Raja Jasti’s Blog - Renaissance Thinking

August 22, 2009

Should Twitter share its tweet stream with Google?

Filed under: Internet — Tags: , — Raja @ 10:18 pm

It appears that twitter is seriously thinking about opening us its tweet stream (internally called firehose) to others including google. Why would they do that? They plan to charge money for that access of course. Should twitter do that?

Edo Segal wrote a guest post on techcrunch calling such move a suicide.

In a way we are all virtual stock holders in Twitter. We all have a vested interest in its success. Facebook is soon to monopolize the social stream to the same extent that Google has done with search. That is not good for anyone, including Facebook. I have had many discussions with people in recent weeks about the face-off between twitter and Facebook and also about the high probability of Twitter cutting a deal with Google. When I was asked by Erick Schonfeld at the Real Tiime Stream Crunchup (Video) event about my opinion on Twitter giving Google their firehose feed, I responded that they could do that if they don’t plan to sell their company in the future. In other words, it is my humble opinion that if Twitter was a publicly traded stock its value would drop by 75% the second that deal was announced and for good reason.

It is a long article but has some good insights. I also agrree with him that it would be a strategic mistake for twitter should to share its tweet stream with google or anyone else for that matter. Tweet stream is twitter’s crown jewels that they should leverage for building up their value. Would google license their relevance algorithms to other companies? See what I mean? Google’s competitive advanatage stems from the fact that they have the most data on seaches which they leverage in their relevance algorithms. That is why they own search. Imagine what would have happened if they licensed it to Yahoo when google was figuring out how to make money. Google would be just another technolgy supplier as Yahoo saw them those days. If twitter licenses their firehose to others it would marginilalize their value to the internet.

Why would twitter think of doing it? It would be easy way to make money. Twitter probably thinks google can make their streams more valuable (which probably is true) thereby increasing twitter’s value. There may be one more reason. Twitter thinks it may make them more attractive target for Google to pay big bucks and buy them.

I think in the end it all boils down to how confident twitter is aout their own potential and their self worth. If they are truly confident they wouldn’t provide access to their crown jewels to others. They shouldn’t do that now. Not yet anyways.

August 21, 2009

Is Bing a worthy rival to Google?

Filed under: Internet — Tags: , , — Raja @ 2:33 pm

Farhad Manjoo of Time.com says google may have finally found a worthy rvial in microsoft’s bing.

bing-Google illo

Every year, the market-research firm Millward Brown conducts a survey to determine the economic worth of the world’s brands — in other words, to put a dollar value on the many corporate logos that dominate our lives. Lately the firm’s results have been stuck on repeat: Google has claimed the top spot for the past three years. The most recent report values Google’s brand — those six happy letters that herald so many of our jaunts down the Web’s rabbit hole — at more than $100 billion.

What’s astonishing about this stat is how effortlessly Google seems to have earned the public’s affection. Other companies — Microsoft, Coke, IBM, McDonald’s — spend enormous sums to stay in the consciousness. Google, which makes most of its money from ads, rarely advertises itself. Telling the world how well it does what it does just isn’t Google’s way.

But Google’s humility is being tested as never before. The firm’s headquarters in Mountain View, Calif., seem besieged by competitors gaining new momentum. Even nominal allies are questioning the company’s motives and long-term plans. In July, Google’s largest competitors, Microsoft and Yahoo!, agreed to work together in an attempt to dethrone it as the world’s dominant search engine. The deal, which awaits government approval, would create a first: a tenacious, well-financed search rival.

Conflicts are beginning to take place in other areas where Google has ventured. That includes e-mail and office programs (Gmail, Google Docs), a cell-phone operating system (Android) and a Web browser (Chrome). Google scans and sells books, runs a phone system and is even working on a desktop operating system to rival Windows. CEO Eric Schmidt recently stepped down from Apple’s board of directors because the two companies now compete in so many areas. The U.S. Justice Department is investigating a legal settlement between Google and the publishing industry over the company’s book-scanning service, and Christine Varney, Justice’s antitrust chief, said she sees Google as a “problem.”

At the moment, Google’s most pressing problem is Microsoft. The software giant is spending $100 million to market its new search engine, Bing — and in the process, to get us all bummed about Google. Bing’s slick ads are unavoidable and blistering. They suggest that Google is broken, that it rarely leads us to what we’re looking for and turns us all into blathering zombies who spew out search keywords in casual conversation.

August 7, 2009

Google looks to mobile for growth

Filed under: Business, Internet, Mobile — Tags: — Raja @ 9:35 pm

Business Week has Maria Bartiromo’s interview with Google CEO Eric Schmidt. Mobile advertising features in Google’s future plans.

http://images.businessweek.com/mz/09/33/600/0933_11face.jpg

Illustration by Daniel Adel

The news on Aug. 3 that Google (GOOG) CEO Eric Schmidt was resigning from the board of Apple (AAPL) took many by surprise. For others in Silicon Valley and on Wall Street, the question wasn’t why—but why it took so long. The Federal Trade Commission has been casting a quizzical eye on Schmidt’s role as an Apple director, and the two companies seem to be on a competitive collision course. Schmidt was unavailable to talk about his decision, but extensive and previously unpublished discussions we had last month illuminate where Google is going and why it is headed in some of the same directions as Apple.

MARIA BARTIROMO

Where is the growth coming from in the next 5 or 10 years for Google? Is it more search opportunities? Is it mobility?

ERIC E. SCHMIDT

Probably a combination. It’s obvious that the highest growth is in our core business as we get better and better at targeted ads, and those ads become more valuable. Our whole theory about advertising is that an advertisement that’s not targeted—just a random ad that you just walk by—is a waste of somebody’s money because you’re not going to buy. It wasn’t relevant to you.

Aren’t there three times as many phones out there as there are PCs now?
More than that. The rough number of PCs is around 800 million; the rough number of mobile phones is on the order of 3 billion. Even more important, the growth rate of mobile phones is quite a bit higher than that of personal computers. There’s an estimate of about 600 million mobile phones that are data- and Internet-capable. And that is the group that we really care about because those are the ones that are able to run powerful browsers. This was all kicked off by the iPhone. The iPhone sort of showed what you can do with a very powerful browser. Now there are many new kinds of devices with powerful browsers where you can have very high-quality ads, new applications, and, of course, the phone.

So how do you get to the next step in the mobile business? Do you need to partner with other companies to make sure that the speed is there, that the connectivity is there?
We’re doing that with our telecommunications partners. We actually share in the revenue for the ads that show up on the phones. So the advertiser pays us, and then we share it, literally, with the handset and mobile operator. And often we divide between both. And that seems to be the only way to really get money into that system. It’s very, very important that the telecom operators have enough capital to continue the build-outs of the so-called 3G and 4G networks.

What are the biggest challenges the mobile Web presents?
Let’s start with the fact that the phones are not fast, the networks are not as capable, the ad formats are not standardized. But on the other hand it’s very, very important to solve those problems because a phone is very personal. And so if we know a fair amount about a person, with their permission we can target a useful ad—you know, “It’s Eric. You had a hamburger yesterday, do you want pizza today? There’s a pizza store on the right.” That kind of ad is likely worth a lot of money to an advertiser because it will generate a sale.

In other words, you send a message to the person’s cell phone, saying: “Look, we know you had a burger yesterday. If you want pizza today, just go around the block”?
Right. It may sound creepy, but it might also be quite valuable. People could use advice as to what to eat and where the food is—and of course you can turn it off. So the important thing here is advertising that has value to the person is advertising that is a valuable business. That’s the business we’re in.

 

April 18, 2009

Is Google the new Pirate Bay?

Filed under: Entertainment, Internet, Media — Tags: , — Raja @ 8:43 am

Pirate Bay was found guilty of copyright infringement. All the site does is index filesharing links for music and video. Now that pirate bay may be history, there is another souce that users can go to: Google. Is google the new pirate bay?

But even if the Pirate Bay sinks, putting an end to file-sharing isn’t so simple. Waiting in the wings to absorb the site’s audience are dozens of second-string bittorrent tracker sites that have avoided the Pirate Bay’s level of notoriety, including Mininova, isoHunt and Demonoid. And according to Ben Edelman, a professor at Harvard’s Business School focused on Internet regulation, that longer-tail assortment of piracy outlets means the starting point for finding pirated content has shifted to an even more resilient source: Google.

“Google now can and does do what the Pirate Bay has always done,” Edelman says. “And if they’re prosecuted, they would have much more interesting arguments in their defense.”

By searching for pirated music or video, Google users can easily scan a range of lesser-known pirate sites to dig up illicit content. Those looking for the upcoming film X-Men Origins: Wolverine, for instance, can search for “wolverine torrent.” The first result is a link to file-sharing site isoHunt, with a torrent tracker file that allows the user to download the full film. In fact, searches for “wolverine torrent” on Google have more than quadrupled since the movie file was first leaked to peer-to-peer networks on April 5, according to Google Trends.

Googling more obscure films works just as well. For example, search for “the maltese falcon torrent,” and the first result links to Torrentz.com, which in turn links to other sites hosting torrent trackers for the Bogart classic, including Mininova, BTjunkie, Torrenthound and Seedpeer.

Will the labels and studios go after google?  Will the courts find google guilty? There in lies the problem with the current laws.

April 17, 2009

Google sees twitter synergies

Filed under: Internet — Tags: , — Raja @ 10:44 am

From SEI:

During yesterday’s earnings call, Google (GOOG) CEO Eric Schmidt talked up the benefits of a search deal with Twitter:

“Without commenting specifically about Twitter … you could imagine that … it could be a channel for product information, marketing information, real-time information for which you can hang advertising products, whether it’s a text ad or a video ad or so forth off of it … It strikes me that’s a logical strategy for them to pursue and something that we would be very happy to pursue with them and all other players in that space.”

These are interesting comments as just recently Eric Shmidt made some comments trivializing twitter. I suspect there may be some posturing involved in those comments. I certainly think there are tremendous synergies between google and twitter and a partnership would be mutually beneficial. However I do not want google to buy twitter at this juncture. I would like to see twitter evolve and innovate as an independent company.

April 16, 2009

Google’s new sales boss: Nikesh Arora

Filed under: Business — Tags: — Raja @ 6:08 pm

From PaidContent:

nikeshFollowing the layoffs of many of its sales and marketing execs, and the departure of US ad sales chief Tim Armstrong, Google (NSDQ: GOOG) is looking to rebuild that area. On Thursday, the company announced that Nikesh Arora is moving from his post as president of international operations to become president of global sales operations and business development. He replaces Omid Kordestani, who moves into an advisory position. Arora will manage all of Google’s revenue and customer operations, as well as its marketing and partnerships. He has been focused on building the European business over the past four-and-a-half-years.

The changes come during Google’s first truly challenging period since establishing its online ad dominance. Last month, the company said it would impose a third round of cuts in the sales and marketing unit, laying off an additional 200. Still, Google being Google means that times are not quite as tough as they are for everyone else: the company just beat analysts’ estimates and posted 10 percent revenue gains. The move also follows the replacement of Armstrong as VP-Americas Operations by European Google exec Dennis Woodside.

This is an end of an important era at google. Omid is generally credited with google’s keyword auction business model for search advertising which is a variation of the model originally invented by overture (now part of yahoo). So he made a real difference at google.

Google reports first ever down quarter

Filed under: Business, Internet — Tags: — Raja @ 5:41 pm

Google announced 3% dip in qualrterly revenues for Q1 2009.

Google has just announced its Q1 2009 results, and for the first time ever, there has been a dip. Revenue fell 3% for the quarter versus the fourth quarter of 2008. But, for the year, revenues were still up.

And it’s actually not as bad as analysts had been expecting. JP Morgan, for example, had been expecting a 4% decline quarter to quarter. And, perhaps most importantly for Google, its paid click numbers were actually up. Aggregate paid clicks were up 3% quarter to quarter, and 17% year over year.

Google saw $1.4 billion in net income for the quarter, which was up 9%. Revenue was at $5.5 billion. Google now has $17.8 billion in cash and marketable securities on its balance sheet.

April 4, 2009

Google big on voice search

Filed under: Internet, Mobile, Technology, Trends — Tags: , , — Raja @ 3:40 pm

Google sees voice search as a core part of their business.

Google has said it sees voice search as a major opportunity for the company in building a presence on the mobile web.

The company’s vice president of engineering made the comments during a wide-ranging discussion at the Web 2.0 Expo in San Francisco.

“We believe voice search is a new form of search and that it is core to our business,” said Vic Gundotra.

SearchEngineLand editor Greg Sterling agreed: “If done right, it could be a valuable strategic feature for Google.”

Murdoch wants a google rebellion

Filed under: Internet, Media — Tags: , — Raja @ 11:45 am

Rupert Murdoch, chief of News corp, wants the media industry to rally against google’s increasing power.

Rupert Murdoch threw down the gauntlet to Google Thursday, accusing the search giant of poaching content it doesn’t own and urging media outlets to fight back. “Should we be allowing Google to steal all our copyrights?” asked the News Corp. chief at a cable industry confab in Washington, D.C., Thursday. The answer, said Murdoch, should be, ” ‘Thanks, but no thanks.’ “

Google ( GOOG - news - people ) sees it differently. They send more than 300 million clicks a month to newspaper Web sites, says a Google spokesperson. The search giant is in “full compliance” with copyright laws. “We show just enough information to make the user want to read a full story–the headlines, a line or two of text and links to the story’s Web site. That’s it.” For most links, if a reader wants to peruse an entire article, they have to click through to the newspaper’s Web site.

Maybe so. But Murdoch’s anger is understandable. Like the music industry, newspapers have watched new distribution channels change the economics of their business. Sites like Google, which don’t produce any journalism of their own, have made themselves into destinations for readers by successfully organizing the work of others and selling advertising against it. Meanwhile, the authors whither. In a recent interview with Charlie Rose, Wall Street Journal Managing Editor Robert Thomson drew a bead on Murdoch’s beef: “Google devalues everything it touches,” he said. “It divides content quantitatively rather than qualitatively.”

Yet the relationship is more complex than that. Sites like WSJ.com rely on Google to send them readers, working hard to game how they appear on Google through the dark arts of search engine optimization. Newspapers use Google in other ways too. Users streaming to The Los Angeles Times Web site last year followed the path of Southern California wildfires using Google maps at the site. The maps were displayed alongside links to updated stories about fires.

I think it is silly to blame the problems of the old media on google. Google is just the biggest beneficiary of the internet tidal wave’s disruption of media. Murdoch knows this very well. He correctly identifies the threat posed by google’s increasing power and the need to neutralize it. He is just trying to rally his industry brethern against this threat. The best way to do it is not by fighting google in courts and strong arming it in deal negotiations. They need to embrace innovative startups and make it easy for them to compete against companies like google and disrupt them. They need to create an innovation ecosystem around media that encourages startups to flourish and help the old media companies transition into the new digital, web and mobile world. This innovation can not come from inside of the old media companies because they are too worried about protecting their current revenue streams. Rupert Murdoch was one of the first media chiefs to realize this. A good example is his acquistion of myspace. Another one is the creation of hulu in partnership with NBS univrsal. That is the best way to neutralize google.

April 3, 2009

Search advertising slowing?

Filed under: Internet — Tags: , , — Raja @ 8:17 am

Search advertising, google’s cash cow and the most effective form of online advdertising, may be slowing down says BW.

Search advertising is finally feeling the full impact of the weak economy, according to a new report out this morning from online marketing analytics firm Covario. In fact, search spending fell from quarter to quarter for probably the first time ever, by 1.4% in the first quarter.

The report isn’t comprehensive—it’s based on Covario’s largely tech and consumer electronics customers—so it may not be typical of overall spending on search ads. But with those clients spending $250 million a year on search ads, it’s also worth mentioning.

Although search ads seemed to hold up decently in the fourth quarter thanks to holiday budgets getting set before all hell broke loose last September, there was no such luck in the first quarter. Virtually all the decline came in Europe and Middle Eastern and African countries, which were down 16% from the fourth quarter. U.S. spending was actually up a little under 1% and Asia-Pacific rose 7%.

What’s more, search ad prices—known as cost per click—continued to fall, to their lowest level in two years—a result of falling demand as marketers cut back on all ad spending. “The pullback is starting to happen,” says Craig Macdonald, Covario’s chief marketing officer. “We expect this erosion in spending to continue the rest of the year.”

Google, which had reported surprisingly good fourth-quarter results, came in for the worst of it—oddly enough, mostly because of its dominant position. For one, it commands around 95% of search spending overseas, so all of that decline landed on Google.

Also, marketers simply saturated their spending on Google, as they started to see lower returns on their search spend: Click-through rates, or the rate at which people clicked on search ads, fell to 0.7% in the first quarter, way down from 1.8% in the fourth quarter. That trend sent them to Yahoo and Microsoft to find more clicks. Yahoo’s click-through rate rose to 1.7% from a little under 1%, and Microsoft’s rose a bit, to 2.3%.

Older Posts »

Powered by WordPress