An investor’s guide to search engine optimization (SEO)

Search engine optimization is about getting a website to rank higher in search engines.  The goal is to increase web traffic without having to pay for ads.

This primer on search engine optimization is relevant to these stocks:

• RetailMeNot (SALE)
• Demand Media (DMD)
• Search engines (GOOG, Yahoo Japan, IACI/Ask.com, MSFT/Bing)
• Phone book companies (YLO.TO, DXM)
• Somewhat relevant to online e-commerce companies (AMZN)

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Digital River (DRIV) and payment processing (V, MA, GOOG, EBAY)

Digital River is a company that offers:

1. Payment processing.  For (very) small software vendors such as myself, Digital River competes with Paypal (owned by Ebay), Google Checkout (now Google Commerce), and others.
2. E-commerce / online store.  This relates to automatically letting the user download the product once payment is received, product updates, etc. etc.  I use E-Junkie for this service.

Digital River has a lot of unhappy customers because it was upselling its customers’ customers.  The software vendors are unhappy since they can’t opt out of the upselling (nor do they profit from it) and some of their customers are turned off by the upselling practices.  Digital River doesn’t seem to understand its software vendors and has a terrible reputation among them (Google around… here is one example).  I will never do business with Digital River as a software vendor.  And I wouldn’t go long the stock.