Tag Archives: Google

Yahoo’s Don Quixote

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The Yahoo Microsoft fiasco saga continues as Jerry Yang, in today’s interview with Kara Swisher, seemed to suggest he’d basically go down with the ship.   Or perhaps more accurately he’s willing to take the ship down with him in what appears closer and closer to a Quixotic vision of what to do about Microsoft.   Yang seems to suggest two incompatible things – first that Microsoft has not given a clear offer to Yahoo and second that:

“Their motivations are suspect and there is simply no good reason to think they will actually show up at the end of the day.”

Huh?   MS is clearly prepared to buy Yahoo.   This is obvious to everybody including Jerry.   He could argue that they are going to screw up Yahoo after buying it, but that rings a bit hollow given the sad conditions of the company right now.     In fact it’s hard to imagine how Yahoo, a key brand in the key global sector, can be doing so poorly right now.   How in the world could Microsoft screw the company up more than Yahoo is screwed up right now?

Even if Microsoft *is* going to bring devastating changes to Yahoo, there is a shareholder obligation here that probably is not met without a sale to Microsoft.     It is simply no longer viable to suggest that an independent Yahoo is likely to show the revenues required to bring the stock to 33+ within a year.    Without any Microsoft interest  YHOO would be trading at about $18, so the likely Icahnesque MS offer can arguably be viewed as a premium of close to 100% on what shareholders can expect if this deal *really* crumbles, which is what Yang clearly wants to happen.

I agree with Swisher:

… even with all the noise, it should be entirely clear by now that Microsoft and Yahoo need each other.

Disclosure:  Long on YHOO

Googley iPhone Goodness

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It is obvious that Google is going to embrace mobile applications very, very powerfully in the coming year and it looks like Google has a great first iPhone effort with their new search application featuring a lot of automated guessing so you can avoid the most painful part of the mobile experience – typing.

Of course things are *really* going to get interesting this fall or early next year when a new Google mobile phone will come out.    Although Google has produced branded hardware for some time in the form of search appliances these had an extremely limited distribution.   The upcoming  “G Phone” will be a *huge* success if it offers iPhone functionality at a lower price.   I think the latest assumption is that a Google phone will be made by HTC for Dell though I have not checked in on this recently.    I think the Google branding factor will be incredibly powerful, and predict that *most* users will choose  a “Google gPhone” over an “Apple iPhone” assuming similar features and cost.    This isn’t to suggest the iPhone market cannot exist alongside a gPhone, and clearly the iPhone is the mobile device to beat, so the game is very much on right now in terms of smartphone competition.     Sprint’s new “Instinct” is an excellent device with many advantages over the old iPhone (e.g. Geolocation), though I think we’ll see functionality in these devices converge as early as next year with no compromises for users.   Computing is rapidly moving to mobile.

Here is a demo of the iPhone application at the Google Mobile Blog

Google blog

Lively by Google: Will Lively bring death to Second Life?

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Google lively is a very clever social interaction “environment” that is simple to set up and modify, and may appeal a lot to folks who like some visual feedback when chatting with others.   I don’t think this will replace the experience for hard core second life folks, but I’m fairly sure it’ll cut the number of *new registrations* at Second Life by quite a bit.      In fact I’m sure they are now discussing how to handle this major assault on what was a virtual monopoly (literally and figuratively) at Second Live.

I’m unable to embed my Google Lively rooms here, though I just tested and they work fine in blogger blogs.

It’s funny how things come back around.   About ten years ago I got my tourism board of directors to experiment with “virtual meetings” using avatars and within a simple browser framework.   I even forget the program.    The technology was fine – even it allowed chats and a way to “carry” groups of people to different URLs so you could demo new web pages and such.     However the mostly non-tech crowd simply was not comfortable interacting in this fashion and I got very limited participation.    Even now this is the case for many, but I think the growing number of technophiles combined with the current generation of young folks who are very comfortable with virtual worlds will open up this type of “conversation” to include a large segment of the population – enough to make this a significant new addition to the online communication landscape.

Niniane Wang from Google has the intro blog post:
Official Google Blog: Be who you want on the web pages you visit

The New York Times Brad calls this a “Whackier” kind of Google, which I think is a compliment.

Google’s KinderGate: Your kids are welcome here for $57,000 a year.

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When I first read about trouble in Google land over child care costs I thought it would be another case of the how super well paid but whiney Silicon Valley parents were unreasonably complaining about a minor bump in their charmed luxury lives. But maybe not.

Google appears to be on a search for the holy grail of child care, and even after charging parents for the service Google wound up subsidizing things to the tune of 37,000 *per child per year* – managing to spend the approximate average national income on every kid lucky enough to reach the nirvanesque kinderplex environment. The solution to this negative cash flow – unusual for the company known for showering employees with benefits like laundry service and free meals – was to raise the child care rates to about 2500 per month per child.

The NYT reports that two kids in Google childcare will run you $57,000. Although Googlers take home an average of something like $140,000 per year this isn’t going to ruin them, but this sure ain’t a page from the Brady Bunch days.

The situation is interesting economically but I think even more interesting as an experiment in Google’s approach to social engineering, which I think argue may be failing because it may not be able to scale in the same fashion as many of Google’s magnificent technological innovations.

Although Silicon Valley employees have historically enjoyed some great benefits, Google shined as the company that outdid everybody with free gourmet meals, free laundry, and great parties all within a context of individual freedom to work pretty much as you pleased as long as you were productively engaged, and even that was defined in some part by the employee.

This approach seemed to be working well, but I wonder how much of this was just an illusion caused by Google’s huge wash of incoming cash. The NYT article suggests that the company hardly even noticed the child care subsidy until recently. I’m guessing that only recently have the Google bean counters been called up from their free lunch to sharpen their pencils and find ways for Google to trim the company budget.

There are obviously two huge human resource pressures on Google now as it grows within the context of providing the world’s best company bennies. First is the fact that the legions of Googlers are for the most part…kidless. As employees age, especially the key folks from the early days, Google will see a lot more departures of key folks and a lot more demands for family time and benefits. Even stronger will be the pressure from the growing number of employees in Google’s empire, far more of whom are likely to be “in it for the money and perks” than in the early days. I remember touring the Googleplex a few years ago with an exec who, when asked about this problem, said it was not happening. But I think that was about 10,000 employees ago and before the level of concern over Google’s KinderGate scandal.

I will be very interesting to see if Google can scale their sometimes pesky human resources as effectively as they have scaled their technological and commercial resources.

I’m guessing…make that strongly predicting….the answer is no.

New York Times Reports

Carl Icahn: Blogger

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There’s a new guy in blog town and he’s shooting from the hip about the defects of the corporate governance models we’ve all come to know and hate over the past decades. His name is Carl Icahn and his blog offers great insight into the mind of one of the most successful corporate raiders in history.

Although it is obviously favorable to Icahn’s bottom line to maintain how incompetent boards are leading to the decline of western economic civilization as we know it, I’m hardly going to disagree with the notion that corporate governance, especially in the technology sector, often seems out of whack with shareholder interests.

It is important not to confuse Icahn’s critiques with the whacky ones of many who suggest the corporation itself is a bad model and should be replaced by outmoded socialistic and centralized approaches that brought economic ruin on an entire generation of eastern Europeans and helped bring genocidal regimes into power in asia.    On the contrary Icahn’s point is more that we need to make sure the corporation model can thrive by insisting on better governance for struggling companies.

In the case of Yahoo, Biz Doctor Icahn’s prescription is to buy up a huge share, then throw the corporate board bums out and sell the company to Microsoft.  The stakes here are so high for Icahn (he could see over a billion in profit if his plan works), that he’s hardly in a position to entertain alternatives that might be better for Yahoo, but I think most shareholders already are rooting him on in the hopes of salvaging the $11+ per share lost when Microsoft withdrew from the bidding for Yahoo last month.

Disclosure:  Long on YHOO

Links and SEO

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From a search ranking perspective links are one of a website’s top concerns- probably the most important concern as linking often trumps content in terms of where a site will place for search queries.

As always, a great source for SEO information is Matt Cutts blog over at Google where a careful read of his SEO posts will bring you a lot of enlightenment about Google do’s and don’ts. His post of a few days ago was particularly interesting as it deals with Google’s crackdown on paid links that try to pass pagerank. This is one of the most contentious topics in SEO and an area where I wish Google would be more transparent since there are so many linking approaches that are not paid but may be questionable in the eyes of Google. The fact that they depend so much on reporting of paid links is also a problem as it allows aggressive SEOs to “game the system” by selectively reporting competitors while creating complex and undetectable linking for their own sites.

However my biggest concern about linking is not something Google can fix, and that is the fact that even in the world of what Google views as legitimate, authority passing links, strategic linking to “friend and associate” websites has largely replaced the early approaches to linking where people work to simply link to a great resource for the reader.   As blogging has exploded into prominence and linking importance this problem has become critical, and we now see that early and well established blogs will outrank far better resources that have few incoming links because they are new.   Ideally, the older resources would be better stewards and link out to the good new resources but generally the stakes have become too high as links are now correctly seen as more valuable than advertising and bloggers have become too reluctant to link to other resources unless there is some reciprocal benefit.

Why O’Reilly’s wrong about Arrington being wrong about Yahoo being wrong about Microsoft

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What did the normally very insightful Tim O’Reilly and Fred Wilson have for lunch, some free hallucinogenic deserts over at Google?

Both are criticizing Mike Arrington for stating the obvious – Yahoo’s not acting in the best interest of shareholders or Yahoo or anybody except Google, who clearly is the big winner in Yahoo’s squandered megadeal with Microsoft.

Fred very correctly notes that Yahoo’s has faced leadership challenges for a long time, but he says he likes the one option that keeps the current Yahoo board intact and very much on track for much more of the same company crushing behavior. Yes, a clean house is needed and that is certainly less likely to happen *now*.

It seems to me there are two issues and they have it wrong on both counts where Arrington’s got it right.

First, Yahoo’s Google move proved that in terms of shareholder obligations it should have sold to MS. Yahoo cannot reasonably make a case that they will come out of the monetization hole using core values while immediately outsourcing their most potentially lucrative biz to Google. Sure this will make more than Yahoo alone, but nothing like what the MS deal would have offered Yahoo in terms of ad cash plus money to develop the search biz. MS offered a shot at glory. Yahoo took Google’s money so they could keep sitting back and watching the really big search money pass them by.

Is Fred saying there is a Googley path back to $34+ per share? Even if yes, it is nonsense to think it’ll happen fast enough to justify turning down MS’s offer of $34 and their subsequent offer of $35 for 1 in 6 of Yahoo’s outstanding shares.

Second, this just gives Google even more of a near monopoly on monetization. As Mike suggests competiton is lacking and needed in the search space. This is a big step in the wrong direction.

Disclosure: Long on YHOO

Google on SEO

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Search Engine Optimization is at the same time a simple concept (help the search engines find and rank your pages) and a very complex one (proper use of redirection when changing domain names, Google downranking, duplicate content and hundreds more topics that are covered online in many places and also at conferences like the SES Conference Series, Webmasterworld PubCon, or the SMX Conferences.  

Arguably the best source for basic SEO information is Matt Cutts’ blog, and he always has great summaries of the conferences at which he gives talks.    Here’s a great post from Matt today after Danny Sullivan’s SMX Seattle Conference.   Google has added some information to their famous (and infamous) webmaster Guidelines, which should be read by every webmaster as they are the best *basic* information about how to structure a site to be ranked properly.   You’ll also want to read Matt’s SEO posts which offer a lot more specifics and technical advice.  

Although several years ago you would *also* have been well advised to read up on some of the tricks of the trade such as various schemes for keyword optimization, I would argue that for most webmasters tricks are more likely to be counterproductive than productive.   This is a really rich topic because there remain many techniques that fall into a sort of gray area of optimization where ranks are affected, but crossing the Google draws between acceptable techniques and unacceptable can lead to severe penalties.   Since Google does not draw a clear objective line we have the ongoing gray area of optimization. 

Many SEO techniques relate to *linking* strategies and *keyword optimization*.     It is an area where I believe Google has in many ways fueled the rise of the very content they hate by making the rules too vague and (more importantly) allowed adsense advertising on pages that don’t meet reasonable web quality standards.   Early in the game I was often frustrated when I would improve on a bad page only to have it drop in ranks due to algorithmic quirks.   I soon decided to leave crappy but high ranked pages alone, fearing they’d be downranked if I changed them.  This in turn caused problems as Google tightened up quality standards. Google is great about transparency in several areas, but algorithmic search penalties are not one of them.

I should also say there are some exceptionally good SEO folks out there who always have amazing advice when I bump into them at conferences.    David Naylor and Aaron Wall, and Todd Malicoat all have remarkable insight into the complexities of Google ranking as does Vanessa Fox who used to work for Google and Danny Sullivan who runs the SMX series of SEO Conferences.    My general advice about SEO is to do it yourself or in-house, but there are a handful of people like this who know the game so well that the normal rules about avoiding SEO folks do not apply.

Google search transparency? You call that transparency?

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Google does a lot of wonderful things, including many that people do not give this amazing company nearly enough credit for doing. These include mail, calendar, and document applications as well as great free search.

However Google transparency goes out the window when it comes to open discussion of the incredible amount of collateral damage Google inflicts daily on websites – including many that never know how their mom and pop business has been displaced by clever SEO tactics from spammers as well as legitimate marketeers who understand the system well.

Udi Manber at Google suggests that they are working for better transparency in the rankings process but I’m sure not holding my breath.

Strategically I believe Google continues to make a mistake here that ultimately is their great achilles heel, though Microsoft and Yahoo have been so busy fumbling their online balls that they don’t seem to get that yet.

The 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 do a lot more 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 penalty offers one of the few instances where Google actually comes very close to lying to webmasters, implying that when “your site appears in the 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’ll have a sense of the downrank penalty, but in the best indication of how the lack of transparency backfires at Google it is the top SEO Marketers and spam experts who immediately will determine that they have penalties.

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 because they have no idea what SEO even means. Also common are websites who hire or associate with questionable SEOs (which constitute about 90% of all SEOs), not knowing 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 more than a tiny fraction of the effort going into manual solutions.   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.

So Udi I’m thrilled 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 important: fairness.

 

Update:
My comment about this topic left over at the most excellent Mr. Matt Cutts’:

Matt I really thought Ubi’s post was probably too generic to be of practical help to most sites with problems. From the inside it probably appears that Google is bending over backwards to make absolutely sure almost no “innocent” sites get caught up in the SEO and Spam crossfire, but in practice most sites now attempt SEO in some form and many sites (and even companies) wind up damaged or destroyed without even knowing what hit them. The issue is the degree to which Google should share “what hit them”. Policy is to share nothing about algorithmic damage, and I think policy is still to define “being in the index” as “no penalty” which totally confuses anybody outside of SEO and even many of us who understand SEO quite well.

It’s the classic collateral damage argument – Google thinks this is necessary to protect the Algorithm, but I think long term this is a mistake and Google should expand the system of communication and community so there is at least a better explanation of the severe downranking penalties that leave sites in the index but out of view.

Towards a solution? Next time you do quality team hires have the new people play webmaster for a month before you share any info with them – have them work some sites, try to communicate with support, etc. This might help bring the outside frustrations…inside.