The annual media party has changed a lot from the early days, I’ve been attending it for nearly a decade. Larry and Sergey used to mingle, and so did a lot of the senior executives. They rarely turn up now, and the media crowd has shrunk so much that the event is now held in a small cafe on the campus grounds.

But media shrinkage has nothing to do with Google — it would have happened with or without it. The Internet is a media publishing and distribution technology and so that’s where you’ll find the disruption: in the media industry.

Chatting with Matt Cutts

I had an excellent conversation with Matt Cutts, head of Google’s anti-spam team and one of the most important people at Google. He’s the public face of Google where it really matters: helping companies understand the Google search algorithm and how to build online businesses that don’t spam its search results.

Everything and anything he says is dissected and analyzed endlessly by huge numbers of people trying to figure out the secret signals that Google uses to rank its search results.

He seems to have an encyclopedic memory and managed to recall several of my articles critical of Google from a few years back. I reassured him that I don’t hate Google. Google is an incredible story, it is one of the most important companies in the world, holding the fate and fortune of hundreds of thousands of companies around the world. What it does or doesn’t do affects many people.

Yet despite thousands of journalists on the Google beat, there are important stories being missed. That’s because many reporters don’t understand the business of Google, they become easily distracted by things like self-driving cars, or its efforts to build G+. These aren’t revenue generating businesses. They might have an effect on its revenues several years from now but they are a distraction that masks some big changes to Google’s business strategy happening right now.

To understand Google it’s important to know how it earns its money; how those advertising revenues are linked to the way its search results are published; how it splits revenues with partner sites; how it acquires traffic; and how it is targeting key industry verticals. It’s a complex business.

Its quarterly reports are a treasure trove of information and they have shown a massive change in Google’s business model this year. Yet I am often a lone voice in pointing to this change and reporting on its consequences.

That’s fine by me. It is every journalist’s greatest thrill to break important news stories, especially ones that are hiding in plain view. That’s why I love Google because there’s so many great stories yet to be written.

The best SEO is

I can’t report what Matt Cutts said to me because the event specified that Google execs were off the record but I’m sure I won’t get into trouble by saying that he was very supportive of my long standing advice to website publishers: “Optimize your content for your readers — not for the search bots. Let the search engines optimize themselves.”

Going beyond basic search engine optimization can put businesses in danger because Google thinks they might be trying to fool spam its search engine and downgrades their rank.

However, aggressive SEO does work — you can see it in scraper sites that spring up from nowhere and quickly gain first page positions. Google’s biggest failure is in making dodgy SEO practices irrelevant. The variants of the Panda algorithm released this year are its most recent attempts to kill SEO and clean spam/low quality content from its search results — but with mixed results.

I’m looking forward to reporting on Google in 2012 and writing the news stories that others don’t have. And hopefully, I’ll continue to be invited to the annual media party. The smoked Kobe beef was incredible. In the interests of full disclosure, I had two servings! Biting the hand that feeds you is a long standing tradition among reporters :)

[Cross posted at Silicon Valley Watcher (http://s.tt/14KWd)]