Google has been developing a new algorithm for indexing textual content in Flash files of all kinds, from Flash menus, buttons and banners, to self-contained Flash websites. Google has improved the performance of this Flash indexing algorithm by integrating Adobe's Flash Player technology. In the past, web designers faced challenges if they chose to develop a site in Flash because the content they included was not indexable by search engines. They needed to make extra effort to ensure that their content was also presented in another way that search engines could find. More >>
Google's new CFO has already taken care of finances (for himself) even before he starts his new job on August 1. Patrick Pichette, who was previously the president of operations at Bell Canada will take over from George Reyes.
Pichette will be getting: 1) Signing bonus $ 500,000 2) Six month bonus $ 500,000 3) Base salary $ 450,000 4) Regular bonus $ 675,000 5) 910 Google shares $ 500,000 ($549 x 910) 6) 910 Google shares $ 500,000 ($549 x 910) 7) 5,556 Restricted shr $3,052,747* 8) 11,112 Stock option $6,105,494* *based on offer date
As well as Relocation fees and other benefits offered to Google employees.
George Reyes had a total compensation of $5.1 million in 2007. According to Wikipedia Reyes's brother is Greg Reyes former CEO of Brocade. On August 7, 2007 Greg Reyes was convicted of stock manipulation and sent to prison. On August 28, 2007, George announced the resignation from this post at Google.
One area where Microsoft is leaving Google behind is in online health care. Today Microsoft teamed up with Verisign to offer OpenID for users of HealthVault, which is a free service that enables consumers to store and manage their health information online.
"HealthVault is about empowering people to take control of their personal health information, and that means making their Web experience easier while also helping them safeguard their privacy," said George Scriban, senior product manager, Microsoft Health Solutions Group. "That's why we're happy to give our users the option of using a VeriSign OpenID with a VIP credential."
Microsoft is moving very fast in this space because it is doing the opposite of what it traditionally does. The company is partnering with others versus building. Where as Google is doing the opposite building versus partnering. Further there is a hesitancy among some companies to use Google's health solution due to the fact that the company lacks a clear privacy statement on patient information. Online advertising in the health care vertical command some of the juiciest add dollars and given the aging population it will be a long wave to ride.
Google's new web audience measurement service is intended to help advertisers identify the best places to buy online ads by providing them data on which web sites their target audiences visit. The goal is to connect advertisers and publishers and provide them with demographics and usage patterns of target audiences. The service is available to select parties at the moment but it is expect to be freely available to anyone shortly.
Presently, ad buyers use services such as comScore, Nielson, Hitwise, Compete.com and Quantcast to analyze audience usage patterns to allocate their media spend. Everyone of these services uses a different methodolgy to gauge usage and their results vary greatly. Ad buyers spend alot of money on these services for the data that they provide.
According to the WSJ, some ad executives are leery about placing even more power in the Google's hands. "For an advertiser, the last thing you want to do is to have your adviser be the same person you are spending your money with," says Sarah Fay, chief executive of Aegis North America, the media-buying giant owned by Aegis Group of the U.K.
Some ad executives say they are concerned that Google could use the data it compiles about their campaigns to make a business pitch to a competitor. They imagine a scenario in which the biggest online advertiser in a category is running its campaign through Google's ad-serving systems. Not only would Google be helping that marketer deliver ads to particular web sites; it would also be capturing data about which Web sites and types of ads work best. Advertising executives fear that Google could then resell that same intelligence to competitors.
Google's new tool could bring more efficiency to the process of buying online ads, ad executives say. Google already has one of the dominant systems for online ad-serving, which helps Web publishers manage their advertising sales and serve up ads each time a consumer opens one of their Web pages. The Web-audience data could be combined with the ad-serving system, so that advertisers would be able to find out whether they would reach the right audience before they committed to placing an ad. Existing ad-serving systems don't currently provide detailed Web-audience data about the sites where they place ads. By giving away the new tool, Google could presumably attract more ad business and shake up the web audience measurement business.
Ad executives weren't the only ones nervous. Today comScore's stock dropped 22% on the announcement of Google Ad Planner.
Visa will be giving away $100 in Facebook ad credits to the first 20,000 small businesses that download the Visa application on Facebook. The goal of the application is to connect small businesses on Facebook. Both Facebook and Visa hope to cash in on the 80,000-plus small business that have already signed up on Facebook.
Facebook hopes that if the businesses receiving the ad credits are impressed enough with the results they will continue marketing on the site. "That's what we certainly are hoping for," said Dan Rose, Facebook's VP of business development.
Google will provides software such as maps, calendars and more — to Visa's small business network. The Wall Street Journal and Entrepreneur magazine provide articles to network members.
Visa will promote the effort with an awareness campaign beginning next month.
LimitNone LLC, a tiny start-up that builds a tool for migrating customers off Microsoft's Outlook email software and on to Google’s Gmail as filed a trade secrets lawsuit against Google.
The suit claims that Google had initially promoted the migrating tool. Google then copied the idea and went into competition with LimitNone.
LimitNone is seeking reimbursement from Google of actual damages, attorney’s fees and punitive damages. LimitNone’s case details the company’s meetings starting in March 2007 with Google to build a tool it named, “gMove.” This tool was used to move the e-mail, address books and calendars of corporate customers from Microsoft’s Outlook to Gmail. David Rammelt, lead plaintiff’s attorney said that LimitNone had been told by Google that 50 million subscribers was "just too big to come from someone else." A simple calculation of the lost revenue for LimitNone "very quickly gets you up to about $950 million."
The case hangs on the fact that LimitNone claims it entered into a confidentiality deal with Google to share trade secrets of its e-mail migration tool with the search giant’s engineers, sales people and key Google Apps customers.
The meat of the case is the fact that Google introduced a free, competing e-mail migration tool earlier this year called "Google Email Uploader." The lawsuit alleges that this tool is "almost identical" to gMove and that "both operate under a similar conceptual design."
Following news that Google had decided to compete with it instead of continues its partnership, LimitNone shifted its business to focus on the emerging market for business software designed to run on the Apple's iPhone.
When Tim Russert died on June 13, NBC held off reporting the news for almost two hours and asked other TV networks to hold off reporting it so that his family vacationing in Italy could be notified first. However, long before Mr. Russert’s death was reported on air, it was on the Web, Twitter, and Wikipedia.
The Wikipedia entry on Mr. Russert’s page was updated at 3:01 p.m., forty minutes before NBC made the announcement on air. His biography had the date of this death and it was rewritten in the past tense. Many journalists had heard something had happened to Mr. Russert but did not know the outcome because of the black out. So, when they searched for news on Tim Russert online many ended up on his Wikipedia page and learned the details of this death. Someone from IBS, a news reporting service had posted the entry.
The word quickly spread that the details of this death were posted on Wikipedia. However, as many landed on his Wikipedia page there we no details of this death. What happened? According to Wikipedia's records, 11 minutes after the first entry, someone working at IBS had deleted the date of death and turned all the past tenses back to present tenses.
IBS says a "junior-level employee" changed the Wikipedia entry to reflect Russert's death because he or she thought it was common knowledge. When NBC discovered the entry, and freaked out, someone else at IBS deleted the date of Russert's death and changed all of the verb tenses back.
IBS also said that the company had taken the necessary measures against the junior-level employee and apologized to NBC. NBC News said it was told the employee was fired.
The world has changed tremendously in the past 5 years. Today in the age of blogs, Wikipedia, MySpace, and Twitter, the news services do not have the same control they had even as recently as the build up to the Iraq war. Was the employee told about the news black out? What if the employee had learned of the news via Twitter from a friend? What should company policy be on such things. What if someone else that learned about it on Twitter went public with the information? The media is not the only party that has lost control; so have all of us. Every time each of us uses a search engine, for example, we have created a record that is not in our control. What are your thoughts?
In an interview with the Financial Times Microsoft CEO Steve Ballmer gives credit to Google for seeing the potential of search and innovating in search. Ballmer admits:
1. Microsoft didn't see the business model for search. 2. The five year development cycle of Windows partly to blame. 3. Online represents a huge opportunity for Microsoft. 4. Live Cashback is not a strategy to buy market share. 5. Cloud computing and world’s media moving online. 6. Google is a single product company.
Here is the interview transcript.
FINANCIAL TIMES: So, you finally got rid of that other guy. Now we want to know what you’re going to do. STEVE BALLMER: Onward and upward, baby. Onward and upward.
FT: What does it mean to lose Bill Gates from his full-time role? MR BALLMER: Well, in a way you lose a talent like Bill, you lose a talent like Bill. But the culture of the place is built on a lot of things. It’s not just built on the leaders; it’s built on the leaders and the experiences that we’ve had, and the successes and the failures. At some point it’s not what leaders say, it’s the accumulation of sort of direction and experiences, successes and failures. The culture builds up itself.
I think his legacy will sustain itself, the kinds of things, you know, Bill values - intelligence and intensity. I don’t think Bill going away actually will detract from the culture. I’ve seen this at Wal-Mart. I mean, Sam Walton has been gone now quite a while, and yet the culture lives on in many ways. So, I don’t really think that’s a very big deal at all.
FT: How have you prepared personally for this? MR BALLMER: [In college] we had to read some passages from [Max] Weber on the routinisation of charisma, talking about how governments in this case primarily move on and transition after a charismatic leader. So, you could say I’ve thought a little bit, and I picked it up and dusted it back off and looked at it. The truth of the matter is the important thing is to point forward and to keep people pointed forward. This is a funny transition, because - how do I say this the right way? Bill started the company, but for the people in the company it’s as much my company almost as it is Bill’s, in a sense. So, it’s not like we’re passing it to let me call it a second generation. I feel relatively first generation, let me say it that way, to our employees. I’m not Bill, but I have some of that first generation fairy dust sprinkled over me, so to speak.
FT: Microsoft’s share price hasn’t done much for years. Why not? MR BALLMER: Well, I think in general we’re not that inconsistent with most large cap stocks. [Also,] for all companies there is a period in which your stock is priced very high on the expectation of growth, and then you go through a period where you’re in “show me,” you’re going to do that growth. This is what the market is supposed to do, it’s supposed to bid your price up in advance of profit, if it thinks you’re going to have them, and then it holds on for a while until you can surprise the market with yet another surge beyond expectations.
So, I think we have grown into what people expected of us in the late ’90s, and now people are trying to decide what do they expect of us, and that gets down to essentially three or four key questions. Are we going to stay strong in the businesses where we have established ourselves? Are we going to be able to move into big, new businesses like online, TV, and phone? Are we going to continue to drive [the] enterprise business, because I think that’s a sleeper for many people, it’s been the thing that’s really propelled a lot of our growth over the last several years, and are we going to be able to get emerging markets really figured out with the high software piracy there?
You know, our share price was sort of on a different trajectory. Then we announced our bid for Yahoo, and that kind of changed the trajectory a little bit. As investors try to think, how are they going to succeed in online, what kind of investment is going to be required, how much value can they create, I feel very good about our prospects. Certainly I feel very good about our results. We’ve out-performed most of our industry in terms of profit growth over the last five years.
FT: The Yahoo bid was taken partly as a tacit admission that you needed to do something fairly radical. Was that a fair response? MR BALLMER: No, it’s inaccurate. It may be fair; I can’t comment as to fair. In a sense online is our best deal, isn’t it? We’re small; the other guys are big. There’s a market out there. We have only one way to go, and it’s up, baby, up, up, up, up, up!
We thought we could accelerate the upside in a way that was value-creating. At the end of the day, Yahoo was not an online strategy. It was a way for us to accelerate our own online strategy. They didn’t want to sell. We were relatively disciplined about the financials You know, it’s funny, because we’re founders, I think [shareholders] wonder whether we really care about creating shareholder value, and yet I think we were far more disciplined than 95 out of 100 companies would be.
FT: What lessons are there from Microsoft’s late move into search? MR BALLMER: I think we have to keep agile. I do fault us for the speed with which we dove into search, primarily because we didn’t see the business model. And I give Google credit for innovating in the business model around search. They did a nice job on that, and that’s why they won.
I think one of the mistakes we made, and I think we’ve said this before, is having a five-year gap between Windows releases did calcify our ability to react to anything, because there was a five-year window basically where a big part of our R&D resources were fairly locked in. It doesn’t mean everything should be a six-month cycle, I don’t believe in that, but we’ve got to have more flexibility in our R&D commitments than that.
FT: How do you deal with search now? MR BALLMER: I think we have three things we’ve got to do. There are some things that we just have to, as we say, ante up to be in the game: relevance, cap-ex, responsiveness. There are areas in which we’re going to differentiate and make Google play catch-up. And then there are areas in which we’re trying to change the rules. I think Google is going to have to decide whether they want to come with us. If this Live Cashback thing is successful, they’re going to have to decide if they want to play the game or not. [Note: Microsoft’s Live Cashback service, announced last month, pays a rebate to internet users if they make a purchase after finding an online merchant through a Microsoft’s search engine.]
FT: Is Live Cashback a way to buy market share? MR BALLMER: No. Well, I don’t know. If somebody else comes out with a product and says my product is better and cheaper, is that buying market share because they made the thing cheaper? That’s all we’ve really done here.
Search looks free, but, of course, search isn’t really free. It’s not free to the advertisers. So, what we’ve said is we’re going to change the way the money gets divided. In today’s world the search provider basically keeps everything, and we’ve said, look, we’re going to share that money differently, some to the advertiser, some to the user, and some to us. Is that buying market share? I think that’s called reinventing the business model in a way that makes the business more competitive, and we’ll see if it works or if it doesn’t.
I’ve got to tell you, in every - other than the battle with Open Source, every other competitor, I love being able to come into a room and saying we’re better and we’re cheaper. We’re going to try to say we’re better and we’re cheaper basically. I don’t think this is sort of the end of the story by any stretch of the imagination, but I think it tells you we’re going to do things a little differently.
We’re going to have to climb up one [market] share point at a time, one innovation at a time. I don’t think this is something that changes, flips overnight.
FT: Why hasn’t that approach worked so far? You’ve been at it for some time. MR BALLMER: No, no, we’ve been building up the basic ante primarily. We had no search engine and we had no paid search engine. We had to build. Then we had to get one round of feedback on where we weren’t up to snuff. Then we had to start tactical differentiation. Now we’re starting some business model differentiation. We’ve got some UI innovation.
You know, the world isn’t very smart about technology businesses in the sense of thinking they move super quickly. Things do move quickly, there’s no question, but generally at the end of the day you have to be fairly patient and persistent with innovation in order for it to beak through.
FT: A lot of people are now saying Yahoo was Web 1.0 and would have been difficult to do, and you should instead be looking at the next thing - Facebook or social networking, whatever comes after that. MR BALLMER: I think people don’t understand what they’re talking about. At the end of the day, this is about the ad platform. This is not about just any one of the applications. The most important application for the foreseeable future is search. It’s where you start things. It’s where you express intent. It is important.
I don’t think we can say, okay, well, we’re going to be in the ad platform business, and we’re going to do it just on the strength of non-search based assets. We have to be in the ad business, and we’ve got to have a good chunk. We don’t have to dominate, but we’d better have a darn good chunk of the search market over time, and we’re working away at it.
FT: How long are you going to do this job for? MR BALLMER: I’ve told everybody I think I’d like to do it until my youngest goes to college, which would be nine years from now. I mean, it might wind up less, the board might not want me here, but that’s kind of my life planning horizon.
FT: How do you want to be judged? What goals have you set yourself for that period? MR BALLMER: I set two kinds of goals: innovation goals, and what I’ll call relative goals.
The relative goals: I’d like to see our company increase its share of profit from all companies who have software as a core capability. I’d like to see us increase our share of the pool. What we are is we’re a software innovation machine. We can turn that machine and apply it in different places. We’re not just a desktop company or an enterprise company; we’re an online company, we’re a software embedded in devices company. And we should be able to outgrow the rest of them.
We’re not going to do that without the right innovation. [That] rolls up into five or six big themes. How do you redefine the way people interact with technology, big screen, little screen, medium-sized screen? How do you redefine the user experience and redefine the definition of how these devices relate to each other? We’ve got some big ideas in that area. I’d like to get those accomplished in the next nine years.
All of the world’s media advertising communications is moving online. I would love to be the company that does the best job at helping people put information online, create new forms of information and communication for that online world, and then that helps people - helps businesses monetise them and consumers consume them.
[We’re] going to move to a world in which more and more of computing is done in the cloud as opposed to corporate datacentres We’ve got a big initiative about transforming essentially enterprise computing and taking costs and complexity out of that.
Last but not least, the ability to let people not only get at information but then to analyse it and use it, we’re already talking about this some in the context of consumer search. We say it’s not really about search; it’s about the task. How do I find and act, find and analyse, find and get insight. I think we haven’t even scratched the surface of innovation in that area.
FT: What sets Microsoft apart as it pursues all these things? MR BALLMER: I think we’re the only company in our industry that’s got any track record of persistence. Some companies get it right once. We’ve gotten it right twice, because we stay after it.
FT: Is that he core attribute of this company, persistence? MR BALLMER: I think our long term - I’d call it our long term approach, which is a combination of taking on bold challenges, being patient, being persistent, being relentless. There’s an accountability and in some senses you’ve got to be relentlessly accountable and you also have to be willing to stick with things. We don’t pull back; it’s not what we do.
Sometimes we get shareholders who will question us on that, but I think it’s our great strength. It’s what built Windows, it’s what build Office, it’s what built our enterprise business, and what’s going to let us build the search business. It’s what letting us build a TV business.
FT: Have you learned anything from competing with Google, for instance their speed? MR BALLMER: I haven’t seen speed out of Google really. I mean, come on. They have one product. It’s been the same for five years - and they have Gmail now, but they have one product that makes all their money, and it hasn’t changed in five years.
I mean, they have a gestalt, but gestalt is gestalt. Let’s talk about the reality. The reality is one product makes 98 percent of all of their money, search. Oh, they have two products, AdWords and AdSense. They have two products, both search-based, that make all of their money, and it hasn’t changed a lot in five years. I’m not giving them a hard time, but we’ve got to learn - if you say, what have you learned, we try to learn from people’s successes, not from people’s gestalt. The gestalt is yet to be proven.
Sergey you can’t be serious. Dinging users 20 cents every time they use Google CheckOut! This is addition to hefty fee you are charging users and merchants for using the service. Yet somehow everyone seems to think the service is FREE. Furthermore, you are also dinging users 20 cents every time they cancel an order. You can’t be serious.
Even worse, merchants are charged 20 cents every time a user cancels an order - even if it is of no fault of the merchant and on plain simple errors made by users. Over 10 million transactions that could add up to $2 million dollars that merchants and users are out of pocket. Do you need everyone’s 20 cents? You can't be serious.
Let's get serious. The service is full of bugs. The callback API malfunctions half the time. It is not even a reliable payment service as users are led to believe. In fact, it is merely a check out service.
In many instances, users' credit cards are charged for goods that never arrive. The goods never arrive because the merchant does not receive the order nor the payment. The money stays in Google’s master account. Users think that the merchant has taken their money and not sent the goods. Next, you send the user an email asking them to rate their satisfaction with the merchant. The merchant can’t deliver the product because they have not received the order nor have they been paid for it because the money is sitting in Google’s account. Seriously Sergey, you can't be serious about not being serious!
The Google service that boasts that any developer working in their basement, can all of a sudden work at the scale of Google using its infrastructure with high reliability got a rude awakening today. The service crashed and remains grounded. A few weeks ago Google's Pete Koomen boasted that signups were "reaching 150,000 people" per week, however there was no mention of it on the official blog to developers about the service being down. I would think any service that is signing up that many people per week would have the courtesy and responsibility to inform their customers. After all you are selling them RELIABILITY. Further, if there were that many developers I would think there would be a BIG OUTBURST. But nothing. Not even a whimper. How can that be?
Want to know where Google is going with their popular Gadgets project? Join the Visual Ajax User Group webinar Thursday, June 19 at 12 PST.
This month's meeting will feature Adam Sah, Architect, Google Gadgets, on Ajax-enabled Widgets/Gadgets and Ads. Adam has been the founder and technical visionary behind 4 successful startups.
Adam will give you the inside scoop on how to develop new Google gadgets, use gadgets in your Ajax applications and demystify Google ads via gadgets.
To: Jerry Yang From: Joe Nocera Re: Shafting Yahoo’s Shareholders
Dear Jerry,
Congratulations — you pulled it off. You got Microsoft to walk away from your beloved Yahoo for good. The final word went out on Thursday...
...announcing a Google deal just a few hours after you and Microsoft revealed that your talks had officially ended. According to your press release, Yahoo will soon begin running ads sold by your archrival...
...you’ve chosen to become a pawn of the most dominant company on the Internet. How exactly is that going to lead to a brighter future for Yahoo?
...Here’s the problem, Jerry. It’s not your baby. It hasn’t been since 1996, when Yahoo went public.
...It sure didn’t look as though you ever took those negotiations seriously. You rarely brought any of your investment bankers... and sometimes the only person you brought along was Mr. Filo — who isn’t even on Yahoo’s board!
...Yang engineered an ingenious defense creating huge incentives for a massive employee walkout in the aftermath of a change of control... The plan gives each of Yahoo’s 14,000 full-time employees the right to quit his or her job and pocket generous termination benefits at any time during the two years following a takeover, by claiming a ‘substantial adverse alteration’ in job duties or responsibilities.”
... it actually encourages Yahoo employees to quit after a takeover, by guaranteeing them a financial windfall that Microsoft would have to pay. And since it cannot be upended even if the board is ousted, or the company is taken over, it also discourages anyone from trying to take over Yahoo.
Jerry, you’re a billionaire because people all over the world bought your stock, and trusted you to do right by them. That’s the compact you make when you take a company public: you get to be really rich, but in return, you have an obligation to do everything you can to ensure that shareholders get a healthy return on their investment. It doesn’t matter that you would like Yahoo to remain independent, or that you can’t stand Microsoft. Your feelings aren’t supposed to get in the way of your fiduciary duty.
A takeover by Microsoft was your last, best hope of rewarding your long-suffering shareholders. Now that opportunity is gone. It says here Mr. Icahn is not going to go as gently into the night as Mr. Ballmer did — and if I were a betting man, I would be taking odds that your days as Yahoo’s C.E.O. are numbered.
It’ll be better for everyone to have someone in that role who understands who he’s supposed to be working for. Wouldn’t you agree?
I am puzzled, was Yahoo in such dire straits that they could not negotiate a better deal? Yahoo has agreed to pay Google a break up fee of $250 million if the partnership falls apart within the first two years.
If the Services Agreement is terminated by either party within 24 months ... Yahoo! is required to pay to Google the sum of $250,000,000...
Under the proposed deal Yahoo anticipates on making $250 million to $450 million in operating cash flow in the first 12 months following implementation. On a profit basis Yahoo could probably be even losing money.
Not only is Yahoo in a position to lose money but in 2 years its search advertising business will be obliterated by Google, Yahoo would have become dependent on Google for its search advertising and in the process handed Google a multi billion dollar monopoly.
It's a plane! No - it's a bird! Wait! It's our social networking expert Sergey. The San Jose Mercury is reporting that Sergey plans on going to outer space in 2010, via an investment in Space Adventures, which books flights on Russian Soyuz rockets. Sergey has invested $5 million into the venture that is in addition to the $25 million that Google has already invested via the Google Lunar Project and the XPrize Foundation.
Other billionaires such as Tabula Rasa's Lord British have paid as much as $35 million for a seat to fly to outer space in addition to the $100 million he has invested in the project. Lord British emailed me to say that he is presently in training for this space flight and plans to orbit the earth sometime in October.
Google accounted for 68.29 percent of all U.S. searches in the four weeks ending May 31, 2008, Hitwise announced today. Yahoo! Search, MSN Search and Ask.com each received 19.95, 5.89 and 4.23 percent respectively. The remaining 41 search engines in the Hitwise Search Engine Analysis Tool accounted for 1.63 percent of U.S. searches.
Percentage of U.S. Searches Among Leading Search Engine Providers
Note: Data is based on four week rolling periods (ending 5/31/ 2007, 4/26/08, 5/26/2007 from the Hitwise sample of 10 million U.S. Internet users. * - includes executed searches on Live.com and MSN Search but does not include searches on Club.Live.com.
In the U.K. market, Google search properties (Google.co.uk and Google.com) accounted for 87 percent of all UK searches in May 2008 representing a 12 percent increase compared to May 2007. Yahoo! search properties accounted for 4.09 percent of UK searches in May 2008, a 2 percent increase compared to April 2008. MSN search properties accounted for 3.72 percent and Ask search properties accounted for 3.07 percent of searches. MSN increased two percent compared to April 2008 and Ask increased 6 percent.
Percentage of U.K. Searches Among Leading Search Engine Providers
Domain
May-08
Apr.-08
May-07
Google Properties
87.30%
87.69%
78.28%
Yahoo! Properties
4.09%
4.01%
8.58%
Microsoft Properties
3.72%
3.65%
5.46%
Ask Properties
3.07%
2.89%
4.96%
Note: Data is based on UK Internet usage over the four week rolling periods (ending 5/31/ 2007, 4/26/08, 5/26/2007) from the Hitwise sample of 8.4 million UK Internet users. Note that the percentages for the search properties include the .uk and .com domains.
Google an Increasing Source of Traffic to Key U.S. Industries Search engines continue to be the primary way Internet users navigate to key industry categories. Comparing May 2008 to May 2007, the Travel, News and Media, Entertainment, Business and Finance, Sports, Online Video and Social Networking categories showed double digit increases in their share of traffic coming directly from search engines.
U.S. Category Upstream Traffic from Search Engines and Google - May 2008
Category
Percent of Category Traffic from Search Engines, May-08
Percentage Change in Share of Traffic From, Search Engines, May-08 - May-07
Percent of Category Traffic from Google, May-08
Percent Change in Share of Traffic From Google, May-08 - May-07
Health and Medical
45.76%
3%
30.86%
5%
Travel
34.81%
11%
24.26%
21%
Shopping and Classifieds
25.48%
2%
16.84%
8%
News and Media
21.70%
7%
14.53%
10%
Entertainment
24.33%
17%
15.76%
22%
Business and Finance
18.15%
14%
11.73%
22%
Sports
13.09%
17%
8.81%
24%
Online Video*
29.94%
37%
20.78%
52%
Social Networking*
16.50%
18%
9.98%
21%
All figures are based on U.S. data from the Hitwise sample of 10 million Internet users. * denotes custom category Source: Hitwise
Yet another social network is shutting down. This time is it Verizon's social network. The social network which let users write blogs, post photos, and discuss in forums, will close June 16, 2008. The existing social network on the Verizon website will be moved over to the Verizon page on Facebook. Verizon jumped into social networking like many other companies, thinking it would be easy. They even branded it as "Join The Conversation" however they soon realized that branded social network wasn’t worth the effort and they are moving to where the conversation is.
In January, Conde Nast folded its social network called Flip into a Facebook app less than a year after launching. Flip was a social network for teen girls. Conde's strategy was to get teen girls to migrate to Flip from Facebook and soon Conde discovered that they did not stand a chance said Sarah Chubb, its president. "If you're a teenage girl, all your friends are already there. And every friend you might want to have but haven't met yet is already there," she says. "What is possibly going to make you go somewhere else?"
When it comes to monetization of social networks even the pros are having a hard time. How hard you ask - MySpace and all of the other FIM properties say saw Q3 revenue drop to $210 million from $233 million in Q2. This is despite experiencing strong growth. Also, about 30 percent of MySpace's revenue comes from a 3-year guaranteed deal from Google, which Google is losing money on. We have some words of wisdom from Sergey.
Source: Google Conference Call - Sergey Brin Speaking
We have had a challenge ... with social networking inventory as a whole and some of the monetization work we were doing there didn’t pan.
We’re running lots of experi- ments. We had some significant improvements but as I said, some of the things we were working on in Q4 didn’t really pan out and there were some disappointments there.
...I don’t think we have the killer best way to advertise and monetize the social networks yet.
I hope to be able to report more progress in the future ...
It is being reported that the man who held the toughest job at Google, Shashi Seth, head of monetization for YouTube has left the company for greener pastures - after only a year on the job.
"I think part of being a Googler is that you like smaller environments, and I think Google got a little big for me," says Seth.
This is yet another indication that monetizing video is a lot harder than many thought it would be despite YouTube's huge viral popularity and lead in the online video sharing market. Irrespective of the fact that YouTube made $80 million in '07 and is estimated to make $125 million this year, the Viacom lawsuit is a stumbling block. Even if Google manages to keep copyright violation payoffs to the $400 million allocated for that purpose in their $1.65 billion purchase of YouTube, they have a long video row to hoe in terms of pulling more than a revenue pittance per video view. YouTube is experimenting with video ads with text overlay ads, expanded text ads, placement targetting image ads, and click-to-play video ads.
There has been a steady stream of exoduses from Google in the last year. In March Sheryl Sandberg, Google's Vice President of Global Online Sales left to become the chief operating officer at Facebook. In November, Gokul Rajaram, aka Google Adsense God, who was involved with the launch of Google Adsense quit. “When we started AdSense, it was just me and four engineers. The night before we launched, Sergey spent five hours with me testing the system and pointing out bugs” said Gokul. Not too long ago, Bret Taylor, who was one of the key people behind Google Maps left to start Friendfeed.
Facebook announced today that it will be opening up its code. Dubbed Facebook Open Platform or fbOpen, this move is viewed as being in direct competition to Google's OpenSocial which is also an open source development platform for creating social apps.
"The goal of this release is to help you as developers better understand Facebook Platform as a whole and more easily build applications, whether it’s by running your own test servers, building tools, or optimizing your applications on this technology. We’ve built in extensibility points, so you can add functionality to Facebook Open Platform like your own tags and API methods." says Ami Vora, Senior Platform Manager, Facebook. The release is licensed under the Common Public Attribution License (CPAL) and the rest of the code is licensed under the Mozilla Public License (MPL).
Facebook has over 24,000 applications built on its platform, over 400,000 developers building new social apps, and about 140 applications added to their directory per day.
Starting June 17, 2008, eBay Australia plans to allow only PayPal as the acceptable form of payment for all transactions on eBay. Hence the Australian Competition and Consumer Commission (ACCC) invited interested parties to submit comments on the move by eBay.
Approximately 700 submissions have been made to date. One of the submissions contained a 38-page report requesting that the ACCC ban eBay from the action under the Australian Trade Practices Act.
The document went on to say "eBay's real purpose, or one of eBay's substantial purposes, is to substantially lessen competition in the market for Online Payment Processing Services, by preventing or hindering competitors of PayPal from competing effectively against PayPal in that market".
It was submitted by a party that wished to remain anonymous. The party had specialized knowledge of eBay’s auction platform and its business. Maybe it was a partner that relied on eBay to operate its business. The detailed document was well researched, prepared and filed prior to the submission deadline to avoid scrutiny. It is very legalease and appears to be someone with deep pockets. But whom would the Australian government allow to post but not make public their name?
Late Thursday, David Bromage of AuctionBytes.com revealed that a 38-page anonymous submission published on the ACCC's website was likely to have originated from Google. He had dissected the original document and found that it contained the words: "Microsoft Word - 204481916_1_ACCC Submission by Google re eBay Public _2.DOC". The document has since been taken down by the Australian government and the identifying content altered to remove any reference to Google and put back on the site.
A Google Australia spokesman would not confirm whether the company made the submission.
Lin Enright and Australian government spokesperson said "It was provided by the party in the PDF format they said was clean and on the understanding that it was to be placed on the public register". However she did not deny the submission came from Google.
eBay Australia spokeswoman Sian Kennedy said the company had nothing to add, except "this is a matter between the ACCC and Google."
A small town of 4,500 residents in Minnesota has told Google that its Street View feature can hit the road, reports CNET. Google's Street View service displays images of street views from a driver's perspective.
The private community of North Oaks, states on the city's Web site, that their roads are privately owned, and a no-trespassing sign greets potential visitors to the city. City officials were "really unhappy" when images of their streets and homes appeared on the Google's Maps.
The City Council sent Google a letter in January demanding that images be removed or risk being cited for trespassing, the Minneapolis Star Tribune reported.
"It's not the hoity-toity folks trying to figure out how to keep the world away," Mayor Thomas Watson told the newspaper. "They really didn't have any authorization to go on private property."
In April, a Pittsburgh couple sued Google over photographs of their home that appeared on the company's site, saying that Google should honor a private road sign on their street. It claims that Google's "reckless conduct" has "exposed plaintiff's private information to the public."
Barack Obama's campaign spent $3.5 million on web advertising between January and April. Of that $2.8 million was spent on Google according to Federal Election Commission filings by Obama for America.
It is estimated that as much as $3 billion could be spent by political campaigns on all forms of advertising. The Obama campaign deployed a mix of pay for performance and display ads on Yahoo, Specific Media, Pulse360, Microsoft's DrivePM, AOL's Quigo and CNN. Spending for other candidates were not available.
Below is a break down of publicly available spending related to online advertising and media strategy for Barack Obama and Hillary Clinton. See also: Barack Spends $1 Million On Google.
Spending Category Barack Obama Hillary Clinton Google $2,941,500 $67,000 Yahoo $350,500 $9,186 Yahoo Right Media $23,560 $0 Yahoo Pulse $36,500 $0 Microsoft $67,500 $0 Facebook $26,000 $0 AOL $25,000 $0 Broadband Enterprises $80,000 $0 CNN.com $24,000 $0 Politico $36,000 $0 Gothamist $2,800 $0 Web Consultants $93,162 $0 Ad Consultant - Howard Wolfson n/a $997,000 Media Strategist - Mandy Grunwald n/a $2,540,000 Pollster - Mark Penn n/a $3,800,000 Direct Mail - Mark Penn n/a $10,000,000
Google CEO Eric Schmidt, interviewed in Germany, offered several insights into the future as Google sees it. Here are some standout items from that interview. Schmidt quotes are in italics:
There is still a lot of revenue in search - as we get the technology better or as we can do more targeted ads. There is no limit for search marketing. People assume that there is a limit, but we have many more ideas about technology.
.... mobile will be a larger business than the PC-Web. But it will take a few years.
On Google's investment in the Wimax initiative to bring broadband outside of the phone carriers: We are concerned that the carriers in the United States might close off the network.
MySpace did not monetize as well as we thought. We have a lot of traffic, a lot of page views, but it is harder than we thought to get our ad network to work with social networks.
On the Yahoo Search talks:
It is true that we have been talking with Yahoo, but we don't have a deal to announce.
On Businesses in Germany who are upset with some Google approaches:
We are always trying to look from the perspectives of the end-users and if they are served well, we are not looking at it from the publisher perspective.
As Google continues to drive online innovation and activity more than any other company, Schmidt remains a key global player - in fact arguably the most important global player - in the entire industry.
As the Viacom Google legal battle over YouTube clip copyright issues intensifies Google has tried to knock the rhetorical ball back into Viacom's court stating today in papers filed with the judge that Viacom:
"threatens the way hundreds of millions of people legitimately exchange information, news, entertainment and political and artistic expression."
In a nutshell the suit is a claim by Viacom that Google owned and controlled YouTube has remained very lax regarding the upload and distribution of copyrighted materials owned by Viacom, and that this has led to diminished revenues for Viacom, and that the appropriate legal remedy is for Google to pay Viacom
...One Billion Dollars....
Austin Powers aside the issues behind this case have enormous significance and the ruling - if there ever is legal closure to this case - will shape online content strategies for many years to come.
As with most high stakes, complex legal disputes it is easy to point to a number of virtues and defects with the logic of each side. Google's own concerns about copyrighted material on YouTube when it was purchased for 1.6 Billion led Google to allocate approximately 400 million of that amount to the settlement of lawsuits like Viacoms. But Google can also note how many clips they have removed, and how much better policed the YouTube environment is now than in the days before Google. For their part, Viacom's claims of great revenue loss are probably without much merit given that they need to suggest there has been a significant shift away from viewing popular shows on TV to viewing unauthorized versions of those shows online AND that this has led to a loss of the money Viacom should have made. Monetizing online video is still problematic and it seems fairly unlikely that pirated clips represent much if any shift in revenue away from Viacom.
Viacom can make a strong case that online activity by many YouTubers as well as many others is inconsistent with copyright law as it is written, and that Google has done only a modest level of upload policing, and that Google has to know there are many copyrighted clips still flowing online regularly. How the judge handles all this is anybody's guess, though there appear to be more precendents for "cracking down" on copyright infringement than precendents where the courts have recognized that we are currently in a transition phase that will completely rewrite the rules of publishing as they relate to online activity.
Udi Manber at Google suggests that they are working for better transparency in the rankings process but I recommend you do not hold your breath, because he's certainly right about this:
For something that is used so often by so many people, surprisingly little is known about ranking at Google. This is entirely our fault, and it is by design.
Strategically I believe Google continues to make a mistake that ultimately is their great achilles heel, though Microsoft and Yahoo have been so busy fumbling their online balls they don’t seem to understand why more transparency is a good thing even in the search sphere.
Google's idea is that transparency leads to sharing ranking secrets and that leads to abuse of those rules. Sure, there would be some of that, but better would be to involve the online community in the definition and policing of spammy material, and also to be more responsive to webmasters who have questions about why their sites suddenly disappear from the rankings or - far more common and mysterious - are simply downranked to the degree they no longer get Google traffic.
This last type of penalty, "downranking", offers one of the few instances where Google actually comes very close to lying to webmasters (in my opinion they cross this line and lie to webmasters), implying that when “your site appears in the Google index” you have no penalty when in fact the downrank penalty by Google is severe, leading to almost no Google traffic. If you are an advanced SEO person you will know what is going on, but in probably the best example of how the lack of transparency backfires at Google you'll find that only advanced SEO marketing folks and spam experts are familiar with the many subtle algorithmic penalties that Google dispenses with algorithmic ruthlessness.
Mom and pop businesses are often hung out to dry with these penalties or - more often - simply ranked lower than they should be because they have failed to perform basic SEO on their websites. Most businesses - even some large ones - have no idea what SEO even means even though their business may be living or dying on the search results. Also common are websites who hire or associate with questionable or incompetent SEOs (which constitute well over 90% of all SEOs). These folks often have no idea that they have violated Google’s improved-but-still-too-ambiguous webmaster guidelines.
In fairness to Google they do have a huge scaling challenge with everything they do. Dealing with milllions of sites and billions of queries can’t be handled with massive numbers of new staff. They need only a tiny fraction of their efforts going into staff solutions or they'll be overwhelmed. However this is what the socializing power of the internet is for. Digg, Wikipedia, and many other sites effectively police content quality without massive labor costs. Another option is to charge websites for quality reviews that would identify problems rather than leaving the site at the mercy of a sometimes predatory SEO community.
So Udi I would like to be happy that you and Google are bringing more transparency to the process but forgive my skepticism that Google will give more than lip service to a much broader, open discussion and corrections of the many ways the ranking process has failed to deliver something that is really, really important to users and should be important to you: fairness.
Today Microsoft is launching the Live Search Cashback program where using Microsoft Live search will sometimes present you with listings for products that are related to your search query.
Following the cashback links or searching within the Cashback environment will lead to a comparison shopping feature of the Cashback program that Microsoft promises will surface the best deal of all they have listed after it offers you a discount on top of the company's price.
Microsoft says: Each time you click a Live Search cashback listing, you'll find great deals on the product you chose. Your results will clearly list the cashback savings you'll receive off the store price, and your final bottom-line price that includes tax and shipping costs...
It will be interesting to see how people react to this approach from Microsoft which is clearly an effort to move one of the most lucrative search niches - searching for products - to Microsoft and away from search leader Google. If Cashback can unearth the best bargains on the same products featured at Google it could be a big winner as buyers are unlikely to show money-losing loyalty to Google simply because they prefer it for searches. However if Microsoft fails to deliver on the promise of cheaper products Live Cashback is likely to go down in expensive flames.
According to the Online Measurement and Strategy Report on web analytics companies are failing to adopt a coherent strategy that ties in web analytics data with business objectives. About 18 percent of the firms surveyed said they had a strategy, 22 percent said they didn’t have a strategy and 56 percent said they were “working on it”.
Lack of budget and resources were sited as the most widespread barrier to implementing an effective online measurement strategy. The most widespread use of web
analytics tools was for reporting traffic figures, with 88 percent saying that it was an “important use” of web analytics. Approximately 43 percent of organizations did not have any dedicated web analytics professionals. About 33 percent of respondents spend less than US$7,500 a year on web analytics and 21 percent spent at least US$75,000 a year. Two-thirds of the organizations surveyed used the free Google Analytics tool, which makes it far and away the most widely used web analytics tool. Some 700 companies took part in the survey including 434 “client-side” respondents and 229 supplier-side companies (including agencies, consultancies and analytics vendors). Some 77% of company respondents and 74% of agency respondents are based in the UK. The rest are split between Europe (non-UK), North America (US or Canada) and other countries, including Australia, South Korea, India and Israel.
Russia's biggest internet firm Yandex plans to raise up to US$2 billion in an initial public offering that would give the company a public valuation of US$5 billion according to Reuters.
Yandextopped both Yahoo! and Microsoft with 528 million search queries (or 2.2 percent of European searches) in March 2008, according to comScore. Yandexreaches over 62% of Russian internet audience with more than 47% of all searches conducted in Russia, followed by Google, Rambler, and Mail.ru. Yandexreported revenues of $167 million in 2007.
The company was founded founded in 2000 by CEO Arkady Volozh and CTO Ilya Segalovich. They currently own about 30 percent of the firm and have raised $5.3 million in capital from investors.
WASHINGTON D.C. From Senate Committee on Homeland Security:
Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman, ID-Conn., Monday called on Google to remove Internet video content produced by terrorist organizations such as Al-Qaeda. The videos – readily available on YouTube –show assassinations, deaths of U.S. soldiers and civilians, weapons training, incendiary speeches by al-Qaeda leadership, and other material intended to encourage violence against the West.
The videos are branded with Al-Qaeda logos – a practice detailed in a recent bipartisan Committee staff report entitled “Violent Islamist Extremism, the Internet, and the Homegrown Terrorist Threat.” These production logos are easily recognizable, making it easy for Google to remove them from its Internet sites. Lieberman called on Google to enforce its own community standards against videos that show gratuitous violence or people getting “hurt, attacked, or humiliated.”
Google appears to be responding to this request without much action, sticking to their general policy that the community rather than Google needs to police the content.
Microsoft CEO, Steve Ballmer, was egged by a student during a speech at the Hungarian University in Budapest. The student threw eggs at Mr. Ballmer and accused Microsoft of stealing 45 Billion in Hungarian taxpayer money.
Many African countries have said that the aid Microsoft provides them in the form of free software, benefits Microsoft many times more in the end. Microsoft donates free software to governments and universities and hence gets them hooked on it. Shortly after the donation, the software requires upgrades, if not it becomes unusable. By then the governments and universities have become highly dependent on the software and have no choice but to fork out millions of dollars for upgrades. These cash strapped countries have many requirements competing for their money such as buying food, medicines, and other necessities for their populations. Hence, Microsoft came to be known as the evil empire. The Government of India, was faced with a similar situation with Microsoft and decided to launch the Linux Initiative, which had a significant negative impact on Microsoft's business. In fact, the State of Tamil Nadu has rolled out Linux and Open Source Software in all the government departments.
Is Microsoft still evil? Will the rise of web applications give rise to a new axis of evil?
From: Kevin Johnson Sent: Sunday, May 18, 2008 1:30 PM To: Platforms & Services Division; APSP FTE - Adv & Pub Solutions Platform; Employees.all.corp.adf@main.corp; Employees.all.adf@main.corp Subject: Online Services Strategy Update
We have been executing against the core strategy I first presented at our Financial Analyst Meeting in July 2007 to go after the growing opportunity in online services and advertising. Four pillars have formed the basis of our strategy:
1. Consolidate ad platform and win in display 2. Innovate and disrupt in search 3. Deliver end-to-end user experiences across PC, phone, and web 4. Reinvent portal and social media experiences
We have many options that support acceleration of our strategy. As announced earlier today, we are also considering new alternatives for a transaction with Yahoo! which do not involve a full acquisition. At this time, we have not made a new bid to acquire all of Yahoo!, but we reserve the right to reconsider that alternative depending on future developments and discussions that may take place with Yahoo!, shareholders of Yahoo! or Microsoft, or with other third parties.
Regardless of the outcome of any new discussions, it is important that we continue to move forward to strengthen our online services business. The fact is that we are not where we want to be in this business yet and we've been in this position longer than we'd all like. To that end, we will be accelerating elements of our core strategy, and breaking ground in new areas.
On Tuesday, Brian McAndrews is hosting advance08, our annual advertising conference here in Redmond. Over 400 leaders from across the media, technology and advertising landscape will be here for two days to engage in dialogue on industry trends and opportunities. These leaders are some of our closest partners in the digital transformation of the advertising industry, and they recognize the increasingly important role Microsoft plays in this transformation.
We are very excited to have these customers and partners on campus.
Brian's keynote will highlight our unique position in the advertising industry. It's amazing to see how far we've come with the aQuantive acquisition in differentiating our advertising platform. This foundation is paying off, with Q3 advertising revenue growth of nearly 40%, a rate that has accelerated over the past two quarters while growth rates at Google, Yahoo and AOL have slowed.
On Wednesday, we will be announcing a major new initiative that our search teams have been driving. We are getting better and better with our core algorithmic search, and at the same time, we are investing to differentiate in vertical experiences and to disrupt the current model. You'll hear more about our plans Wednesday.
advance08 will underscore our commitment to search and online advertising, and you'll continue to see announcements demonstrating our progress in this space. Earlier this week, I spoke to leaders across our online services business about our core strategy, the importance of acceleration and a set of actions we are taking, including:
1. Innovate and disrupt in search - We will disclose some elements of our plans with this week's release of search and sharpen our focus on user experience and business model innovation. The work we have done over the last 4 years on search has established a solid foundation to build upon. 2. Win targeted distribution - With this release of search, we are now ready to throttle up broader distribution initiatives. 3. Reinvent portal and deliver new experiences across PC, phone and web - We are building our new releases of Windows 7, Windows Live wave 3, Windows Mobile 7, Internet Explorer 8, Search and MSN with an eye towards optimizing and unifying experiences and scenarios. 4. Fix our online branding - Our brands are fragmented and confusing today, and we recognize a need to clarify and align our online branding. We are now driving forward to address this opportunity. 5. Win in display advertising - We have an advantage in tools, agency assets/relationships and a team laser-focused on capturing the display ad platform opportunity. As we build from a position of strength, we will increase engineering resources to drive even more innovation. 6. Build on our strengths in Europe - As measured by comScore in March, our online business in Europe is doing well. We have over 3 times the page view volume and nearly 7 times the minutes of usage compared to Yahoo!, and 68% reach to internet users throughout Europe. We will double down on our investments in Europe and expand on this strong position. 7. Expand strategic partnerships - In addition to our organic innovation agenda, we will expand strategic partnerships that increase inventory on our display ad platform, enable new paradigms in search and accelerate growth in key geographies. 8. Pursue small, targeted acquisitions - Looking forward, we will focus on small, targeted acquisitions that support our work in search, complement our value in the ad platform and help us grow scale in key geographies. Recent acquisitions including Rapt and YaData are examples of these types of acquisitions.
The PSD leadership team is actively working on the FY09 budget, including resources and investments to support the actions above. Additional elements of our work will be revealed in the coming weeks, leading to our Financial Analyst Meeting in July where I will share more details on our strategy and business/financial outlook.
As we move forward, I want to remind everyone that we are well positioned to compete. We have some of the industry's best assets on our side: technical and business talent, global scale, a culture of self-criticism and tenaciousness, a healthy balance sheet and an unparalleled product portfolio. It's time for us to seize the opportunity.
Thanks again for your continued leadership and focus on our business. If you have any feedback or thoughts, please feel free to send me mail.
Google provided Indian police with information that led to the arrest of 22 year IT professional, Rahul Vaid, on Friday (May 16, 2008).
Vaid posted derogatory content about Congress chief Sonia Gandhi on a orkut community named — “I hate Sonia Gandhi”. The messages were circulated through an email address – Rahulvaidindia@gmail.com, which is operated by Google's Gmail.
The investigation began in December 2007 when the cyber crime cell of Pune police communicated with the Google seeking details about the identity of the person who formed the forum and circulated the obscene content.
On Friday evening a team of Indian police arrived at the home of Rakul Vaid in Gurgaon city, Haryana. He was arrested and flown to Pune where he was arrigned on Saturday. Vaid was charged under section 292 of Indian Penal Code and section 67 of the Information Technology Act because he created a profile and then posted content in vulgar language about Sonia Gandhi in the community. If proved guilty, Vaid could be imprisoned for up to five years and may have to pay a fine up to Rs. 100,000.
Last year, Yahoo was embroiled in a similar situation and the provided the Chinese government with information that led to the arrest of a journalist, who wrote critically about the government. In February, Facebook provided the Moroccan government with information that led to the arrest of a 26 year old IT engineer who created a fake profile of Prince Moulay Rachid of Morocco. Internet companies operate in a world without borders however they are increasingly being bound by laws under which their users reside. What are your thoughts on this?
The debate over data portability is very important. It is also not as technical as many people seem to think, and kudos today go to Google for a clear explanation of how they are handling social data and why Facebook's concerns about Google Friend Connect appear to be more of a smokescreen over profits than privacy.
From the Google Friend Connect Developer Team:
Google Friend Connect puts users in control over whether they're connected to their data on Facebook.
Google Friend Connect only reads a small amount of user data from Facebook, and does so using Facebook's public APIs. We read the Facebook numeric id, friendly name, and public photo URLs of the user and their friends. We read no other information.
The only user information that we pass from Facebook to third-party applications is the URL of the user's public photo.
Google Friend Connect does not permanently store any user data retrieved from Facebook.
Although Facebook has reason to be concerned over losing their leading position in social networking to more open architectures this should not be seen as a problem for users or other companies. Privacy is a very legitimate concern but unless I am really missing something Facebook is just scrambling here to define things in ways that make sure they keep control of their most valuable assets, otherwise known as ... you and me. Online folks should be working hard to make sure the social data is ultimately used as we see fit, and is under the control and ownership of the person who created that data and not the company who simply facilitated the creation of the data.
Revolutionary activity may be needed in the social networking space soon to help make sure that all the key players make sure social networking standards continue to become more open, more transparent, and always *user centric*.
It's time for the social networks, like the 13 colonies in 1774 banding together to be free of British authority, to unite and manifest that the Web is by and for the users.
I say ... Huzzah! It's imperative that individual users and the community at large *insist* on standards that will make thing work well for the community. The data portability standards group is a great step in the right direction, though some are reasonably concerned that Myspace's leadership there may have more behind it than simple online altruism. Many are also skeptical that Facebook's rejection of the Google Friend Connect system was due to the privacy concerns stated by Facebook.
It is very important to recognize that from a practical point of view we don't want to wait around for the big commercial social sites to do things right - it is *our* responsibility to insist that they do the right things right out of the social chute.
Blog Maverick - Mark Cuban has added his voice to the chorus on beating Google. Cuban presents a plausible argument. He argues that in essence, its no different that any other content aggregation play. Its paying for content. Here it is:
Is there anything more fun than sitting around, growing your hair, drinking a Bud while listening to Jethro Tull and pondering how to change the balance of power in the search world and unseat Google?
Better search? Too subjective. Better monetization? After the fact. Better User Interface? Will we know it when we see it? A new and different search? Semantic? Human powered? We won't know till we know.
But what about the Google Index, all the websites that are indexed by Google? What is it worth to be in the Google Index? What would you, as a website owner require in order to remove your site from the Google Index and no longer be available when someone does a google search?
It should just be a matter of dollars and cents and sense, shouldn't it?
How many websites would have to recuse themselves from the Google Index before Google Search was negatively impacted? Mahalo.com thinks it needs to support the 25K most common search terms in order to be successful. What would happen if MicroSoft or Yahoo or a MicroHoo went to the 5 top results for the top 25K searches and paid them to leave the Google Index?
A theoretical maximum of 125K sites, but with overlap, probably closer to 100K or less, times how much per site on average?
The math starts to get interesting. At $1,000 per site average times 100K sites, thats only $1 Billion Dollars. The distribution would obviously favor the larger sites, so of that billion dollars, would the top 1K sites take 500K each and the remaining 99K split the rest?
Given the stakes, why stop at $1 Billion Dollars? Would the top 1k most visited sites take a cool $1mm each, plus a committment from MicroSoft or Yahoo to drive traffic through their search engines to more than make up for the lost Google Traffic. After all, once consumers realized that Google no longer had valid search results for the top 25K searchs, that traffic would most likely go to MicroSoft and Yahoo.
And why we are at it, why not require that these 100k sites switch from Googles Publisher Network to Yahoo's or MicroSofts? It would start to earn back the $1 Billion paid out very quickly.
On top of that, in order to grease the skids even further, why not issue advertising credits to the sites that switched off Google? Its soft dollars, that would sweeten the pot and drive more traffic.
IN essence, its no different that any other content aggregation play. Its paying for content. But, it would take some big ones to go for it and see if it worked. However, without question, every search engine has some number of core sites, that when removed from its index, destabilizes the value of its search.
The question is how many? What would it cost to get that number of sites to turn Google off and stay off, and would the traffic created as users switch from Google more than compensate for the cost?
Or would Google recognize the risk and jump in and offer more to websites to stay?
Plaxo today announced that they have just signed an agreement to be acquired by Comcast. Details of the price were not disclosed but it is rumored to be in the $140 - $175 million range.
The company blog says "Plaxo Pulse is to become central to creating a unified “Social Media” experience across the web and television". Not sure what exactly that means for Comcast? Given that 75% of Plaxo's users are business users. I am surprised that Plaxo was not acquired by Google or Cisco.
Google because Plaxo could have been the center piece for its OpenSocial and Friends Connect initiatives, it could provide Google with its own LinkedIn type service and become a sourcing pool to extend Google Apps into the enterprise. Further Plaxo is funded by Google's Founding Board Member Ram Shriram. So the sale would not have been a stretch.
Even more puzzling is why Cisco didn't jump on it - it would have been great to drive adoption of Cisco's Webex products. In fact Cisco has invested close to $15 million in Plaxo. At the time of the investment a Cisco spokes person said "The investment by Cisco reflects an interest in the emerging social-networking space, Plaxo's strength lies in its ability to connect people with those they already know or do business with".
For Comcast this is an expensive way to get into Social Media when there are far better alternatives that are more synergistic to its core business (maybe Comcast knows something I don't). Plaxo's site is still in beta after all these years and millions of dollars in development. Further, their traffic is headed downward. Plaxo management probably decided that any exit is better than no exit. Your thoughts?
Billionaire takeover strategist Carl Icahn is looking at a possible play to force Yahoo back to the table with Microsoft to sell the company at a big profit. The news today sent Yahoo up about 1.30 and YHOO is still rising in after market trading.
Given that the prevailing stock price of Yahoo is well below Microsoft's top offer of $33 per share, this play has only one key challenge - making sure you can get Microsoft back to the table. Frankly I think that is not much of a hurdle to overcome as I think Microsoft Steve Ballmer's decision to drop the bid was 1) Mostly strategic to force the issue and 2) Will be quicly overcome if Icahn can seat a more sympathetic board of directors.
I'm guessing that Ballmer will have two basic requirements to return to the Yahoo table: No Google deals and no more Jerry Yang. Although it would be sad to see a founder of Yang's vision leave the company one does not need to feel too sorry for him. A Microsoft merger would value his stock close to 100% higher than the lows of a few months back, netting Yang in the neighborhood of an extra half billion over that low price.
Of course Yang has seen Yahoo trading at over $100 and I think part of his malaise over the deal is a longing for the good old pre-Google days where Yahoo was the high flyer in terms of value and buzz. Sorry Jerry, but despite Yahoo's suberb ongoing work in many aspects of the online experience, those days ... are ... gone.
Most analysts do not feel Yahoo can sustain even the current price levels without the "threat" of a takeover looming, which is propping up a share price that will likely drop to $20 or below if Yahoo had no serious takeover suitors. In fact YHOO was trading at about $18 per share a few months ago just before Microsoft bid which valued the internet empire at about 60% more than the market. Yet Yahoo argued this was not enough and the board, especially in the form of CEO Jerry Yang, went to great lengths to prevent the Microsoft Merger.
Icahn is no stranger to this takeover strategy and the graph above shows how successful it has been for him. Image Credit: Fortune Magazine Disclosure: Long on Yahoo
Nokia CEO Olli-Pekka Kallasvuo told investors that company would like to act "more like an internet company" than a "traditional manufacturer". Translation - we have a Google Strategy and an iPhone Strategy.
The company has been on a buying bing very much like AOL has been. However instead of buying into new markets like AOL, the company has been making acquisitions that extend its core products in new markets.
Google Strategy Nokia has bid to acquire car navigation devices and mapping services company Navteq for $8.1 billion to gain digital maps of 69 countries. Google has been making inroad with device manufacturers and carriers to provide Google Maps as the default mapping service on their handsets. Google has an initiative with BMW to provide in car mapping services. Sales of navigation products is expected to triple to $12.8 billion by 2010, according to iSuppli Corp.
Recently Nokia launched a mobile ad network for placing advertisements through text messages and e-mail. The mobile advertising market is dominated by Google and Yahoo. Global sales are estimated to rise to $11.4 billion by 2011 from $2.17 billion currently, according to Informa Telecoms & Media Group. Nokia acquired the technology via the purchase of Enpocket.
iPhone Strategy In March of this year Nokia debuted its online music retailer in Germany. The company acquired Loudeye to create a mobile music service to counter the iTunes and diversify its offerings. The services enables user to download music directly to their handset. Devices with mobile music players and cameras fueled a 74% increase in profit in the first half of 2007 for the company.
Microsoft has released the WorldWide Telescope application, a desktop environment for visualizing the cosmos. Most early reports suggest that WorldWide Telescope is one of the finest educational applications ever developed. It was showcased earlier this year at the TED Conference in Monterey but not released to the public, and was then eclipsed by Google's Space viewer - an excellent spinoff from another of the finest educational applications ever created - Google Earth.
Web 2.0 Startup playmaker Mike Arrington was very skeptical of Powerset during the early phases, but he appears to have had a change of heart after attending a demo of the semantic search engine, scheduled to launch soon. Today in TechCrunch Arrington quotes his reaction to a demo last month and writes (with a few qualifications I'm not noting):
.. when I tested the service I had something very similar to the “Aha!” feeling that ran through me the first time I ever used Google. In short, it is an evolutionary, and possibly revolutionary, step forward in search...
This is the kind of praise that Powerset has had from several key valley players so it is not surprise that even before launch they are already on the sales block hoping for a huge play from Microsoft who is especially flush with cash after the withdrawl of Microsoft's offer to buy Yahoo. Although a pricetag of $100,000,000 has been bandied about Arrington is likely correct that this will be considerably too low for a company that - if Powerset lives up to all the hype and all the promise - could become worth more than Google or Microsoft as the next search giant.
Microsoft's proposed bid for Yahoo was its fastest way to gain the scale necessary to compete against Google for online advertising dollars. Even before pulling the Yahoo offer, the company he had begun laying the groundwork for a strategy to compete with Google in online advertising. Microsoft CEO Steve Ballmer is convinced that online advertising is crucial to its future. So much so that he sees online advertising making up as much as 25% of the company’s business within a few years. Google generates approximately US$ 22 billion versus Microsoft's US$ 3.3 billion from online advertising.
Consumers and businesses increasingly are switching from desktop software like Microsoft's to free online services that do the same things. "We are absolutely committed to be the leading player in that endeavor," Ballmer told employees at a recent gathering.
Google dominates the market, taking in 77% of the revenues from search advertising where as Microsoft has 5% of U.S. search revenue, according to search marketing firm Efficient Frontier. Acquiring Yahoo would not have given Microsoft the revenue nor the search market share it is seeking for, as Yahoo's strength is in display advertising not search advertising.
Microsoft Seven Times Bigger Than Google In Display Ads Microsoft's share of the display advertising market is already about 7 times larger than Google's. Although the display market is smaller than search, it's expected to grow faster over the next few years because of a surge in video ads. Market research firm IDC figures that by 2012 the display market will double, to $15.1 billion; revenue from search will reach $17.6 billion.
Microsoft makes money in the display business in two ways. It sells ads on its own popular web sites, such as MSN and Hotmail, and it acts as a broker by placing ads on other companies' web sites and then splitting the revenue with them much like Google's Adsense Program. Smaller web sites use Microsoft because they don't have a salesforce to call on advertisers and ad agencies. And even large players like media giant Viacom have found that letting Microsoft sell some of the space on sites like Comedy Central and MTV can lead to higher revenues. "They can achieve better monetization than we can on our own," says Viacom CEO Phillipe Dauman.
It's All About Display Microsoft's new pitch is that, in display advertising, the company has the most sophisticated technology of any company. It can help advertisers precisely target display ads and assess the value of ads even when web surfers don't click on them. Microsoft is also making the case that search advertising, Google's gold mine, is overrated. Soon the company, it plans to introduce new ad technology that it says will demonstrate that to advertisers. "We're going to win with this strategy," said Keith Lorizio, Microsoft's advertising manager. More>
Google Picasa is an excellent photo service, though in my view and those of many others it is not as good as Yahoo's Flickr, which most would say represents the leader and key innovator in the competitive-but-not-lucrative photo sharing, storage, and photo community space.
Part of Picasa was a service called "hello", which allowed photo commenting in real time and as Matt Ingram notes "hello" was actually a great application.
So why will Google close it down on May 15th?
The likely answer is that it's a drain on Google's human resources without presenting a clear path to profitability. In simple terms, hello has probably failed to capture enough interest to make it worth Google's precious time. Perhaps Google could have put more resources and promotion behind the tool, but I think in some ways Google is comfortable having left the online photo business to Flickr and others.
One of Google's many brilliancies is focusing laser-like on those aspects of the business that they do very well and that do very well for them. Search is the key, and it's made Google one of the most successful companies in business history. Contrary to their sterling reputation Google has actually failed to deliver much if any profit in the key online venues of video sharing (despite owning the major player YouTube), photo sharing (despite owning Picasa), and social networking (despite owning Orkut). Google's failure in these venues is conspicuous given their success in search, though this probably mostly just shows how fickle and habit-driven we are as online application consumers.
Below is the memo Mark Zuckerberg’s sent to all Facebook employees announcing the hiring of Elliot Schrage as the company's new VP Communications and Public Policy.
Hey Everyone–
I’m writing from India to share with you the good news that Elliot Schrage will be joining our management team as VP Communications and Public Policy. In this role, he will be responsible for developing the key messages we want people to understand about our products, our business and the growing global importance of social networking and what we do. The goal here is to help people understand how the internet can strengthen people’s relationships. Elliot will direct our efforts to work with users, media, governments and other entities around the world to ensure that Facebook’s policies are transparent, responsive, effective and are recognized as being those things.
Elliot is joining us from Google where he has been their VP Global Communications and Public Affairs since 2005. At Google, he broadened the company’s messaging from a focus on only product PR to include all aspects of corporate, financial, policy, philanthropic and internal communications. Before that, he served as a Senior Fellow at the Council on Foreign Relations, a public policy think tank, as a professor at Columbia Business School and as SVP at Gap. Early on, he began his career as a Harvard-trained lawyer.
This is a really important role for us and one that we’ve been trying to find the right person for a while. Elliot’s role will be critical to helping us scale based on our culture that values transparency, openness, and honest internal communications.
Elliot will be starting on ***, although you may see him around the office before then. If you want to send him a note to congratulate him on joining, his email is *** and I’m sure he’d love to hear from you.
Google's PR Chief Elliot Schrage left the company to take the same position at Facebook. Schrage will be Facebook's VP Communications and Public Policy, reporting to Sheryl Sandberg who herself left Google to become the COO at Facebook. Schrage was famous for putting the best spin on several "Don't Be Evil" protests at the company's Mountain View campus and elsewhere.
Like Matthew Ingram I'm not really feeling Google's excitement about their "notes" feature in Google reader, which allows a sort of "post it note" and sharing web items with friends.
But maybe we are missing something? Read the announcement at Google Reader blog to get the scoop, which includes:
I can't wait for my friends to start pelting me with *more* cat videos, recipes, and long-winded reviews. As much as I love the social web, I fear that it is becoming far too easy to *pester people* when the power of online has been that we can filter our content and read it on our own time.
Google has filed a patent application for "Targeted Video Advertising" with the USPTO, for "a computer-implemented method of providing targeted video promotional material".
The process being patented includes transmitting a promotional item for display on a video terminal, monitoring a viewer's interactions with particular advertisements, such as skipping advertisements and presenting advertisements determined to be similar to those that the user has watched and less like those the user has skipped. The "Targeted Video Advertising" patent application suggests it may go into set-top boxes.
The patent also covers the following user behavior patterns:
1) "Users may be allowed to skip particular commercials, but required to watch or accept a set number of commercials in order to watch a program. The required number may be, for example, a set integer, such as 11 commercials."
2) "The system…may also require the user to fully watch at least four promotions before the program will continue."
3) "The profile includes some demographic information of the user, such as income, age, and gender. This information may be obtained when the user registers for the video service."
4) "A commercial with the interactive format is an advertisement that requires user interaction to be completed (e.g., a survey)."
Fortune interviewed Google's Larry Page, who is one of those guys who really has a nice handle on the big picture.. Like his partner Sergey Brin, Page is one of a small but growing group of very smart, very wealthy, and very innovative business leaders who are shaping not only the way *they* do business but the way the rest of us live our lives.
Page offers some direct and simple advice - we need more people thinking and working on innovations and solutions. He's right of course. My view is that a combination of politics, bureaucracy, and human inadequacies stand in the way of innovation. Evolution did not reward highly experimental, rational thinking as well as short term emotional responses. For example while Neanderthal Ned was carefully thinking about better ways to get away from the Lion pack who lived nearby, Neanderthal Bob simply ran for the hills or sharpened his spears. Bob went on to populate our world while thinker Ned simply became ... dinner.
Silly simplifications aside, humans are not particularly well equipped to be high order problem solving and we never will be. Fortunately for us we can now rely on machines to handle the calculation parts of the equations. Unfortunately for us machine intelligence will have to improve very dramatically before it can do all the work. Until then we'll need to do a better job of identifying key problems and starting to frame solutions to those problems, as well as trying to think in ways that identify general patterns of solutions to problems we cannot even see yet.
If you are managing an enterprise application, especially one that has a significant online presence, it is a good idea to regularly review new applications and innovations that may solve current problems or lower your costs on existing solutions.
One example of a resource to bookmark is Google's Enterprise Application list where you'll find several partners who have deployed solutions for Google Apps. Several of these partners have very robust applications for communication, emailing, and data integration that take advantage of Google's powerful and free to very low cost programs.
Another bookmark for those considernig or working on Microsoft platforms is Microsoft's Patterns and Practices Website which offers examples of a variety of Enterprise solutions using MS systems and applications.
However perhaps the strongest way to audit your Enterprise is to simply take a few minutes to list each of the key challenges you are facing, articulate them carefully so you can form a very targeted query, and then simply take some time to search online. Ideally you'll find *people* who have solved this problem and get them to share their experiences if they have not already written about their solution, but you'll also hopefully run into new or revised applications that can help.
One of Google's most brilliant strategies to conquer the online world hasn't made them more than a trivial amount of revenue and perhaps never will. But they'll be OK with that, because Google is slowly encroaching on Microsoft at a game that company has dominated for over a decade with the Microsoft Office Suite.
Google Docs are still a small part of both the home and enterprise software market but they appear to be slowly getting incorporated into home desktops and enterprise applications around the globe, and this poses a huge threat to the Microsoft Office dominance in that market.
Wordsmith Nick Carr has it right and as usual puts the point cleverly:
[Google] knows that, should traditional personal-productivity apps become commonplace features of the cloud, supplied free or at a very low price, the economic oxygen will slowly be sucked out of the Office business. That doesn't necessarily mean that customers will abandon Microsoft's apps; it just means that Microsoft won't be able to make much money from them anymore. Microsoft may eventually win the battle for online Office applications, but the victory is likely to be a pyrrhic one.
Pyrrhic victories are hardly the stuff of which success is made, and Carr's point is excellent here. Google does not even have to win some of the battles they have been fighting to win the big war for massive online dominance and untold online riches.
Google's recent brilliancy along these lines was forcing the 700MHZ spectrum open without spending a dime on it. Google was involved in the big spectrum auction but probably had no interest in winning. Rather, Google just wanted to make sure the big winner (which happened to be Verizon), would be required to adopt certain rules that happened to give Google big advantages in the mobile space in terms of the ability to capitalize on that market. I'd agree with Google that they were good rules - but that's beside the immediate point here, which is that Google's has been extremely effective at exploiting resources - or gaining access to them - without spending nearly as much as their competitors.
Historically Microsoft did this kind of thing as part of their massive capitalization and ability to spend. Google appears to be pulling this off without much spending at all, giving their competitors even more Pyrrhic victories while Google hauls away the really big online treasure.
Maria Bartiromo at CNBC has a detailed interview with Google CEO, Eric Schmidt. The full transcript is here and below. I've noted some items below in quotes.
As we've noted here before, monetizing video and social media is very difficult. Schmidt confirms that is an ongoing challenge at Google:
... the whole social networking space has been harder for us tomonetize--that is, develop advertising businesses again--than some of theother--than some of the other spaces that we're in. It has to do what peopleare doing. When you think about it, you're in a social network, you'relooking at people's photos, you're figuring out where your friends are.You're not as likely to be purchasing a new car at the same time or purchasingclothes or purchasing a book or what have--whatever business that you're in.So the development of the advertising tools and techniques, literally theplatform, has been more difficult than we have thought. But we're working onit, and we're hopeful.
Regarding the explosive Mobile market, which clearly is a major focus for Google:
.... most people in most developed countries have a roughly 100percent coverage of mobile phones. So it really is a tremendous phenomenon. Over the next three or four years, there'll be more than another billion or somobile phones added. Eventually our numbers indicate that there'll be five or so billion mobile phones in a world of six billion or so. People, this is aphenomenon. It's an unprecedented reach, even greater than, for example,television, or even electricity in some cases. So that's a platform that we can exploit. Our mobile phone, both search traffic as well as advertising is growing very rapidly, and we think people will do more and more interesting things in mobile phones. And, I mean, small phones, big phones, big screens, things that don't look like a phone, things which are mobile.
Here is the full, unaltered transcript of that interview:
Maria Bartiromo, host: Eric, thanks so much for joining us.
Dr. Eric Schmidt, Google CEO: Thank you for having me on again.
Bartiromo: Let's begin with this debate that seems to be brewing on Wall Street about growth. So the company grew 46 percent in the third quarter, 40 percent in the fourth quarter, 30 percent in the next quarter, and then sequentially 1 1/2 percent when you look quarter to quarter. How insulated would you say is Google to the economic slowdown or recession?
Schmidt: Well, the numbers you're using are year over year, quarter over quarter in the US. Globally, of course, we had good growth, and the US numbers are masked by the fact that, a year ago, we had a very strong quarterly growth of that quarter. So the real growth rate in the US is good, although overall growth rates are slowing, as they have for years. Just because of the scale and size of what we operate. The business has continued to be good.
Bartiromo: OK, because when you get to a certain size, it's really hard to sort of grind down more market share when you've already got 70 percent or get that much bigger, given the fact that the company is getting--you're a large business.
Schmidt: But we have--we have multiple ways in which we grow. Of course, more people use the Internet, more people are using electronic commerce on the Internet, more people are clicking on the ads, and also our ad technology is getting much, much better. And it's really any one of those will push us over the top in any given quarter; sometimes they all come together. We don't seem to be very sensitive to macroeconomics, at least right now. We don't seem to be very sensitive to things like recession. But we're very sensitive to how quickly do we bring in the new product improvement or something like that.
Bartiromo: The comScore data took everybody's estimates down, and this whole debate about whether it was accurate or not. How can you ensure that the growth occurs, even if people pull in their spending, if perhaps advertisers slow down on the budgets? I mean, is it fair to say that the hypergrowth of 2004 to '07 is--has been seen?
Schmidt: Well, as I said, if you think about it over a five- or six- or seven-year period, growth rates are slowing, as they have to. So I don't think it's a big shift. It's not, you know, today it was one way and tomorrow it's another. In our case, we focus on quality, and we have a very simple model. If we show fewer ads that are more targeted, those ads are worth more. So we're in this strange situation where we show a smaller number of ads and we make more money because we show better ads. And that's the secret of Google.
Bartiromo: Yes, that's what Mary Meeker was saying. She's saying, `Look, it could be that they're actually benefiting from a recession because they're monetizing the ads better.'
Schmidt: There's been--you you know, if you were running a business today, you would be looking very carefully at where is your marketing spend going? And we think that you'll choose to put your marketing spend on the thing that's most measurable, the thing that's most, you know--because you can always defer a branding campaign that may or may not work, but you want to get those customers and those leads right now, and that's what we do.
Bartiromo: Let's talk about DoubleClick. You acquired the company. How's the integration going?
Schmidt: Well, it just started. It started about three weeks ago. And what we're doing is we're taking their products and our products and integrating them so that people have better tools, advertisers have more, literally, ads, and publishers have more spots that they can publish information into. So it's the combination of all that that we've been waiting for so long, and it's under way. It takes six months to get all the products together.
Bartiromo: So you think that the integration process will take about six months?
Schmidt: It's on the order of that. And, of course, at Google, everything is a try. We try this, we try that, we see what works. The early indications are that we'll be largely complete within that period.
Bartiromo: It's no secret that Google owns search, but what about the display ads? Is it--is it fair to say that's sort of up for grabs? You know, you've got DoubleClick, Microsoft has aQuantis. It's up for--up for grabs, that part of the business.
Schmidt: Well, it's fair to say that that Google is not the leader in display ads, but our customers want to be able to purchase text ads and display ads and other advertising in one purchasing bundle, and the combination of the tools that we're developing, plus the DoubleClick integration acquisition and so forth, allows us to offer a single product for those advertisers. So we think that will help us with our display ads competitiveness. We think our technology is better. And so really now it's a question of earning those customers' respect and knowledge.
Bartiromo: So how do you ensure that that was actually the right acquisition and not just go it alone, do it on your own?
Schmidt: Well, we had tried that. But the customers really liked the DoubleClick product, and in our surveys we concluded that in one of these--this was one of those cases where another company had simply built a better product, which is why we went forward with the acquisition.
Bartiromo: Tell me what you're doing with Yahoo! in terms of testing. On the earnings call last time, you said you're setting up ads there. How's it going? What's involved?
Schmidt: Well, the long and short of it is that we did a test for about two weeks, which has since ended, where Yahoo! took a small percentage of their ads and replaced them by ours. We did this as part of a commercial conversation, which I obviously cannot go into, but it's one of the strategic options that we believe Yahoo! is considering at this time.
Bartiromo: Now, of course, after that, I guess the Department of Justice announces that it's, you know, doing an inquiry about this. Have you heard from the Department of Justice on this?
Schmidt: Well, again, without going into the specifics, you should expect that in all of these possible transactions, all of the regulatory bodies will be reviewing them. If there were an acquisition of Yahoo!, for example, the Department of Justice would also be doing a review. And the anti-trust laws allow the government--and I think properly so--to look at both commercial deals as well as acquisitions.
Bartiromo: What kind of a combination would you like to see with Yahoo!? What kind of a partnership would you like to see?
Schmidt: Oh, well, we actually enjoyed working with Yahoo!. We also compete with them. They're a well run and, I think, impressive company. We've primarily been concerned about the possibility of a Microsoft acquisition of Yahoo! because of Microsoft's history and because of the assets that Yahoo! has are quite valuable. And we actually think that in the wrong hands, they could be used in the wrong way.
Bartiromo: What do you mean, Microsoft's history?
Schmidt: I think people are aware of the anti-trust trial from 10 years ago. Microsoft has a long history in that area.
Bartiromo: Yeah, you can bet, I guess, who tipped off the DOJ about the phone call that was made, Steve Ballmer or somebody from that side. So what do we know about Microsoft and Yahoo!? Tell me this. I mean, I know that, you know, we're waiting on possible news from Microsoft, possibly, a hostile--we don't know what's going to happen next. But what kind of a challenge would Microsoft/Yahoo! be for Google?
Schmidt: Well, today we actually do not know what's going on. We read in the press that there's discussions and we'll see what they decide to do. If they go ahead and the merger's ultimately successful, it would be possible for Microsoft to integrate some of the properties and essentially eliminate consumer choice, particularly in electronic mail, instant messaging, the things where they have 80 or 90 percent market share, and that's a sweet spot for Microsoft in its ability to eliminate choice.
Bartiromo: Mm-hmm. And, of course, Google has been getting all these new killer apps, whether it's Gmail or Maps or, you know, spreadsheets. Ultimately is the game to compete direct, head on, with Microsoft?
Schmidt: Well, Google is actually trying to be an innovator, and we're always concerned about competition. We have found that if we can simply invent a brand-new product that really solves a problem that really does matter to you, we can get your business, we can get your attention, we can get your traffic and your customers or what have you. We're trying in a new thing called cloud computing to offer very powerful Web services that do the common things--e-mail, word processing and so forth--where the data's kept in the cloud, it's kept by somebody else, it's managed by professionals. You don't need to worry about where you keep all that information. We like that model a lot. We're getting traction. It is a competitive threat to other companies, but we think it's a technological breakthrough.
Bartiromo: How will you respond if Microsoft goes hostile?
Schmidt: Well, a lot will depend on whether their strategy is successful. In the short term, we have pointed out the possibility of a bad outcome, but it really depends on what happens in the hostile.
Bartiromo: Do you have any sense of how these things go? I mean, can they go in the open market, buy the stock, and then just create a proxy battle?
Schmidt: All I know is what I've read in the press, which is that essentially you replace the board and you force--you force the deal.
Bartiromo: Let me ask you about YouTube and MySpace. YouTube has these phenomenal growth rates. What do you think is behind that?
Schmidt: Video is powerful. And it's amazing. You know, we started off with Mentos and the other sort of fun videos, and now people, because they have so many digital cameras, are essentially uploading everything. Furthermore, we're beginning to see glimpses of significant professional content on YouTube. People are using it--because there's such a large reach, they're learning how to reach that audience. We're working but have not yet in my view gotten a breakthrough around monetization. So while we have lots and lots of traffic and we have lots and lots of interesting and creative people and all sorts of controversies--we're blocked in countries, so on and so on--I don't think we've quite figured out the perfect solution of how to make money, and we're working on that. That's our highest priority this year.
Bartiromo: Which is a huge priority, clearly. A lot of people feel like this is an amazing opportunity for you. So, as far as monetizing that business on YouTube, do you think that takes a year? Does it take the next five years? What's your time frame on that?
Schmidt: We believe the best products are coming out this year. And they're new products. They're not announced. They're not just putting in-line ads in the things that people are trying. But we have a number--and, of course, Google is an innovative place. The Yahoo! team are trying various new forms of advertising, ones which are much more participative, much more creative, much more--much more interesting in and of themselves. Google believes that advertising itself has value. The ads literally are valuable to consumers. Not just to the advertisers, but the consumers.
Bartiromo: They want to look at them.
Schmidt: When they're targeted. When they're the right ad for what you're doing or what you care about.
Bartiromo: Mm-hmm. But, you know, it gets me to MySpace. Some people feel like, when you look at the MySpace part of the business, that's really where people are looking at, or feeling a bit of an economic downturn. Let me ask you about that. The deal involving revenue promises, is that going to impact margins in the coming two years?
Schmidt: Not materially in that sense. We have pointed out, and I'll repeat again, that the whole social networking space has been harder for us to monetize--that is, develop advertising businesses again--than some of the other--than some of the other spaces that we're in. It has to do what people are doing. When you think about it, you're in a social network, you're looking at people's photos, you're figuring out where your friends are. You're not as likely to be purchasing a new car at the same time or purchasing clothes or purchasing a book or what have--whatever business that you're in. So the development of the advertising tools and techniques, literally the platform, has been more difficult than we have thought. But we're working on it, and we're hopeful.
Bartiromo: You've got $12 billion in cash right now?
Schmidt: A little more than that.
Bartiromo: What are your plans for that money? A lot of people say, `Look, the company's doing well. Growth is still continuing very strongly, global in particular. Why not pay a dividend out? Why not buy back stock?
Schmidt: We love watching that cash sit in a well-managed bank and not get lost.
Bartiromo: So you could categorically rule out, no dividend coming?
Schmidt: Well, first this: We never rule anything out. But right now we're happy to let the cash accumulate. The cash represents a strategic option for the future. As you know, we had the luxury of entering the wireless auction. And we did not win the auction, but our financial resources allowed us to credibly and seriously enter an auction for 4.65 billion. Couldn't have done that without the cash.
Bartiromo: What did you get out of that, though, Eric?
Schmidt: Well, from a corporate perspective, we participated in something important. From a consumer perspective, we know that our participation helped in making sure that the networks remained open. So consumers get choices. What's better than that?
Bartiromo: Yeah, and the FCC was happy about that. Mobile. A lot of people say mobility is where it's at. You've said, actually, I've heard you on conference calls saying that this is one of the big priorities for the company. How do you envision this? Tell me what you're looking for.
Schmidt: First place, everyone I know, everyone you know carries a mobile phone. And it's true in every country.
Bartiromo: And I'm not carrying my PC, by the way.
Schmidt: And most people in most developed countries have a roughly 100 percent coverage of mobile phones. So it really is a tremendous phenomenon. Over the next three or four years, there'll be more than another billion or so mobile phones added. Eventually our numbers indicate that there'll be five or so billion mobile phones in a world of six billion or so. People, this is a phenomenon. It's an unprecedented reach, even greater than, for example, television, or even electricity in some cases. So that's a platform that we can exploit. Our mobile phone, both search traffic as well as advertising is growing very rapidly, and we think people will do more and more interesting things in mobile phones. And, I mean, small phones, big phones, big screens, things that don't look like a phone, things which are mobile.
Furthermore, the telecommunications industry is helping because they're deploying billions of dollars of literally excess data capacity so these things will have fast networks wherever I go. One of the greatest things for me is whenever I fly somewhere, I open up and I open up my iPhone or my BlackBerry, and, boom, there's everything in my world as I've landed in a country I've never been in. It's a remarkable achievement.
Bartiromo: Yeah. What needs to happen before we actually get to that world that you're talking about? In other words, do we need to see the providers create different screens? I mean, do you need a larger screen to access some of this data? How do we get there?
Schmidt: Well, one of the problems is we haven't figured out a way to change finger sizes. We just haven't...
Bartiromo: Right.
Schmidt: There's no solution to that.
Bartiromo: Right.
Schmidt: We'd like to, but we haven't done it. And people don't like to kind of go like this. So you need a certain size screen. But there's other technology. For example, the processors in the phones have gotten faster. The batteries have gotten longer last--longer lasting. The screens have gotten brighter. The whole device has gotten lighter. So all of that has been happening while people have been talking about this. We know that these things are working now. We know because we measure it that there's been a huge increase in maps, Google Maps, hugely successful. These phones have GPSes in them. So when I want to go to the equivalent of a Starbucks, I just type "Starbucks," it says it's over there. For me, that's just a huge--a huge improvement. And that service is available almost everywhere in the world.
Bartiromo: That's amazing. Let's--that transitions right to the rest of the world. Global has been really the hot spot for Google. Tell me how you keep that going. Where are the biggest opportunities for Google right now outside of the United States?
Dr. Schmidt: Well, first place, the Internet is growing faster outside the United States than in the United States. Also advertising online growth rates are higher outside the United States than they are in the United States. You've got--and of course you have a weak dollar strategy--because the US has a very weak dollar--so that also helps. For all of those reasons, revenue outside of the United States should grow dramatically over the next while, and that's great.
In our case, the biggest difference--and, in fact, perhaps the only difference--between people in the US and other people is language. Other than that, simple rule: Everybody wants the same thing. They want fashion, they want information, they want products, they want e-commerce, they want it now, they want to have fun, they want to use credit cards or debit cards. So we work very hard to make that true globally. I think most of the large, successful US corporations, the ones that you certainly cover all day, all are going to see that kind of growth if they'll well positioned internationally.
Bartiromo: So when you look around the world, what's the most important, sort of richest area for you right here?
Schmidt: Well, for us, of course, Europe has been our stronghold for a long time. And Europe is just very, very strong for Google. They have relatively higher market share, they're very sophisticated consumers, and a very mature advertising rate. If you look at the global advertising market, it's the United States, Japan, China, Britain, France and Europe--and Great Britain. Those are the sort of the big five or six. Well, of course, we're doing very well in Europe, we're doing well in Japan, and we've been in the process of entering China for a while, and we're growing there nicely.
Bartiromo: What's happening there, though? You're number one in every market except a handful in Asia. How do you break in, and really with a solid foothold.
Schmidt: Well, in each case, they're different. In China, of course, there's all the issues of regulation and censorship. We delayed our entry for good reasons, and as a result we're not number one there. In some of the other countries, it's because we didn't get the language right. It turns out Asian languages often have what you and I would think of are nonsensical ways in which words are put together. So, for example, all the words in Thai are put into one very long sentence. They don't have word breaks. So developing the technology to do that right and then search and index against it took us a little while longer. We've now addressed that, so we think we should do well now.
Bartiromo: Fascinating. So what's the biggest challenge that you're facing today?
Schmidt: In Google's case, I think it's internal. It's the ability to manage the creative process, deal with the complexity in what is a relatively large company, in terms of people, who's doing what. We have 50 development centers all around the world, people in different time zones, `Are you doing that? Are you doing that? Do I work with you? How do I check in my code?' Those sorts of things.
Bartiromo: And for a long time, people were saying, `Look, you know, Google has this incredible campus, and, you know, spending money, and really showering employees, making sure that people are happy there.' Are you beginning a new process of managing employee growth right now and managing expenses more aggressively than you have in the past?
Schmidt: Well, certainly not our benefits, per se. Every day I turn around, there's some new benefit that we've come up with for our employees. It's part of our culture; we're happy to do that. And, of course, we have gross margins to afford it. So higher gross margins is one of the explanations. We have slowed our head count growth for a couple of reasons, but the biggest reason is it began to feel like we really didn't have a good sense of what people were doing. The systems in the company, literally who's doing what, what are they doing, seemed to lag our ability to hire these great people. So we slowed it a little bit. But we're still going to hire some number of thousand people this year.
Bartiromo: Let me--let me go back to something on the DoubleClick acquisition. Are you seeing any pushback from some of the advertisers who say, `Look'--the ad agencies who say, `We're already spending a ton of money on Google. Why do we need to spend more on all this other stuff away from search?' How are you going to get them to devote more money to display, to audio, to print and TV ventures, which are--and everything else you're--and the display ads, obviously.
Schmidt: Because we earn it. Because you can measure it. We never want people to give us--give us money that we don't earn and that we can't prove that they--that they--that it really provides value. That's not a good business for us. So as we enter these markets, we hope to say, `We have the tools that can show you that if you put this display ad out there, you really will get the sale.' And we have ideas, we have new research in how to do that in a closed loop way that is phenomenal. So our innovation model is in very category of ads, not just text ads, to show real return, real sales, and we think we can do that. And if we do that, we'll get the business. And if we can't do it, we shouldn't get the business.
Bartiromo: Right, because it's so measurable. That's why you don't really see a real dry up in the advertising during a recession.
Schmidt: Which is...
Bartiromo: Would you agree with that?
Schmidt: That's our hope. Our hope is that, again, in a recession, people would say, `Look, I'm going to put my money where I know my money's being well spent.' Now, we don't know that we're in a recession, but if we were, we hope that's what will happen.
Bartiromo: Now, earlier you said, `Look, growth levels have to slow, obviously.' What's appropriate then? I mean, when you say--I mean, investors are saying, `Look, is this company insulated? Is it not insulated?' So you say of course growth levels have to slow. To what?
Schmidt: Well, we don't know, but obviously, we don't plan to a growth level, we plan to an innovation level. Our idea is you just keep inventing new stuff, and it grows as quickly as it can. And there's some capacity with which we can deliver these to customers and that they can adopt them. And, of course, they have to do work. They have to learn how to use new tools, we have to talk to them, there's a lot of selling and marketing involved. It just doesn't happen automatically. Here's a new idea. People have to be comfortable with it. But once they are, we've found that growth rate is quite...(unintelligible).
Bartiromo: As a steward of technology and innovation your entire career, what would you say is the most innovative thing out there? What's the next big thing, from your standpoint?
Schmidt: I've always thought that the scariest piece of innovation is knowledge understanding and language translation. I don't understand how it works, but to watch a computer--literally watch it--read something in English, dissect what it's about, translate it into a language that I don't speak and having that other person say, `Wow, that's incredible,' to me, that's magic. And it isn't magic, it's just very good computer science, very good artificial intelligence, very good physics. And that's where we are. So the things that are most impressive to me are the things where the computer does something that nobody could do, literally translate things 100 language in parallel, summarize something for me, take me to something which I didn't know I was interested in but knows that I cared about it. And we're right on the cusp of that.
Bartiromo: Eric, your stock went from $750 to $450 in a very short period of time. What do you think happened?
Schmidt: I don't know. We don't really focus on short-term movement of the stock price. We said, since the company went public, that we're in this for the long term, and we want shareholders to be with us. These short-term fluctuations in outlook and so forth are not something that we focus on. We don't talk about it. We're really focused on this huge opportunity before us, which is automating the trillion-dollar industry that is advertising. We won't get all of that, for sure, but we should be able to get a significant part of that over the lifetime, certainly of my service to the company. And our goal is to build this into an institution that lasts for many, many years and is the greatest innovator in technology in this space.
Bartiromo: So the biggest priorities right now, continuing to access that potential huge, huge advertising market. What else?
Schmidt: Well, our number one priority is end-user--end-user happiness. Literally, are people happy with the results that they get using Google search? So it's literally search, and every day we bring out new improvements and indices that are--taxonomies that are understanding of language, more content, bigger--all of the things that make Google such a great search experience. That's our number-one priority, even more important, for example, than advertising. The way we pay for it, of course, is by improving our advertising solutions, as you described. That's what we do in the core.
Our next big play is in this applications phase, where we think people spend a lot of time online with information, and we can help them, whether it's their e-mail, which is an easy one to understand, but what about their personal data? What about their spreadsheets and their calendar, keeping it all there? And we can help them search. We can solve the problem of `how do I live in this digital lifestyle?' If we do that right, they can do it on mobile phones as well as at home, in their office and on a Mac and on a PC, and it all works great.
Bartiromo: This is all fantastic for the consumer. It's free, they've got access to all this stuff, they don't have to pay for it. What about...
Schmidt: It's a pretty good model.
Bartiromo: Yeah.
Schmidt: It works pretty well.
Bartiromo: What about the corporate customer? I understand that there are tests going on right now. What are you hearing from that customer?
Schmidt: We're working with the corporate customers to do the same thing inside their networks as we do with consumers. Now, corporate customers are not the same thing as consumer customers. Corporate customers have a much higher need for reliability, so we'll sign an agreement that guarantees a certain level of service. But then we charge for it. So that's a case where people are willing to pay for something which is free without the level of reliability. They also have other needs. They need greater security, for all the obvious reasons. And they also need better integration with all of the other services that their companies have. This is a long process. It's not a fast process. But it's very deeply valuable. And those customers we will have for 20 or 30 or 40 years as they build into our model. We like that model. It's an enterprise play. It's a business that I've been in for a long time, and one which will ultimately be very, very lucrative through Google.
Bartiromo: Do you ever look back and think about what has happened to the company? I mean, you, for a long time, have been really one of the most admired companies out there, and then one of the sexy, sort of big growers out there. And then as the company got bigger and bigger, people started to get afraid of Google, they way they were afraid of Microsoft at one point as well. Do you worry that that's the perception or that perception could take hold at some point?
Schmidt: We do worry about perception because we want to make sure that we are--that our perception is consistent with the way we way we behave. Google runs on a set of principles, and every company has their own principles. Ours are about doing no evil, it's about trying to serve the end user. Larry Page, our--one of our founders, wrote a very thoughtful memo about what it's like to be a big company. So, for example, he authored the rule that we'll never trap people's data. So if you become dissatisfied with us, we will make it easy for you to go to our competitor. Most companies don't do that. So we're trying to find that balance between the structure of a company and the need for predictability and so forth with our real mission, which is to serve you as an end user. And if you're not happy with us, keeping you trapped, that's a mistake. We want you to have another choice.
Bartiromo: Final question. Eric, let's face it. Microsoft wants Yahoo!. How much of a disadvantage do you think Google is at if these two players get together, what...(unintelligible)...two and third player in the market?
Schmidt: Well, a lot of people debate this. There's a big debate within the company. People say, on the one hand, that we stay focused, which, of course, we're very focused, while they're doing their maneuver. On the other hand, people are concerned about the history, as I mentioned, and the possibility of merger. So I don't think we really know yet. We debate it all the time.
Bartiromo: Eric, would you like to add anything else?
The "deadline" imposed by Microsoft on Yahoo expired yesterday, which makes it likely that Microsoft is either preparing to drop their bid or - and this appears a more likely scenario - preparing for a hostile takeover where they'll try to get a new slate of directors approved for Yahoo who would view the takeover favorably, leading to a probable merge this summer.
Yahoo's board meets today and although it would be interesting to be there I'm certainly not envious of the Yahoo board right now. If Microsoft drops their current offer Yahoo stock is likely to drop severely - perhaps even below the 52 week low into the high teens. Shareholders will be understandably upset if fighting Microsoft has led to nothing more than a 30%+ drop in share price. Some have suggested a Google advertising partnership may help matters but I'm skeptical that the broad market views Yahoo as favorably as Yahoo seems to think. If they did one would expect Microsoft's share price to be faring much better than it has while people await the takeover verdict. In fact most stock watchers are convinced that if Microsoft announces they are dropping the quest for Yahoo MSFT will see a significant jump in share price.
Larry at CNET has noted some interesting alternative scenarios to a Microsoft Yahoo merger, even including a CNET option.
I think my prediction is the same as it has been for some time: Microsoft will start the hostilities but will also let Yahoo know they can get about $34 per share if Yahoo does not put up a fight. Yahoo will (finally) give in to avoid a potential price meltdown, lawsuits, and a fight that is only going to misdirect energy while both companies watch Google scoop up the increasing online advertising revenues.
Over at CNET Steve Tobak is wondering how much of a role luck plays in business success. Tobak nots some big lucky breaks in business such as Bill Gates' landing the IBM OS contract that launched Microsoft after being second choice for the job, but he winds up concluding:
... in my experience, passion, intelligence, hard work, perseverance and timing play a bigger role in success than luck.
I'm in partial agreement but I don't think I'm as convinced as Steve that things we can control play a big role in business success. If they did simply cutting loose a bunch of hard working, smart folks on new projects would generally bring success, and this is rarely the case. In fact if we look at most of the most conspicuous tech success stories of the century they seem to be more a product of a small number of people finding new solutions to major problems, often stumbling into success.
Yahoo, Google, Microsoft, and Apple all started small - very, very small in fact - and I think all of them would have happily sold out for tiny fractions of their current values very early in their growth curves before the founders understood the significance and magnitude of their key technological innovations. Yet they did not sell out because in I think all these cases there were not serious buyers who were willing to pay much in the early stages. Neither the founders of these tech behemoths, nor the key players who could have bought them out realized the potential impacts of these companies. All these four, and hundreds of other smaller companies, have gone on to become global leaders and global brands.
I'm not suggesting they were just lucky, but I think serendipity may play a large role in success, and it is probably helpful to recognize that success may come as much from circumstances that you cannot control as from things you can.
Larry Dignan and Dan Farber at CNET have the early scoop on Yahoo's freshly unveiled Yahoo! Open Strategy somewhat cryptically labelled .... "Y!OS"
Ari Balogh, Yahoo CTO said at the San Francisco Web 2.0 Conference today:
“We are taking open to a whole other place,"... “We are rewiring Yahoo from the inside out with a developer platform that will open up the assets of Yahoo in a way never done before, making the consumer experience social throughout and provide hooks to developers.”
It is too early to know if this type of openness will be embraced by developers to the degree needed to make a significant impact in the way people use Yahoo services, but it is very encouraging to see how the key players are racing to claim the title of the "most open" online environments. Facebook's API's were followed by Google Open Social and now Yahoo which appears to offer more programmatic freedom than ever across Yahoo's massive number of network assets and 500,000,000 person user base.
On January 18, 2008, Google informed me that they will no longer be hosting the WebGuild events. A Google representative said the decision was based on the fact that the name of our January 2008 event called "The Future of Web Applications" and the name of our web 2.0 conference called "Web 2.0 Conference & Expo" were not changed as requested by O'Reilly.
O'Reilly associates contacted Google and asked them to demand that WebGuild change the name of our events and conferences and to cease supporting the WebGuild. See the email below.
from A**** I*** ******@google.com to Daya Baran date Fri, Jan 18, 2008 at 8:03 AM subject Webguild and Google signed-by google.com
Google will no longer be able to host the Webguild meetings. We need you to take our logo off your website as a sponsor since we will not be sponsoring your meetings moving forward. We also need you to take off our logo on your upcoming conference site as Google is not sponsoring that conference http://www.webguild.org/meetings/web20/2008/. You can keep our logo as a PAST sponsor but the language needs to say past as that is indeed what we are, a past sponsor. I tried to warn you that this was a delicate issue but you did not listen. I asked you three times to change the name of this weeks event in order to maintain the relationship and since you did not budge we will no longer support Webguild. I wish your organization the best of luck!
Thanks,
*********
The WebGuild Conferences and Events provide the web community with the opportunity to learn about new developments in web technology. We believe that knowledge is not the domain of the privileged. Our events have been extremely successful in creating an open platform to share knowledge with the masses. This is contrary to O'Reilly's model which is based on withholding knowledge and gouging attendees, companies, and sponsors where the highest bidder wins shelf space.
Do No Evil The old boy's network hasbenefited from the O'Reilly platform by publishing books through his company and by speaking at his conferences and hence, positioning themselves as experts in their respective fields. Many such experts have landed at Google. O'Reilly contacted these old-timers and asked them to demand that WebGuild change the name of our event and conference and to cease supporting WebGuild. Once such individual is Dewitt Clinton, who joined Google in 2006. This arrogant individual threatened to cancel the January event on 200 people if I did not change the name immediately. I did not budge. The harassment continued. I was flooded with emails and phone calls demanding I change the name. Finally, they became condescending, arrogant, unprofessional, and appalling. I emailed Larry Page, Serge Brin, and Eric Schmidt about this issue. I also told them that the WebGuild has been a big supporter of Google and its products since 2001 and we represent the community that are early adopters of Google products and contributes to Google's revenue engine. I never received a response.Google has also hired several hundred employees from the WebGuild events they hosted saving the company hundreds of thousands of dollars if not millions.
O'Reilly felt it was necessary to cut-off Google's support for WebGuild because he felt that without Google's support we would not have a venue to keep putting on high quality events at low costs. Thus, he would be able to continue gouging the industry. Furthermore, O'Reilly contacted speakers, sponsors, and bloggers and asked them to withdraw support for WebGuild Conferences and Events. O'Reilly was desperate to avert a repeat of the backlash when he sued an Irish non-profit for putting on a Web 2.0 conference.
O'Reilly Sues Non-Profit Web 2.0 is about community, openness, and the free flow of information. O'Reilly's model is centered on limiting access to knowledge and creating dependencies for profit. It is a Web 2.0 Conference, however, not everyone can attend. You have to be exclusive enough to be invited to the conference which is about common technologies and for that privilege, you have to pay a king's ransom to get information that is freely available. O'Reilly sued ITCork, an Irish organization for holding a Web 2.0 event (see here and here). His attempt to extract his pound of flesh backfired so badly that he is resorting to questionable tactics to avoid a similar backlash.
Claims To Coining Web 2.0 O'Reilly even claims that he coined the term "Web 2.0". The term was coined two years earlier by Joe Firmage, CEO, ManyOne Networks. Web 2.0 is a term used to refer to the web as a platform to develop applications. The term "web 2.0" is in the public domain, however, O'Reilly has attempted to trademark itto retain exclusive use of it and prevent others from using it. Paul Graham has a great post about the term Web 2.0 and his run-in with O'Reilly.
Shame on You O'Reilly Presently, O'Reilly is promoting keynote speaker Saul Griffith calling him a "genius" and "a scientist and engineering polymath" without disclosing the fact that he is his son-in-law. When I met him, I cordially introduced myself, however, O'Reilly was a despicable individual. He is a dinosaur whose time has past.
As a result of this, we have not had a venue for events for the past few months. Many of you have been asking when the next event will be. I am happy to announce that the events are back on track and we will be holding the next event on May 7, 2008.
Mechanical Zoo has an impressive startup team include Google News product lead Nathan Stolle. The concept, according to Zoo member Ventilla quoted at CNET:
... tackling the problem of subjective search--when no one answer would satisfy everyone--and the answer is not to serve a Web page," Ventilla said in an interview. "We've developed an online social structure that lets users reach out to people they already know" for answers.
Integrating social networking into the search experience seems to be one of the most promising ways to solve several problems with the search applications of today. Even just the power of social environments (like Digg) to help eliminate spammy entries from search results has obvious potential to improve the search landscape. A robust social network where users are interacting not only with respect to quality websites and blogs but actually generating content to answer questions would be a strong offering.
Mechanical Zoo is not alone in this quest and some would argue that services like Yahoo Answers have already built this type of environment. Unfortunately for Yahoo, Answers appears to have been more successful as a question and answer environment rather than as a thriving social network. Can Mechanical Zoo bridge that gap?
As social applications like Facebook, Myspace, Ning, and dozens of others attain sky high valuations few are focusing much attention on how poorly most of these social networking sites monetize their enormous traffic levels.
Microsoft's Emerging Business guru Don Dodge, in an excellent post about Social Networking, notes an example where a Facebook application only manages to generate $6,000 to $15,000 per month revenue with page views of .... wait for it .... three hundred million per month. This disparity is so great I'm wondering a bit about his source for those numbers, but it is certainly clear that social media monetization is no walk in the PPC park.
Google's dominance in the very lucrative search pay per click market has made Google the global online advertising leader in terms of advertising traffic and advertising revenue. Despite this success, even Google has been failing to find another holy grail. YouTube may eventually justify its huge valuation in indirect ways, but it does not appear to be a very healthy way to capture revenue for Google or for affiliated video publishers.
Likewise Facebook's key advertising revenue has come somewhat indirectly - from a guaranteed advertising deal with Microsoft rather than from clever internal advertising schemes like Beacon, which practically blew up in Facebooks ... own Face when issues were raised over privacy and potential misuses of Facebook user account information.
People, and certainly the advertising market, are still adapting to social networking so it is too early to know if social networking will prove to be as fertile a ground for advertisers as search. What is clear is that not much revenue is growing there yet.
Google has been named the world's number one and most powerful brand for the second year in a row clocking in at an estimated value at $85,057 million which represents a 30% increase in its brand valuation. This, according to BrandZ's top 100 brand ranking for 2008. Other tech heavyweights in the top ten included GE, Microsoft, China Mobile, IBM, and Apple which was the biggest mover in the top 10 and a new entrant, moving up from sixteenth to seventh place with an incredible 123% increase in brand value to $55,206 million. HP was at sixteen, Cisco ranked twenty-two, and Oracle and Intel at numbers twenty-six and twenty-seven respectively.
Google is a marketer's dream with its ranking being driven by financial performance and equity value. The brand equity measurement is determined by a global survey of 100,000 consumers.
Despite a small 1% drop this morning, stock in internet giant Google (GOOG) appears to be stable at the new price level of approximately $533 per share, about a 20% increase from the lows of last week. Until Thursday's favorable earnings report Google stock had come under severe downward pressure after reports that revenue could suffer from a major slow down in the increase in paid clicking at Google - by far the internet's most important advertising venue with control of approximately half of all online advertising.
Thursday's earnings, however, indicated that the reports of a Google revenue demise from fewer clicks had been greatly exaggerated. Clearly Google's quality control initiatives have managed to pull more revenue from each click. Click growth is certainly slowing based on Comscore and other large scale reporting, but Google once again has pulled a revenue rabbit out of their magic hat and in doing so has recovered some of the value lost during the stock slide of the past several months.
Google CEO Eric Schmidt has been critical of what he feels was irresponsible reporting by Comscore that led analysts to conclude that Google was in serious trouble. Although Comscore and Google had issued clarification on the implications of the reporting, Google's stock price had suffered severely in Q1 2008, mostly on the basis of how analysts interpreted Comscore's findings of a serious slowdown in paid clicks.
Fresh from a 2.75 Million funding round, internet startup Publish2 will seek to create a sort of Digg-like social bookmarking community for journalism and journalists / bloggers.
Publish2 intends to be a sort of news aggregator that’s based on the stories that journalists — broadly defined to include bloggers — think are interesting, so not unlike Digg or Techmeme. It’s a social bookmarking site ...
As Matt Marshall notes this is a really intriguing idea despite the fact that many such news aggregator approaches have so far failed to gain much traction with the exception of Google News. With Scott Karp, Jeff Jarvis, and other prominent journalists on board already Publisher2 could gain some immediate traction. Also, Publisher2 appears to have a component of cross linking by stories and journalists which could bring it a measure of ranking success at Google, which favors stories and websites that have abundant "inbound linking". That said, Google is notoriously suspicious of any linking systems that they feel may undermine the integrity of the Google algorithm. Yet Publisher2's approach appears to fall pretty squarely into what Google tends to view as a legitimate approach to linking.
Microsoft has purchased the innovative travel service "Farecast" for a reported $115,000,000. SeattlePI has more about this breaking story. Farecast uses a predictive algorithm to help users determine if airline ticket pricing is poised to go up or down from the current levels and thus helps to find bargain pricing online.
Rather than develop extensive "Web 2.0" features internally, it is becoming very clear that Microsoft is trying to fuel their massive new web initiative with cash, buying companies like Farecast (and Yahoo) that can make Microsoft an immediate player in the rapidly evolving online environment.
Google stock soared in after hours trading to over $500 per share after a very favorable earnings report that suggests Google is doing a much better job of pulling revenue out of paid advertising clicks. After hours GOOG showed a gain of over 11% from today's closing price.
Google Q1 earnings report comes out after today's market close. Many consider this report to be a bellweather for the internet industry at large as well as for Google, given Google's massive dominance in the online advertising space.
A key issue is how well Google monetizes search clicks now that they have implemented new quality controls on advertising. Comscore reports suggest that the growth in total paid clicks is diminishing dramatically from earlier levels (though still up from last quarter), but Google has suggested that they now do a better job of pulling revenue from each paid click. This complex algorithmic balancing act between total clicks and revenue per click will largely determine the fate of Google's stock price after the close today.
CNBC has a short Google earnings preview with some of the key analytical issues associated with today's report.
The Wall Street Journal is reporting that Yahoo and Google are closer than ever to a deal where Yahoo would outsource their search monetization to Google. Google continues to do a much better job of producing revenue from searches - some estimates suggest that Google gets more than twice Yahoo's revenue per search click.
Yahoo also is continuing to negotiate with AOL as part of Yahoo's efforts to stave off a takeover by Microsoft.
The Journal suggests that Yahoo's April 22 earnings report may play a key role in the Microsoft takeover argument. If Yahoo comes in with strong earnings it will strengthen the idea that the Microsoft bid is too low, but if earnings are weak it will support Microsoft's efforts to force a Yahoo merger against the will of the current Yahoo board.
Harrison Hoffman, reporting at CNET, is impressed with the news feature that Microsoft is now bringing to the LIVE search environment as part of the changes to LIVE that are codenamed "ROME" and are to be released this spring. LIVE has struggled for some time to take market share from Google and/or Yahoo, and so far LIVE has failed to deliver.
Thus despite the cleverness of the Microsoft LIVE team I'm skeptical that they can do much to pull readers away from Google's excellent Google news service unless they manage to bring news directly into the explorer browser. Microsoft has a sorry history of losing to Google in virtually every head to head search item, so it is hard to bet that LIVE news will fare much better given that it does not even appear to include as many news sources as Google News.
Google watchers are anxiously awaiting the GOOG earnings report due this Thursday. Google shares, trading today at about $477 are off a whopping $270 per share from the 52 week high of $747.
Henry Blodget suggests that Google can show 25% growth but only throug a substantial increase in the price per click, a Google metric that won't be clear until the Thursday report.
This 25% growth estimate obviously assumes that Google has seen a strong increase in price-per-click: If it hasn't, and the Comscore data is accurate, US revenue will miss by a mile and Google's overall revenue will come in well below consensus. Thursday's earnings report will be interesting.
Click revenues are very dynamic making it hard to predict the effect on revenues of the changes at Google which are a funciton of of total paid clicks, which are up but very modestly over last years, and the revenue *per click*, which can vary with season, market, user interface, and other factors. Google has been seeking better quality control for pay per click advertisements which appears to have increased the revenue per click but also was a key factor in the huge decrease in the growth rate of total clicks.
As Bloget notes, Thursday's earnings report will be very interesting.
Google has befriended Salesforce.com and recruited the company to battle Microsoft. Salesforce’s customer relationship management software and Google’s suite of office productivity applications, which includes e-mail, word processing and spreadsheets programs will be integrated into a single software package that will be offered over the web.
The offering competes with Microsoft’s customer relationship management software, which is integrated with the its Office suite. Google is seeking to displace Microsoft by offering a web based alternative.
Dave Girouard, Google’s Vice President said the product would have new features like letting users keep track of e-mail sent to a customer right on that customer’s sales record, and a group of people collaborating on a sales account would be able to communicate by instant message with one another".
“In the history of hosted software to date, applications could be like islands,” Mr. Girouard said. “They don’t really work together seamlessly. This is a first of its kind.”
“Salesforce has belatedly recognized that it is important to link C.R.M. apps to productivity tools,” said Brad Wilson, general manager for Microsoft’s C.R.M. unit. “It has been core to our product since we launched five years ago. It validates our strategy.”
“The enemy of my enemy is my friend, so that makes Google my best friend,” said Marc Benioff, chief executive of Salesforce.com. However, Google has introduced a service called Google Market Solutions that competes directly with Salesforce's App Exchange. Also see Google Is Frienemy.
Personalized web page startup Pageflakes is running out of cash and is desperately seeking a buyer reports Gigaom. Pageflakes aggregates RSS feeds and widgets in a customizable AJAX-based personal web page.
Pageflakes has around 1.5 million visitors a month and over 200,000 registered users. However that pales in comparison to their closest pure competitor Netvibes. However, the real competitors are Google's iGoogle, Yahoo's 360, Microsoft and AOL which too offer personalized web pages. The cost of these services is borne by their core offerings.
However, Pageflakes's personalized page is their core offering and it is much harder to monetize. Further to garner premium ad dollars the site needs serious traffic, which costs money. Again the majors can acquire traffic simply by putting up a "tab" to their personalized web page offerings.
According to Gigaom Pageflakes is just the tip of the iceberg and many 2005-2006 consumer web startups that rely of on VCs money will find life increasingly tough once the money stops flowing (SeeCrash 2.0 Coming). At least Pageflakes has interested buyers, even if they are not big spenders.
Google just announced the creation of an online marketplace for Google-related solutions released by 3rd parties. The site named "Google Solutions Marketplace" will organize 3rd party solutions built by using Google components. The aim of the site is to simplify match-making between the customers, products and professional services.
The Marketplace's initial focus is to connect customers of communications and collaboration products like Google Apps and Enterprise search with 3rd parties that sell complementary products and services.
For users, the Marketplace has search, browse, and end-user ratings to make it easy to locate and purchase from a vendor that meets their needs. For developers and partners, the Marketplace makes it easy to create information-rich vendor and product listings to reach new customers and grow sales. And listing is self-service and free.
Yahoo said it plans to carry search advertising from Google as part of a test that could lead to a broader partnership reports the WSJ. The two-week trial, which will be limited to U.S. traffic and no more than 3% of Yahoo's Web search queries, is designed for the two sides to evaluate the revenue potential of a broader search ad outsourcing arrangement. Yahoo already had been in negotiations to outsource its Web-search advertising in Europe to Google since last year, say people familiar with the matter.
Citigroup Global Markets analyst Mark Mahaney estimates that Yahoo could boost its cash flow more than 25% annually by outsourcing all its search advertising to Google. Some investors have called for Yahoo to abandon its own search advertising system as a quick way to boost its revenue. Analysts predict that outsourcing its search ads to Google would boost Yahoo's cash flow, since Google's system generates significantly more revenue for each search query than Yahoo does. Under such an arrangement, Yahoo would likely garner a majority of the revenue and Google keep the rest as a commission.
In a press release, Yahoo said "the testing does not necessarily mean that Yahoo will join the AdSense for Search program or that any further commercial relationship with Google will result. " Yahoo CEO Jerry Yang has previously said "We believe having a principal position in both search and display advertising is critical to creating...long-term shareholder value".
OpenX, the open-source ad server startup, has hired Tim Cadogan, Yahoo's senior vice president for search marketing as its CEO reports AllThingsD. OpenX gives web publishers an alternative to Google Adsense to monetize the traffic on their web site.
“With open-source software, there is a lot of potential for business disruption and to open up the market,” You have not really seen open-source models really applied to the ad space until now…but there is a big business in giving publishers a really robust offering and a platform where they can also share what they build.”
Google gave the cloud computing initiative a major boost today by launching Google App Engine. Web developers can build and run their web applications on the Google infrastructure. The goal is to make it easy to get started with a new web app, and then make it easy to scale when that app reaches the point where it's receiving significant traffic and has millions of users.
The service is similar to Amazon Simple DB and SalesForce App Exchange where developers can online demand applications or SaaS applications. Google App Engine gives developers access to the same building blocks that Google uses for its own applications, making it easier to build an application that runs reliably, even under heavy load and with large amounts of data.
Dynamic webserving, with full support of common web technologies
Persistent storage (powered by Bigtable and GFS with queries, sorting, and transactions)
Automatic scaling and load balancing
Google APIs for authenticating users and sending email
Fully featured local development environment
Google App Engine packages these building blocks and takes care of the infrastructure stack, leaving developers more time to focus on writing code and improving your application.
A European Commission advisory body on data protection has said that search engines should delete data held about their users within six months reports the BBC.
The proposed rule specifieds that "Search engine providers must delete or irreversibly anonymise personal data once they no longer serve the specified and legitimate purpose they were collected for."
Google and Yahoo anonymise user data after 18 months and MSN does the same after 13 months. The body said search companies were not "clear enough" on their data protection policy and the recommendation is likely to be accepted by the European Commission and could possibly lead to a clash with search companies. The recommendation could have broader implications such as getting user consent before serving them personalized advertisements.
Peter Fleischer, Google's global privacy counsel, said in a statement: "Google takes privacy incredibly seriously; protecting our users' privacy is at the heart of all our products. It is the reason we were the first company to commit to anonymising our search logs, and also why we dramatically shortened our preference cookie lifetime."
Search engines presently collect and store information every search query such as search term, IP address, browser type, time, and number of clicks. The search engines say this information it required to better serve the user. The advisory body said search engine providers had "insufficiently explained" why they were storing and processing personal data to their users and that personal data of users should not be stored or processed "beyond providing search results". The report also said search engines did not need to gather additional personal data, beyond the IP address of a machine being used, in order to deliver basic search results and advertisements.
The advisory body said, "Search engine providers mention many different purposes for the processing, it is not clear to what extent data are reprocessed for another purpose that is incompatible with the purpose for which they were originally collected". Thus search engines should not use personally identifiable data to improve their services or for accountancy purposes. Nor should personal data stored for security purposes be used to improve services and if search engines enriched personal data about users from third parties they could be breaking the law unless customers had given explicit consent. It said users should have the right to access, inspect and correct all the personal data about themselves held by search engines, including their profiles and search history.
The report issued a set of obligations to search engines firms, including:
Search engines should get informed consent from users if they correlate personal data across different services, such as desktop search
Search engine providers must delete or anonymise (in an irreversible and efficient way) personal data once they are no longer necessary for the purpose for which they were collected
Personal data should not be held by search engines for longer than six months
In case search engine providers retain personal data longer than six months, they must demonstrate comprehensively that it is strictly necessary for the service
It is not necessary to collect additional personal data from individual users in order to be able to perform the service of delivering search results and advertisements
If search engine providers use cookies, their lifetime should be no longer than demonstrably necessary
Search engine providers must give users clear and intelligible information about their identity and location and about the data they intend to collect store or transmit, as well as the purpose for which they are collected
YouTube has come out with a tool to help you answer the question of who's watching you. YouTube Insight is a free video analytics tool that allows users who upload videos to YouTube to track the viewership on their videos including the geographic breakdown by region, as well as the popularity relative to all videos in that market over a given period of time. Uploaders can also delve deeper into the lifecycle of their videos to find out how long it takes for a video to become popular, and what happens to video views as popularity peaks. Another key feature expected shortly is a breakdown of how viewers discovered your video. Using these metrics, you can increase your videos' view counts and improve your popularity on the site. To view your video analytics, click "About this Video" button under "My Account > Videos, Favorites, Playlists > Manage my Videos."
Google has announced that it will be enabling offline access to Google Docs. The planned rollout is expected to happen over the next couple of weeks. Powered by Google Gears - which once enabled, provides the user with a local version of their documents and a list of documents and editors. Features are limited offline; users are able to view and edit. Changes are made via a web browser even when offline and saved locally and when back online, documents are sync'd back up with the server. Offline access is only being provided for docs initially, not spreadsheets and presentations.
Google announced plans to sell Performics, DoublClick's search marketing division, that helps marketers place ads on search engines.“It is clear to us that we do not want to be in the search engine marketing business. At Google, maintaining objectivity in both search and advertising is paramount to our mission and core to the trust we ask from our users.” wrote Tom Phillips, Director of DoubleClick Integration on the official Google blog.
Rajiv Parikh, CEO of Position2, a full service search marketing company said that the Performics sale was a good move on Google's part as it removes a significant competitive roadblock many in the industry had to compete with.
Ellen Siminoff, Chairwoman of Efficient Frontier, a search marketing software vendor said, "Google’s job is to get paid as much as possible for the ads that appear on its pages. If you are a search marketing agency, your goal is to get the most for your customers’ money.”
Google's newest employees learned on April fool's day that they would no longer have a job. The employess today were assured that it was not a joke but real. Vanity Fair reports that "DoubleClickers’ heads are rolling left and right. Hopefully, Google’s generous severance package—two months pay with an additional two months if you sign a non-compete agreement—will keep them from jumping out the window. Google’s suggestion? Take two months vacation and don’t even think about it. Or start looking now."
It is rumored that the entire DoubleClick finance department will be let go. DoubleClick’s U.S. workforce of about 1,500 will be reduced by 300. In a statement, the company said: “Since our acquisition of DoubleClick closed on March 11, we have been working to match and align DoubleClick employees in the U.S. with our organizational plan for the business. As with many mergers, this review has resulted in a reduction in headcount at the acquired company.”
I have been hearing this all day that but I was thought that it was an April fools joke. Google CIO Douglas Merrill is leaving to becomes the president of EMI. John Furrier has posted on his blog that he has confirmation from a source that Douglas Merrill sent out an email resigning from Google to join EMI as president. Word has it that he will be figuring out the next business models for EMI.
Techcrunch reports on a rumor this morning that would have Google either buy Skype from eBay or Google partner with Skype. According to the site,
"Skype, acquired in late 2005 for$3.1 billion, has been a financial albatross around Ebay’s neck. eBay removed Skype co-founder and CEO Niklas Zennstrom in October 2007, reportedly due to frustration at the financial performance of Skype. Ebay also negotiated down the huge earnout due to Skype stockholders and took a $936 million one-time loss around the transaction. It’s clear that eBay wants to either unload Skype, or significantly drive performance. Google, by contrast, is just beginning to think about how to dominate the voice space. They have a VOIP service through GTalk, a free 411 service and GrandCentral, a telephone management service they acquired last year for $50 million."
What it means: I think this potential acquisition/partnership makes complete sense. IMHO, call tracking and pay-per-call represents a large portion of future local search revenues and Google clearly sees that local search is where they will get tremendous growth in the next 5-10 years. By buying the Skype infrastructure (and user base) and combining it with the GrandCentral technology and expertise, they instantly get core assets to execute that strategy globally.
Google has done an amazing job of capturing the imagination, and more importantly the search queries, of hundreds of millions of web surfers. Google has also turned that attention into a huge source of revenues with which they have built one of the world's great technology companies.
But if former Microsoft employee and veteran search watcher Robert Scoble is correct is his assessment which is the same as many other analysts, Google is now beginning a fairly aggressive push to go after the enterprise market - a market dominated by Microsoft products. Scoble thinks Google CEO Eric Schmidt is basically on a five year plan to take over from Microsoft as the enterprise software leader.
Google's strategy to take over the corporate enterprise space is intriguing because it is based on the idea of providing high quality, well engineered software along with a massive cloud computing network at little or no cost to companies. Although there are some small charges for a handful of Google applications most Google applications - such custom search, gmail, Google spreadsheets and documents, and blogging tools - are free for the taking. All of these can easily be scaled up and adapted to many enterprise computing tasks such as document collaboration.
Comscore will soon release their report of Google advertising activity for February and Silicon Alley Insider says they already have the numbers that show Google with 515 million US paid clicks in February, up 3% year over year. Unfortunately for Google a gain of only 3% is not very impressive on the surface and is also somewhat misleading because we had 29 days in February this year, which means that ad clicks at Google were flat on a year to year comparison.
The market did not take this click report very well, and Google has fallen over 3% in after hours trading, though tomorrow's trades will tell the full tale of how this information will be incorporated into Google's share price which will open at about $444 tomorrow due to the after hours trading corrections to the close today at $458. This is not as low as the $412 Google has traded at recently but well off Google's 52 week high of $747.
Lacking from these reports however are the revenues obtained from these clicks. Better optimization can yield higher revenues from the same number of clicks, and major changes recently were implemented by Google, effectively elimating many ads that Google felt did not meet their new "quality scores" which reflected higher advertising standards. Thus it is possible that this new approach could actually lead to a "better than expected" revenue outcome for Q1 without more clicks. That said, if the advertising market as a whole is flattening out, Google will be very hard pressed to continue their amazing revenue growth. It is not clear if the current stock price on GOOG fully reflects the pessimism many analysts have expressed about online advertising in the next few years.
Barack Obama's campaign spent $1 million on Google for the month of February 2008 versus $67,000 for Hillary Clinton, according to filings with the Federal Election Commission.
Barack's also outspent Clinton on social networking sites and other web properties. Barack spent more on new media than Clinton who spent heavily on old media. Barack raised $45 million online in February versus $30 million for Clinton. Here is a break down of their media related expenditure for 2008 up to today from the best available public sources.
Spending Category Barack Obama Hillary Clinton Google $1,000,000 $67,000 Yahoo Web Ads $99,341 $9,186 Yahoo Search Ads $58,000 $0 Facebook $4,900 $0 Web Consultants $93,162 $0 Ad Consultant n/a $997,000 Media Consultant n/a $2,540,000
Google has finally figured out a way to pay for the YouTube acquisition. Video ads, have started appearing on Google's search results page according to a report from Digital Inspiration. Video ads from AT&T appeared on the Google search page for the keyword “phone” - the video clip remains hidden until you click the “Watch Commercial” link. You then get to see the video in a neat drop-down video player. Google is possibly charging higher rates for the video ads since it is served only on-demand when requested by the user. Though these video ads appear with other CPC ads on Google search results, the advertiser will pay when users click to see the video, even if they never click through to the advertiser’s site.
Shareholders in Google will be voting on two controversial provisions about how to govern Google affairs.
The first concerns internet censorship such as that practiced by China and several other countries where much of the online content is monitored, some content is prohibited, and internet archiving is used for political persecution of dissidents.
This proposed set of censorship rules would direct Google to take very aggressive measures to fight censorship. Specifically the vote is whether to implement these policies at Google:
1) Data that can identify individual users should not be hosted in Internet restricting countries, where political speech can be treated as a crime by the legal system. 2) The company will not engage in pro-active censorship. 3) The company will use all legal means to resist demands for censorship. The company will only comply with such demands if required to do so through legally binding procedures. 4) Users will be clearly informed when the company has acceded to legally binding government requests to filter or otherwise censor content that the user is trying to access. 5) Users should be informed about the company’s data retention practices, and the ways in which their data is shared with third parties. 6) The company will document all cases where legally-binding censorship requests have been complied with, and that information will be publicly available
The second proposal would amend the bylaws to establish a Human Rights committee:
The proposed Bylaw would establish a Board Committee on Human Rights which would review and make policy recommendations regarding human rights issues raised by the company’s activities and policies.
Google's proxy outlines each of them in more detail, and Google has recommended a "no" vote on both.
In the case of the internet censorship provisions Google will argue that they would make it more difficult to conduct business in some countries, especially if other players like Yahoo and Microsoft are unbound by such restrictions. However a careful read of the rules above does not suggest that they would seriously interfere with Google's business practices.
Arguably much more outrageous, however, is the decision not to establish a human rights committee at Google. This provision is worded in such as way that it is hard to imagine how it would inhibit Google business or open them to liabilities beyond current levels of exposure.
More importantly, as *the* world's key player in the internet space Google has an obligation to uphold human rights whenever possible and to be extremely proactive in fostering human rights with respect to internet activity.
This is a sad day for Google and the recommendation is a death blow to their now transparently specious "Do No Evil" mantra. Google has an obligation to promote human rights within the reasonable confines of their business structure and goals. In this obligation, they have now dramatically failed.
A new social networking alliance will include internet powerhouses Google, Yahoo, and Myspace in an "Open Social Foundation". Facebook's absence from this list is something of a social networking elephant in the room as Facebook is generally considered the key innovator and eventual market leader in the social networking space.
The Open Social Foundation will, according to the Yahoo Press release today, work to ensure:
... the neutrality and longevity of OpenSocial as an open, community-governed specification for building social applications across the web...
The foundation will provide transparency and operational guidelines around technology, documentation, intellectual property, and other issues related to the evolution of the OpenSocial platform, while also ensuring all stakeholders share influence over its future direction.
In short, Open Social is working towards a social networking environment that spans the internet, sharing information across platforms and websites rather than confining social networking information to a specific standard or a particular online environment.
Facebook has also created tools for the integration of information with other sites and routines, but generally Facebook is considered to be a less open online environment than the type envisioned by Open Social advocates. With Facebook the user tends to socially interact within Facebook itself, where with Open Social you will be able to access social networking functions from any sites that have adopted the Open Social platform.
The dust is finally settling from the recent US Government auction of licenses to operate using the 700MHZ spectrum that will be freed as Televisions move to "digital only" signals in 2009.
Verizon was the winner of most of the new spectrum by bidding the highest, and thus will have a new and commanding mobile presence. However Google has some ideas of their own about how to use the "white space", or unused parts of the spectrum, for WIFI signals to handheld devices. Many analysts feel that Google was participating in the multi-billion high stakes auction for the purpose of creating open access in the mobile space rather than for the purpose of owning the licenses, and if so Google appears to have succeeded in their goal.
CNET parses today's statement from Google about their future plans which appear to include a massive increase in the bandwidth and usage of mobile wireless devices that will use the open operating system for mobile devices "Android" as well as have the active support of the Open Handset Alliance.
For all their virtues Google is known to be very protective of many of their secrets.
The Google interview process, with test questions that can include riddles and rhymes, is almost legendarily unique among job interviews. Thanks to several blog posts from people turned down by Google we have a bit more insight into the process:
Corey Trager, perhaps suffering from a bit of sour grapes, writes:
I would have felt more at home in a humble Amish household than I did in the pseudo-hip, purchased-cool, energy-profligate, global-warming-contributing lobby of Google's Chicago office. I knew these judgments were being fueled by my unsettled emotional state. I knew that if Google were to make me an offer, I would accept it. I mean, hey, it's Google, the Angelina Jolie of tech employers.
Trager also lists some other Google interviewees that failed to make the Google grade, but gifted us with some insight on the process of trying to get a job with what many would suggest is clearly the world's most prestigious technology company:
In a move that may have a lot of significance in the online advertising industry ESPN has decided to shun lower priced and sometimes questionably relevant network advertising where the placements are created by algorithms that try to match remnant advertising space with advertisers and publishers.
ESPN appears to be reacting to concerns that running this type of ad may dilute their brand as well as support the "commoditization" of advertising, fearing that the huge pools of many advertisers getting matched with huge pools of publishers will result in much lower cost per ad for premium publishers like ESPN.
The online advertising industry that is the key driver of much of the power and change on the internet. For example about 97% of Google's total revenues are derived from online advertising with about 35-40% of that total coming from Google's revenue sharing relationships with other publishers.
ESPN is encouraging other premium publishers to join them in what amounts to an advertising power play where premium publishers may come to demand higher rates for advertising. Although this play may succeed temporarily in driving up ad rates for some sites, the success of Google's mathematically derived ad distribution network both for publishers and for advertisers is an indication of how computers may match up advertising better than humans.
LinkedIn, the social network mostly inhabited by technology professionals, now offers a great feature that allows you to explore various features of the linked in crowd such as company affiliations, age, and years at a company.
Most interesting to me was the very low tenure time at Google, though this may reflect a large number of new hires rather than people leaving the company. However even established titans like Microsoft and Apple appear to have something of a revolving door where people are jumping and climbing aboard other big ships at a surprising pace.
Infoworld reports that HTC is developing their Android based phone. Initial reports make the Dream look like a very solid competitor to the Apple iPhone. The dream will have both a full touchscreen and a qwerty keyboard. Apple iPhone critics often complain about the lack of a real keyboard, so this may be a key Dream advantage.
Infoworld also reports that Samsung is probably developing a similar phone based on the Android platform.
In February, Google Sites extended its share of core searches to 59.2 percent, up from 58.5 percent the previous month. Yahoo! Sites ranked second with 21.6 percent, followed by Microsoft Sites (9.6 percent), AOL LLC (4.9 percent), and Ask Network (4.6 percent).
comScore qSearch 2.0 Report - Total U.S. Home/Work/University Location
Share of Searches (%)
Search Entity Jan-08 Feb-08 Jan vs. Feb Total Core Search 100.0% 100.0% 0.0 Google Sites 58.5% 59.2% 0.7 Yahoo! Sites 22.2% 21.6% -0.6 Microsoft Sites 9.8% 9.6% -0.2 AOL Network 4.9% 4.9% 0.0 Ask Network 4.6% 4.5% 0.1
* Based on the five major search engines including partner searches and cross-channel searches. Searches for mapping, local directory, and user-generated video sites that are not on the core domain of the five search engines are not included in the core search numbers.
Americans conducted 9.9 billion searches at the core search engines, representing a 6-percent decline versus January. Each of the five core search engines experienced search query declines as a result of February being a seasonally soft month for overall search activity. Google Sites saw more than 5.8 billion core searches, followed by Yahoo! Sites with 2.1 billion, and Microsoft Sites with 953 million.
comScore qSearch 2.0 Report - Total U.S. Home/Work/University Location
Searches Query Volume by Site
Search Entity Jan-08 Feb-08 Jan vs. Feb Total Core Search 10,492 9,882 -6.0% Google Sites 6,139 5,855 -5.0% Yahoo! Sites 2,332 2,136 -8.0% Microsoft Sites 1,030 953 -7.0% AOL Network 514 488 -5.0% Ask Network 475 450 -5.0%
* Based on the five major search engines including partner searches and cross-channel searches. Searches for mapping, local directory, and user-generated video sites that are not on the core domain of the five search engines are not included in the core search numbers.
Google is cooking up more gadgety goodness with todayś release of the Google Spreadsheet gadget maker, which allows for very simple integration of a dynamic spreadsheets in websites. I undertand the application will also work with other Google docs, but probably spreadsheets will be the most useful and used implementation of this type of Google gadget.
Today I spoke with Googleś Adam Sah who was a key pioneer of the gadget/widget concept as it took shape a few years ago. The gadget programming structure is now becoming a key part of the Open Social efforts at Google. Adam was particularly excited about how gadgets are now being integrated into the Adsense platform, providing a new and high level of functionality for advertising, which can now be called up into the Adsense blocks as a miniature application. This is not available yet to all adsense publishers but Adam made it clear that things are moving in that direction.
Dow Jones VentureSource released a report on venture capital investment in Web 2.0 companies Tuesday saying that "investment boom may be peaking."
A total of 178 deals received $1.34 billion in 2007, an 88% increase over 2006. Of that Facebook received $300 and Ning.com received $44 million. The rest of the distribution does not look too good from there. Venture capital investment has been sustaining many Web 2.0 startups, which are often chasing the same users. When the money dries up so will most Web 2.0 companies unless they find a new source of revenue.
Bay Area 74 $431 72* $721* New England 15 $79 20 $158 Southern California 10 $41 14 $115 New York Metro 9 $18 25 $58 Pacific Northwest 6 $35 13 $140 Southeast 6 $24 7 $47 Mountain (CO, AZ, UT) 4 $7 7 $31 Texas 3 $10 2 $4 North Carolina 2 $3 2 $10
*Includes Facebook
"The beauty of Web 2.0 companies is that they can do so much with so little. A few million dollars and they're not only up and running but attracting eyeballs and advertisers. 2008 may be a make-or-break year for many Internet companies with business models relying on advertising. The slumping economy, coupled with a slowdown in click-through rates for online advertising, is going to pose a real challenge to their ability to generate revenues and position themselves for an exit," said Jessica Canning, director of global research at Dow Jones VentureSource.
Is Google evolving into a portal? That was the debate at SES New York. Of the 1.2 billion or so search queries on Google during a one-week period in January 2008, 17% of the queries were sent to Google destinations reports James Lamberti, SVP, Search and Media, comScore.
"The search result page is beginning to operate as a destination. The consumers are a priority. Not the marketers," said Lamberti. Google sent nearly 400 million search referrals to their own multi-media properties, such as YouTube, over six months. That includes 148 million referrals to YouTube and 173 million to Google Images, the comScore data show.
John Battelle, CEO, Federated Media, said "Google's moves, including its purchase of YouTube and use of video overlay ads on that property, suggest the company is rethinking its business model."
Battelle also wondered out loud whether Google gives preferential treatment to its own content, such as Google Finance over Yahoo Finance? "It's interesting, if you put in 'stocks,' Google Finance comes up first... It used to be that Yahoo was first," he said.
Jack Menzel, project manager for Google's Universal Search, said the aim is to provide relevance. "We try not to promote ourselves any more than we believe is fair," he countered. "We try to be relevant as possible and not biased toward ourselves."
Battelle went on to say exact what most are thinking these day. He said, "You guys are becoming a media company and let's call it that." He went on to say that he had met with comedian Damon Wayans previously and Wayans told him that he's a YouTube partner, has a revenue sharing arrangement, and indicated that YouTube guarantees his channel 60 million impressions.
Here at Mashup Camp Chris Schalk from Google just wrapped up an excellent presentation about Open Social - the open source social networking environment spearheaded by Google along with partners like Myspace, Ning, Plaxo, and hundreds more.
Shindig, the ¨container" for social applications, appears to be ready for outtside development now. The lack of a container was a concern at the initial launch of Open Social.
One can make a strong case that Open Social and the Open Handset Alliance are the most significant open source projects now under broad deployment, both because they are backed by Google dollars and ingenuity as well as a legion of potential partnerships, and because they are helping with the mass migration of data, services, and people to open architectures where users are the key players in the online equation rather than the website creators or service providers.
Facebook does not currently support Open Social and remains something of a wildcard because Facebook is often a key component of good social media strategy. However developers can easily deploy both for Open Social and for Facebook and thus cover most of the bases.
Yell has started to play against Google at its own game. Yell is an online advertising syndication which allows florists, caterers and funeral directors that use its online listings to extend their reach to other websites.
Yell will charge the small and medium-sized businesses an annual fee for the service. Partner sites will receive a share of the revenues, calculated on a pay-per-click basis just like Google Adsense. "If you think about Google, a lot of their traffic comes from other sites," says John Condron, chief executive. "This is nothing new."
Half-a-dozen partners, including the Manchester Evening News and Multimap, have tested the system, in which relevant listings appear in a Yell-branded "capsule" on their sites. Yell will be contextually or geographically relevant to their users.
As Microsoft´s merger with Yahoo becomes increasingly likely, Google is continuing to make their concerns public. Speaking in Beijing, China, Google CEO Eric Schmidt said:
"We are concerned that there are things Microsoft could do that would be bad for the Internet,"
Schmidt did not elaborate on this concern, which has also been expressed by Google in many other venues. Clearly however Google worries that the combined Yahoo Microsoft might use Microsoftś browser and operating system dominance to route traffic to their own sites and searches and away from Google, which is still the search engine of choice for the overwhelming majority of internet users. Reuters Report
Flickr, Yahoo's popular and successful photo sharing site, will provide Video sharing by April. Dan Farber reports on his interview with Flickr Co-Founder Stewart Butterfield, who along with his wife Caterina Fake and their staff developed Flickr several years ago as a supportive service to their game development and wound up focusing exclusively on the photo sharing capabilities. Yahoo purchased Flickr from them for a reported sum of about 20 million, which by today's standards may make Flickr one of the greatest Web 2.0 undervaluations in history.
Video sharing in a socially networked environment is definitely on the radar screens of all the major players despite the fact nobody has figured out how to monetize it. YouTube remains the key player in the space, serving up 1 of every 3 online videos. However Flickr entry into this market may have an impact, as Flickr enthusiasts tend to represent many developers and early adopters in the online space. That said, Yahoo's challenges in the recent launch of Yahoo Live service may indicate they'll have trouble making a dent in YouTube's video dominance.
Google's adwords and adsense pay per click juggernauts appear to be sucking the life out of old media says stock watcher Henry Blodget, author of the Silicon Alley Insider technology stock blog.
Blodget noted that online advertising is flowing online at a "frantic" rate, and Google captured twice as much of the new revenue as its closest three competitors combined.
Where offline advertising increased by about a billion from 2006 to 2007, online ad spending increased 4 billion with Google scooping up a whopping $2.7 billion of that $4 billion increased spend. As Blodget notes about a third of Google's revenues are from its relationships with publishers who use Adsense to run Google ads on their own properties, so some of that 2.7 billion is shared with the tens of thousands of large and small publishers in Google's advertising stable.
Google's powerful dominance in the online advertising space will be enhanced with the DoubleClick acquistion, although it remains to be seen if Google can monetize display advertising as successfully as it has monetized per click advertising -in many ways revolutionizing the industry with the success of the pay per click model. Ironically Google was not the inventor of this pay per click model that is rapidly making Google the most successful technology company in history.
Most credit the invention of the pay per click ad to Bill Gross and his startup GoTo.com which was soon renamed to Overture.com in a Disney trademark dispute and then Overture was acquired by Yahoo.
Disclaimer: The opinions expressed on the WebGuild Blog including posts, comments, and external links, are those of the individual
authors and not WebGuild's.
Google has been developing a new algorithm for indexing textual content in Flash files of all kinds, from Flash menus, buttons and banners, to self-contained Flash websites. Google has improved the performance of this Flash indexing algorithm by integrating Adobe's Flash Player technology. In the past, web designers faced challenges if they chose to develop a site in Flash because the content they included was not indexable by search engines. They needed to make extra effort to ensure that their content was also presented in another way that search engines could find. More >>
Google's new CFO has already taken care of finances (for himself) even before he starts his new job on August 1. Patrick Pichette, who was previously the president of operations at Bell Canada will take over from George Reyes.
One area where Microsoft is leaving 
"HealthVault is about empowering people to take control of their personal health information, and that means making their Web experience easier while also helping them safeguard their privacy," said George Scriban, senior product manager, Microsoft Health Solutions Group. "That's why we're happy to give our users the option of using a VeriSign OpenID with a VIP credential."
Google's new 
Facebook hopes that if the businesses receiving the ad credits are impressed enough with the results they will continue marketing on the site. "That's what we certainly are hoping for," said Dan Rose, Facebook's VP of business development.
LimitNone LLC, a tiny start-up that builds a tool for migrating customers off Microsoft's Outlook email software and on to Google’s Gmail as filed a trade secrets 
When Tim Russert died on June 13, NBC held off 
In an 
The Google service that boasts that any developer working in their basement, can all of a sudden work at the scale of Google using its infrastructure with high reliability got a rude awakening today. The service crashed and remains grounded. A few weeks ago Google's Pete Koomen boasted that signups were "
I am puzzled, was Yahoo in such dire straits that they could not negotiate a better deal? Yahoo has agreed to pay Google a break up fee of 
It is being 
Facebook announced today that it will be opening up its code. Dubbed 
Starting June 17, 2008, eBay Australia plans to allow only 
Approximately 
A small town of 4,500 residents in Minnesota has told Google that its Street View feature can hit the road, reports 
In a nutshell the suit is a claim by Viacom that Google owned and controlled YouTube has remained very lax regarding the upload and distribution of copyrighted materials owned by Viacom, and that this has led to diminished revenues for Viacom, and that the appropriate legal remedy is for Google to pay Viacom
Russia's biggest internet firm Yandex plans to raise up to US$2 billion in an initial public offering that would give the company a public valuation of US$5 billion according to Reuters.
The investigation began in December 2007 when the cyber crime cell of Pune police communicated with the Google seeking details about the identity of the person who formed the forum and circulated the obscene content.
Plaxo today 
For Comcast this is an 
Billionaire takeover strategist Carl Icahn is looking at a possible play to force Yahoo back to the table with Microsoft to sell the company at a big profit. The news today sent Yahoo up about 1.30 and YHOO is still rising in after market trading.
Nokia CEO Olli-Pekka Kallasvuo 
In March of this year Nokia debuted its 
Google Picasa is an excellent photo service, though in my view and those of many others it is not as good as Yahoo's Flickr, which most would say represents the leader and key innovator in the competitive-but-not-lucrative photo sharing, storage, and photo community space.
Elliot is joining us from Google where he has been their VP Global Communications and Public Affairs since 2005. At Google, he broadened the company’s messaging from a focus on only product PR to include all aspects of corporate, financial, policy, philanthropic and internal communications. Before that, he served as a Senior Fellow at the Council on Foreign Relations, a public policy think tank, as a professor at Columbia Business School and as SVP at Gap. Early on, he began his career as a Harvard-trained lawyer. 
Google's PR Chief Elliot Schrage 
Google has filed a patent application for "Targeted Video Advertising" with the 
Maria Bartiromo at 
The old boy's network has
Google has been named the world's number one and most powerful brand for the second year in a row clocking in at an estimated value at $85,057 million which represents a 30% increase in its brand valuation. This, according to BrandZ's top 100 brand ranking for 2008. Other tech heavyweights in the top ten included GE, Microsoft, China Mobile, IBM, and Apple which was the biggest mover in the top 10 and a new entrant, moving up from sixteenth to seventh place with an incredible 123% increase in brand value to $55,206 million. HP was at sixteen, Cisco ranked twenty-two, and Oracle and Intel at numbers twenty-six and twenty-seven respectively.
Google has befriended Salesforce.com and 
Personalized web page startup Pageflakes is running out of cash and is desperately seeking a buyer reports 
However, Pageflakes's personalized page is their core offering and it is much harder to monetize. Further to garner premium ad dollars the site needs serious traffic, which costs money. Again the majors can acquire traffic simply by putting up a "tab" to their personalized web page offerings.
Google just 
Citigroup Global Markets analyst Mark Mahaney estimates that Yahoo could boost its cash flow more than 25% annually by outsourcing all its search advertising to Google. Some investors have called for Yahoo to abandon its own search advertising system as a quick way to boost its revenue. Analysts predict that outsourcing its search ads to Google would boost Yahoo's cash flow, since Google's system generates significantly more revenue for each search query than Yahoo does. Under such an arrangement, Yahoo would likely garner a majority of the revenue and Google keep the rest as a commission. 
Google gave the cloud computing initiative a major boost 
The service is similar to 
A European Commission advisory body on data protection has said that search engines should delete data held about their users within six months reports the 
YouTube has come out with a tool to help you answer the question of who's watching you. YouTube Insight is a free video analytics tool that allows users who upload videos to YouTube to track the viewership on their videos including the geographic breakdown by region, as well as the popularity relative to all videos in that market over a given period of time. Uploaders can also delve deeper into the lifecycle of their videos to find out how long it takes for a video to become popular, and what happens to video views as popularity peaks. Another key feature expected shortly is a breakdown of how viewers discovered your video. Using these metrics, you can increase your videos' view counts and improve your popularity on the site. To view your video analytics, click "About this Video" button under "My Account > Videos, Favorites, Playlists > Manage my Videos."
I have been hearing this all day that but I was thought that it was an April fools joke. Google CIO Douglas Merrill is leaving to becomes the president of EMI. 
Google has finally figured out a way to pay for the YouTube acquisition. Video ads, have started appearing on Google's search results page according to a report from 
Dow Jones VentureSource released a 
Yell has started to play against Google at its own game. Yell is an online advertising syndication which allows florists, caterers and funeral directors that use its online listings to extend their reach to other websites.
Yell will charge the small and medium-sized businesses an annual fee for the service. Partner sites will receive a share of the revenues, calculated on a pay-per-click basis just like Google Adsense. "If you think about Google, a lot of their traffic comes from other sites," says John Condron, chief executive. "This is nothing new."
