Along with its portfolio of marquee websites that it publicized, Geosign had tens of thousands of other websites (and possibly far more) that it kept quiet – sites like
thefart.com and
Your canadianrockiestour.info Directory – which are variously described as spam, splogs, made for advertising and scraper sites. Almost the only way these spam sites and even the marquee Geosign properties generated significant traffic was through buying
Google AdWords ads to attract visitors. Once visitors lured by ads arrived, be it at a marquee site like thewealthygeek.com or an embarrassing site like thefart.com, they were confronted with a web page designed specially to be user unfriendly. The theory, explained former insiders, was that the more confusing it was for a readers to figure out the site, the more likely they were to click on one of the many pay per click ads displayed on all Geosign websites.
While Geosign bought ads from Google to display on search pages and to deliver traffic to its own sites,
the ads displayed on Geosign websites were from Google’s competitor, Yahoo. Every time a user clicked on one of them, the advertiser was charged and the profits were split between Geosign and Yahoo.
The profits from this arbitrage operation -- buying cheaper Google ads and displaying more expensive Yahoo ads -- were by all accounts enormous given the sheer volume of sites Geosign owned. “It was a mathematical formula,” said one former employee who marveled at the fact that Google and Yahoo didn’t close the arbitrage loophole given the number of individuals and companies openly exploiting it and the hundreds of millions pouring into online advertising.
