vineri, 6 ianuarie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Barnes & Noble in Trouble; What's the Next Chapter?

Posted: 06 Jan 2012 04:45 PM PST

Retail sales are up but profits are down as noted in Profit Warnings at Target, Kohl's, J. C. Penney, American Eagle

However, shrinking profits are one thing, huge losses another.

On Thursday, Barnes & Noble increased its projected loss per share for the current fiscal year to between $1.10 and $1.40, from the 30 cents to 70 cents it reaffirmed one month ago.

I have commented before that brick-and-mortar book stores are in serious trouble. It's time to move Barnes & Noble to the top of the list.

The Wall Street Journal reports Barnes & Noble Seeks Next Chapter
The nation's largest bookstore chain warned Thursday it would lose twice as much money this fiscal year as it previously expected, and said it is weighing splitting off its growing Nook digital-book business from its aging bookstores.

Ironically, Barnes & Noble had been one of the first to recognize the potential of digital books. In 1998, it invested in NuvoMedia Inc., maker of the Rocket eBook reader, and the bookseller actively supported digital-book sales. But in 2003, it exited the still-nascent business, saying there wasn't any profit in it.

It wasn't until 2009 that Barnes & Noble re-entered the business, introducing its Nook e-reader. By then, Amazon had been selling its Kindle device for about two years, and was offering best sellers for $9.99, a fraction of what hardcover best sellers are priced at.

Apple introduced its iPad tablet in January 2010. Amazon responded with its competing Kindle Fire tablet this past September, and in November, Barnes & Noble introduced its Nook Tablet.

To promote the Nook, the retailer returned to national TV advertising in 2010, after a 14-year hiatus, buying spots on popular programs such as "American Idol."

The heavy Nook investment has squeezed Barnes & Noble's bottom line.
Barnes & Noble said in a statement on Thursday it was "in discussions with strategic partners including publishers, retailers and technology companies in international markets." It said that could lead to expanding the Nook business overseas.

What's the "Next Chapter"?

The Journal reports Barnes & Noble is also considering a plan to spin off its Nook business. If it does, can it make a profit selling books the old-fashioned way? If it doesn't, does if have the resources to compete against Amazon and Apple?

Either way, the "Next Chapter" for Barnes & Noble just might be bankruptcy court. It took me a second to catch the play on words in the WSJ article because the first thought I had was "Chapter 7" and a word was missing.

Bear in mind, even if that happens, it can take years to play out. GM was terminally ill for a decade before it succumbed to the inevitable.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Employment Trends Since 1955

Posted: 06 Jan 2012 11:41 AM PST

Reader Tim Wallace sent some comments and a nice chart in response to Nonfarm Payroll +200,000 ; Labor Force Drops Another 50,000 ; Those Not in Labor Force Rises by 194,000 ; Unemployment Rate 8.5%; Notes from Trim Tabs on the BLS Report

Wallace writes ....
Hello Mish

On today's labor report: Note how the labor force has flat lined for four years even though population growth has averaged 1.5 million for the past 55 years. From 1993 to 2007 population growth was 1.7 million per year!

Thus, the labor force should not suddenly turn flat since retirements do not even come close to explaining the chart. Yet, suddenly the work force has just been frozen in time although the population continues on the same upward trend.

The work force is literally one million smaller than during Bush's last year in office. This is statistically impossible, at least judging from historic trends.

We also are still 5.6 million people below the employment number of the peak year in 2007. So, practically speaking we have approximately 11.6 million more people unemployed than in 2007.

If we add the additional 6 million that should be counted as available for the labor force, the unemployment number at the U-3 level surges past 11% as you have said numerous times.

Tim

Employment Trends



click on chart for sharper image

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

LPS Mortgage Monitor Shows Little Improvement in New Problem Loan Rates, First Time Delinquencies Slowly Rising Since April, Cures to Current Status Decline

Posted: 06 Jan 2012 10:39 AM PST

The LPS' Mortgage Monitor Report Shows Halt in Delinquency Decline; Foreclosure Starts Down Nearly 30 Percent in November. Via Email ...
JACKSONVILLE, Fla. - Jan. 6, 2012 - The November Mortgage Monitor report released by Lender Processing Services, Inc. hows that while mortgage delinquencies at the end of November 2011 were nearly 25 percent less than the January 2010 peak, the trend toward fewer loans becoming delinquent, which dominated 2010 and the first quarter of 2011, appears to have halted. At the same time, new problem loans - those loans seriously delinquent as of the end of November that were current six months prior - have not improved significantly in the last year. This degree of stagnation indicates that while the situation is not getting markedly worse, it is not improving either, and inventories of troubled loans remain significantly higher than pre-crisis levels across the board.
Here are a sampling of charts from the December 2011 Mortgage Performance Observations

click on any chart for sharper image

Delinquencies vs. Foreclosures



New Problem Loan Rates



First Time Delinquencies Slowly Rising




Cures to Current Decline



Foreclosures back to 90+ Days Delinquent



History suggests those rollbacks from foreclosure to 90+ days delinquent will soon be back in foreclosure and eventually REO (bank real estate owned).

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Nonfarm Payroll +200,000 ; Labor Force Drops Another 50,000 ; Those Not in Labor Force Rises by 194,000 ; Unemployment Rate 8.5%; Notes from Trim Tabs on the BLS Report

Posted: 06 Jan 2012 08:20 AM PST

Quick notes about the "falling" unemployment rate (Trim Tabs Comments Follow):

  • In the last year, the civilian population rose by 1,695,000. Yet the labor force only rose by 274,000. Those not in the labor force rose by 1,421,000.
    •  .
  • In December, the Civilian Labor Force dropped by 50,000.
    •  
  • In December, those "Not in Labor Force" rose by a whopping 194,000, In November, those "Not in Labor Force"  rose by a staggering  290,000. If you are not in the labor force, you are not counted as unemployed.
    •  
  • Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.

Notes from Trim Tabs on the BLS Report

Madeline Schnapp at Trim Tabs Pinged me with a few of her notes this AM.
Hello Mish

A couple of things to keep in mind re: the BLS employment December release.

1. December seasonals were -821,000 jobs (high, although not as high as January's will be, +2.1 million +/-).

2. The BLS survey reporting period contained five weeks in December as opposed to four.

3. The BLS survey is incomplete. The response rate in December was 71.5%.

Best,

Madeline Schnapp
Director, Macroeconomic Research
TrimTabs Investment Research
For Trim Tabs estimate for today, please see Whoa! The 10x Difference Between TrimTabs December Jobs Estimate of 38,000 New Jobs and ADP's Estimate of 325,000 Begs an Explanation

Revisions to November Report

  • November Payrolls Revised lower from 120,000 to 100,000
  • November Unemployment Rate revised up from 8.6% to 8.7%
  • November count of Those Not in Labor Force revised from 487,000 to 290,000 which helps explain the slight revision upward in November unemployment rate.

Jobs Report at a Glance

Here is an overview of December Jobs Report, today's release.

  • US Payrolls +200,000
  • US Unemployment Rate Declined .2 (from revised number) to 8.5% 
  • Civilian labor force fell by 50,000
  • Those Not in Labor Force rose by 194,000
  • Participation Rate steady at 64.0%, nearly matching a low last seen in 1984
  • Actual number of Employed (by Household Survey) rose by 176,000
  • Unemployment fell by 226,000 (194,000 of which comes from those dropping out of labor force)
  • Civilian population rose by 143,000
  • Average workweek for all employees on private nonfarm payrolls was +.1 to 34.4 hours
  • The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged higher 0.1 hour to 33.7 hours in November.
  • Average hourly earnings for all employees in the private sector rose by 4 cents to $23.24
  • Government employment decreased by 12,000
  • The private sector has only recovered 36 percent of jobs lost in the peak-to-trough period of January 2008 to February 2010.

Recall that the unemployment rate varies in accordance with the Household Survey not the reported headline jobs number, and not in accordance with the weekly claims data.

After two months of increases, once again the labor force fell. This is not a good sign. Moreover, were it not for people dropping out of the labor force for the past two years, the unemployment rate would be well over 11%.

December 2011 Jobs Report

Please consider the Bureau of Labor Statistics (BLS) December 2011 Employment Report.

Nonfarm payroll employment rose by 200,000 in December, and the unemployment rate, at 8.5 percent, continued to trend down, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in transportation and warehousing, retail trade, manufacturing, health care, and mining.

Unemployment Rate - Seasonally Adjusted



Nonfarm Employment - Payroll Survey - Annual Look - Seasonally Adjusted



Notice that actual employment is lower than it was nearly 10 years ago.

Nonfarm Employment - Payroll Survey - Monthly Look - Seasonally Adjusted



click on chart for sharper image

Between January 2008 and February 2010, the U.S. economy lost 8.8 million jobs.

In the last year of the weakest recovery on record, 2.5 years old, the economy averaged about 137,000 jobs a month.

Statistically, 127,000 jobs a month is enough to keep the unemployment rate flat.

Nonfarm Employment - Payroll Survey Monthly Details - Seasonally Adjusted



Nonfarm Employment - Payroll Survey Annual Details - Seasonally Adjusted



In 2011, the private sector added 1.9 million jobs, while government lost 280,000 jobs. Professional and business services had the largest employment gain (+452,000), followed by education and health services and leisure and hospitality (+427,000 and +268,000, respectively). These three industries contributed 60 percent of all private-sector job gains over the year.

To put the net 1,640,000 jobs in perspective, it takes about 1,524,000 jobs to keep the unemployment rate flat. The unemployment rate is lower only because those not in the labor force rose by 1,421,000.

Average Weekly Hours



Index of Aggregate Weekly Hours



Average Hourly Earnings vs. CPI



"Success" of QE2 and Operation Twist

  • Over the past year, average hourly earnings of all private-sector employees have increased by 2.1 percent. The Consumer Price Index for All Urban Consumers (CPI-U) was up 3.4 percent from November 2010 to November 2011.
    •  
  • Not only are wages rising slower than the CPI, there is also a concern as to how those wage gains are distributed.

BLS Birth-Death Model Black Box

The BLS Birth/Death Model is an estimation by the BLS as to how many jobs the economy created that were not picked up in the payroll survey.

The BLS has moved to quarterly rather than annual adjustments to smooth out the numbers.

For more details please see Introduction of Quarterly Birth/Death Model Updates in the Establishment Survey

In recent years Birth/Death methodology has been so screwed up and there have been so many revisions that it has been painful to watch.

The Birth-Death numbers are not seasonally adjusted while the reported headline number is. In the black box the BLS combines the two coming out with a total.

The Birth Death number influences the overall totals, but the math is not as simple as it appears. Moreover, the effect is nowhere near as big as it might logically appear at first glance.

Do not add or subtract the Birth-Death numbers from the reported headline totals. It does not work that way.

Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions.

Birth Death Model Adjustments For 2011



Birth-Death Notes

Do NOT subtract the Birth-Death number from the reported headline number. That is statistically invalid.

Historically, it has been exceptionally rare to see negative numbers in birth-death adjustments in months other than January and July. Data for much of this year actually seems reasonable.

Household Survey Data



click on chart for sharper image

In the last year, the civilian population rose by 1,695,000. Yet the labor force only rose by 274,000. Those not in the labor force rose by 1,421,000.

Were it not for people dropping out of the labor force, the unemployment rate would be well over 11%.

Table A-8 Part Time Status



click on chart for sharper image

Part-time status shows some improvement vs. a year ago but remains elevated and the data series is choppy.

Table A-15

Table A-15 is where one can find a better approximation of what the unemployment rate really is.



click on chart for sharper image

Distorted Statistics

Given the total distortions of reality with respect to not counting people who allegedly dropped out of the work force, it is easy to misrepresent the headline numbers. Digging under the surface, the drop in the unemployment rate is nothing  but a statistical mirage.

The official unemployment rate is 8.5%. However, if you start counting all the people that want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

While the "official" unemployment rate is an unacceptable 8.6%, U-6 is much higher at 15.6%. Both numbers would be way higher were it not for millions dropping out of the labor force over the past few years.

In the last year alone, the civilian population rose by 1,695,000. Yet the labor force only rose by 274,000. Those not in the labor force rose by 1,421,000. That puts a huge damper all all reported unemployment rate statistics.


Things are much worse than the reported numbers would have you believe. The entire economic picture is on very thin ice given the clear slowdown in the global economy.

Addendum:
Please see a follow-up to this post: Employment Trends Since 1955

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Profit Warnings at Target, Kohl’s, J. C. Penney, American Eagle

Posted: 06 Jan 2012 12:24 AM PST

It easy enough to increase sales if you discount enough. Profits are another matter as I have warned repeatedly throughout the Christmas season. Nordstrom and Macy's did well but 4th quarter earnings estimates missed guidance in a number of high-profile retailers.

The New York Times reports Retail Sales Edged Up in December After Stores Cut Prices Sharply
Sales at stores open at least a year at major retail chains rose 3.4 percent compared with December 2010, according to data compiled by Thomson Reuters, just above the 3.3 percent that analysts had expected.

But the cost of propping up sales was high. Profits "were a mess" for many retailers, said Paul Lejuez, an analyst at Nomura Equity Research. Consumers were buying less than retailers had expected, and stores had to mark down inventory to get it out the door by Christmas.

"Retailers came in with pretty conservative assumptions, and they were hoping to blow them out of the water — they really didn't," said David L. Bassuk, managing director and head of the retail practice at AlixPartners, a consulting firm. Retailers were resorting to promotions like " '50 percent off our whole store,' '60 percent off our whole store,' which is when you can see times are tough," he said.

Thursday's Retail Earnings Announcements

  • Target reduced its fourth-quarter earnings expectations to $1.35 to $1.43 a share from prior estimates of $1.43 to $1.53 a share.
  • Kohl's reduced its fourth-quarter earnings expectations to $1.70 to $1.73 per share, from $1.93 to $2.04 a share.
  • J. C. Penney reduced its fourth-quarter earnings expectations to $.65 to $.70 from $1.05 to $1.15 a share.
  • American Eagle reduced its fourth-quarter earnings expectations to $.33 to $.35 per share from $.40 to $.44 cents.
  •  Macy's raised fourth-quarter earnings expectations to $1.55 to $1.60 a share, up from $1.52 to $1.57 a share.


Much of the chatter from Black Friday on was more hype than reality. The bottom line - profit - looks anemic at best at many major retail chains.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.
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Damn Cool Pics

Damn Cool Pics

Vinnie Jones, Stayin' Alive: The Best CPR PSA You'll Ever See

Posted: 05 Jan 2012 06:21 PM PST



Definitely the best CPR PSA you will ever see. Vinnie Jones resuscitates a passed out guy to the beat of Bee Gees' Stayin' Alive in the new advert for the British Heart Foundation.
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Seth's Blog : Joel and Clay don't write often enough

Joel and Clay don't write often enough

Here's Joel Spolsky's latest post and project. Worth a read if you think about software, business models or how people use Excel.

And Clay Shirky's latest is about the future of newspapers. Again and again, he's right.

Any day when you can learn something new from either of these guys is a good day. Hard to imagine that just six years ago, knowledge like this was carefully hidden or non-existent.

 

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All About Anchor Text - Whiteboard Friday

All About Anchor Text - Whiteboard Friday

All About Anchor Text - Whiteboard Friday

Posted: 05 Jan 2012 01:26 PM PST

Posted by randfish

Welcome to our first Whiteboard Friday of the new year. It's 2012 and we're going to kick it off by examining the intricacies that revolve around anchor text. Although, this may seem like a very basic topic, we are going to cover some lesser known aspects of anchor text that is sure to satisfy even our more advanced SEOs. Enjoy and don't forget to leave your comments below!



Video Transcription

Howdy, SEOmoz fans. Welcome to another edition of Whiteboard Friday. Happy New Year. This is the first Whiteboard Friday of 2012, and today we're talking about anchor text, which could seem like a basic topic. But, in fact, there are a lot of intricacies that we should cover. Let's get right to them.

What I have drawn here is a web page, and it says, "I just found this great website on Portuguese cooks. You should check it out." Now, this, this text in blue with the underline, that links somewhere, and that link points to another page. Let's say it's a page over here, a very nice page on Portuguese cooks. It has some pictures on it. I don't know what it's got.

What it's saying to the engines is not only eye this page and this website, I'm voting for this other page over here, and I want to pass over some PageRank and link juice. I want to pass over trust. I want to pass over the domain diversity, whatever the signals, the keyword agnostics signals are, but I also want to say that I particularly like this web page about Portuguese cooks. That's what I think you, search engine, should interpret and take away from it.

Of course, this anchor text with the keyword embedded in it becomes a very strong signal to search engines, and as we all know, this is one of the strongest signals that Google and Bing interpret, Bing maybe even stronger than Google. Because of this, lots of people go down a path of trying to acquire links that say the precise keyword that they want.

Of course, this is a challenge because most natural links on the Web don't generally do this. They will say things like your brand name. They might say something about your site. They might use your personal name, if they're linking to a blog or something. But it's rare, it's uncommon that they might say "Audi 87 engine parts for sale" or "best deals on holiday gifts." These types of anchor texts, the things that people search for, longer phrases, in particular, are very hard to get as natural links, and this is one of the biggest reasons that gray and black hat SEO exist because manipulating the search engines by acquiring lots of links that have these keyword matches pointing to your page can, in fact, do a great job of ranking you up, at least temporarily until the engines catch up and do something bad to you or to the people linking to you.

What I want to cover is some intricacies around this, some details that you may or may not know about anchor text, and those include: Number one, multiple anchors from the same page "do not" provide more value. What I mean by this is if this page said I just found this great website on Portuguese cooks, you should check it out and a bunch of other text, and then it said Portuguese cooks again and linked over to this page, not helpful. It does not add additional value. There is no reason that you should be going, "Oh man, I wish I could get four anchor text match links from this web page." No, that's not going to help you.

Multiple web pages will help you, but if they're from the same domain, that's not nearly as valuable as if they're from different domains. That leads us to the next thing, diversity of anchor text, diversity of the source. The root domain source of the anchor text links provides the strongest benefit, meaning if you can get lots and lots of websites, not just individual web pages but different unique web domains, linking to you saying "Portuguese cooks," chances are good this web page will do very well.

Number three, the fluctuating anchor text. This is something that people talk about all the time. They don't just talk about diversity of the link location across different domains, but they talk about diversity of anchor text itself, meaning, "Oh, I should have one that says Portuguese cooks and one that says Portuguese cooking and one that says cooks from Portugal. I'm going to vary up the anchor text a lot."

I'm a little skeptical about this, not because it's not potentially useful, and it should be a natural thing if you're going out and doing white hat types of link building and inbound marketing. But because the primary reason I think most SEOs do this is so as to not trigger pattern matching problems in the engines, meaning if every website that's linking to me says Portuguese cooks, that's suspicious, highly suspicious. That suspiciousness is the feature that people are trying to prevent.

So, I'm not so sure whether this fluctuation is all that important unless you're doing manipulative types of link building, in which case SEOmoz is not all that helpful for you. So, you're probably not watching this video.

Number four, the first anchor text in the HTML of a page is what Google counts, Bing as well. This was discovered on SEOmoz a couple of years ago. We ran some tests about it. We published the results. There was a lot of skepticism. I think Debra Mastaler from Alliance-Link wrote about it and said, "Hey, Matt Cutts, would you please confirm this?" And he did. He came out and said, "Yeah, that's how we interpret it".

So, basically, here's what's going on. If you see a web page and it says this website is awesome, it features highlights of great Portuguese cooks, now look, these two links are both pointing to the same page. I don't know why my handwriting is so terrible in 2012. I hope that repairs itself soon. That means not that the website is going to get credit for the anchor text website and the anchor text Portuguese cooks, but rather they are going to consider the anchor text website and ignore Portuguese cooks.

It's very frustrating, and something that you should think about when you're doing internal linking and you say, "Oh, yeah, we should optimize this link." If it's already in your menu, if it's already at the top of the page somewhere in a side bar and that's higher up in the HTML code, then that is what the engine is going to count. So, do be aware of that and same goes for anything that you're earning externally. If you've got the optimized anchor text for your website in the footer of the blog post where it talks about the author, Rand Fishkin is the CEO of SEOmoz, an SEO tools company, but I've already link to SEOmoz's home page somewhere in the blog post above, that "SEO tools company," that's not going to help anything. That's going to be discounted by the engines.

Number five, internal anchor text, meaning anchor text that comes from your own site, your own pages, it does help. It helps a tiny bit. You can see a little bit of benefit from that. I wouldn't focus on it too much because tiny is a small amount. That's probably the most obvious statement I've ever made on Whiteboard Friday. But nevertheless, tiny, small amount, therefore don't focus too much energy on this. Link naturally, internally. Link in such a way that people think your site is good, and, yeah, if you can work in your anchor text, great.

External anchor text is where it really helps, meaning websites that are not your own linking to you. That's where you really get value from anchor text, and you do need to worry about this a little bit. There should be some manual efforts, some efforts, whether that's guest posting and blogging, whether that's sponsoring an event, whether that's getting your biography featured or something like that, getting a badge embedded somewhere or a graphic embedded somewhere that links back to you in a certain way, you do need that anchor text link match. So, working on at least a little of that external anchor text is definitely worthwhile.

Number six, if a link uses an image, like this, so check out this awesome site on Portuguese cooks, and then here's a little screen shot of the Portuguese cooks website, and this is linking over. I tried to illustrate that in blue. This does not have any anchor text. It's an image. So what could the anchor text possibly be?

The answer is they use the Alt attribute. The engines use the Alt attribute that becomes the anchor text usually, not always. If there is no Alt attribute, sometimes they'll use something like the surrounding text, and you can sort of see and feel that association. Sometimes, they'll use page titles. Sometimes, they won't use anything, but they'll have weaker signals from those other areas of the page, that kind of thing.

If you are embedding images and you're linking back to yourself or you're getting links from somewhere or you're linking out to someone, you want to help them out, use good Alt attributes that describe the page that you're linking to. This is a great best practice just in general for screen readers and usability reasons. It's also good for search engines.

Then finally, number seven, no surprise, surrounding text can matter as well. Just as in this example where we said, "Hey, Portuguese cooks is mentioned right before the image," the engines may be using surrounding text of an anchor, particularly where the anchor itself doesn't have much value or context.

If something says, "Click here, you'll find some great information about Portuguese cooks," the engines might sort of glance around the page and look at the sentence, parse the paragraph, try and understand, "Hey, what do you think they're talking about here? What seems relevant?" This is one of the reasons why you can see that people who have earned not necessarily great anchor text can rank very well for keywords because it's often talked about. That topic is talked about when their website is talked about, and it becomes a brand association thing. It becomes a contextual association thing. This is a helpful thing to think about if you are earning links and you can't control the anchor text. Maybe, at least, you can get them to mention what you do somewhere near the link.

All right, everyone. I hope this edition of Whiteboard Friday has been helpful. I look forward to discussing more details about anchor text in the comments and hope to see you again all next week for another edition of Whiteboard Friday.

Happy New Year! Take care.

Video transcription by Speechpad.com


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Interim Linkscape Update for January

Posted: 05 Jan 2012 08:19 AM PST

Posted by randfish

If you've been following my posts on Linkscape's index, you know that we've been trying to aim for fresher, better and larger indices over the past few months, but have been finding some very tough challenges. It turns out that indexing the web, canonicalizing millions of pages and calculating a link graph with quality metrics is super-hard; who knew? :-)

As part of those efforts, we've been working toward an experimental index that leverages a more search-engine style crawler that crawls fresher pages/sites more often and less fresh stuff less frequently. That index, however, is taking its sweet time (and we're doing a lot of babysitting and monitoring to make sure it's smooth). Our tentative plan is to have that index launched in the next 2 weeks, but we felt that since our last index was at the very end of November, a new one with fresher data was warranted. Hence, last night, we launched an interim index with the following metrics:

  • 36,660,519,013 (36 billion) URLs
  • 427,626,242 (427 million) Subdomains
  • 128,149,029 (128 million) Root Domains
  • 387,656,119,262 (387 billion) Links
  • Followed vs. Nofollowed
    • 2.05% of all links found were nofollowed
    • 55.00% of nofollowed links are internal, 45.00% are external
  • Rel Canonical - 10.57% of all pages now employ a rel=canonical tag
  • The average page has 69.12 links on it (negligible from last index)
    • 57.76 internal links on average
    • 11.36 external links on average

This index is smalller than our last few, but the numbers look reasonably solid and the data's from the first few weeks of December, so it should be helpful to all you link builders and analyzers. Do be aware, though, that this update is likely to only last a couple weeks before we replace it with our new version, for which we have high expectations (but don't want to promise the moon just yet).

Also noteworthy - last night, when the index first launched, we experienced some wackiness with Page and Domain Authority scores. Those should have largely settled down to normalcy now, but if you see anything odd, please let us know.


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