Friday, August 26, 2011

Negative Effects of the Internet on Small Businesses



The internet has proved many new and better ways for companies to advertise and sell goods globally. But there are also negative issues that effect small businesses. Some of these issues are advertising and website ranking.



Since small businesses have lower site traffic, their sites are not ranked as high. Because larger businesses have hundreds of links floating about, they usually have better search engine placement. Also, they have the budget to artificially pump their rankings by buying paid text links on other high ranking sites. Most search engines detect hight traffic volume as up votes, which helps with rankings. Google uses a "PageRank formula" to help determine

rankings of links in the search engine. In the end, small businesses cannot compete and big business stay at the top of the Internet market.



There are many Internet advertisers out there. A popular one is Google Adwords. This system is based on a "bid per click" basis. This means the more competition there is out there, the more businesses are encouraged to fork over money for Google Adwords. As a result, Google then ups the "price per click." A small business entering this competition upon starting up would be hard pressed to find the budget to compete with large businesses.



As you can see, the ability of tapping into the global market is not based upon the size of a business, but rather their budget. Small businesses that do not have the capital to put into site ranking and advertising will always be overshadowed by the large businesses that have the cash to put into these traffic-inducing necessities.


Google Ranking Formula


Google Adwords

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