Diversify For Safety's Sake

I have a friend and colleague here in Washington who has just one client. He used to have many, but today (and for the last few years) he has had only one. He is, sadly so, at the whim and mercy of that one client. If his client gets hit by a bus, he risks being in a world of hurt. If the client forces upon him a new contract, he will be in a position where he can't say no. This is not safe.

A few months back, I wrote Search Engines and your website (9/26/07) in which I addressed some of the risks of disappearing from Google. Reliance on Google alone for a large chunk of your business could be a problem if you disappeared from the search results, or, Google was no more. Consider this - getting too cozy with any one revenue stream is a recipe for disaster. Rubbermaid was forced into bankruptcy because of excess leverage that one of its' clients - WalMart - had over it (as explained here), but, of course, Google is impervious to ceasing to operate.

Or is it?

(Continued after the Jump)

Saturday, morning, a time usually reserved for slumbering work-a-day adults, or Saturday morning cartoons for youth, instead was causing a worldwide panic behind the scenes for Google.

Really? World-wide panic?

Yup.

Behind the scenes, Google works to flag websites if the site is known to install malicious software. According to Marissa Mayer, VP, Search Products & User Experience, who writes on the official Google blog here "We maintain a list of such sites through both manual and automated methods. We work with a non-profit called StopBadware.org to come up with criteria for maintaining this list, and to provide simple processes for webmasters to remove their site from the list. We periodically update that list and released one such update to the site this morning. Unfortunately (and here's the human error), the URL of '/' was mistakenly checked in as a value to the file and '/' expands to all URLs."

You can read more about it, and see what the site looked like, by visiting this article on the issue, and reading more about the implications to the world economy.

Google's net revenue (as reported here) for 2008 was $21.8 billion. With 98% of Google's revenue coming from advertising (as reported here), that's roughly $21.36 billion from advertising. According to Google's blog (here), the rolling affect was 40 minutes, worldwide. Let's see - $21.36B divided 365 days divided by 24 hours divided by 60 minutes = $40,646.89 per minute, multiplied by 40 minutes equals $1,625,875 in a potential lost gross revenue total for Google because no paid-clicks were getting though. Consider that a paid click of $0.05 per click results in a $50 sale, and a $1.6 million dollar loss by Google could result in billions of dollars in lost gross-domestic-product. But, is it worth it to be buying Google ad words? Here's a great article on how that may not be a wise investment for some. But I digress - the point is, not only did Google lose, so too did the clients it served, on a sleepy low-volume morning like Saturday. Imagine if that happened mid-week mid-day?

Yikes. Human error caused a potential $1.6m loss in gross revenue?

Reliance on one source of revenue is risky at best, and irresponsible or more, at worst. We are diversified, generating word-of-mouth work, working with a growing base of existing clients, and yes, a percentage of our business comes from clients who find us on the web. But there are photographers who, when a tweak in Google's search results caused their site to disappear from Google's search results, were in mortal fear of their business closing. This is not good, because you should never be beholden to one form of client sourcing.

Be sure to remain diversified in your own client base. Not doing so is your own human error that will likely cost you more than 40 minutes of downtime.

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