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Rankings for Sale: Payola on the Information Highway? or Payments for Good Shelf Space?

The Internet is spawning a new version of payola. Once a term pretty much applied to secret payments by record companies to radio DJs that encouraged them to play certain songs with extra frequency, payola has become a standard way of doing business for some companies on the Internet. Unlike payola for playing records, this new payola is probably quite legal.

The implication for schools? When students and teachers go looking for information and resources on the Internet, they may find the best sites and products dropping out of sight (or site) in favor of those who pay for better placement.

Imagine going into a school or public library and finding certain books pushed to the front because the librarians are all taking money on the side.

Payola

NOUN:1. Money, property, or a favor given, offered, or promised to a person or accepted by a person in a position of trust as an inducement to dishonest behavior: bribe, fix, graft. Informal: payoff. Slang: boodle. See CRIMES. See MONEY. See PERSUASION.

Roget’s II: The New Thesaurus, Third Edition. 1995.

On May 9, 1960., DJ Alan Freed was indicted for accepting $2,500, allegedly to influence play time. There was no payola law yet, just laws against commercial bribery. But following the trial, a federal anti-payola statute was passed making payola a misdemeanor, with penalties up to $10,000 in fines and one year in prison. The law covers radio stations but evidently does not extend to payola on the Net.

Examples

On October 15, 1999, MP3.Com openly advertised its willingness to take money for placement in a press release (GCI Group for MP3.com, Inc.) . . .

MP3.com Accepts Payola! http://pr.mp3.com/pr/20.html
New Feature on Music Web Site Provides Innovative Way for Artists To Promote Themselves to Vast Audience.

Telling it like it is, MP3.com has dubbed its new promotional feature "Payola," which functions similarly to traditional online auctions. The top bidder at the end of each round wins a position in the Payola section of their genre page for one week. The new promotional avenue has no direct relation to MP3.com's music charts, which are created based on the number of downloads, listens, CD sales and other measurements of consumer popularity.

Some search engines such as GoTo and Altavista now sell their highest rankings to the highest bidders. GoTo even posts the amount each listing has paid for its spot next to the listing.

If you do a search for "educational technology" on GoTo, the first 16 sites listed are bidders - sites who have paid for a listing. Much further down the list one finds the Office of Technology from the Federal Department of Education and incredibly important sites such as AECT and ISTE. The top of the list is dominated by profit making, entrepreneurial sites with advertising budgets.

If a middle school student does a search for "nutrition" on GoTo, the first 221 sites listed are bidders!

2.Lose Two Pounds A Week - Every Week!

Altavista and several other search engines have created special "partner" listings that appear alongside or above the main (unpaid) rankings. They label these sites as "featured sites" or "sponsored sites."

Yahoo and several other sites have taken to giving special listing preference to those who pay money when they submit a site for consideration.

Amazon.Com created a storm of protest when it became public that some of its book recommendations were influenced by payments from publishers. The company defended itself by arguing that book stores routinely accept extra money from publishers to give certain books more favorable display status and placement, but it quickly backed down from the online practice as negative public opinion mounted.

Now Amazon is back with that same strategy full force as reported by CBS Market Watch in February of 2001 . . .

Amazon makes publishers pay
By CBS.MarketWatch.com
Last Update: 4:18 PM ET Feb 7, 2001

NEW YORK (CBS.MW) - Amazon.com Inc. will begin charging as much as $10,000 per title in exchange for having its in-house editors recommend their books in promotions e-mailed to customers, according to the Wall Street Journal.

Previously, the e-tailer did not charge publishers for its e-mail recommendations, which were determined by Amazon book editors. The new fees, which could generate tens of millions of dollars, are not unlike shelf fees that food makers pay to grocery stores for premium placement.

The companies who request payments point to retailing fees charged for preferential shelf placement as a precedent for such payments. Even though they are engaged in the business of sharing information rather than bread or cereal, they argue that they are doing nothing wrong.

Who Else?

It is difficult to know all of the sites engaged in this new form of payola.

How can we know when a site is being paid for favorable ratings or rankings?

Without the presence of a law or clear guidelines, it is evidently a matter of personal choice as to how openly a site should declare its real or potential conflicts of interest. Sometimes it is quite evident, as with MP3.Com that payola exists. At other times payola is subtle (hidden away under some fine print on a different page) or entirely secret.

In a related development, the Net has fostered the growth of many strategic partnerships that shape the advice being given consumers on various Web sites. When an Internet "portal" directs its visitors to only the Web resources offered by strategic partners, the visitors are being channeled. They are steered and directed to a limited list of preferred sites owned by the portal's partners. This is a form of partial truth. Rather than send a visitor to the ten best professional development sites on the Web, the portal sends them to its partners and fails to mention competitor Web sites.

For a generation raised with the balanced and objective information guidance typical of school and public libraries, this brave new world of payola and partnerships represents an alien and troubling shift in the information landscape.

Need for Legislation?

If payola was thought criminal in the 1960s for radio, how can it become a standard business practice for the Internet in the present century? As long as Congress is intent upon legislating morality on the Internet, perhaps it might devote some attention to this new form of payola.