Seth Godin Killed Squidoo-Was It Fraud?
Serious Trespass of Ethics or Worse?
Is it time to get serious about Seth Godin’s most recent trespass on internet business ethics?
With his widely criticized handling of Squidoo’s collapse, has he stepped from poor judgment straight into illegal?
Already with a history of internet irresponsibility, his actions in laying the final hammer to Squidoo may top his other strange behaviors for their cunning ability to manipulate facts for PR and trusting followers for profit.
That Godin retains a reputation for internet marketing brilliance, even after a bumbling of Squidoo that rivals what you’d expect from a failing high school senior, shows us that the blogosphere loves hewing to the ongoing narrative as much as the mass media does.
The mass hates change once the story’s embedded.
Of course, being a klutz at marketing management, which Godin certainly is, is not a crime. Being impervious to one’s own inadequacies and failures, as Godin also seems to be, is perfectly legal too.
But taking control of assets belonging to others and leveraging them for your own private profit, while scheming to cut the owners out of their share, isn’t.
It’s what we call “fraud.”
Here’s how Wikipedia defines fraud:
“Fraud is a deception deliberately practiced in order to secure unfair or unlawful gain.”
Wikipedia goes on to explain that fraud can be both a civil wrong and a criminal offense.
Seth Godin at Work
Let's Look at the History
From inception, although Godin and his partners promoted Squidoo as a place to write about your passions, it was the go to place for marketing products on commission for affiliates, especially Amazon and eBay.
All the self-proclaimed experts selling strategies for making millions on the internet, usually with little or no effort, on a sort of marketing autopilot, sent their customers straight to Squidoo, a free and easy platform where there were no restrictions of marketing excess.
Seth Godin built a site where anyone with internet access could pluck products from Amazon and sell them freely, gaming the web crawlers for key word dominance. You searched for “shower curtains” and you got a Squidoo catalog of pasted in Amazon products.
Other efforts descended from obvious to ridiculous
In a notorious initiative, Godin discarded the concept that made him famous:
“From permission marketing fame to cyber greenmail shame, Seth Godin has finally jumped the shark,” according to internet attorney Mike Young.
What did the marketing genius do to earn Young’s condemnation?
He put together hundreds of Squidoo lenses for companies with major brands and promoted it as a Squidoo product, Brands in Public. In a Squidoo HQ post, Godin reported demanding $400 per month from each of the companies, even though — shades of the future — neither he nor anyone else had permission from the owners to create the pages to begin with.
“If your brand wants to be in charge of developing this page,” Godin wrote, “It will cost you $400 a month.”
Young summed it up.
“From an ethical standpoint, there’s little separating what Godin is doing from cybersquatters who sit on domain names filled with the companies’ brands demanding unreasonable sums.”
That’s our boy, Seth Godin, not just unethical, but unaware on top of it.
His post has been taken down and the initiative abandoned in less than a month and just shortly after he fumbled a rationale, as has Squidoo’s TOS, and this money-grubbing initiative was as doomed as Squidoo itself now is.
More Questionable Ethics
In a post titled The stupidest thing Seth Godin ever said,” Chris at 1 Good Reason takes Godin to task for a gaff so mindbogglingly stupid, it stopped veterans seasoned in the Seth Godin Genius Sauce in their tracks.
It also offers insight into the ethical slant with which he influenced Squidoo.
In a blog post titled Ads are the new online tip hat, Godin proposes:
“If you like what you're reading, click an ad to say thanks.”
His mission, he claimed, was to change the economics of the internet.
Blogger Patrick Altoft wondered if Godin was advocating click fraud before going forward with a reasoned explanation why an advertiser would be cheated with a click made with no intention of considering a purchase.
A commenter, Ranked Hard, who may have had an eye on the future thought…
“I'm convinced that Seth wrote what he wrote for linkbait. It's too inane to be something he actually advocates. But I don't know, maybe his goal is to get Squidoo smart-priced.”
Another commenter was more succinct:
“It is stealing.”
A Foundation Laid
All things considered, it’s no more a surprise that Godin and his co-founder Megan Casey nimbly populated Squidoo with catalog pages that were little more than transfer stations for affiliate sales.
If you were there, trying to join company with outstanding writing or even smart ideas, you were thrown into despair just looking around the scuzzy neighborhood.
Don’t worry about that, Casey posted, the only real way to make money here is through Amazon sales. Shared Adsense revenue wouldn’t make you rich.
The values of Squidoo’s leadership team were clear enough.
But it should also not have been a surprise when Google, those dirty bastards, threw up their hands and decided, via Panda update, to decline sending searchers to Squidoo for products they could as easily find with just a few clicks on Amazon.
While the lazy, marketing-addicted “lensmasters” who’d found Squidoo fertile for getting something for next to nothing railed at the terrible unfairness in Google’s actions, none really noticed that Google took money out of their own pockets as well in its efforts to improve user experience.
Then, it got ugly.
Seth Godin - WTF?
Megan Casey Skiddoes
When a cofounder who’s experience in publishing was a key element in winning writers’ trust abruptly departs, you’d expect some details.
Nope, so long and farewell. Casey, who was well liked, skiddooed, leaving to start a new website that she hinted was about dogs.
I don’t know about you, but leaving one of the most prosperous sites on the web — Squidoo was in the top 200 in the U.S. by then — for one more in the crowded web niche of dogs seemed a little strange.
Some speculated retrospectively that she saw what the big Panda was about to deliver at Squidoo and got out before the fit hit the shan.
Godin got scarce when the going got rough too, leaving Bonnie Diczhazy, as community organizer, to scramble a rescue along with behind the scenes manipulators Corey Brown, Gil Hildebrand and probably a silent Seth Godin.
The cascading shared revenues, the chaotic filters, blocked lenses and locked out members that followed have been well-documented. I’ll skip that bit of ugly history.
Many believe that Squidoo made things worse by chaotically employing medieval torture racks instead of working positively to improve what they had and help out the content creators who’d helped them.
Google, it seemed, penalized Squidoo, and Squidoo was conveying the gift bluntly to its writers, many of whom abruptly lost revenue they’d earned by following the spirited advice of guess who…?
While Diczhazy took gobs of flack, much of it personal, I was impressed by how strong she was, never letting down, at least not publicly, and coming up with positive new ideas and suggestions consistently.
What did bother me was that neither she nor Godin or anyone else running the show at Squidoo ever accepted any responsibility for what went so wrong. Perfectly within what I find to be Godin’s skewed perspective, fingers were pointed at the content creators, not the managers.
The reason this bothered me is that, raised in a non-digital land known as the American Middle Class — maybe you’ve heard of it — I was taught that taking responsibility was a critical part of becoming a grownup.
I thought it mattered, fool that I am.
I’m confident Seth Godin disagrees because what happened next was of such hair-raising arrogance, only an arrested adolescent could have the conscience to pull it off without inhibiting shame.
HubPages Acquires Key Content from Squidoo
Kids and grifters, pay attention now, there's a master at work.
“Here’s some good news, big news, news that will open some new possibilities for you…”
…was Godin’s opening line.
Yes, yes, yes, whatever’s coming, shade it positive, very positive right at the doorway. Marketing 101.
“HubPages is acquiring key content from Squidoo,” he cheerfully continued, “making it the largest site of its kind in the world.”
Are you getting this? Largest = better, without any justification whatsoever, and lucky you are part of it, just because.
My initial reaction was, Great! Squidoo is failing, and he’s arranged for us to get a new home on HubPages. As a HubPages writer since before joining Squidoo, I was pleased. I hadn’t done as much on HP only because there are only so many hours in a day.
Then, others began to see something sinister, and my skepticism went with them on high alert.
- First, how was it that HubPages was “acquiring key content” from Squidoo when Squidoo, the failing company, didn’t own that content. Their TOS, now thoughtfully deleted from the website, has always been clear that content belonged to the writers.
- “We’ve been busy building transfer tools,” Godin wrote, “that will make it easy (and mostly automatic) for content to move…” How long had this been going on? And why the secrecy?
- Squidoo’s content creators, who’d never been consulted, were told they shouldn’t worry. If they didn’t want to become hubbers, they could opt out, but that had to happen within a strict deadline of two weeks. What was the big rush? Oh, sorry. Godin explained that. It was to be on time for Halloween. Honest, you can’t make up BS like that and expect to be believed, although he apparently did.
- “…the Squidoo team has always been focused on what’s best for you, our users,” Godin proclaimed, without blushing. Such self-sacrifice. It’s like this, if something is self-evident, there is no need to publish the information, especially as a compliment to your own goodwill toward your fellows.
- When you read the accompanying details, you find that the Squidoo team’s best wishes for you meant that, if your pending payout fell below the newly increased threshold of $25 (from $1!), they were confiscating every penny and turning it over to a fund where Godin serves as a featured advisor.
- What Godin also failed to mention was that if you opted out of the easy transfer to HubPages, as he so generously offered, according to Squidoo’s TOS, you too would sacrifice all your earning because you weren’t a member for the entire month.
Maybe Halloween wasn’t the big reason, after all.
But Is It Fraud?
“I’ll be working with HubPages to ensure that we make the best possible transition and impact going forward.” Seth Godin
Seth, really? In your wildest, self-aggrandizing dreams, did you imagine we’d be gratified to hear that you’ll come along and do for HubPages what you did to Squidoo?
Speaking on for myself — No, thank you.
Update, November 18, 2014: With the huge collapse of views on HubPages, it seems Godin was indeed able to bring his reverse magic to the new platform. Long time Hub writers as well as imported lens writers are taking a massive hit.
One reason, something smells bad around the smoldering ruins of Squidoo. In fact, it smells so suspicious, like kerosene after an arson, that the officials ought to have a look at it.
Fraud? I don’t know, but let’s take a look at the signs.
Let’s go back to the dictionary. Fraud is —
- wrongful or criminal deception intended to result in financial or personal gain.
- a person or thing intended to deceive others, typically by unjustifiably claiming or being credited with accomplishments or qualities.
Was there deception? Yes, of course.
It’s impossible to pinpoint when the Squidoo to HubPages deal was struck, but no later than early July is most likely, at least a month before the surprise announcement.
That’s when Squidoo’s development of its own promising new lens format stopped in its tracks. It’s also when the innovative “review” template got radical surgery, converted to a standard hub design, without explanation.
Suddenly, the reviews were just right for a uniform transfer to HubPages and potentially conflicting new designs were dumped.
Seth Godin and his enablers will never own up to the stages in which they worked in secrecy to move content to HubPages, unless forced under oath to do so. The best we can get are educated guesses.
What’s wrong with closed door negotiations to protect the transaction from outside interference?
Nothing’s essentially wrong with that, of course — except that Godin and company worked to prevent inside interference, too.
Grifters and kids, again, take note.
It was pretty nifty, what Seth Godin did. Since he couldn’t sell the content on Squidoo — he never owned it — he sold access to it. Not just that, he did it in a way that took all the value out of the content by diverting it into his pockets and locked up the process in a way that guaranteed maximal benefit — to him.
All this was worked out well in advance and the timing of the announcement smartly orchestrated.
- Most obvious was the crafty moving of Squidoo payday to 8/13, two days ahead of schedule. Happy “lensmasters” were delighted with the early payout, but then, on what would normally be payday, 8/15, late in the afternoon on Friday, came the “good news.” As any public relations disaster control expert knows, that’s precisely when to dump bad news to guarantee the least exposure possible.
- Secrecy prevented the owners of the content from influencing the deal with HubPages and, most important, from staking a claim. Squidoo’s TOS, now deleted from public view, makes a big deal about sharing revenue with writers. Not now. After supervising the disaster, Seth Godin decided that all value was to accrue to him and his favorite charity, the Acumen Fund, with which he is involved.
- Haste was a critical factor in turning the gears before there was opportunity to gum up the works. After weeks or months of negotiation with HubPages and, then, designing transfer tools, why was all the cheery “good news” accented by a hard deadline, just two weeks away, to go along or get out?
- “Will I get paid all the money Squidoo owes me?” “Yes, of course!” was the resounding answer in the accompanying FAQ. But it was as untruthful as it was resounding. All the payouts due for less than $25, including a majority of lensmasters, would be confiscated and turned over to Seth Godin’s charity. That minimum had recently been ramped up from $1 (to streamline operations, Squidoo claimed.) In the resulting fury, that decision was reversed. But what was not reversed was the unsaid fact that, if you deleted your account by August 29, as demanded by Godin, you would lose all your earnings for that month.
- Sale? What sale? In Godin’s Black Friday announcement, he never once said he’s sold anything. It was an acquisition, artfully phrased to look like a merger, “combining these platforms.” Yes, at the bottom of the FAQ on a different page, whoever wrote it did say that Squidoo had sold “its platform,” but it was a lot more than the platform, wasn’t it? Godin never ‘fessed up to the moneymaker he sold — that is, access to your content without your consent. Yes, you could opt out, downloading all your content in numerically coded files of raw html, to do with as you like, if you knew how to deal with it at all, could sacrifice the months of income required to post again elsewhere and had oodles of time to redo what you’d already done once.
In reality, Squidoo’s content creators were faced with extremely limited choices, but Godin arranged it so he couldn’t lose. If you transferred to HubPages, he pocketed whatever reimbursement had been negotiated. If opted out by the deadline, he then pocketed your earnings for at least the month of August.
Why the hard deadline of August 29, a Friday yet, when it could just as easily have been three days later on Monday — in October? Waiting until October would have let those opting out collect their August earnings. Of course, Seth Godin and his team were always “focused on what’s best for you, our users…”
Kids, grifters, did you get that?
If something is so sour and ugly no one would eat it, throw some sugar on it. Yum!
The evidence for fraud is strong. Seth Godin has not helped his case by refusing to respond to questions or concerns and tossing responsibility for managing the resulting mess to Corey Brown and Bonnie Diczhazy, neither of whom were empowered to do more than carry out his policy.
I’m not a cop or a prosecutor, and I don’t pretend to know if a crime was committed. But as an affected user, I’m entitled to ask someone who is to look further. Seth Godin has been publicly chastised for questionable ethical conduct before, as detailed above.
Did he take it too far, this time?
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You're the jury.
Did Seth Godin's actions in selling Squidoo add up to fraud?
© 2014 David Stone