Saturday, 13 September 2008

Money, Credit, Fannie Mae and SEO

First off here's the credit crunch in a nutshell....

Banks are more choosy about who they lend money to because they've had their fingers burned. This includes lending to consumers - mortgages - and lending to each other - wholesale lending. They are more choosy because they got their fingers burned by giving mortgages to people who couldn't afford to pay them back. This was driven by greed because you can lend to poor people at a higher rate of interest and it tapped into a huge potential market.

Furthermore these dodgy mortgages were wrapped into complex investment products that other institutions bought in the hope of making a profit. The dodgy mortgages were packaged with good mortgages so nobody asked any questions and chose instead to bury their snouts in the trough, tell their bosses they were onto a winner and claim an obscene bonus for being so clever.

I could go on but the point I'm making is, people and organisations put their trust in 'experts' and it turned out these experts were clueless idiots simply trying to line their pockets. Put simply the experts and the people who trusted them dispensed with common sense and buried their heads in the sand. That's the thing about common sense, it's not that common.

Assuming experts know what they are doing only to discover they didn't is a familiar story and something I'm prone to myself. It's also true that with 20:20 hindsight it's usually easy to see where they went wrong. The thing about the credit crunch and the credit binge it fuelled is that any fool could see that it was doomed to failure, credit's all well and good but there has to be a limit.

So are there lessons to learn from the credit crunch that could help with SEO. Perhaps....

Just as a reliance on credit eventually led to a credit crunch, could the current reliance on links lead to a link-it crunch? I think so.

The eventual outcome of living on credit is at some point the repo man comes calling. People who wear fur coats without knickers will eventually find themselves standing naked in the street. If your SEO efforts revolve around building links and nothing else you will come unstuck. If your idea of SEO is comment spamming or buying into link farms you will eventually fall flat on your face.

Links are important but if there's nothing of substance on the other end of them you are going to become a victim of the link-it crunch.

TTFN

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