OMG – It is Socialism on the Internet!

There does not seem to be enough reporting or buzz about about Google and Facebook’s social networking widget strategy..

The Industry Standard notes the growing Facebook v Googe battle for “internet mindshare”.

I’d argue this is the single most important aspect of the current internet landscape, where users will eventually insist that their their single identity flows around the internet as seamlessly and simply as possible,in what I like to think will be an analogy to a global gathering / party / conference / lounge environment.

Soon we will surf on in to a website and decide what information we’ll share with that site and with others who arepresent there at the time.

MyBlogLog, now owned by Yahoo, is for me the closest thing to that ideal environment because it allows you to see others who are at the site and then click off to more information about them.

Yahoo Buyout Rumor – this one is real

The faulty Times of London rumor over the weekend about a pending major Yahoo search deal with Microsoft was likely spawned in part by what appear to be correct reports that Jonathan Miller, former CEO of AOL, has been working to pull together at deal that would value Yahoo in the $20-$22 per share range and lead to a takeover of the company, presumably the deal would put Miller in a key role.

Jessica V at Wall Street Journal Reports

Miller’s interesting history as an AOL innovator and corporate rescue man who was fired after what many think were successful actions suggests to me that he’s eyeing Yahoo as a way to get back in the internet saddle in a major way.    Yahoo’s internet footprint remains *larger than Google’s*, yet Yahoo’s legendarily inept monetization of this online traffic has let Google leave them in the revenue dust.    As a company Yahoo is a lean shadow of its former self, but as an internet empire they are still doing just fine.   One caveat is that Yahoo continues to lag Google big time in the most lucrative online activity of search.   However, as one of a handful of global website empires that can shape user behavior simply by adjusting their offerings, advertising, and navigation elements Yahoo optimists like me continue to think that Yahoo’s problems can be fixed, leaving them in a position to double revenues in short order.    They do not have to match Google’s revenues or monetization to be wildly successful – they just need to *do somewhat better than they do now*.   I’m betting they can.

Disclosure: Long on Yahoo (in fact I just bought more today)

Microsoft to Aquire Yahoo Search for 20 Billion… or not?

While the Times of London is reporting that Microsoft is close to announcing a Yahoo search aquisition at 20 billion with a slew of details suggesting they have a lot of inside information, Venture Beat is suggesting this might be a bogus report as they’ve been told by a key player in the deal, Ross Levinsohn, that he knows nothing of this.   Although it’s possible Levinsohn is … covering for the deal it seems odd he’d issue a flat denial if there was something to the rumors.

My wild guess is that the Times had a hot tip about one of the dozens of potential deals that are surely percolating around Yahoo as the stock (and thus buyout value) dips to very low levels, and that they ran with it rather than spend much time researching.   This has become a major pitfall of “real time” media, where there is increasing pressure to shoot first and hope your story is correct later.   Another possibility is that this is a carefully contrived rumor to pump and dump the stock on Monday – without more denials this is likely to spike Yahoo a few bucks or even more Monday morning.

Disclosure:  Long on Yahoo

AOL and Yahoo star in “Spawn of the Ugly Ducklings”

After Yahoo turned down Microsoft’s offer of over $31 per share there has not been much good news for a troubled Yahoo, with a price now right about *half* what Microsoft offered.   However it does appear that Yahoo will merge with another struggling internet empire:  AOL.    Time Warner’s merger with AOL years ago will probably go down as one of the most misguided corporate marriages in history leading as it did to nothing but heartaches and lowered TW values, but the Yahoo deal actually seems to make a lot of sense to me if Yahoo can get it’s management act in gear.   With AOL Yahoo will control even more valuable internet items such as about half of all the email accounts in the world.     Some reports suggest that Microsoft may have even more interest in a combined Yahoo AOL. In today’s challenged fiscal environment it seems unlikely Yahoo could refuse another MS takeover even at a reduced cost per share.

TechCrunch Reports

Disclosure:  Long on YHOO

Check out some Boss Mashups

Yahoo BOSS is a promising development tool that allows you to access some very powerful features from the Yahoo toolbox.   TechCrunch features some of the best BOSS mashups to date today and also notes that the BOSS “Yuil” application that was quickly pulled together after the notoriously challenged Cuil search launch had to be taken down when Cuil’s legal team jumped on the mashup for copyright infringement.

Yahoo Shareholder non-meeting

Today Yahoo Shareholders are meeting in San Jose.   Or maybe we should say non-meeting since there are apparentely mostly empty chairs and uneaten pastry in a venue that was to hold 1000.

With shares now trading about $19 you’d think shareholders would be out in force with torches and pitchforks, but Yahoo management – at enormous cost to shareholders and the company – has kept the corporate raiders and Microsoft at bay partly by granting a newly sheepish Carl Icahn a seat on the board and two more seats.     Icahn noted last week that enough large shareholders were sticking with the current board, making it impossible for him to take over the company.     His plan was fairly simple – buy a lot of Yahoo and then sell the company to Microsoft at a huge profit.    As a shareholder I remain  *totally* confused as to why large shareholders were unwilling to support this move – the obvious choice in terms of maximizing shareholder value with minimum risk.

However with challenges come opportunities.  Yahoo at $19 is looking pretty ripe right now given that Microsoft offered $31 just months ago when Yahoo’s prospects were not significantly different than they are right now.    Either MS is horribly miscalculating Yahoo’s value, or the Market is underestimating that value.     Clearly the current board is convinced there is a lot more value, and in this at least I would agree with them.

It’ll be interesting to see how the rank and file Yahoo folks are feeling at SES San Jose in a few weeks.   SES is the biggest search conference of the year in the heart of Silicon Valley, and hundreds of Yahoo folks will be there.  It will be interesting to get a feel for the current morale challenges at the company.

Disclosure:   Long on YHOO.  Considering buying more. is up! Everybody Yawns. Tagging is so … 2007!

OK, even though I really love the power of tagging things and think *auto tagging* will quickly becoming a cornerstone of how the world will effectively managing the maelstrom of web content effectively, I’m not really feeling the new launch  of Delicious – the site and application that in an important way is the grandfather –  which in web years that means you have at least passed out of drooling infancy – of content tagging.

What?   I have not even reviewed the new site or APIs?   Yes,  I’m blogging before enough thinking again  (sorry, Sarah Lacy!)

Delicious’ basic tagging idea is very good – users tag stuff and share tags with people and the main site then has a body of information that can be used to determine the sites most appropriate for various tags.     The challenge of course is that noboby much wants to spend that extra 10 seconds or so tagging stuff, unless of course you are a search engine optimizing person in which case you are going to be *far too willing* to tag stuff.   This disparity in tagging enthusiasm can easily distort the results, especially for popular commercial terms.   This is why I would argue that the best tagging is automatic or based on simple behavior observations rather than direct user feedback.    Google, MSN, Yahoo alll have this type of massive behavioral data stream and I want to see them process it to improve the search experience.   For example if, after millions of searches,  4 out of five people who do a lot of dental searches click to the site  “” and stay there for several minutes after a query for “dental information”, you can be fairly confident that the site is a good one for that query.    This is a simple equation but data can be processed in far more complex fashion to reveal a lot more about how others are searching and finding things.   Generally this will give us a lot of insights.

So, I’m hoping a lot of folks use Delicious and tag like crazy, but I’m not holding my breath…

Cuil Search “Ah Ha! NOW I GET IT!”

OK, I have a mild conspiracy hypothesis about Cuil that helps explain what I see as the glaring problems with this new entrant into the search landscape.   I should say that I don’t know any of the founders so it’s presumptuous to suggest their motivations are not purely to create a great search engine.   All I can assert reasonably is that even if great search is their prime goal, they have a wonderful fallback in terms of getting bought out by Google to protect their secrets or another big player who wants to get at Google secrets indirectly.

Here is the evidence for the buyout hypothesis:

1)  Cuil results are formatted in a crappy way.    It’s hard to scan and review results.  Dramatically inferior to other search engines in my view.

2) Results are not very relevant.    Searching for “computers” yields….nothing.    Cuil cannot even find  “Cuil Search Engine”.   Sure, building a huge search index is very difficult, but Cuil had time, expertise, and resources.  So why such a lackluster relevance debut?

3) No revenue model except the ubiquitous and vague suggestion of monetizing through “advertising”.  Given 1 and 2 it’s going to be hard for Cuil to turn a buck in current form, especially because after all the initial buzz dies they’ll be left with …. very little traffic.

Given this and Glenn’s earlier comment about great new technology at Cuil suddenly it hit me.   BAM! Cuil probably has little or no intention of existing in current form for more than a year or so.    Like Powerset, Cuil secretly planned and plotted in stealth mode, suggesting to insiders they were the next big thing.  Then, when  they had something that basically worked (or in the case of Powerset worked on a limited basis), they launched to great fanfare.    They have improvements on Google’s dated hardware framework and probably have included many of the same features in the Cuil algorithm, coded differently enough to elude legal entanglements.

Now it’s time to shop yourself out to the highest bidder, and in this respect  Cuil is looking at some very, very high bids even though they don’t seem to be a very good search engine. Why the big bids?    Cuil’s team was from Google and no doubt has a lot of specialized, inside information about how Google works.    Due to disclosure and other legal issues I’d guess the Cuil team has been very careful to create something that is new and unique yet includes enough Googley technology to be of concern to Google and of great interest to Microsoft or Yahoo or AOL or Fox or …. ?

The stakes in search are extremely high, and these Google insiders saw a super opportunity to do one of two things:   Improve on Google and be the richest people in history OR   build a modest quality search engine with some Google technology, hype it, and become super rich.     Based on early tests and reviews the first option is out, but the second one is looming large for the lucky Cuil winners.     Powerset sold for $100,000,000 and only managed to index Wikipedia (and not very well at that).    With Cuil I’m guessing the bidding’s going to start quite a bit above that.    Hmmmm – let’s see what Cuil turns up on a search for …

$$$ Cha Ching $$$

Extremism in the defense of the algorithm is no vice?

WordPress surfing led me to another interesting sob story from a penalized webmaster and my reply got so long it deserved to become a post:

Marshall Sponder wrote:

Take Know More Media’s case – you have 100+ blogs and 2+ years of content – that’s easy, 30,000 to 50,000 blog posts and Google, with just one or two paid links that pass PageRank, is going to throw the entire blog network out of it’s index over that?

Yep, it appears that’s it – that’s the reason.  But is it fair?  No.
Strictly from a users point of view I think it is very hard to justify technical penalties on good content.    Few users know or care what “hidden text” is, so if a mom and pop webmaster uses this tactic and Google deletes the otherwise informative, relevant website it is hard to argue that users are served well.    Even if a black hat SEO created a site filled with illegal tricks but also full of highly relevant quality content I think Google’s case against including that site is weak.  As a user I want  *quality content* and I don’t care about the site’s technical construction.    Where Google is simply banning sites for using spammy tactics I’d agree with Marshall that to be faithful to user centricism they really have to take it a step further and look at the content they are excluding.   Even if the content contains paid linking and other violations if it unique, quality content Google cannot exclude it without violating their stated “prime directive” of providing the best for the users.

However, Google has to manage about one trillion URLs, so obviously they need shortcuts in ranking and one of them is a page from AZ Senator Barry Goldwater’s playbook when – many years ago – he tried to justify an escalation of the Vietnam war, perhaps to nuclear level.   Google’s coin of the famous Goldwater phrase would be: “Extremism in the defense of the algorithm is no vice”.

I don’t think penalties are generally *fair* or *user friendly*, but I’m willing to concede they may be necessary for Google to function as profitably as they do since it would take a lot of human intervention to help every mom and pop determine what’s wrong with their sites.

However, I feel Google continues to fail in their obligation to communicate more effectively with penalized sites although I think they are s-l-o-w-l-y  catching on to the fact that most webmasters of penalized sites remain unclear as to why the site has been penalized or downranked.    Removal offers you a shot at “reinclusion” and (very rarely) possible webmaster tools staff feedback.   Downranking is algorithmic and Google will not generally offer any advice to help downranked sites.     In this case you generally want to re-read the webmaster guidelines and experiment with different approaches in an effort to boost rankings.

My view is that as many thin content database sites have flowed online Google is holding online material to a higher standard of quality, especially if it’s at a new website.    This helps explain why you can find well ranked pages that are inferior to pages at a new website.

There is a solution to all of this in my opinion, which is for Google to include a lot more community input and feedback into the process than they currently appear to do.    I’d guess the recent discussions to aquire DIGG may have been in part to gain more community feedback tools and data.     Historically Google has been brilliant at using algorithms to determine ranking and advertising, but has fallen short of brilliance in their ruthlessness in dealing with website practices they don’t like, leaving a lot of collateral damage – especially related to sites involved in “paid linking” and variations on that complex theme.

At SES San Jose 2009 I’ll hope to get to ask Matt Cutts more about this in person.   Matt is Google’s top spam cop and always very open to conversations about ranking and search.    In fact the best event of the conference is the Google Party where engineers are on hand to discuss search related issues – including complex ranking technicalities that are sometimes brought to Google’s attention as part of the search conference circuit.

Ballmer: Yahoo a tactic, not a strategy

Microsoft Chief Steve Ballmer spoke to the Microsofties today about the companies plans.   For Yahoo merger followers there was nothign much new as he simply reiterated this point:

Related to Google and our search strategy are the discussions we had with Yahoo. I want to emphasize the point I’ve been making all along—Yahoo was a tactic, not a strategy. We want to accelerate our share of search queries and create a bigger pool of advertisers, and Yahoo would have helped us get there faster. But we will get there with or without Yahoo. We have the right people, we’ve made incredible progress in our technology, and we’ll continue to make smart investments that will enable us to build an industry-leading business.

Some would argue that the reason Microsoft needs Yahoo is that their online strategy has so far failed to do very much.   My take is that they have not moved the online market as they’d hoped, but that they also have not worked nearly as hard in this area as they could have because Microsoft (correctly) sees that their huge presence in the software market is where the big money remains, at least for the next few years.    They have chosen in large part to protect their huge revenue ship rather than act more aggressively and nimbly (and expensively) to find online revenues or pull market share from Google.    I think many analysts – especially those in blogging – fail to recognize that Google’s revenues simply pale in comparison to Microsoft’s.   Google has the lion’s share of online money but Microsoft still has the lion’s share of the lion’s share money, which is in software, gaming, and entertainment.      I agree that the power curve is shifting from MS to Google, but MS remains the 800 pound revenue Gorilla.    Money beats buzz to the bank every time, and this point is not lost on Microsoft or Google.

Disclosure:  Long on YHOO