, head of spam team, "You did this thing to stop spam, yet everybody's still seeing spam," his response was, "Well, we're trying to be very cautious and hit things where we absolutely know we're supposed to do it."
I know that when I've looked at sites time and time again that have been hit, it's pretty easy to spot spammy profiles. I think the other thing and I'm hoping that we get some clarification from Google is that I don't think people who saw a drop with Penguin were necessarily penalized per se.

I think a lot of people saw a carry-on effect, where there were networks or links that were discounted. It's not that you were penalized. It's just that the votes you had before don't count for as much.

Rand: Right. You were ranking on some links that don't pass any value anymore.

Danny: You did great on Ezine and Skidoo Do-Do [SP], and now it's not doing so well anymore.

Rand: That's my favorite site.

Danny: It's great. It's awesome.

Rand: Amazing. How about Google+, speaking of Google's methodologies here? Is this a win for them? Has it been a win yet? Is it part of the way there? Is it a ghost town? Is it going to have any competition?

Danny: All of the above. I think that Google+ is a win in the sense that who else is a credible second place to Facebook? Right? If you don't want to use Facebook and you want a full featured social networking application, share photos with people and share status updates and do all that sort of stuff, it's not Twitter, because Twitter doesn't have those kinds of control.

Rand: Twitter's really micro blogging.

Danny: I love Twitter.

Rand: Oh, me too.

Danny: It's like a slice of the whole spectrum. So I think that they've come in and they've done a good job of building their Bing to Facebook's Google if you will.
Now, is it a success in terms of being closer to market share? No. Is it a ghost town? Not a ghost town. There's activity that's there. It's just much lower level, much less activity. I think that the core thing that what they're looking for is allow them to gather up some of these social signals that they need.

If that's all it did, it's already a success just because so many of us put their Bing buttons all over our websites.

Rand: They can use that to help make their search results better, which is the moat around the castle.

Danny: Even without the buttons, if you remember, there was this concern that if we get all the Facebook likes, Facebook will know everything and they'll rank everything up and Facebook sees all this stuff.
Well, Google sees a lot of data. Sites with Google Analytics. Okay. So potentially they could take that data and use it for other good purposes.

Rand: Sure. We all just signed a privacy agreement that sort of changed a lot of the rules around that.

Danny: Yeah. But not everybody uses Google Analytics. Well, Google AdSense. Well, not everybody's carrying Google AdSense. Well, they've got DNS that they give to people. Now they've got the link shorteners. Well, the Google buttons themselves, even if nobody clicks on them, every load is telling Google that somebody's on that page. They're getting more data off of that as well.

Rand: They know every person who's logged into Google+ or any other Google service, they know who that is visiting those pages.

Danny: I think that they're going to be coming up on a year, and I think that it has been successful in many ways, especially when you compare it to something like Google Buzz. If you're comparing it as hey, now they've got 30% market share of social networking, no, nowhere near like that.

Rand: A few more things on Google. I'm really curious. I know a lot of people are asking particularly, not just Penguin people getting penalized, but like these recent individual bans. You saw BuildMyRank, the big blog network, a bunch of directories, it seems like some of them had been banned previously, but a bunch of new ones were. SEER Interactive was banned for 48 hours, which is Will Reynolds' company. Then iAcquire, of course, was banned.

Danny: The rare 48 hour penalty. Not often plotted in nature, but . . .

Rand: I assume that was a mistake. I don't know what it was. It felt like Google's Webspam Team was quiet for this, particularly on the linking side. Maybe in lots of other areas, malware, etc. They were quiet for a long time, and then all of a sudden the first six months of this year have just been a rocket ship.

Danny: I think that the BuildMyRank and the directories are one aspect of that. I think Google had seen these complaints where people are saying, "Well, you let all this spam go through, you let all this stuff happen." You've had this whole growth of this area.
What I've really realized in the wake of Penguin is that a lot of people's ideas of SEO are how they were brought up on what SEO is. Apparently buy some software that takes an article and spins it into 500 different versions, then go over to some new blog network where we're all linking together thing, because that's link building. Fire off to a bunch of directories that nobody on earth actually uses to find anything, and now I'm ranking, and apparently it worked.

Rand: They were.

Danny: I feel for those people who don't understand that that wasn't the SEO . . . they're like completely disconnected. I've seen people who were clearly lost. It's like they're coming out of the woods and they're going, "What happened? Some bomb just went off and there are penguins and feathers everywhere, and I don't know what's going on." They're going, "I just did all these things. I thought that's what you're supposed to do." It's like no.
I think that that's part of it. Google said obviously they're building Penguin. I think they were also saying we're going to take out some of these networks that really are not adding value.

I think there's great confusion also between the idea that they could look at something like a BuildMyRank and say, "Okay. Everybody's been playing in this space. Therefore we're going to penalize all of you, and we're going to penalize the network, because we know that you all think you're perfectly fine. So we don't think there's a whole lot of innocence running around here."

Then afterwards, they could say, "Okay, now if anybody starts getting links from that, we will just not count them." What happened after that, of course, is the whole no negative SEOs.

Rand: Right, I'm going to point a bunch of links from BuildMyRank.

Danny: Yeah, you could do that if Google didn't change their mind as to how they're going to treat those kinds of links. I feel like it was like a drunk driving checkpoint, and everybody got breathalyzed at first before anybody knew it was going to happen. Then the next week they set it up, and they're just out there watching you go by, because they know everybody's like, "I didn't have that extra drink." Maybe not the best analogy, but.
These are just weird stuff. This is like if Google thinks you bought links, don't yell at them or something.

Rand: Yeah. iAcquire was really interesting, because the last one I think we saw like that was Text Link Ads . . .

Danny: Text link AdWords, yeah.

Rand: Where their network essentially got revealed, and then so Google took them out of the listings.

Danny: And there's plenty of other people who haven't been taken out of the listings. That's a weird thing, because that feels like, "Well Google, gosh, why did you pick on them? You didn't pick on everybody else?" It's sort of like, "Because we did."

Rand: Make an example of somebody.
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Danny: On the other hand, it doesn't really impact iAcquire in the sense that it's not like I think they were sitting around hoping we're going to rank. Oh no, no one found us searching the Web. Potentially it makes clients who are savvy enough to say, "Hey, why were you banned or whatever?" Even if they hadn't done the penalty, that might have come to light anyway.

Rand: Sure. It shouldn't hurt any of their white hat clients, because they're not impacted.

Danny: Yeah, to the degree that they're white hat clients and Google hasn't found some network that they're shutting down or going to go with it from there.

Rand: Fair enough. Speaking of the negative SEO, I'm just curious. Have you ever actually seen a site that you thought was 100% white hat, never done anything wrong, get hurt by negative SEO?

Danny: I don't recall things like that. I've got one site that's still in my email box that I'm looking at and trying to follow up more with Google where someone's like, "I know they're doing this to me." I'm trying to look at it more.
I've probably been through a hundred different complaints at this point. I think most people who've been saying, after Penguin, "I was hit by negative SEO," no you weren't. You really weren't hit by negative SEO. You weren't.

I think that a lot of people who were hit by Penguin who were seizing on negative SEO as a "now this is going to happen," it's like, yeah, maybe it could happen. That's not going to get you back into Google.

Rand: Saying it's somebody else's fault.

Danny: Great, that's a good point, but you're not going back to where you were. That's done, that's over with. I think people need to understand that if they're thinking, well, we'll just start talking about negative SEO or whatever. That's not to take away that there's potentially serious issues that go with it. What if you did point these kind of links, and what if you do generate up a link warning, and does that translate into this? But when I've looked at all these things, they have not been cases of people having negative SEO that's been hitting them.

Rand: To my mind, it's incredibly impressive that we've seen so few examples of real negative SEO. It speaks volumes about how good Google's algo team must be.

Danny: Yeah. If you're a small player and you're in a competitive industry and you don't have a lot of reputation, then yeah, I think you'd be at much more of that kind of a risk. I do think that at least it's highlighting something that Google will consider. Maybe Google will have to take further look and say, "All right, maybe we should just be discounting the links more, or maybe we need to give even more feedback to people so that they're feeling comfortable that this is happening. Gosh, maybe we'll have a disavow links feature come in at some point" or whatever.

Rand: Which is of course a spammer's greatest dream, because then they can . . .

Danny: On the list of things I would be concerned about as an SEO, negative SEO wiping me out, no, that would not be my immediate [inaudible 12:09] on how to react to Penguin.

Rand: Excellent. All right. How about the new pay to play that's in Google Shopping? Paid inclusion.

Danny: Yeah, the new evil is good. Or new good is evil. Like wow, or in the words of one of my editors, "f wow." Ages ago, he used to get blown away and go, "f wow."

Rand: Yahoo! used to have paid inclusion. Google railed on them.

Danny: Yeah. Google never liked the idea of paid inclusion. That's the idea that you pay to somehow be involved in listings that are not the advertisement listings. When you pay, you don't have a guarantee of anything other than maybe you'll be included, maybe you'll get revisited more often or various things.

Rand: Crawled, yeah.

Danny: Google was always like, "We don't believe in that." It wasn't just that we don't believe in it on web search. It was like we don't believe in it when we went public in 2004, as an example of how we don't think we should do it, we'll cite Froogle, our shopping search engine and talk about how awesome Froogle is, because we don't charge for inclusion.

Whoa, fast forward eight years later and Froogle, now that it's going to be called Google Shopping, even though it's still the same exact thing, oh yeah, well now paid inclusion's all right.

Why is it all right now? Well, it's just really hard to get the good quality without that. Your algorithm eight years ago was good enough for you to be cocky enough to say, "Yeah, we can include everybody because we can just figure it out." But eight years later it's like, "No, payment has a role." Which is exactly what some of the search engines that Google dissed said. They didn't just go in and wink, nudge, hey yeah, paid inclusion's an easy way to go, which it was in some aspects. There were also some of them that were arguing there's a role for payment.
Yeah, they're doing it now. Not only is it an amazing, 100 degree turnaround, but it's incredible that they've actually taken a big chunk of what were free listings and made them paid. It rolls everything out into questions. What next?

Google News. Top 50 newspapers now have to pay to be included. They get in, [inaudible 14:25] resource. Google+ Local or whatever we call it now.

Rand: Google Places.

Danny: This is one of those things you thought Google would never touch, because it was "don't be evil." In fact, remember when they acquired what was the company? Performix, which sold paid inclusion? They quickly divested their paid inclusion aspect because they did not want to be tied to it. Now it's like, "Who cares?"

Rand: I wonder if they'd keep them today.

Danny: They might. Sure, why not.

Rand: How about this Google Places move to Google+? Do you think that's a good move? I mean, at least it's not paid inclusion yet.

Danny: I don't know. I kind of liked that we had Google Places. It's just weird. I feel like Google+ is now turning into this new house where all of Google's moving into. Someday I'm going to go to Google and no one is going to be home. Like, "Oh, we're all over here at Google+."
Now Google Events is coming in. We've seen suggestions that Google Events will be coming along.

Rand: Google Timeline.

Danny: Here comes Google+ News and next up, Google+ Shopping inclusion. It makes sense in that it was crazy that you caused all these merchants to try to think that they needed to have Google Places accounts and then Google+ Local accounts.
It's clever if you're Google and you're thinking, "Hhey, how can I get 80 million new users? I know, let's make every business in America a Google+ user." Maybe it makes sense when you start thinking that Facebook's got some things that they're doing with locals that really . . .

Rand: They have business claims.

Danny: You can say to some of these businesses, "Look, you're understanding that there's a social aspect. You get Facebook." Although my local donut shop didn't. I was in there and he was like gone. I'm in there [inaudible 16:14], "What are you doing?" He's going, "I'm checking in on Facebook." "What's Facebook?"
He was more obsessed over the fact that my Facebook account, I hadn't checked messages. "I've got to check messages." Like I don't read that. Anyway, and he's not on Facebook either. I'm like, "You've got to get on Facebook. You've got to get on Foursquare. You've got to get on Google+." He's just like, "What donut do you want?" he didn't care.

Rand: That's a really excellent response to that.
I'm curious about just some personal stuff with you and with Third Door Media. Tell us about the Search Engine Land, Marketing Land move, spin going down. I'm really curious about goals of yours in the future. Is SMX going to become broader?

Danny: It's going to be SMX Land. Everything's going to be "Land" after this. We're going after Disneyland.

Rand: It's like we put "moz" on everything. You're going to put "Land" on everything.

Danny: Yeah. Then we can get the conspiracy theories going on. "I think they're going after Terra next. Terra Nova."

Rand: Kenny register Moz Land. Quickly.

Danny: Already got it. We started with Search Engine Land, which made sense because I came from a search engine background, and it was the only domain that was left.

Rand: That can't be the reason.

Danny: Well, no, but I mean I needed a new one. I wanted to do what I'd been doing when I had been running Search Engine Watch. I had to go off and start all over again. Search Engine Land was starting up a new site. That made sense to go and do what we were doing.
When we started Spin, it was that we thought we would like to, as Third Door Media company, not just be covering search. We'd like to be doing stuff on Internet marketing, internet marketing the good kind, not Internet marketing apparently of the evil kind that I've recently learned. Internet marketing, digital marketing, anything that wasn't the marketing that was supposed to get you rich, but do well for you online.

At the time, things like Digg were really popular.

Rand: Sure, yeah. Reddit is still huge.

Danny: This is going or whatever. We thought this'll be great. Let's start up a site where people can share stuff out there, especially in a way it's so hard for people to share a search story on Digg and not have it buried.

Rand: Same with Reddit.

Danny: We did spend the first year, it went well. It really grew and everything. I really think that what happened was people just started sharing much more on Facebook and Twitter. We didn't see the activity that was continuing on. We sure saw plenty of spam that was coming in.
Then we'd have people arguing over what was spam or not spam. "Well, no, you didn't take out that [inaudible 18:37]." We're spending a lot of time trying to help the 14 people who were actually submitting their own stuff decide who's fair or not fair rather than focusing on good stuff.

We did a year of trying to do, well, let's just do hand picks. Then in the end we thought we know what we're doing on Search Engine Land. People appreciate that content. We're watching that social is growing and some of the other aspects of what Google and Facebook are doing are growing. We're going to the same press conferences. We have the ability to do the kind of writing we do on Search Engine Land, but more broadly on other aspects. Let's just do Marketing Land.
That's what it was. We didn't want to turn Search Engine Land into Marketing Land, because I think there are people who want search news and only search news and really, really appreciate it. We didn't want to mess with that. I want to keep doing the deep dive.

Rand: You're going to keep them separate? It's not going to be Marketing Land/Search some day?

Danny: Yeah. Ten years from now, if Marketing Land was huge, maybe you might have an area of Search Engine Land. Right now it didn't make any sense to do that and to mess with the audience that's really used to what they're doing.
We did feel like there was another audience out there that's like, "Hey, I want to know some of the search stuff that's going on, but I want to know some of the marketing stuff that's going on and what's happening." That's what Marketing Land was about, to leverage the existing editors we have and the quality of the content that we already have.

That's what happened. We brought that out there. That's been growing great. It's been much more of a success in terms of spin, in terms of our social followerships and our paid views and the kind of reaction we've had from it.

The other thing that we struggled with is that sometimes we'd have stories that were a little bit broader on search and you put them on Search Engine Land, you didn't feel like they resonated with people outside, because they went, "Oh, it's a search engine? Search Engine Land?"

Rand: Right. They'd submit it to Hacker News and people would be like, "I don't know what this is."

Danny: Today we were on Daring Fireball. I did a thing on paid inclusion. The paid inclusion story I did on Marketing Land, which I think resonates with that audience who think, oh, it's a marketing thing rather than some weird search engine thing.

Rand: Got you.

Danny: That's where it was.

Rand: Interesting. SMX, going to stay largely as it is?

Danny: Yeah. That's been focused on search, and we're really happy with that. The one thing that we did bring back, which we had done in 2008, was SMX Social Media.

Rand: Right. I remember that first one in New York. That was awesome.

Danny: It was great. We had done it on social media, and initially it was social media we'll keep it somehow connected with search. That we might go a little more broader. We might go ahead and let it be SMX Social Media, just talking about social media, that's not necessarily tied with search because at the main search shows, that's always the hallmark with it there.

Rand: You guys usually have a social session at SMX.

Danny: We do. The key thing that we tend to do at the SMX shows, like the main ones we've done, is there's always some connection with search. We haven't wanted to just say, "Oh, by the way, now we'll do some things on Twitter." We wanted to be fixated there on that.
Potentially we could do more, but our plate's pretty full. We're happy with what we've got. We want to just go to the shows we have existing before we launch Internet Marketing Land MX.

Rand: Got you. IMMX. Make sure to grab that one too.

Danny: Yeah. Impossible Mission Expo.

Rand: I would pay money to see that. Tell me about your personal goals. I don't know why I've never asked you this question, but I'm really curious. What are you passionate about? What do you want to do long term? After Third Door is sold or you're retired and had someone else take it over, what's Danny going to be doing?

Danny: I want to spend more time with my kids while they're still young and want to spend time with me. That's number one. That's been one of the great things with Search as we've built up our staff so that I don't have to work 8,000 hours a day.
Long term, I don't know. Personally, I have a column that I write on cNet. My column's a tech column, and I'm just writing about stuff that I had been doing on my personal blog and now just more broadly about tech, because I don't know, sometimes it's fun to write about that. I think that I can bring in a voice that's not, "Oh, here's my latest phone. Let me tear it apart and see what the processor is. Man, it's got eight megapixels. Rocking."

I'm going, "Hey, my phone, it's Android 4 and there's no clustering or conversation view on the email. Isn't that stupid? 1991 called."

Rand: [inaudible 22:54].

Danny: Right. I'd love to see me have the time to continue to do that sort of thing. Third Door, it's ticking right along where I wanted it to be. I want it to continue to grow. I want it to be a solid company that's not just thought of as a company that, "Oh, that's Danny's company. He writes everything." I don't. I don't run things.

Rand: Like 10% of things, maybe.

Danny: Yeah, maybe 11. We've got a good staff of people both with the company, doing the expos, and we have a good chunk of people who work on Marketing Land and Search Engine Land. I suppose my long- term Internet goal is to continue to build up the staff and continue to have it be a solid - I don't want to say machine, that's not quite the right word - a solid foundation.

Rand: Scalable process.

Danny: Yeah.

Rand: Great. Very cool. All right. Number eight, huge question.

Danny: Yeah, I know the answer to this.

Rand: You do?

Danny: I do. If I could just get $1 billion in investment, I promise, you'd never see me again.

Rand: I'm sure we could make that happen. I would not be surprised if Marc Andreessen was like, "Danny Sullivan. Yeah, I bet he could beat Google."

Danny: I'd be surprised if Marc Andreessen even knew who I was, to be honest.

Rand: He probably does.

Danny: Yeah, we'll see.

Rand: What would it take for someone to beat Google?

Danny: First of all, Google have to get bad. They have to get bad.

Rand: They have to defeat themselves. No one can defeat them while they're . . .

Danny: I always use this analogy of, I get to draw because it's Whiteboard Saturday, and this is Google, Whiteboard Saturday, and these are cigarettes. Google is a pack of cigarettes. Google is a habit, but it doesn't kill you. People are like, "What?" Eric Schmidt loved to say this sort of thing. "We don't need to have regulation. We're just a click away. People could quit us at any time." It's like yeah, they can quit smoking at any time, but they don't, because they're addicted to it. Google doesn't even have a Surgeon General's warning telling you that it's bad. You don't want to kick the Google habit. It's working.
The other model I tend to talk about with Google is I say, look. Google's like your best friend. You've been asking it questions for years, and it's been giving you good advice. As a searcher, forget you're an SEO, forget that they're evil, they're paid inclusion, can't believe Matt, it's all part of a concocted plan where little people are moving around, it's all designed to keep down the small businesses and push them back into Austria. I don't know. Forget all that stuff. Most searchers like Google. They really, really do. Go look at any of the consumer surveys. They like Google. They don't think they're evil. They've got dogs and balls and they give them search results.
For years they've been asking Google for advice. Google keeps giving them good advice, and it's like their best friend. Here comes Bing, and he's like, "Hey, I'm Bing." That's Bing over there. He's like, "I want to be your friend." You're like, "I've got a best friend. I don't know who you are. I don't need to talk to you. Why would I give up this best friend?"

This best friend starts being evil to you. It's not around. You can't depend on it anymore. You're sitting at home, "I want to go out. What are you doing, Google?" "I'm over here on Google+. I've got some things to do, doing some social stuff."

"Come on, Google, let's go out." "No, man, I'm drunk." "Dude, you've been too busy taking some spam," or whatever. The results are getting bad.

Then people might start thinking, "I need to find something else." I need something, and who's there? Bing's here. Bing's your buddy. Bing's your pal. I think to really win against Google, Google itself has to screw up. Amazingly, they've done a little bit of that already.
The problem where I think they tend to screw up is the more they start pushing on things on Google+, the more they do anything that has nothing to do with search, the more that they have cars that drive themselves, the more that if there's something wrong with search, you get people and I think even ordinary people might start thinking it's probably because they're not focused.

For the most part, they haven't been screwing up. Aside from that, just some game changing, huge improvement in search quality. I don't see that coming anywhere. I don't see it coming from Bing, and I don't see it coming from two guys in a garage.

Rand: Duck Duck Go.

Danny: No. Sorry.

Rand: Oh well. What about the next Facebook? That's an area where we've seen a lot of companies, your Friendsters . . .

Danny: Google+. Buy it. No, it's the same argument.

Rand: Would you sell your Facebook stock and buy Google stock?

Danny: Yeah, if I had stock. I don't have stock in any of them.

Rand: Actually, that probably makes sense, since you're a journalist.

Danny: Yeah. Plus I'm an idiot when it comes to stock. Ask me about my e-pal or whatever it was, e-cars. Finally they're like, "We're going to have to drop your ten shares of these things because they've been negative $3 for ten years."
Anyway, it's the same exact thing. Facebook is your best social friend. The same people who've got the, "Facebook's going down because they don't respect your privacy and they don't take care of you and they're always changing stuff. Zuckerberg just wants to take over the world and steal even more money from people and crush them like bugs, so he can say, 'I'm the super CEO' or whatever." Ordinary people don't care. They clearly do not care after five major different Facebook privacy things and a movie that was not exactly flattering. What are they going to do next to really get you concerned about them? Go public? Oh, wait, no, they did.

Rand: And the stock price is sort of . . .

Danny: Right. I think it's the same exact thing. People are happy using Facebook, so they're not going, Oh, you know what? I should go use some Google+ now." What?

Rand: Do you see another one? Not necessarily a Facebook substitute, but a Tumblr or a Pinterest or a Quora or whatever?

Danny: I think there's slightly more possibility that the two guys in the garage come out with something better or something different like that. I think search is really hard. I think search is probably harder than social, because you're dealing with billions of pages that are trying to mislead you automatically.
You've got your social account trying to mislead you, but you immediately put a filter on the social results, because the social results are who you decide to become friends with, right? Imagine if we only could get personalized results. You could not get search results on Google unless you picked every single source you wanted to hear from. That is what happens on Facebook, right?

Rand: Yeah, that's true. Well, they backfill with Bing results.

Danny: Well, they do. Yeah, but it's . . . I think something like Pinterest, you're like, "Where'd that come from?"

Rand: Right. It's completely different.

Danny: Where are the copyright lawyers coming in? That's a new thing. I think there's more of a possibility, but I still think Facebook's built such a huge network effect or whatever it is at this point that it's just difficult to come in there and chip away at it.

Rand: Surely analysts must be calling you and asking you all about Facebook and how they're going to operate in this ecosystem.

Danny: No.

Rand: Really?

Danny: No, because I don't tend to talk to them for free. They call you up. They're like, "Hey, we just want to talk to you for an hour." You're like, "Because I've got an hour to spend with you to tell your clients what to buy?"

Rand: Right. That'll be $1,000.

Danny: "Oh no, we don't pay for that." It's like, "Oh, you must be a great analyst."

No, I occasionally hear from some people, but I'm not sitting around trying to dissect the value of Facebook any more than I try to dissect the value of Google, because I think those things are impossible.

I actually went to an analyst thing once where I was asked to go. I think it was one of the companies that's now gone down. Either my advice was good or bad. I went in and there were 25 people there trying to figure out what Google was going to do next. This one guy in particular really got annoyed with me. He was like, "Well, I've got this spreadsheet here, and I've calculated the visibility of all their ads. Then I can project that it's going to do this. I don't understand how you can say that we don't know what might it go."

I'm going, "Because it's run by two people who don't care what your spreadsheets say. It's run by two people who decide for the next year, 'Let's take a loss, because in the end, we control the company. So who cares?'"

It's run by people who at the flip of a switch can add a fourth ad that you didn't put into your little projections. We've watched Google do that. Take this thing, the shopping thing, six months from now, free listings suddenly cost everybody money in Google Shopping. Their estimates, that's going to make Google $200 to maybe a billion more in revenue. That's nice that's happening to them.

Rand: Yeah. Wish I had a lever I could pull for a billion extra dollars.

Danny: It's the same thing with Facebook. Greg Finn did an article today. It was like the paid organification of Facebook. The point was people were going , "GM's not going to do ads anymore. Yeah, we just want the free stuff."

Hey, GM. Guess what? The free stuff that you get, no one's reading your Facebook page. No one goes to your Facebook page every day. We know that really, about maybe 18% of the people that are out there on Facebook and follow your page actually see some of the stuff that you post, because Facebook doesn't let all of your stuff go out there.

At any point, Facebook could decide that you know what? Edge rank. Edge rank like this equals, and then GM's screwed. You should only actually be visible 10% of the time, so all that brand building and all the stuff you've been doing and everything you did for Facebook, guess what? They'd like you to do a sponsored post to get that back. How's that suck in your ad pipe?

Rand: That's very true.

Danny: I feel sorry for anybody who has to go out there and try to figure out what Facebook's worth. I really do. I don't know what it's worth. I don't know if Instagram's worth a billion dollars. Don't ask me what it is on the value. I don't know.

Rand: All right. Well, Danny, this has been awesome. Thank you so much for coming in.

Danny: You're welcome.

Rand: Really excited about SMX tomorrow and Wednesday, and we'll see you all again for another edition of Whiteboard Friday.

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