Two recent articles on blogs provide contrasting arguments on the way that these tools can be used as an effective business tool. The first articles from Wired Magazine claims that blogs have now become a dated medium, outclassed by the more 'trendy' Web 2.0 sites like Facebook, Flickr and the latest 'hot site', Twitter. The argument is that the 'blogspace' is now so crowded and overused - particularly by large corporates - that it's almost impossible to get heard and therefore time could be better spent participating and developing content on the newer social multimedia sites.

In contrast, a report on the ClickZ website covers the results of some new research which has found that blogs can have more impact on purchase decisions than social networks, because blogs create the type of online conversation and 'trusted' resource that influences the purchase decision. The survey found that consumers were influenced by blogs more than social networks when making a purchase decision, mostly because bloggers establish themselves as an authority on a topic, particularly in niche areas, and create a relationship with the consumer.

Of course both of these arguments are centred around differing objectives for an individual or business and although there are clearly elements of truth in both viewpoints, there also has to be a clear strategy in developing either process, which can also work better in some markets compared to others.

The increasingly sophisticated options for small business owners to run analytics services on their website continues to develop, giving them better information on how their sites are being found and used for a minimal cost. Google Analytics has announced a series of new enhancements for their service which comes hard on the heels of Yahoo! launching their own free Analytics product.

Earlier this month Yahoo! finally launched their long-awaited analytics service, based on the IndexTools service which they bought in April. Called simply Yahoo Web Analytics, this is another free tool available for websites to use but providing in-depth data analysis that offers a significant challenge to established - and higher cost - services such as WebTrends, Coremetrics and Omniture. However, Yahoo! (and MSN who are also developing an analytics tool) are later to the market for their free product and Google has now established a strong lead in this sector.

In taking another step forward against this new Yahoo! product, Google Analytics has added some new features to their product, including a custom-reporting feature, advanced segmentation, a renamed Trendalyzer (now called Motion Chart) as well as closer integration with the AdSense service.

With the custom-reporting function, users can now request tailored reports by geography, the referring source, or other selected queries. With advanced segmentation, users now have the ability to create customised segments of site traffic, such as from a particular country, and can also limit the data viewed to just AdWords customers or other sources and then switch between segments by checking and unchecking boxes.

The new 'Motion Chart' tool visually depicts user behavior on a site, allowing users to search on five dimensions of data to see how site visitors behave over time, and how the quality of their visits rates through an animated graph with colored patterns. With the AdSense enhancements to follow, Google Analytics is making an already powerful tool even more valuable to users, offering greater insights and data analysis on website activity.

Yahoo! is still struggling in the search market and within the weakening US economy as net profits in the third quarter of 2008 are reported to be at US$54m, down from US$151 a year before. This was from a total revenue of $1.78bn, which was just 1% up on the corresponding period in 2007.

As a result, about 10% of Yahoo!'s global workforce (about 1,400 people) will be laid off. This news has, not surprisingly, received wide media coverage - including by the Sydney Morning Herald - and comes after the announcement earlier in the year by Yahoo! that an initial 1,000 jobs was also to be cut.

The deepening troubles at Yahoo! also come just over a week after Google reported their third-quarter results which exceeded analyst expectations - revenues were $5.54 billion, up 31% compared to the third quarter of 2007 and an increase of 3% compared to the second quarter of 2008. Profits jumped 26% to US$1.35bn, up from US$1.07bn in the 2007 quarter, which indicates that the company is continuing to grow despite the wider economic problems in the US and worldwide.

Google AdWords advertisers will have noticed a new range of statistical options that have just been introduced to display search coverage and performance metrics. As the Google AdWords blog has announced, the Campaign and AdGroup summary reports now display additional view options from a drop-down menu.

Previously, the summary stats for either Search or the Content Targeted network were shown, but now advertisers can view their campaign details for more options, including the slit between Google-only search and advertising coverage of Google's search partners. This enables users to get better data on the performance of their AdGroups on the different advertising channels offered through Google AdWords and therefore to adjust coverage or bids as necessary.

Google also reports that this additional data analysis will also be available within the Report Centre shortly.

The Google Webmaster blog has announced a new service being offered to users of its Webmaster Tools service - an alert to webmasters if Google identifies possible issues with a CMS website or online publishing system (like Wordpress) that could create an exposure to hackers.

This is currently undergoing a trial phase, but Google says that they are seeing more websites getting hacked because of various security holes, so this new service should help to provide valuable information to website owners if there is a potential vulnerability. A message will then be posted in the Webmaster Tools account (and even if a website hasn't yet signed up for this tool, the message will be available once the account is opened).

If this service proves effective and is extended across the system then it adds another valuable element to the Webmaster Tools console. Of course Google isn't going to pick up every potential hacker issue, but sites that use common software systems where there are issues should be notified and this will give website owners an advance warning to fix the problem.

The Official Google Blog has posted an overview of the Quality Score system used within the AdWords pay-per-click advertising system. It explains in simple terms how and why this system is used and what it means for advertisers, with the underlying issue of relevancy and value of a keyword or advert providing more benefit to the searcher and the advertiser.

As Google states in the post: "The quality score gives search engines a way of aligning the incentives of the buyers, the sellers, and the viewers of ads. The search engine wants to sell ad impressions, but advertisers want to pay for clicks. The solution is for advertisers to bid on a cost-per-click basis, while the search engine estimates the total value of the ad over time: bid per click times the expected number of clicks."

The post finishes by asking why quality scores are important - to which the answer is that "they lead to a better auction by allowing advertisers to buy clicks, publishers to sell impressions, and users to see relevant ads".

AdWeek reports on the launch of a new advertising service from the social networking site MySpace. Their new self-service banner ad system is called MyAds and the intention of this system is to attract thousands of organizations and small businesses to create their own display ads which will be matched to user interests on the site. These small ads will then be placed on pages through a bid auction system similar to Google AdWords.

This advertising mines personal profile data - "hyper-targeting" - and will make the 56 billion banners displayed by MySpace each month more valuable to advertisers through better targeting. Of course, this type of system also raises the issue of privacy again within these type of sites and how personal information is being used to 'monetise' the site.

MySpace has been testing this system with 3,000 advertisers and is now rolling the system out across the network with the hope of significantly extending the number of advertisers using the site, not just in the US but worldwide.

This new launch comes after an earlier report by AdWeek on the latest research from eMarketer, which says that social networks now rank among the most popular destinations on the Internet (particularly with the youth market) and marketers will continue to look for ways to reach consumers at those sites. The 2 leading networking sites - MySpace and Facebook - are expected to account for 72% of the total US social network ad spend in 2008. Spending at all other online social network sites (including general social, niche and marketer-created networks) is expected to reach $370 million this year.

This week has been 'links week' on the Google Webmaster Blog, with a series of posts about Google's view of web links and which work best to support the indexing and ranking of websites. Each post gives a very basic overview of the advantages of links, with some links to additional resources or posts.

After the initial introduction post on Monday, Day 2 considered the importance of link architecture within a website and how this can help the usability of the site (allowing users to find their way around and know where they are on the site at any time) as well as the 'crawlability' of the site, which enables search engines to find all pages easily. it also covers the advantages of using descriptive anchor text for the links.

The third article covers the importance of outbound links on a website and how these can - or can't - help a website's credibility in Google's view. As with the previous day, the blog post includes a number of 'typical' questions about the subject at the end.

The final post for the week looks at perhaps the most important issue, at least from a search ranking perspective, of inbound links into a website. It explains what these links tell Google about a website and suggests a number of ways that websites can increase the number of these links, such as through blogs, articles and helpful content.

It's certainly not been the definitive guide to linking, but Google's view of these things is always worth paying attention to!

A recent news story in the New York Times reveals plans by Microsoft to open 3 new research centers in the UK, France and Germany to improve its Internet search technology. Described as a vote of confidence in the European economy, it also indicates Microsoft's ongoing plans to close the gap with arch-rival Google.

The new 'centers of excellence' will be in London, Paris and Munich, employing several hundred people. The intention is that the new R&D work conducted in Europe will help to improve Microsoft's ability to run Internet searches and to attract a larger share of the search market and therefore the advertising revenue that comes with it, after its failed bid to acquire Yahoo meant that the option of buying share is currently closed.

According to comScore, Google accounts for nearly 80% of Internet searches in Europe, compared to their 60% coverage in the United States. In contrast, Microsoft has barely 1% of the European search market and in some countries it even trails local search engines. In addition to working on improvements to Microsoft’s existing search technology the European centres are also said to be focusing on new types of searches, including queries from mobile devices and searches involving pictures and video.

The new October issue of the monthly Web Marketing newsletter has been published today, covering some of the recent stories on web search and online marketing trends.

This month's edition looks at the use of different pricing models that are commonly offered for the management of PPC advertising campaigns and how these can benefit or disadvantage advertisers. It also reports on the launch of Google's new web browser, called Chrome, and what impact this may have in the increasingly competitive browser market. Finally this edition reviews LinkedIn, the social networking tool for business people worldwide and consider how this can be used effectively by members and advertisers.

If you want to sign up for future issues of this newsletter, please do so by using the form at the bottom of this page. To view back issues of this newsletter you can see the archive by date or by subject.