SEO Arbitrage

SEO Traffic Arbitrage
My father, besides being a wild Texan, worked on Wall Street. I’ve never understood exactly how my father paid for things. It was as if he could tell me but then he would have to kill me so, despite multiple attempts, I never could get my youthful mind around what he did everyday besides disappear and return. I did hear terms like “Arbitrage”, “Carry Trade” and “Fed Funds Rate” before I was out of shorts.

Once, and this is a true story, on a beak from college my dad shared his reports from the Feds. Did you know there are regional federal reserve banks? We spent a Saturday working on paperwork together. I flew almost 4,000 miles to see my father. It was years since I saw him, and it would be years before I saw him again. Besides playing golf talking about fed reports was the coolest thing since sliced bread for my dad. All lost on me. Dad got me on the mailing list for the St. Louis Fed's report and it was like trying to decipher hieroglyphics. Little note at the end of each report read, "we could tell you what this gibberish means but then we would have to kill you." I didn't renew my free subscription.

Nirvana in my father’s business is the risk free trade. There is never any such thing, but that doesn’t stop a million computers crunching a billion calculations looking for Nirvana. You could argue this "risk free" idea is what got us in the situation we are in, but let’s walk past that idea to another one. Let’s discuss SEO Arbitrage.

Search Engine Optimization (SEO)
Since well-tuned webs sites generate traffic from organic listings there is a potential for arbitrage. Here is how Wikipedia defines arbitrage:

Arbitrage is the practice of taking advantage of a price differential between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices.

Here is the definition of SEO Arbitrage:

SEO Arbitrage: the practice of creating a traffic market on one or more keyword phrases by tuning a web site for top organic search listings (page one or two) then creating a combination of deals to capitalize the traffic at some multiple of its development cost where profit is the difference between the strike price (price traffic sold to another web site) and the SEO arbitrageur’s traffic capture costs.

SEO Traffic Arbitrageurs are different cats. They are the fighter pilots of the web space. Their hats* are at least grey and may go all the way black depending on how bad papa needs a new pair of arbitrage shoes. They eat what they kill, have no back end costs (no ad costs, no warehouse and their staff costs are a tenth of sites who actually ship things). If you little corner of the web is free of SEO traffic arbitrage you are lucky, BUT every corner of the web, every keyword, every phrase will be arbitraged at some point. Think like my father or you will be in trouble. Now if I could just understand what he did for a living. I know, he could tell me but he would have to kill me.

Martin

Want to read about my “Wild Texan” father, try these stories about growing up with a true Texan:

We Happy Few (shopping with dad at Hunter and Buck)

My Dad's Hunting Lesson (in Texas shotguns are a rite of passage)

Why Are We In Iraq (hunting Sky Bo ranch with my dad and our dog Friendly)

* Hat color is a colloquialism for if you are on the right side of Google Laws. Black hats break laws and dare the sheriff to catch them. Grey hats straddle the fence and white hats try to do the right thing. I say "try" because it is a moving definition. What was white yesterday can go grey tomorrow and black the day after that.