Daily Archives: March 10, 2011

10 Counties With the Highest Property Taxes in the Country – ABC News

Businesses in Westchester County, a suburb north of Manhattan, pay the highest property taxes in the nation. And they are saying, “Enough is enough.”

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“Everyone assumes property tax is a homeowner issue, but it’s really a business issue,” said Paul Vitale, vice president of government and community relations with the Business Council of Westchester.

The organization has about 1,200 members and is lobbying to lower property taxes to keep businesses in the area.

Westchester is the county with the highest median real estate taxes in the country, at $9,044, according to the Census Bureau’s American Community Survey.

According to Vitale, businesses pay 44 percent of property taxes in the state of New York.

Kail Padgitt, an economist with the Tax Foundation, a non-partisan tax research group in Washington, D.C., said property taxes are among the most transparent taxes. For example, while taxes on wages automatically are held from a paycheck, he said, real-estate owners can get more irked by having to pay one or more checks each year for their property taxes.

“With income tax, you have withholdings, you see it but you don’t feel it. You don’t think about the income tax,” said Padgitt. “Property tax is very visible.”

Marsha Gordon, president and CEO of the Business Council of Westchester, is in favor of Gov. Andrew Cuomo’s proposal to cap property taxes to combat the high costs businesses and residents pay. Cuomo’s bill was approved by the New York State Senate on Jan. 31. The bill most recently was before the state assembly.

“Certainly, as a business organization we see high property taxes as detriment to business growth,” Gordon said. “We want Westchester County in New York [to be] a place where businesses stay and thrive.”

Donna Greene, a spokeswoman for Westchester County Executive Robert Astorino, agrees that property taxes are too high, though said there are many components behind property taxes. Property taxes levied on behalf of the county itself are about 18 to 20 percent of a real estate owner’s property tax bill. Other property tax levies may go toward municipalities or school districts.

“Of course, we’re well aware that the high county taxes in Westchester County need to be dealt with,” said Greene. “We don’t want the dubious distinction for highest taxes.”

Wealthy U.S. individuals invest in commercial property – Crain’s New York Business

(Bloomberg) – When Sumeet Parekh bought a retail property in Manhattan’s TriBeCa neighborhood in January, individual investors provided about a quarter of the financing.

Morgan Stanley put up a little more than half of the $6 million purchase price, and Mr. Parekh contributed about $1.25 million. He got the rest from wealthy investors, who contributed increments of $100,000 to $625,000 in hopes of a 10% annual return and a portion of the building’s appreciation, said Mr. Parekh, a principal at San Diego-based HP Investors, which owns and invests in commercial properties.

High-net-worth individuals invested $2.1 billion in commercial real estate last year, up from $579 million in 2009, according to Real Capital Analytics Inc., a Manhattan-based research firm. Apartments were the properties most sought after by investors last year, accounting for 32% of deals they were involved in, according to Real Capital, which has tracked more than $5 trillion in global sales transactions since 2001.

“Commercial property looks damn attractive versus other asset classes right now,” said Dan Fasulo, managing director at Real Capital. “Everyone’s looking for some form of inflation protection. They’re buying gold, they’re buying oil, or you can buy property. It has inflation protection characteristics, plus it gives you a check every month.”

Prices for commercial property have dropped 42% since their peak in October 2007 through December, according to the Moody’s/REAL Commercial Property Price Index. The index posted gains in three of the last four months of 2010 as individual and institutional investors including the Hartford Financial Services Group Inc. bet on a rebound.

Demand for apartment buildings has risen as the foreclosure crisis forces more people to rent and the children of baby boomers move from college dorm rooms to their first residences. Rents climbed 4.3% in the last three months of 2010, the most since the third quarter of 2006, according to Dallas research firm Axiometrics Inc., while U.S. homeownership rates in December remained at a 10-year low, according to data compiled by Bloomberg. Axiometrics projects a 6% increase in U.S. rental revenue by the end of 2011 from December 2010.

“There’s a lot more equity that wants to get in the real estate market, particularly from high-net-worth individuals,” who want the higher returns without the onus of managing a property, said Robert Knakal, chairman of the Manhattan-based commercial property brokerage Massey Knakal Realty Services. “They don’t want to get a call at four in the morning that something is broken, or there’s a fire or the toilet is stuffed up,” Mr. Knakal said.

Low yields on other investments are driving investors to real estate, said Mr. Knakal. “Look at what your options are: Are you going to buy a CD and get 50 basis points on your money? Or buy a 10-year Treasury and get 3.46%?” he said.

The average capitalization rate on commercial properties excluding hotels was 7.2% as of the fourth quarter last year, Real Capital data show. Cap rates are a property’s net income divided by the purchase price.

Investment-grade U.S. corporate bond yields were 4.01% as of March 7, according to the Bank of America Merrill Lynch index. Rates for 10-year certificates of deposit averaged 1.48% as of March 7, according to Market Rates Insight, based in San Anselmo, California.

Clients from athletes to entrepreneurs have moved 3% to 5% of their cash into real estate deals in the last year as a way of adding assets that may protect portfolios from inflation and stock market volatility, said Rick Flynn, head of the family office group for Rothstein Kass, an accounting and advisory firm in Roseland, New Jersey, serving those with a net worth of at least $10 million.

“Families are really excited because everything else they’ve been sold in the last five years had a lot of complicated structures that they never really understood, whether it’s a hedge fund or a structured product,” said Toby Moskovits, chief executive officer of Heritage Equity Partners in New York, whose firm has advised families who invested $30 million in apartment deals in the past six months.

The building Mr. Parekh bought has a major tenant, Petco Animal Supplies Inc., he said. Investors have an equity stake in a partnership that owns the property and get a share of its cash flow and future appreciation based on how much they contributed, said Mr. Parekh. His firm told investors they would receive at least a 10% return on their investment annually after it collected the monthly rent and paid bank debt.

Individuals are tying up their money for an estimated holding period of 10 years to 15 years, according to the operating agreement, Mr. Parekh said. The property may be sold earlier, he said. Mr. Parekh takes a fee of less than $350 a month for managing the property and a portion of the property’s cash flow after investors are repaid, he said. Mr. Parekh, 34, used to acquire and manage real estate investments in New York for Washington-based Carlyle Group, the world’s second-biggest private-equity firm, he said.

Investors who concentrate their money in one or several properties may take on more risk, while investing in a real estate investment trust, or a REIT, provides more diversity across the market and greater liquidity, said Craig Leupold, president of real estate research firm Green Street Advisors Inc. in Newport Beach, Calif. The Bloomberg REIT Index of 124 publicly traded property owners, including apartments, office buildings and shopping centers, climbed 23% in the past year.

“You have to be very careful of being lured by yield,” said Lew Altfest, president of Manhattan-based Altfest Personal Wealth Management, whose clients have a minimum of $1 million in investable assets. If a property owner defaults, a family could end up managing a property, be involved in litigation and incur legal costs before a property can be repossessed and put up for sale, Mr. Altfest said.

“Anytime someone purchases real estate they have to understand they are buying an illiquid asset,” said Jeff Sica, president of Sica Wealth Management in Morristown, N.J. Mr. Sica said he helped in real estate deals with a combined value of $200 million for four families in the last year with an average holding period of 10 years. He seeks apartment buildings with a cap rate of 6% to 9% annually.

Families should compare what they may be charged in “promotes,” which are similar to carried interest fees paid to private equity and hedge funds, to other investments, said Wayne Heicklen, an attorney and chairman of the real estate department at the law firm Pryor Cashman. Mr. Heicklen said he has worked on deals including Mr. Parekh’s purchase in TriBeCa.

Investors should also investigate the sponsor and inspect the property, said Mr. Heicklen. “They were offering great yields yet the tenant wasn’t there for the full time and the location was bad,” he said of one property his clients were evaluating.

Emergency facility to open at former St. Vincent’s site – Crain’s New York Business

A health facility with emergency care will open in Greenwich Village after a deal was struck among Saint Vincent Catholic Medical Centers, the North Shore-LIJ Health System and the Rudin family. Plans call for a neighborhood medical complex as part of a proposed redevelopment project, the organizations announced Thursday morning.

St. Vincent’s is seeking court approval to sell its most significant real estate asset, the Manhattan campus, for $260 million to the Rudin family. But it will transfer the O’Toole Building to North Shore-LIJ, which will invest $110 million in a project to create a comprehensive health care center there with a freestanding emergency department. The facility is expected to treat more than 72,000 patients annually and employ 300 people.

The O’Toole Building is located on the west side of Seventh Avenue between West 12th and West 13th streets. North Shore-LIJ plans to invest $110 million to renovate and develop the building to create the North Shore-LIJ Center for Comprehensive Care. The Rudin family is providing $10 million to partially offset North Shore-LIJ’s costs.

The proposed center would provide round-the-clock emergency care. If approvals are granted, it would open in the fall of 2013. North Shore-LIJ said in the announcement that the facility would be the first freestanding, 24-hour emergency department in the New York area. It would feature a diagnostic imaging center with digital x-ray, computed tomography, magnetic resonance imaging and ultrasound services. There also would be a specialized ambulatory surgery facility to focus on interventional treatments for the sick and elderly.

“The Center for Comprehensive Care proposal is an innovative solution to the health care dilemma facing residents of Greenwich Village and other local neighborhoods, who have been without a nearby emergency room and other critical health care services since the closure of St. Vincent’s Hospital,” said Michael Dowling, North Shore-LIJ’s president and chief executive, in a statement.

“Making this facility a reality, however, will require city, state and federal approvals, all of which are needed for us to move forward with this project,” he added.

North Shore-LIJ opened an Urgent Care Center on Tuesday at 121A W. 20th St. and is exploring other proposals to strengthen health care access in lower Manhattan.

St. Vincent’s said the transaction would provide money for its creditors. Its board of trustees and creditors approved the deal, which will be brought before the bankruptcy court at a hearing to approve the sale on April 7.

The announcement clarifies the Rudin family’s role in the buying St. Vincent’s properties, which had been complicated by the system’s bankruptcy filing last April. In 2007, during the prior Chapter 11 case for SVCMC, the Rudins had entered into a contract with SVCMC to develop the East Campus.

The original Rudin contract and all previous proposals involving the Manhattan campus were contingent on obtaining zoning approval, so SVCMC pursued an amended transaction with Rudin, which had made extensive progress in navigating its plans “through the uncertain, often contested and costly zoning, landmark and community approval process,” the hospital wrote in court papers, concluding the Rudin group had the best chance at completing a transaction.

Last fall, SVCMC said it received an initial proposal from Rudin that did not include a health care transaction, remained conditioned upon zoning approval and whose purchase price, payment and other terms were “deemed inadequate even in the current
market.”

The deal for a new medical facility is linked to a Rudin family residential development on West 12th Street between Sixth and Seventh avenues, previously approved by the NYC Landmarks Preservation Commission. That project includes about 300 apartments and five brownstones. It would reuse four buildings that were part of the St. Vincent’s campus. The project meets previous Landmarks decisions by preserving five key buildings: O’Toole, Spellman, Smith, Raskob and Nurses’.

The proposed sale includes lots, pieces or parcels of land located at 1 Seventh Ave., 133 W. 11th St., 143 W. 11th St., 148 W. 12th St., 158 W. 12th St., 170 W. 12th St. (collectively referred to as the East Campus); 76 Greenwich Ave. (the Triangle Site); and 20 Seventh Ave. (the O’Toole
Building).

The Rudin family said in the announcement that its project team would work with the local community and elected officials to design new park space at the St. Vincent’s triangle. A new 564-seat elementary school at the Foundling Hospital at West 17th Street and Sixth Avenue is also proposed. The Rudin family said it will build the park on the triangle, in addition to providing financial backing for the new elementary school.

SVCMC disclosed that in January it received a significant offer from another developer in New York City that had partnered with a major New York health care provider, which it didn’t name. The health care provider, according to one source, is Continuum Health Partners. In January 2010, Continuum had made an offer to take over St. Vincent’s and turn the hospital into an ambulatory care facility. The plan was poorly received by the local community.

In a Jan. 29, 2010, letter to St. Vincent’s, Continuum President Stanley Brezenoff explained that he was withdrawing the offer that included ending inpatient services “given the reaction of the Department of Health to our proposal for an ambulatory care facility,” adding that he was ready to resume discussions “at any time” that would be “productive.”

A Continuum spokesman had no comment on whether it is the health care provider mentioned as part of the rival bid to Rudin’s.

The competing offer did not have a higher purchase price than the Rudin deal. It did, however, remove all zoning contingencies–a factor that was a material concern for SVCMC’s creditors. During negotiations with both sets of potential purchasers, Rudin increased its purchase price offer by $40 million, eliminated the zoning and other conditions, and improved other key parts of its offer. Rudin gave SVCMC a $22 million deposit.

The deal in its current form is not conditional on zoning approvals for the the East Campus, nor is it dependent on state Department of Health and related regulatory approvals for the North Shore-LIJ transaction at the O’Toole Building.

“The significance of this component cannot be minimized, as a very limited amount of developers would be willing to entertain such a condition-free transaction without a significant discount to price,” SVCMC wrote in court documents filed Wednesday. “By eliminating the condition of zoning, DOH and related regulatory approval,” the closing time for the deal was cut by six to 12 months.

The final deal, added SVCMC, made the purchase price offered by the Rudin family nearly comparable to that of the original contract that “was entered into during mid-2007 at what was considered the height of the real estate and financial market in New York.”

A renters insurance wake-up call | Inman News

A renters insurance wake-up call

Consider extra liability insurance, coverage of valuables

By Robert Griswold, Thursday, March 10, 2011.

Inman News™

Q: I have been a resident at an apartment community for several years and I am in the middle of a one-year lease. The property recently changed ownership and the new owner’s property management company has just sent me a letter demanding that I double the amount of the minimum coverage for my renters insurance policy.

I don’t mind having the renters insurance, as it protects me, but I think that the current minimum of $50,000 is sufficient and I shouldn’t have to pay for a $100,000 policy.

Is it legal for my property manager to demand an increase in my minimum renters insurance coverage while my current lease agreement is still in effect with a $50,000 minimum?

A: There are really two issues here. The first is: Can the new owner require you to have a renters insurance policy with a $100,000 minimum? The second is that if the owner can require the new higher minimum, can it require you to obtain such a policy and show proof of the required coverage while you have a valid and binding lease with set terms already in place?

I believe that the new owner can require you to have renters insurance and it can also set the minimum policy limits. Of course, the owner needs to realize that this is an additional expense to its tenants and could be a deterrent or competitive disadvantage if other rental properties in the area do not have the same requirements.

I am an advocate for renters insurance and believe that tenants should make their own decision as to the proper amount of coverage. I will discuss some of the important factors to consider below.

So the real question is the timing of the required change in minimum coverage limits for your renters insurance policy. As with all terms that are set for the term of a lease, you cannot be required to comply with the new terms until the expiration of your current lease unless there is a specific clause allowing for such a change.

This is not very common, but an example would be if you had a long-term lease stating that the rent would be adjusted at some point during the lease.

It is extremely unlikely that your former landlord would have any language allowing for increases in renters insurance minimum coverage during the lease term. So I would suggest you send your new owner’s property manager a brief letter indicating that you are not required to obtain the insurance it is requiring during your lease. Your new owner may not be aware that the change of ownership has no bearing on the validity of your current lease.

The new owner can change the terms at lease renewal but not during the current lease term. The only other exception would be if there is a mutual agreement of both the tenant and the landlord.

To see if you would actually want to consider increasing your renters insurance coverage from $50,000 to another amount, you need to get some professional advice from a competent insurance agent, as there are many important aspects to making sure you have the proper insurance coverage.

While I can give you some general feedback to your question, I strongly suggest you contact your insurance broker and ask about an HO-4 policy.

When done properly, obtaining the right insurance policy with all of the coverage you need plus an understanding of what you don’t need is very personalized. You need to discuss not only policy limits for your contents or possessions, but also the appropriate limits for liability, which would cover you if someone were to be injured in your home.

In other words, you may think that your worldly possessions are worth only $50,000 and that your current policy limits are sufficient. But you need to ask about your current policy’s limits for liability.

Liability coverage is to protect you if someone gets hurt or injured (maybe a slip-and-fall) in your home, and it is my personal opinion that $50,000 is not much coverage to protect you from a liability suit.

You will want to probably start with a basic HO-4 policy, but after consulting with your insurance professional you may also want special coverage or riders added if you have certain valuable collectibles or possessions, or if you participate in certain risky hobbies or activities.

Alternative-living expenses (ALE) is also coverage that may be worth considering.

You will want to evaluate the cost of your customized insurance and see how much of the risk of a covered loss that you are willing to accept yourself. This is known as the deductible (or simply the amount you pay before your insurance policy offers coverage) and you can usually reduce your insurance premiums if you have a higher deductible. But the right level of deductible is also a personal decision that only you can make.

Send your new landlord a letter and make an appointment with your insurance professional. Your landlord may have actually helped you determine that your current renters insurance policy is not exactly what you need. If you still think that your current policy is sufficient, then you will need to convince your landlord that its higher required limits are unreasonable or you will have to find a new place to live.

This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of “Property Management for Dummies” and “Property Management Kit for Dummies” and co-author of “Real Estate Investing for Dummies.”

E-mail your questions to Rental Q&A at rgriswold.inman@retodayradio.com. Questions should be brief and cannot be answered individually.

Contact Robert Griswold:
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Copyright 2011 Robert Griswold

All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.

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Want More Readers? Read More Blogs

This guest post is by Jeremy Myers of www.tillhecomes.org/blog.

Every blogger wants to be read. While some of the keys to attracting readers include writing valuable content, having error-free text, and using a clean blog layout, one of the most overlooked elements in getting people to read your blog is being a good blog reader.

Here are five tips to make this happen.

1. Read your own blog

Just because you’ve written a post doesn’t mean you’re done with it. After you post, you should read and respond to people who make comments on your blog.

One of the reasons people comment about your posts is because they want to interact with you, the author. If you do not reply, they feel ignored, and will likely not comment again. People will not continue to read what you write if you ignore what they write. The best bloggers out there try to respond to nearly every comment, even if they get dozens of comments per post.

2. Read your readers’ blogs

Another way to encourage your readers to keep coming back and commenting is to reward them by reading and commenting on their blogs. People like to be loved, and those whom you love will love you in return. Also, it helps to know what your blog audience is writing about. This enables you to write more targeted posts.

3. Comment on other people’s blogs

You should comment on at least five other blogs per day—more if you have the time. You should chose “target” blogs that you want to comment on frequently, ideally those that have similar content as your own. This gets the attention of the blog author and other blog readers, and some of them will come over to see what your blog is about. Also, if you comment enough, the writer of that blog may eventually add you to his or her blogroll, which will generate even more readers for your blog.

4. Repost excerpts from the blogs of others

When you read a good blog post, repost an excerpt of it on your own blog, providing a link back to the author’s blog. Don’t repost an entire entry—that’s plagiarism, and is illegal. But reposting a brief excerpt and linking back to the original is an easy way to get big-time bloggers to “guest” on your site, and if you use trackbacks, to get them to notice your blog.

Occasionally, they will even make a post on their own blog that you have reposted some of their content on your site, and that also sends traffic to your blog. Maybe that other blog author will eventually return the favor, and quote you on their blog, thus generating even more visits.

5. Repost the comments of others

Write an occasional post about the best discussion or blog comments you read that week. Include some of the comments people made on your own blog, as well as some from other blogs you read. If there is good interaction and dialogue taking place on a blog, either yours or some other blog, write a blog post about it. This gets more of your own readers involved in the discussion elsewhere, and frequently, they will mention that they found the discussion on your blog, which causes many of those involved in the discussion to come check out your blog.

Again, one of the reasons readers comment is because they want to be read. Nobody writes comments hoping they will be ignored. So show them you’re reading by replying and reposting.

A better blogger…

In today’s blogosphere, it is not enough to just write a great blog. You also need to read great blogs and interact with their bloggers in a meaningful way. This is the Golden Rule applied to blogging: Do unto other bloggers as you would have them
do unto your blog.

Do you read others’ blogs? Do you think it makes you a better blogger?

Jeremy Myers left the established church to follow Jesus into the world. Though he has advanced degrees in Bible and Theology, and over a decade of pastoral experience, he left all that behind to hang out with people who generally aren’t found in church. Jeremy writes about his ongoing journey at www.tillhecomes.org/blog. He also contributes Scriptural research at www.gracecommentary.com.

The Past, Present, and Future of [Content] Farming | Search Engine Journal

Mar 10 2011

The Past, Present, and Future of [Content] Farming

Am I the only that doesn’t have a problem with content farms? Based on the sheer number of sites that engage in this technique (and I’m not just referring to the high profile ones) I’m guessing the answer is no.

However, I’m fairly sure that I’m in the minority when I say that I welcome content farms, auto-content generating bots, site scraping scripts, etc with open arms. Most self-respecting SEOs will gasp and wince, wondering how I can possibly side with all of those hack spammers out there that are making life tough for legitimate SEO practitioners that do things the “right” way.

Some might even read this and automatically put me on their ish list and unfollow me, unsubscribe from my RSS feed, etc. But for those of you that are willing to stick around and hear me out with an open mind I offer up what I believe to be a valid explanation:

Artificial Intelligence.

Yep, I said it. Good old AI. You know, the stuff that’s mostly relegated to science fiction flicks and geeky forums like Slashdot. At this point, you might think that old Hugo has had one caipirinha too many. But please, bear with me.

At its core, Google’s search engine is a primitive form of AI. And by primitive, I mean that it doesn’t yet come close to mimicking human intelligence (although I agree with Danny Sullivan when he asserts that Big G could likely whip humans and give Watson a run for his money on Jeopardy).

That said, if you listen to Google’s lead scientists, the search engine will eventually evolve from being a basic tool for discovering information via keyword queries to an almost living and breathing entity that suggests information based on much deeper semantic and social inputs. In fact, their goal is for Google to suggest information that you didn’t even know you wanted to find or that would be interested in.

Now back to content farming, automatic content generation, scraping, etc.

When viewed through the lens of internet history, all of these techniques are in their infancy. And sure enough, virtually all past and current attempts to execute on these attempts have proven to be clunky, spammy, and moderately useful at best (although I’ll be the first to admit that I’ve found use in an ehow.com article from time to time). Content farming in particular seems to be following a similar pattern to real life food farming in that it started off as a fairly inefficient and disparate effort with few if any large players but has now reached a point where it is dominated by mega entities that produce at a gargantuan scale.

And the fundamental thread that ties all of these techniques together is automation. Automation of content creation. Automation of internal linking architecture. Automation of keyword research and selection. Automation of page and site-level SEO. Automation of reporting and analytics.

And make no mistake about it. There are some very bright minds in the programming world that are hard at work at building smarter and more efficient forms of automation that pump out better and better content. And by “better” I mean content that is both search-engine friendly and aesthetically pleasing and useful to humans.

One might even say that they are working on is a form of AI that will be capable of creating content that is as good or (gasp!) better than the stuff being cranked out by most humans. In fact, I’ve heard from a very honest and well-respected peer that some folks are already cranking out machine generated content that is capable of passing for human. Maybe not New Yorker material, but good enough.

But back to that in a moment.

The reason why I’m a fan of these unpopular (yet clearly effective) techniques is that:

  1. They help Google further refine their algorithms, which is ultimately a win/win situation for the user in me that craves better search results, and a better search experience in general
  2. They make SEO harder, and that puts interactive marketers who can consistently find success despite the shifting sands of search in a very favorable position
  3. There’s a lot that a conventional, white-hat-only SEO can learn from deconstructing the methodologies that the more successful content farms use (e.g. the ones that nobody is talking about but that continue to rake in the search engine traffic)

I’m pretty sure that I’m not the feels this way, particularly about the second bullet point above. For example, Alan Bleiweiss put together an interesting article on what he believes are the main facets of the Google’s latest “Farmer” update. In it, he goes onto mention how clients that took his advice and focused on things like original content/copy and internal linking architecture not only came out of this update unscathed, but in some cases, actually benefited from an increase in traffic.

I agree with virtually all of Alan’s assertions. But what he didn’t mention is that there are a lot alleged “content farms” that also came out unscathed and even gained traffic as a result of the latest algorithm. I know because I’ve seen it first-hand (by analyzing the traffic patterns of networks setup by colleagues of mine who shall remain nameless). How is that possible? Because the very best content “farmers” (both in the publishing and e-commerce sectors) have actually worked hard to apply the very principles that Alan outlined in his article.

In other words, there are content farms out there are challenging the very definition of the term “content farm.”

Meanwhile, Google is hard at work fashioning an engine that:

  1. Maximizes their revenue potential (let’s not kid ourselves)
  2. Rewards the right kinds of content, even if they are a little “farmy”

In the future, I expect the content farm landscape to continue mirroring real life farming trends. What I mean is that there will be a movement to farm locally (focusing on local and even hyper-local search queries) and sustainably (e.g. creating truly unique, useful, and in some cases remarkable content) as well as a return to a smaller scale of production (building out content in tight niches as opposed to catch-alls like Demand Media). In a certain sense, this is already beginning to happen. It just doesn’t make the cover of mainstream publications.

I also believe that some day in the future, machine-generated content will rival what’s created by mere mortals and it will be constructed to appeal to Google’s search machine. In the meantime, wise interactive marketers will avoid getting stuck in philosophical debates about search engine boogiemen and instead focus on ways to push the envelope and strike a balance between truly original, human content and automated, scraped, and otherwise manufactured varieties.

And you know what? As long as the content is useful to searchers, I’m fine with either or.

Written By:

PG

Hugo Guzman | @hugoguzman

Hugo Guzman focuses on online marketing strategy for enterprise brands. He can be found at hugoguzman.com or on Twitter @hugoguzman

More Posts By Hugo Guzman

  • I don’t necessarily have a problem with content farms; I have a problem with the majority of the content they push. If a content farm that is churning out useful, relevant information, by all means churn away. If a human writer (or a machine) can produce 100 quality articles in the span of a few days, why stop them? It’s when quality is sacrificed for quantity that gets me.

  • What is quality? Who am I, or Google for that matter, to say what is or is not a quality article? Your’s is, on one level, a quality blog post, yet when I read it there are words missing from sentences. My definition of great content is different from the next man.
    And there lies the rub. It should not be for any algorithm to determine but should be left to the individual to decide.
    There are apps that allow the user, the final arbiter of quality, the opportunity to determine what, in their view, is not up to scratch. They vote with their app – the website is shown the red card and results no longer include those from that website.
    Conversely, a user can determine that a website meets their quality criteria and bookmark the site. Social bookmarking though is prime territory for the backlinking spammer.
    It is time to stop whining about the results received back after a query. It is time to vote for or against particular web-pages. The ‘farmer’ update (Panda) to the Google algorithm is not the answer. Farms have evolved to satisfy the requirement for immediate answers and, in the main, they satisfy that requirement. As users we have brought them upon ourselves. We should be grateful for all the hard work put in by the share-croppers and fiefs who supply the food that we pay so little for.
    Wake up and support those that are producing your kind of ‘quality’ with a FairTrade policy of voting them up. For those that you feel are scamming the system, vote them down – however you want to do it.

  • The content farms and SEO seems to be a “if you build a better mouse trap, someone builds a better mouse” scenario. Google modifies their algorithm to keep content farms out of the top of the results, and someone then goes and re-engineers the true definition of a content farm.

    As you mentioned, there are content farms that did benefit from the latest algorithm, because they changed the definition of a content farm. Flying under the radar is always a good approach as you attract less attention, but still benefit in the long run.

    With the power of computers increasing at an alarming rate, I believe that one day automated content will rival what humans can produce. Actually, with some of the human written content of today, it wouldn’t take much for a computer to produce better material.

  • I love that last sentence, Paul!

  • A dig the perspective, humagaia. And I’m pretty sure that Google would too.

  • Saying “I like content farms because they help Google refine their algorithm”, is like saying, “I like criminals because they help the police refine their operations”, or “I like people that walk slowly on the pavement, because they help me refine my walking strategy.”

    I agree that an objective definition of ‘what quality is’ is not the responsibility of Google – but then they aren’t required to provide that. They are required to define ‘what quality is – in Google’. Which is what the algo does. If it’s standard of quality doesn’t match yours, you go somewhere else.

    For instance, I go to a restaurant and order a meal. It’s a well-presented meal, but the chef has served (what I consider to be) poor quality meat. His definition of quality doesn’t match mine, so I go to another restaurant from thereon. However, there’s nothing to stop someone else coming in after, finding the quality completely acceptable, and becoming a returning customer.

  • Those are not really parallel analogies, especially the first one, because building a website in a “farm” style is not against the law.

    And if you want to go the biped-analogy route, you’d have to go with something building a running track in that it needs to be built to work with all types of bipeds, ranging from slow walkers to world class sprinters.

  • I wish this will help a lot of people. I will tell my friends to read this. Thanks

  • Hugo,

    I only read past the opening of this article because you’re the author – otherwise, I would have yes, jumped ship on this one 🙂 And I’m glad I stuck around. Not because you refer to one of my articles – instead because you are describing the concept of pushing the bounds of technology for positive results.

    Looking at content farms and believing they’ll ever be able to generate quality content with proper IA implemented is the equivalent of people who saw the first cars not believing we could put people on the moon.

    While it’s not inevitable, with enough time, leverage and willingness, it is quite possible. Heck in my site audits for large sites, ecommerce sites, I routinely provide step by step how-to for automating the vast majority of the SEO – humans don’t have to touch every single page when it comes to the SEO aspects of a site on that scale. Haven’t for years. At least since I came up with several methods, though I doubt I was the first.

    And my methods include the IA issues – that’s already been resolved, though Content farms can forget asking me for input on regarding the IA on sites they churn out crappy content on. 🙂

    It’s the content that’s the most challenging because too much of it requires human emotion, passion, opinion that currently no machine comes anywhere close to. That’s the biggest factor. Next up from there, is the way content from existing sites are re-purposed. If a human isn’t reading it, thinking about it, evaluating how to communicate it from scratch in “their own voice”, it’s not going to be good content. Yet. Because that also requires emotional filters machines can not replicate. Yet.

    And until they do, content farms just need to die. Painfully. But since they don’t feel, I’ll settle for the die part.

  • Thanks for the comment and for stick around, Alan!

    Really well said. AI is definitely in its infancy, but since technology advances on an exponential scale, don’t be surprised to see emotional, passionate, opinionated bot articles in the next decade or so.

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