Tag Archives: Google

Blog Revolution Note XXIV

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At SoundBiteBlog I stumbled (or rather twitter-comment-followed) an excellent post about how much the poisonous / ranting writing styles of many blogs help them succeed.   The author wonders if nice blogs can finish first …

The short answer is “sure”.  A good example is Matt Cutts at Google who rarely has a bad word to say about anybody at his blog yet has one of the most read technical resources on the internet for Google search issues.   Fred Wilson’s A VC is also a blog with heavy readership and a friendly tone.    Marc Andreessen at blog.pmarca.com  is another and there are many, many more.

However I think the key blogging success issue is ranking, and there are many ranking problems in blogging paradise.  Blogs that rank well will be read more often and in turn will confer more rank via linking, so the  *linking style* of most of the old timer blogs  has really inhibited the broader conversation.   The best posts about any given topic are rarely by A list blogs anymore but these posts are rarely seen because the ranking structure favors older, more linked blogs over those with less Google authority.   

The old authority models work much better for websites – where high ranks for a general category make sense  – than for blogging where authors tend to cover a lot of topics.    TechCrunch will appear with a higher rank than almost any other blog if a technology topic is covered even if their coverage is weak, wrong, or misguided.    A thoughtful and well researched post about a critical topic is unlikely to surface if it is written by an “outsider” and escapes the RSS feed of somebody prominent, or sometimes even if linking to that post is seen by the “A lister” as giving a potential competitor too much free juice.   Note how “up and coming” tech blogs like Mathew Ingram link generously while most A list blog writers – who are now often hired writers, paid to be seen as a key breaking source of news – are far less likely to  cite other blogs.    Ironically I think success has really diminished some formerly great blogs.    John Battelle is one of the most thoughtful writers on the web but now he’s way too busy with Federated Media to keep Searchblog as lively as it once was.  

Google and other aggregators (like TechMeme) in part use metrics similar to Google pagerank to define TechCrunch as more reliable because they have more incoming links, more history on the topic, and more commenting activity.   This is not a *bad* way to rank sites but it tends to miss many high quality, reflective articles from sources who do not actively work the system. 

Solutions?  I still think a blog revolution is needed more than ever to re-align quality writing and new bloggers with the current problematic ranking systems. 

In terms of the ranking algorithms I’m not sure how to fix things, though I think Gabe should use more manual intervention to surface good stuff rather than just have TechCrunch dominate TechMeme even when their coverage is spotty and weird.   I’m increasingly skeptical that TechMeme is surfacing the best articles on a topic – rather it seems to give too much authority to a handful of prominent but superficial stories.    As others link and discuss those stories we have only the echo of a smart conversation.  

I don’t spend enough time searching Technorati to know if they are missing the mark or not, but I like the fact they are very inclusive.   However like Google and I think Techmeme, Technorati has trouble surfacing content that is highly relevant and high quality but not “authoritative”.

For their part, Google needs to do more to bring blog content into the web search results.   Last year at SES Matt Cutts was explaining to me that they are doing more of this than ever and I’m sympathetic to the fact that fresh content into the SERPS will lead to spamming problems, but I’m finding that I often get more relevant results from a blog search at Google than a regular search.   This is more the case for breaking news or recent events but it has even happened for research topics where the blog search has led me to expertise I don’t find in the web listings.

Digg for sale! Again. This time it’s for real. Maybe.

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TechCrunch is reporting that Digg is likely to get sold soon – probably to Google and probably for about $200,000,000.   Good for Kevin Rose and the VC folks, but I’d like to know from the key Diggers if they’ll feel any loyalty to the new owners or to the project.   Also, do they think they are owed more than … zero… on this deal?  

Social sites do offer their participants something of value = participation and platform – but are there “losers” in these equations? 

How do the high level participants who have put in thousands of hours and made the site what it is feel about these cash outs?

I’m wondering how often distribution of equity during the  *liquidity* event properly reflects the building of equity.    Entrepreneurial capitalism correctly asssumes you need to highly reward risk to get folks to take business risks and innovate.   But as Mike Arrington has noted entrepreneurs have a value system that appears to actually assign a high value the thrills and chills of the experience.   Thus to get optimal production and innovation it appears to me we need to pay “deeper” on these big internet deals.   In the case of a YouTube, DIGG, or Facebook I’d find a way to reward those down the food chain in some proportion to their contribution to the enterprise.   It’s possible that these rewards would be small enough that I’m wrong to think this matters much in the overall equation of optimizing the capitalist experience, but even a modest reward would brand the mega deals as “fairer” than simply a situation where fat cats effectively exploit self-motivated worker bees who have generated the user content and social networking that the market values so highly right now.

Googling the Comscore click metrics = indigestion

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The Google / Comscore clicking clash is really an interesting story from a lot of angles.     Comscore’s recent report that came earlier this week about Google pay per click metrics sent Google stock into something of an immediate tailspin, losing Google tens of billions in market capitalization as soon as the report came out.   However, today Comscore is claiming their report does not directly support the ideas that Google click ads are in trouble and that the recession is going to kill online ads. 

Comscore notes the two concerns others express from their findings:

1) a potentially weak first quarter outlook for Google, and
2) an indication that a soft U.S. economy is beginning to drag down the online advertising market.

And then says their report does not directly support these conclusions:

While we do not claim that these concerns are unwarranted, we believe a careful analysis of our search data does not lend them direct support. More specifically, the evidence suggests that the softness in Google’s paid click metrics is primarily a result of Google’s own quality initiatives that result in a reduction in the number of paid listings and, therefore, the opportunity for paid clicks to occur. In addition, the reduction in the incidence of paid listings existed progressively throughout 2007 and was successfully offset by improved revenue per click. It is entirely possible, if not likely, that the improved revenue yield will continue to deliver strong revenue growth in the first quarter. Separately, there is no evidence of a slowdown in consumers clicking on paid search ads for rest of the US search market, which comprises 40% of all searches.

I’m still digesting the larger report but it seems to suggest that Comscore sees *no reason whatsoever* from their data to assume Google will have a bad first quarter, and if I’m reading them correctly they are effectively saying there is reason to think the quarter’s earnings will *improve* because the revenue per click is improving and paid clicks are increasing?   Confusing because these are the almost exact opposite of the conclusion made by market watchers based on the same data.

Microsoft’s Engagement Mapping … a quantum leap … in BS?

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Initially I read the Microsoft engagement mapping announcement thinking this would be a remarkable innovation. They are claiming that EM will track a consumers interaction with advertising all the way to the point of sale which if done accurately would be a watershed in advertising accountability.

We’ve noted in many posts before how poorly advertisers track offline and even online advertising effectiveness, usually resorting to opportunisic reporting and explanations by their advertising agencies or reporting firms that stay in business because they support the agency advertising spends using questionable metrics.

Enter Engagement Mapping. Microsoft says:

“The ‘last ad clicked’ is an outdated and flawed approach because it essentially ignores all prior interactions the consumer has with a marketer’s message,” said Brian McAndrews, senior vice president of the Advertiser & Publisher Solutions (APS) Division at Microsoft. “Our Engagement Mapping approach conveys how each ad exposure — whether display, rich media or search, seen multiple times on multiple sites and across many channels — influenced an eventual purchase. We believe it represents a quantum leap for advertisers and publishers who are seeking to maximize their online spends.” (bolding mine)

Read the bolded sentence again. Although I’ll have to see the methodology before rejecting it as bogus, that last line does not really suggest objectivity here. Rather it appears this is yet another way for a metric to support a course of action (increase online ad spending) rather than measure the effectiveness of that action.

This is standard fare for ad agencies who feed their kids by exaggerating the effectiveness of their campaigns so I guess it’s no surprise that Microsoft is going to help them do that for the online spends, which benefit…..wait for it ….. GOOGLE! And Microsoft too. But given Google’s approximately 50% share of all online spends I think Eric Schmidt should send Steve Ballmer a really nice gift. Maybe a even a Lazy Boy CHAIR?

Google economist on Google’s success: Huh?

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Hal Varian is an economist at Google, and I’m sure he’s a good one.   However his Freakonomics and Google blog analysis of why Google has done so well in search leaves a lot to be desired.    After knocking down a few straw man items that obviously have nothing to do with Google’s search   monopoly   dominance, he goes on to conclude that Google is just better than the competition because they have been doing search for so long.

Hal – Excuse me but you call that economics?    I doubt this would be your internal Google explanation (assuming you want to keep your economics job, let alone your degree).  In fact it was so thin and almost bogusly “cheerleading” that it raises for me the ongoing questions about Google’s questionable mantras about doing no evil and transparency:   Transparency in all things except those that might affect our bottom line!

As I’ve noted ad nauseum I do NOT think Google has more than a modest obligation to be more transparent, but I’m tired of how often Google *witholds information* to protect Google and then pretends this is in the interest of users.  Google screws users and webmasters regularly – this is common knowledge in the search community.   The most glaring challenge is with ranking errors, mistakes, penalties, and rules.   In this area literally tens of thousands of mom and pop websites, and sometimes larger enterprises, are indexed in questionable ways by Google leading to serious economic challenges.   Unlike almost any other business however Google has only a tiny team of specialists who generally can only offer vague and often useless canned information, even when the problems are fairly obvious to an experienced search person.   

But I digress into ranting….!  

My working hypothesis about Google’s success is simple and I think would hold up far better than Hal’s silliness:  Humans are creatures of habit, and Google was the best search at the time when most formed their internet search habits.   Yahoo, LIVE, and even Ask are only marginally inferior to Google search now, but there were dramatically inferior a few years ago when the online ranks swelled with people looking for information.   Google provided (and still provides) high quality, fast, simple results. 

This hypothesis helps explain the following facts:
Google is not the search of China where Google.cn traffic is dwarfed by Baidu.com
Even as Yahoo improved search quality they did not improve their search market share. 
Quality differences are slight, yet Google search share in USA is very large.
 

Another indirect factor in the Google success equation is that Google’s monetization remains superior to the competition by a factor of more than 2  (per Mike Arrington .09 vs .04 per search at Yahoo).   In this monetizing sense Hal’s “we are better from experience” would ring very true, and if he had written about *economics* he would have noted that Google’s brilliancies in monetization are a lot more notable than in other areas, and are more of a key focus area at Google than is generally talked about.    In fact such a focus area that they are downright opportunisic in the effort to monetize the heck out of the searches.  My favorite examples are when Google violates their own guidelines to bring users …. non-information from advertisers.   I ran into this last week with the following search for airline tickets.   

Google Query: “Xiamen to Beijing”

The top result on the left side, which is supposed to be reserved for non-commercial results, at first seems helpful, giving you the ability to order tickets from several places:

Flights from Xiamen, China to Beijing, China

Departing:   Returning: 

CheapTickets – Expedia – Hotwire – Orbitz – Priceline – Travelocity

Unfortunately though, you can’t order the tickets because at least some of those clicks lead to commercial websites that do not offer that route.  

No big deal?  I guess not, but this is a clear violation of the Google Guidelines which call for clicks to a page where you can really get the thing advertised.  Also it would be refreshing for me if Google stepped down at least half way from the high horse of claiming they never put money ahead of users, and more importantly used some of the enormous profits to bring more transparency and helpful information into the mix.

In summary I want to be clear:  Google has the right to make big money online.   They also have the right to be very aggressive in making money.   However with their success goes an obligation for quality communication and transparency.   They are failing in that obligation and perhaps as importantly are not even recognizing that they are failing.   Google is a great company.  But they can do much better by users whose habits have made Google the most successful company of this generation.

MicrosoftOxymorons

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OK, not quite an oxymoron, but here is the latest “headline” from Microsoft that comes pretty close to contradicting it’s own strategic premise:

Microsoft Makes Strategic Changes in Technology and Business Practices to Expand Interoperability.
New interoperability principles and actions will increase openness of key products.

Huh?   Oh, OK, now I get it.  Hey, that really is big news, but I wonder if many folks will have a clue what all this means until it’s intrepreted by the media which is generally not all that sympathetic to the Big MS.     Why do they write like this?    It’s bad enough that these initiatives come like Microsoft is Google’s lap dog, chasing away at quality innovation two or three years too late.   Can’t they find somebody to state this stuff clearly?

It seems to me microsoft routinely shoots themselves in the foot before they are even out of the gate.  This happens for many reasons, but it is almost as if the company actually believes all the bad things about them and thinks they can only maintain dominance via monopoly and power plays rather than ….ummm…. working a lot harder to be customer centric, highly communicative, innovative and clever.    They can do it, but they don’t do it. 

Ironically all these goals are a key part of  what they are trying to do with this excellent open architecture  strategic initiative, but I think this great idea is almost lost in the bizarre Microsoft doublespeak we’ve all come to know and shake our heads at.

How would Google write a corresponding headline?

Microsoft Headline:
Microsoft Makes Strategic Changes in Technology and Business Practices to Expand Interoperability.
New interoperability principles and actions will increase openness of key products.

Google Headline: 
We’re OPEN!

Yahoo Headline:
Help, we are about to be held prisoner in a Microsoft Soylent Green Fortune Cookie Factory! 

Gates on Yahoo: “It’s the People” | Yahoo on Gates “OMG! He’s making Soylent Green!”

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As Microsoft prepares for a proxy fight that will pit them agains the Yahoo board in the fight over control of Yahoo, Bill Gates is talking up the deal as a way for Microsoft to access the great talent pool of Yahoo.    Although he’s certainly right that Yahoo’s got a lot of great talent, it is not at all clear that most of them will stay and work for Microsoft.   I think a lot of the Yahoo staff will see MS as trying to consume them into the Micro Borg mother ship, rather than work with them to make a better Yahoo/MS to fight the Google wars.

I suspect they will if MS treats them right, and I think MS would treat them right, but it would not take an extraordinary poaching effort from Google to effectively dismantle the really great parts of Yahoo.   Oh, yes, and this Google poaching has already begun. 

A couple years ago – at the Google Party no less – I was involved in a fascinating conversation with one of the key search guys from Microsoft’s search engineering team and another top engineer from Google.  One of the most interesting topics was how MS felt that Google had very selectively poached a key Microsoft search insider.    The MS guy said until that point he felt Google had been basically playing fair, but that he knew from that episode that Google was strategically picking off people not so much because they wanted them but because Microsoft *needed* them.      He felt this defied the “don’t be evil” Google mantra and had soured him on Google’s honesty in these matters.    Suffice it to say that as much as I think Google *usually* does follow the “don’t be evil” mantra there was some pretty interesting clandestine activity going on at that party to record the MS guy as several beers got him to spill more beans about the MS algorithm.    In fact it was then I realized how weak the MS search effort was with what he said were only 300 engineers working in search, while Google had *thousands*.

Gates is certainly wrong that the cultures are the same.   Based on my experiences with people from these three companies I’d suggest the cultures are pretty clear:   MS culture is a massive corporate empire with lots of heirarchies, corporate bloat, somewhat overbearing, and diminishes the role of the individual as a key part of the big team.  People are not proud to be with MS – they are often almost apologetic.

Google is flexible with lots of lateral motion in terms of project and ideas.   Ideas and cleverness will trump formal designations which are few anyway.   You can stand next to a top engineer worth tens of millions and a new hire and you can’t tell which is which – not even from the way they treat each other and certainly not from the casual dress or styles.    Google people are smart and confident, and generally very helpful and well-informed with the notable exception of questions about ranking quirks where transparency goes pretty much out the window.

Yahoo?   I think they *used to be* just like Google, but managed to mov in the direction of managerial bloat and questionable treatment of engineers several years ago.  They paid people well, but I think the focus moved away from search and engineering and towards a content and entertainment empire.  This was a mistake, and Yahoo’s about to to pay the price – they are about to get absorbed into the MS empire.    But don’t worry Yahoo engineers – they are not making much Soylent Green over there anymore.  Right Bill?

Ina on Gates

Disclosure:  Long on YHOO 

Yang to Yahoos: Keep the Faith

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Blodget has a good summary of Jerry Yang’s Yahoo note to the troops articulating the reasons for the rejection of Microsoft’s offer and the company’s future plans.    He gives Yang an A- but I think this might be generous.  

I’m wondering if Yahoo didn’t fail recently, rather years ago when many lines of separation were drawn between technologists and most of the company management.  I assume there were official lines drawn, but I’m talking more in terms of culture here.     My bullishness about Yahoo has rested on the assumption that the technologists would eventually have their day and as with Google would create the tools necessary to keep Yahoo competitive and interface with the broader developer community as Google has done so effectively to bring more awareness and use of Yahoo tools, effectively widening their footprint over the internet landscape.  

I no longer thing there is enough technological empowerment at Yahoo to make this likely anytime soon.   It will take a LOT more than peppy emails and a combative stance here.  Recent defections from Yahoo suggest that even internally Yahoos are more bullish on Google than their own company.   

So, if we assume Yahoo’s got to do something really big is Microsoft or News Corp the best fit.    From Yahoo’s perspective clearly they’d love it if News Corp was willing to pony up as much as MS, and frankly this seems like a more likely winning combination than MS and Yahoo which would have a lot of initial, and perhaps long term, contentiousness.   Fox Interactive is run brilliantly, and applying these management principles to Yahoo could do a world of good to the bottom line of the combined company.    As a Yahoo shareholder I’m rooting for that option though I’d predict MS will win this battle because of the difficulties News Corp will have showing how valuing Yahoo at 50 billion+  is justified given how difficult it may be to make a lot more money from the combined company in anything short of many years.

disclosure:  Long on Yahoo

The Price of Danger: $500,000,000

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Microsoft just picked up Danger, inventor of the Sidekick mobile device and overall very clever mobile company founded by Andy Rubin who is now working for Google on Android and Open Handset Alliance stuff.

Om Malik is quoting the price as 500MM after what his reasearch showed was 225MM in past injections of capital.   

Although at first glance everybody thinks these deals make huge money for everybody associated with them, this is not the case.   As we’ve noted before average VC deals  *lose money*, and more importantly you always need to factor time into these equations to make sense of the profitability of a deal.

In this Danger sale people made out well, but depending on when the big money was invested it’s not clear anybody had a spectacular return here unless the big money came in very recently (I don’t know if it did or not).

Why would MS want this company?   As with the Yahoo aquistion and as MS has done for so long, they are trying to gain a huge foothold in key markets by buying up a key company in the space.    I’m expecting some competition for the Google/Dell phone to be announced soon.