Entrepreneur Watch

Google: Success and controversy - 3

"Inside Larry and Sergey's Brain" to be released Sept. 17, 2009

Contrary to popular belief, Google’s success was not simply a matter of inventing a better mousetrap and watching the money flow through the door. The initial design of Google’s search engine did not have technology much more advanced than its competitors. It was how they used and refused to abuse the technology that mattered. Larry and Sergey have been successful because they have completely rethought the process of catching mice. Not surprisingly, they’re upsetting a lot of business fat cats in the process.

Revolutions do not come easily. They arrive like an invading army, pillaging industries in their path. One group’s revolutionary is another’s corporate terrorist. Google’s fans see it as a corporate version of Thomas Jefferson, or a freedom fighter trying to spring dissidents from a Gulag work farm. Its enemies think of it more like Joseph Stalin, and are mobilizing to attack Google like capitalist idealists fighting the Red Menace. Competitors, Hollywood executives, book publishers, copyright holders, privacy advocates, civil rights activists, and government regulators are menaced by Google’s enormous power.

Larry and Sergey are wickedly clever. They break the rules. They challenge old industries and make a lot of enemies. They’re ruthless businessmen. Most of all, they’re idealists, believers in the power of the Internet to make the world a better place.

           

Google: Success and controversy - 2

"Inside Larry and Sergey's Brain" to be released Sept. 17, 2009

Google now employs about twenty thousand people, but just two of them set the pace and guide its evolution. Larry and Sergey work together like two halves of a well-balanced machine. CEO Eric Schmidt is responsible for growing revenues, but the decisions that Larry and Sergey make are the fuel that powers that revenue growth. Everybody in the company refers to them by their first names—sometimes as the single unit LarryandSergey—but treat them like emperors, the final arbiters of all important decisions.

A young, smart, and athletic kid whose family escaped the oppression of the communist Soviet Union and a clever young geek from Michigan with a fondness for Legos would seem a very unlikely pair to create a business revolution. Asked by reporter John Ince in early 2000 what Google’s biggest challenges were, Sergey admitted it was learning to run a business:

“The most difficult part has been learning to deal with organizational challenges. We have over 70 people now. It’s a more complicated beast. It’s not very clear how to keep everybody productive and focused. That’s been more of a learning process. Business dealings . . . have been a little bit new to us.”

But they’ve turned Google into more than just a great company. They almost single-handedly revived Internet businesses and changed the rules of commerce on the Internet. They have commercialized the Internet and started an Information Revolution the way Thomas Edison helped start the Industrial Revolution by harnessing electricity and saying, Let there be light bulbs.

           

Google: Success and controversy - 1

"Inside Larry and Sergey's Brain" to be released Sept. 17, 2009

“Good luck. I’ve been trying to do that for some years.”

— Google CEO Eric Schmidt after being told the title of this book

Google has become the de facto head librarian of the world’s information; the entity that guides us through the labyrinthine web of online information, philosophy, entertainment, opinion, debate, slander, pornography, art, and worthless blather that the geeks and executives of the Internet like to lump into the single category of “content.”

To say Larry and Sergey struck the right business chord would be the understatement of the twenty-first century. When they launched Google, they were entering a war that pundits were insisting they had already lost. In mid-1998, it was Yahoo Inc. that sat on top of the World Wide Web, the place where 75 percent of Web searches were begun. More than twenty-five million people visited Yahoo every month. In September 1998, it became one of the first pure Internet companies to claim a profit.

The previous March, Fortune magazine had summed up the prevalent view: “Yahoo! has won the search-engine wars and is poised for much bigger things,” its editors declared. Its stock peaked at $230 at the end of 1999.

Then it all fell apart. By mid-2000, Yahoo’s stock was in free fall, on its way to hitting the bottom at under $5 a share. Yahoo CEO Tim Koogle, once hailed as a great Internet visionary, was a year from being fired. Nobody seemed to know what hit them. Whatever it was, it missed Google.

As the cash flow that had kept the technology world afloat reversed direction, Google seemed to catch the runoff. In 1999, Google took in revenues of $200,000. In 2000, the start of the technology recession, its sales had grown 940 percent, to $19 million. By the end of 2002, when most dot-com companies were either desperately dehydrated or dead, Google’s revenues had bloated to $440 million. In 2003, just four years old, its sales hit $1.5 billion, its profit was $100 million, and it had taken over some 80 percent of the world’s search queries.

Verizon Wireless to adopt Android!

Verizon Wireless just saved me as a customer.

I HATE my current Verizon/LG phone. Now Verizon Wireless is going to launch an Android phone from Motorola by the end of the year, according to AMOL SHARMA and SARA SILVER at the Wall Street Journal. 

My current Verizon phone boasts "Web access," but only using Verizon Wireless's OS, browser, maps, search engine and other apps and they all SUCK! It give me access to all the major online email programs EXCEPT Gmail. Verizon Wireless generally hates Google for trying to open up the cell phone business. 

I had vowed to quit Verizon Wireless as soon as my contract expired in order to get an Android phone, even if it meant switching to T-Mobile.

Now I have a reason to stay. Is the company getting smart, or just desperate? Who knows? It's a good move either way. Maybe the company will actually survive.

A source in the wireless industry recently told me that Verizon had passed up the opportunity to be the first to offer the iPhone, and then passed on the opportunity to be the first to offer the Android phone. It regretted both decisions. Now it's playing catch-up.

Steve Jobs has been frustrated with his deal with AT&T as well, because of its mediocre service.

So the next question is, will Verizon Wireless also get a deal with Steve Jobs to put an iPhone on its network when the contract with AT&T ends?

A victory for openness.

Steve Jobs and the culture of secrecy

BRAD STONE and ASHLEE VANCE have a nice article at the NYTimes about Apple's "baked in" culture of secrecy and disinformation. It mostly comes down to marketing.

I think it also comes down to ego. Steve Jobs likes to make a bigger splash than Namu the killer whale in a small pond. He wants people to adore him. He doesn't just release products, he unveils them with a flair for the megamaniacal. People must not just lust after his products, they must be rabid about them. It guarantees that people flock to his product releases, both for the products themselves and for a chance to hear the great man speak.

Jobs wants to be bigger than life. I guess it feeds some deep-seated insecurity.

Even Apple employees don't know about new products until they're released.

There has been debate over whether he should be allowed to keep secrect his cancer and recent liver transplant. I can sympathize with his desire to keep such personal issues secret. But one has to wonder about the danger of such a public figure keeping such secrets. There's always the possibility of insider trading by the few people who know what's going on. 

Google has a similar culture of secrecy, but it seems to me it comes more from a touch of paranoia. Larry and Sergey rarely give interviews, but they're also shy. They also seem afraid that others will steal their ideas. For my book, I had access to just about anybody at Google I wanted except Larry and Sergey.

Jeff Bezos at Amazon also likes to closely control his own publicity. He'll appear anywhere to promote his Kindle, but try asking him for an interview about the company in general. I can't get an interview with anybody at Amazon, period.

The problem is that it puts them all in danger of misinformation. If a reporter is trying to write an accurate story, closed-mouth secrecy ensures that is extraordinarily difficult to achieve.

But then, I'm a reporter. I believe in full disclosure. It's a big part of what the Internet is all about. Sigh. What's a reporter to do? Work harder and pray you get it right.

And with that, I'd better get back to work.

Bezos doesn't like Google Book Search

The big question is, exactly what doesn't he like about it?

Asked that question by Steven Levy at the Wired Business Conference, Bezos said, as reported by Caroline McCarthy at CNET:

"We have strong opinions about that issue which I'm not going to share ... But, clearly, that settlement in our opinion needs to be revisited and it is being revisited."

The one clue he offered:

"There are many forces of work looking at that and saying it doesn't seem right that you should do something, kind of get a prize for violating a large series of copyrights," Bezos said.

Huh? Wasn't the settlement reached specifically to avoid violating copyrights?

Is Bezos afraid that reading books on Google will keep people from buying them? You mean, like checking them out from a library, where you can read the full text?

I recently read part of a book on Google Books, all the way to the to the point where Google cut it off. I then went to the library to check it out and finish reading it. I could have just as easily bought the book, but I don't have any more room on my shelves.

Too bad Bezos isn't more forthcoming about anything except the phenomenal success of the Kindle -- without revealing actual sales figures, of course.

Sergey Brin afraid of Bing?

Probably not as much as the New York Post reports. It's just not the best source of unbiased journalism. Neither is Fox News, which carried the story on its site. Fox News' slogan of "Fair and Balanced" is like McDonald's ads trying to convince people that fast food is good for them.

Says the Post:

"Brin, according to sources inside the tech behemoth, is himself leading the team of search-engine specialists in an effort to determine how Bing's crucial search algorithm differs from" Google's.

Also:

"But co-founder Sergey Brin is so rattled by the launch of Microsoft's rival search engine that he has assembled a team of top engineers to work on urgent upgrades to his Web service, The Post has learned."

The Post article of Sergey's fear is based on "sources" but it quotes only one (anonymous) source:

"Bing seems to be of particular interest to Sergey," said one insider, who spoke on the condition of anonymity." 

That doesn't exactly sound like fear. Sergey's "fear" is more likely the type that Andy Grove always promoted -- always stay ahead of competitors and never ignore them.

The interesting thing about Bing is that it's Microsoft's third attempt at building a seach engine. For some reason, that's the version that Microsoft tends to get right. 

Thomas Claburn at Information Week suggests that Google's bigger fear is antitrust investigations from DOJ. Losing a few points in market share to Microsoft could lessen the pressure from DOJ.

Greed isn't good. But a little fear is. One of the guys I follow in Twitter, Raju Vegesna at Zoho, who has always professed to like Google, said in a recent tweet, 

"10 Days into using Bing as my default search engine and I happy with it. I guess I am sticking with it."

Will be interesting to see how Bing does. I guess buying Yahoo is out of the equation.

Dell profits from Twitter spam

PC PRo News reports that Dell has brought in $3 million from tweets, $1 million of which came in just the last year.

What does this say about potential revenues for Twitter? Dell has resisted proposals from Twitter to charge businesses for such tweets. It seems fair to me that businesses should be charged. I consider business tweets to be spam. I keep getting notices that certain tweeters are following me, only to find out they're frm businesses selling things, apparently hoping I will follow them as well.

But it's a good way to find out what Dell has on sale at the moment. An alternative would be to just offer ads off to the side, targeted at the topics one is following. I would have no problem with that.

For that matter, I don't see any problem with ads on any social network. Targeted ads are often just as valuable as the content itself. That would work on Twitter for companies not as well-known as Dell.

These postings from Dell are very valuable. They're opt-in ads. The followers are already in the market for Dell products.

I say, charge! 

New search technique reveals Batman is richer than Bill Gates

Technology Review has an article about a research project from the University of Washington that combines information from 500 million Web pages to answer questions. Instead of just returning Web sites, it returns snippets from Web sites that (it hopes) answers your English-based question. Google provided the database of Web pages for the project, called TextRunner. 

The project is a demonstration of the technology and is not ready for prime time yet. But it represents what may be a better approach to natural language search queries.  

TextRunner does not require human intervention to teach the computer the relationships between words. TR explains the concept:

'[UW computer scientist Oren] Etizioni says TextRunner's ability to extract meaning quickly and at huge scale flowed from his group's discovery of a general model for how relationships are expressed in English that holds true no matter the topic. "For example, the simple pattern 'entity1, verb, entity2' covers the relationship 'Edison invented the light bulb' as well as 'Microsoft acquired Farecast' and many more," he says.'

The results are still rough, but amusing. Type in "who is a billionaire?" and the first solid answer is Batman. JK Rowling was 3rd, Sergey Brin and Larry Page 7th. Iron Man was about 38 on the list, but you had to get to response #65 to find Bill Gates' name.

I wonder what this tells us about what society is reading, or about the database Google provided.

Some answers are enigmatic. The first response, before Batman, was: "guys (28)

, men (18)

, people (16)

, 114 more... are 

billionaires"

Response #22 was:

"Batcave (3)

 is the alternate identity of bill-

ionaire playboy Bruce Wayne )"

It couldn't answer the question "Why is the sky blue?"

Slashdot suggests trying "Who has Microsoft acquired?" That one gives better results.

Hey, it's more fun than tagging your Web site for "natural language" search engines.

Google's ad future

Rob Hof at Business Week has a nice article about Google's moves in online display ads.

Here's my conclusion on Google's forseeable future in advertising:

Search ads: WINNER

Display ads: WINNER

TV ads: WINNER

Newspaper ads: LOSER

Radio ads: LOSER

It's quite simple. Targeted ads work, non-targeted ads don't. Google is great at targeted ads.

Search ads are targeted. The BW article outlines Google's move into a type of display ads known as "performance ads."

Here's what Hof says about performance ads:

"They allow advertisers to use data analysis and user-tracking technologies to match ads more closely to likely buyers and measure mouse clicks and other actions so advertisers pay only when ads deliver. Google spies an opportunity to apply its mathematical wizardry to make those ads even more effective. The idea is to make display ads useful knowledge instead of visual clutter." 

Is there any question that Google will do this well and that they will be effective? Google will be ramping up a revised DoubleClick to take advantage of that technology this summer.

Newspaper and TV ads? I've never thought Google had a future there. There is no way to leverage its expertise in targeting ads. Earlier this year Google dropped those efforts.

What about TV? Hof's article says that area is still iffy: 

"And a TV ad project has been slow-going."

Slow, yes, but still great potential. I've written before about how Google is working with cable and satellite set-top box manufacturers to track people's habits as they watch TV. They track which ads people watch, which they click away from, and how quickly they leave.

It's only a matter of time before they use that data, plus data from YouTube, to figure out how to deliver the right ads to the right people on the fly. Sounds like a winner.