Seth Godin's Failed Squidoo Site Sells Out to HubPages

After 20 months of tanking traffic, Squidoo.com's founder and president Seth Godin is closing the doors on his user-generated-content (UGC) site. According to Quantcast.com, traffic to the Squidoo site was averaging about 2,315,300 unique visitors per day in November, 2012. The day before its demise was announced, traffic had plummeted to just 358,000 a day, a loss of more than 84%. Translate that to an equivalent loss of income as well.

A revenue sharing site, Squidoo paid half of the money generated from Google AdSense and Display Network ads to the writers of 85,000 articles on the site. For the month of June, that 50% payment equaled just $18,640 – hardly enough to pay the salaries of Squidoo's 15 managers and employees.

Godin made the announcement in a short blog post on the Squidoo website on August 15, 2014, stating, "HubPages is acquiring key content from Squidoo, creating the largest site of its kind in the world." That media spin is more than a little misleading. Squidoo LLC, a privately-held corporation, never owned the content in its website; the copyright is owned exclusively by the individual authors.

Godin's announcement further explained that content would be moved to HubPages.com and that writers could delete their articles or opt out of the transfer and their work would simply vanish online. URLs on Squidoo for transported pages will have 301 redirects to their new locations on the HubPages' domain. The transfer of content began on September 2 with a projected completion date of October 1.

The Sale of Squidoo.com

I asked Marina Lazarevic, Product and Quality Manager for HubPages, if money actually changed hands in the acquisition. Her answer was yes. "While I can't disclose the details of the agreement, I can say that yes, we are paying Squidoo for the assets," she said. It appears that certain technology and user information was purchased.

Squidoo was operated remotely, with employees working from their homes or shared-office spaces in different parts of the U.S., so there are no tangible assets involved in the purchase.

None of the Squidoo employees will be working at HubPages. In a veiled message, Seth Godin discussed the fate of his employees in a post on his personal Typepad blog on August 19: "Many of them are off to start new projects, and some are looking to join teams that are doing important work--people with this much talent don't find themselves in between projects for long."

Of the hundreds of thousands of pages of content transferred, only 175,000 Squidoo user-generated webpages are presently available to search engines, trimmed down from 400,000 in the month before the deal was announced publicly. Though all content will make the move, only the pages now visible to search engines on Squidoo will be accessible to search engines on HubPages.

Before the transfer began, there were 838,700 articles published on HubPages. Of these, 335,638 were coded for search engine crawl. The massive content dump from Squidoo will increase crawlable pages by 52%.

HubPages is gambling that the content will do better on its site. It's a business gamble that not many would take. As Google's Panda algorithm is an ever-present and ever-changing beast which evaluates a site's entire inventory of content and applies across-the-board penalties, HubPages is at risk of losing its successful traffic numbers. Also, it is well known that any existing Google penalties follow URLs directed to a new domain.

The day before the acquisition was announced, the HubPages site received 1,282,894 unique visitors and average traffic was running at 33,145,000 a month for the previous quarter. It will be intriguing to watch how these numbers change over the coming months.

UGC Sites, AdSense Dollars and Backlinks

What happened to Squidoo.com? Looking back, Squidoo was a train wreck ready to happen.

Development of the Squidoo site began nine years ago, two years after Google introduced its lucrative advertising program for Web publishers. It was a time when almost any search query on Google would deliver results displaying a handful of webpages from EzineArticles.com. (Remember EzineArticles? Its traffic from search nose-dived in February 2011 with the first release of the Google Panda Algorithm which specifically targeted so-called content farms, and the site never recovered its search rankings. Since the end of 2012, even having backlinks from that site garners a Google penalty for spam links.)

It was Google's own search engine results combined with its AdSense program which encouraged UGC sites to spring up like mushrooms; and it was Google's Web Search Quality team which eventually targeted these sites and wiped most of them off of the first pages of search results, beginning in 2011.

HubPages was hit hard in Google's cleanup and, although its traffic never returned to pre-Panda levels, it did make a healthy recovery. Squidoo.com survived the great purge of 2011 and came through relatively unscathed. No one really knows why, for that site was stuffed with similar low-quality content, duplicate content, spam, spun content, etc.

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Easy Money on Squidoo

Many of those drawn to post articles on Squidoo were attracted by the opportunity to make money from AdSense, especially people who couldn't qualify on their own for an AdSense account, those who got their accounts banned, and those living in countries where AdSense accounts were not allowed. Unlike HubPages, on Squidoo, writers didn't need their own approved AdSense account; all ads from Google used the Squidoo ID for AdSense.

Spammers from around the world used software to generate spun content for the site and targeted lucrative keywords. Other schemers opened sideline businesses selling such articles for $5 each. Countless eBooks were written and sold touting methodology for using the Squidoo site to make fast money online. The spam content poured in.

Easy Backlinks from Squidoo

Like EzineArticles and HubPages, Squidoo was also a link-drop farm, where anyone could post hundreds of 500-word articles, crammed with anchor text links to their Web properties. Since its launch, Seth Godin blatantly marketed the site as a place to post links. In an interview with SearchEngineLand.com's founding editor Chris Sherman in 2007, Godin encouraged businesses and website owners to enlist people to write Squidoo articles as marketing gimmicks for their companies.

In the initial marketing effort for the Squidoo Beta Test, Godin distributed a PDF file in which he said that he was not looking for articles containing content; rather, he was looking for articles containing links to other content on the Web. He even boldly announced that a link from a Squidoo article could increase another website's Google PageRank. This is the mindset which attracted and encouraged the link spam.

Squidoo allowed unlimited outbound links to the same domain in each article. Word spread online among SEOs and webmasters that Squidoo was a top place to get anchor text backlinks. Shallow content filled with link spam flooded the site.

Squidoo was also a venue for generating income from Amazon.com products for people with or without accounts on the shopping site. Articles on Squidoo could have unlimited displays of Amazon products and many articles were uploaded to the site which contained nothing more than dozens and dozens of Amazon links.

The Day of Reckoning for Squidoo

When Google's Panda algorithm annihilated search traffic to top UGC sites such as Suite101, DemandMedia's eHow, Business.com, Helium.com and Yahoo's AssociatedContent, management at Squidoo ignored the inevitable.

The time of judgment began for Squidoo with the release of the 21st Panda update on November 5, 2012. Traffic decreased by 100,000 unique visitors the next day. Two more Google algorithm updates targeted the site in late November and December, the height of the holiday shopping season, cutting traffic down by another 666,700 daily visits. In just 30 days, traffic plunged by 30%.

During the first two months of 2013, Squidoo management played the fiddle by ignoring the crisis and taking no intervention to reverse the downward spiral. On February 28, 2013, and after four months of diminished traffic, Squidoo Head of Community Bonnie Diczhazy, posted this message on the site blog:

"Squidoo faces a serious crossroads, one that effects [sic] our entire community."

In the post, Diczhazy explained that certain content on the website "used to be able to fool the search engines, but it’s not fair to our readers and it doesn't work any longer regardless." To many, this statement indicated receipt of Google warnings and/or manual penalties.

The post goes on to reference specifically the massive amounts of spun content on Squidoo, but the example Diczhazy gave in the blog post was actually for keyword stuffing – another indication that management was clueless about search engine algorithms and Google's Webmaster Guidelines. Diczhazy stated that the company was building software to ferret out spun content and remove it from the site. Clearly, the day of reckoning had come.

Two weeks later, with the release of a new Google Penguin update on March 12 and the last Panda manual update on March 14, the death knell sounded for Squidoo.com. Traffic statistics dropped in a free fall, never to return.

When Squidoo content began transitioning to HubPages on September 2, 2014, Squidoo traffic had fallen to its 2008 levels, the year its measurement statistics were first recorded on Quantcast.com.

Seth Godin's Leadership Failure

In the 16-month period from March 2013 until the demise of Squidoo.com, management made erratic decisions that did as much to harm the website's traffic numbers as the increasing pressure from Google algorithms did. In fact, at times it was difficult to determine which was affecting the site more.

Management Ethical Failures – Squidoo Writers' Payments

The leadership mentality of Squidoo was reflected in its method of payment to its writers. Most of the writers were never paid for their content. Those who were paid did not receive the actual advertising commissions their articles earned from Google advertising. Rather, that income was pooled and divided among writers according to an internal ranking system which was convoluted, opaque, and manipulated by Squidoo management and by some Squidoo content producers.

The 50% Google advertising revenue split with writers was not evenly distributed. The ranking system paid the writers of 2,000 articles a proportional amount of approximately half of the distributed portion of this revenue. The writers of the next 8,000 ranked articles received a piece of 34% of the revenue and the writers of the next 75,000 articles shared a cut of 16%. Writers of 315,000 articles available to search engines received nothing, even if those articles earned money from Google ads. Before traffic to the site began to fall, the amount of money distributed to content producers peaked at $244,920 for one month.

Though the algorithm for determining the ranking system was never fully disclosed by management, it was revealed and well-known that these factors greatly influenced ranking and, therefore, payment tiers:

• receiving push-button 'likes' from other site writers;
• receiving push-button 'likes' or 'blessings' (or downgrades) from a small, elite group of other content producers chosen by management;
• receiving 'likes' from a Squidoo employee;
• receiving awards from a Squidoo employee;
• daily updating an article;
• receiving a click-out to any link for another website or to an affiliate link from a page visitor, including clicks on Google AdSense ads.

Traffic was not a factor.

The Squidoo ranking/payment system encouraged internal traffic, not external traffic. It also fostered gaming of its system by writers who manipulated ranking for their own accounts with automated software and actually selling 'likes', 'blessings' and clicks on links within articles.

People exchanged AdSense clicks on Facebook, forums and other social sharing sites. Some writers sabotaged the articles of competitors by using multiple accounts to vote them down. Some of the gamers had dozens of articles receiving top tier payments and were receiving thousands of dollars a month from pooled income. All of this was known to Squidoo management for it was often specifically reported by disgruntled Squidoo writers, to no avail.

Squidoo employees were also allowed to write articles and compete for extra income from the ranking-system payout pie. In the 30 days before the transfer of content to HubPages was announced, of the articles featured on the homepage of Squidoo.com, more than 50 were written by Squidoo Head of Community Bonnie Diczhazy, writing under her user name Beliza.

Either Diczhazy felt her articles were indicative of the best available on Squidoo or she was greedily double-dipping into tier payments by spotlighting her own content in the quest for 'likes', 'blessings' and comments. Samples of Diczhazy articles which were given site awards for being outstanding – and thus, given a significant boost in tier-payment ranking – are here and here. Resentment of management sizzled among the rank and file.

Crisis Management Failures – March 2013

March 4: Diczhazy issued a new company policy which limited 'likes' to 20 a day per IP address and the 'blessing' system for favored writers was limited to five per day. This, of course, reduced site visits but allowed the gamers to continue by simply using different IP addresses and multiple accounts on the site.

March 11: Diczhazy announced a new page-blocking advertising banner on Squidoo which linked to other pages on the website. This above-the-fold intrusion flew in the face of Google's advice for best practices.

As the Squidoo internal filter cranked up, many Squidoo writers found their entire accounts, some containing hundreds of articles, were removed from the site and two months of earnings were confiscated by management. The filter was a slash-and-burn and completely oblivious to which articles were actually favored by Google and bringing in traffic from search.

Other writers spent frustrating hours trying to please the eyes of a faceless algorithm when their content was locked without an identifiable reason. Emails to management were largely ignored.

Bewildered and furious writers were told that they might get a response from their emails to the company within three weeks or they might never get one, depending upon the whim of management. Most writers received no responses.

On March 21, Diczhazy told writers that the company wanted them to put another Amazon product on their articles, high on the page in the critical above-the-fold space. "Our research indicates this is a sweet spot for the Amazon module", she posted on the company blog. Apparently their research didn't involve a glance at Google's Page Layout algorithm releases.

March 25: Diczhazy announced another round of deleting articles and automated scans to:

"detect thin lenses [articles], spun content, excessive use of keywords and overuse of affilate [sic] ads.

"We're finding that a lot of lenses that have multiple affilate [sic] ads. 50+ in some cases with very little content."

Countless articles, some generating high traffic, were removed from the site. Again, more accounts were deleted and two months of those writers' earnings were withheld by management. Like a squid chewing off its own tentacles, tens of thousands of webpages vanished from the site.

March 28: Squidoo made the decision to NoFollow all outbound links and made history as the only website to slap a NoFollow on all internal links as well. Under ridicule, the decision to NoFollow internal site links was rescinded the next day.

Amid the helter skelter directives from management, Google was also chopping away at traffic to the site. On March 13, the last manual Panda update began. By the end of March 2013, Squidoo traffic was down 59% from its heyday just four months prior.

Seth Godin's Business Plan Failure – Treading Water

In May 2013, webmasters noted the release of a Google Phantom update. On May 29, Google adjusted domain crowding which limited most listings from the same website to two URLs on the first pages of search engine results. This was to allow for more diversity on results pages. For a site like Squidoo which was stuffed with articles with overlapping content, this produced a further traffic fall. (In fact, Squidoo management regularly issued calls-for-content which encouraged multiple articles on the same subject.)

Squidoo floundered and failed to come up with a clear direction for its site. Throughout the rest of 2013, slipshod ideas were thrown at the wall such as: a new homepage design without links to major content sections, encouragement for writers to produce extremely short how-to articles and 250-word product reviews, a new flyout bar which blocked content, new subdomain URLS for some writers' content and for some site topics, a limit of 20 Amazon products and 20 external links per article, removal of articles which had any backlinks pointing to them, and more wholesale cancelling of writers' accounts and pocketing their earnings.

Dissenters among the content writers were banned from the forum and from leaving comments on the site blog. Class-action lawsuits for collection of earned compensation were threatened by devastated authors.

Following the Leader

During the 20-month downfall of Squidoo traffic, founder and President Seth Godin made direct communication with Squidoo writers only twice – in March of 2013 and in June of that year – both times by invitation-only conference calls with a select few writers and staff. Notorious for his blog which accepts no comments, only a few questions were allowed on the 20-minute calls. Bonnie Diczhazy attended the conference calls and defended her management actions by saying that all decisions were made as a group.

Two months before the sale to HubPages was announced, Squidoo released an increased minimum payment threshold for writers of $25, up from the $1 minimum.

When the sale was announced, writers protested and demanded that all earnings under $25 be paid to them instead of being forfeited to Squidoo. Their outrage was made loudly and clearly across social media, forums and blogs. Squidoo reneged and lowered the minimum payment back to $1 for writers' final payments.

In his 160 page missive Tribes, Godin said:

"Yes, I think it's okay to abandon the big, established, stuck tribe. It's okay to say to them, 'You're not going where I need to go, and there's no way I'm going to persuade all of you to follow me. So rather than standing here watching the opportunities fade away, I'm heading off. I'm betting some of you, the best of you, will follow me.' "

I think he will lose that bet. It's doubtful any in the ex-Squidoo tribe will be following Seth Godin again.

For more information, see:

* The Real Cause of Business Management Failure Is More about Ethics Thank Skills

Scroll down below the video on that page to read this informative article.

Comments

Carlos Mendes from Portugal on August 14, 2016:

I don't buy it! For me it was all about money, not traffic, not spam, not google. I joined Hubpages before Squidoo, while in HP I was never good, mostly because I did not have the time to explore it but also because I always found HP with many problems in design, I was making a decent money every month on Squidoo. I had traffic, I had readers and I had comments. Nothing was bought to increase my quality on my lens, all was my own work. Seth just made a selling from Squidoo and of course HP was pretty glad to buy it. For me it was all to fill his pockets. Nothing bad about that of course, it was his own business. While Squidoo had some problems, many people on the community were aware of them and everyone fight evil (spam and so on) every day. In fact after google change for the 2 times I was in Squidoo, Squidoo got more traffic and HP in fact dropped! HP will never pay us the kind of money we made on Squidoo, also, the very strict rules in design also do not allow the same freedom to make more interesting pages like it was in Squidoo, and no, I do not mean making a page with 20 amazon links and no content, those pages never made anything on Squidoo.

Jack Lee from Yorktown NY on August 21, 2015:

Writer Fox - What an excellent summary on an important milestone in the Squidoo / HubPages merger. I am curious, in the year since, do you have an update on how the merge has worked out for HubPages? From some of the comments and seeing the decline of rank on Alexa, I'm getting the impression that things are not going as well as anticipated. I have noticed that HubPages have been getting the Google preferential treatment in searches just as Squidoo. That is a good thing for hubbers.

Thanks for the info.

Writer Fox (author) from the wadi near the little river on December 28, 2014:

Hi Theresa,

I'm glad you read this because it makes it easier to understand why that website failed and what happened to HP traffic when the content was moved here. Happy holidays and have a great 2015!

Theresa Ast from Atlanta, Georgia on December 18, 2014:

Fascinating and eye-opening. I knew almost nothing about the backstory or history of Squidoo. I had no idea at all. Have a Blessed Christmas. Theresa

LindaSmith1 from USA on November 05, 2014:

WF: I lost my first adsense account a couple of years ago and have not bothered with it for my blogs. There reason was about false clicks, which we have no control over. I use it only for HP. My blogs are under the old gmail address for Adsense and I have deleted content, as well as most of my blogs. Most of my hubs, at least 30 or so are only a few months old, and less, so I have a lot of new content. I have about 10 hubs ranking page 1-7 for G search engines. Some of my top pages, according to Webmaster tools are old ones that are picking up traffic. I am getting more traffic here, sales here, as well as my sites that aren't getting a lot of traffic.

Writer Fox (author) from the wadi near the little river on November 05, 2014:

Hi Linda,

I'm sorry to hear about your AdSense account, but there are other advertising services you can use. If you just search on Google for 'AdSense alternatives', you'll probably find a few dozen of them.

If your content is doing well here, I wouldn't move those articles. But, content which is not doing well probably needs another venue.

Susie Lehto from Minnesota on November 03, 2014:

Yes, you were missed. Good to know you are just busy making money. Yeah, you can get a lot of smooth talking clique spell casting material from a couple of resent thread for your eBook. Some people like reading that kind of stuff so they know how to do it or combat it. I hope you write a best seller in it's category. Anyway, I'll check out your new hubs when I get a chance. to do some reading. - Blessing and stay safe.

Barbara Fitzgerald from Georgia on November 03, 2014:

You have been missed; welcome back! What is sad at InfoBarrel?

Nathan Bernardo from California, United States of America on November 03, 2014:

Writer Fox, when you say you completed a review of InfoBarrel, do you mean you wrote an article about the site? I have to say, I'd be very interested in reading it, but I'm guessing you can't tell us where it is (if it's an article). I decided to publish some articles there based on reviews I could find which were rather minimal/inadequate in many ways. I published about 11 articles but have hesitated to post more because it's not looking promising to me. So, I'm wobbling, so to speak. At any rate, I'd trust your review way more than I'd trust anything else I'd found about the site.