The Weakest Links – A Former SEO Wizard Turns Narc For Wall Street

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Bryne Hobart of Digital Due Diligence

Bryne Hobart learned the vagaries of Google rankings while working at Blue Fountain Media, one of the biggest SEO shops in New York. The 24-year-old college dropout had hoped for a career finance, but the market implosion of 2008 nixed that idea. Instead, he scored an internship writing copy at Blue Fountain, eventually working his way up to managing director of marketing.

As the tech sector began heating up, Mr. Hobart spotted an opportunity to distinguish himself on Wall Street. “I saw all these companies, like Demand Media, getting ready to have these big billion dollar IPOs and I thought, ‘Their whole business is based on the kind of campaigns I run every day for clients.’ Maybe there is something I can add to that discussion.”

He and a colleague, Doug Pierce, had already been attracting a lot of attention with their research on how companies were gaming the system. Work they did at Blue Fountain became the basis of a February page-one story in The New York Times by “Haggler” columnist David Segal, exposing the dark arts being employed by JC Penney. A follow-up wilted the Mother’s Day sales efforts of 1-800-FLOWERS. In both cases, coverage prompted Google and its all-powerful antispam enforcer, Matt Cutts, to tweak the engine’s algorithms, banishing the sites, at least temporarily, to search-engine Siberia.

In March, Mr. Hobart and Mr. Pierce formed their own company on the side, Digital Due Diligence. His first post, on Demand Media, drew tens of thousands of readers and was passed around internally at the content farm. Mr. Hobart began monitoring other companies that were relying on some of the shadier SEO strategies, and posting these findings online. The idea behind the business was to help hedge funds and venture capital firms assess the risk of investing in companies that relied heavily on search traffic.

Not surprisingly, Mr. Hobart’s double game–practicing SEO by day, exposing it by night–soon proved unsustainable.

In April, when DDD published a piece noting that the fashion site Milanoo was attracting a number of sketchy inbound links from sites about football and cars, their work was picked up by the massive industry blog TechCrunch. The revelation embarrassed the venerable Silicon Valley venture firm Sequoia, a Milanoo investor, and earned the fashion site its own spanking from Google. It also infuriated a lot of the partners’ erstwhile colleagues, who saw them as turncoats who’d violated the ironclad omérta of the industry.

“Their main angle is whoring for media attention,” Aaron Wall, a long-time expert at SEO Book, complained to The Observer. “People who destroy this trade for their own self-promotion deserve to be called out.”

As Cyrus Shepard of SEOMoz put it, “This is a sticky issue because no one is quite sure about Digital Due Diligence at this time, given their less than clean past and conflicted motives. SEOs are asking ‘Who is checking in their closets?’  and ‘Who is policing the police?'”

Equally distressed by the post were their employers, whose clients include P&G, Oppenheimer Funds and the U.S. Mint. “They are two of the most valuable individuals in our marketing department, but this was a case of bad judgment,” Blue Fountain CMO Alhan Keser wrote on the blog SEOBook. “I came back from a trip on Tuesday and confronted Byrne and Doug about the issue and asked them to stop outing companies.”

Instead, Mr. Hobart quit. There was more opportunity, he thought, in evaluating the risks investors incur due to SEO than in performing it himself. “I looked at the attention I was getting for my posts on Due Diligence and just decided that it was time to strike out on my own,” he said, noting that he is now scouting office space.

Despite the occasional scandal, search-engine optimization is now a $19 billion business. One of New York’s more prolific SEO gurus, who agreed to speak to The Observer anonymously, sees the industry in zoological terms. “It’s kind of like we’re all gazelles running past a big crocodile” he said. “You just keeping hoping you don’t catch the monster’s eye.”

Rather than simply paying for links, which often means relying on poor quality sites that are easy to identify as cheats, this “black hat,” let’s call him Merlin, uses his legitimate business as a cover. He created a simple, easy-to-use template for small-business owners looking to build their own inexpensive sites, then sold the templates well below market rate, quickly building a network of thousands of perfectly legitimate websites run by independent users.

Since he controlled the template, he was able to attach a bit of fine print to the footer of each page in the network. “Let’s say I had a client who wanted to rank very highly for a keyword, maybe ‘squash racket’ or ‘snow boots.’ I had hidden links inside the text at the bottom of all these sites, and I could just turn the switch. Suddenly, 6,000 sites agree my client is the most relevant source on snow boots.”

The insistence among SEO experts on defining certain tactics as legitimate and others as underhanded strikes Merlin as absurd. “Ethics, where search is concerned, is a luxury few companies can afford,” he said. “Let’s face it, the distinction between ‘white hat’ and ‘black hat’ changes all of the time. Those of us who ended up in this business are surprised to discover we’re making good money. We’re wearing a tie.”

Shops that strive to uphold a higher ideal find that many clients arrive on their doorsteps chastened after past transgressions. “We have a lot of people come in who have been burned,” said Rhea Drysdale, CEO of Outspoken Media. “We had a client come in from the world of online poker. They had swapped links with other sites,” a practice she considers a no-no. “The attitude was, you had to do it in order to survive. It sounded kind of like a joining a gang; you needed to be initiated.”

Mr. Hobart isn’t yet 25, but he’s already nostalgic for SEO’s heyday. “I started off in this game as an intern, writing little articles to improve the look and feel of sites,” he said wistfully. “But the time when an intern could get your site to rank are gone. eHow and Demand Media manufacture thousands of articles a day–there is no way to match that scale.”

The future of SEO will demand different skills more suited to social media. “That’s the scary thing, thinking about how things like Facebook and Twitter will change the game,” Hobart said. “It’s one thing with Google, trying to outwit the machine. It’s different when you’re trying to optimize on real people.”

The Weakest Links – A Former SEO Wizard Turns Narc For Wall Street