Musings on Google, Amazon.com, interesting entrepreneurs, happenings in the tech community.
"The Google Guys: Inside the Brilliant Minds of Google Founders Larry Page and Serge Brin" is out in paperback.
"ONE CLICK: JEFF BEZOS AND THE RISE OF AMAZON.COM" arrives Oct. 26
This blog will soon be transferred to my new site, RichardLBrandt.com. Please check it out.
Interestingly, it brings up one of the biggest criticisms I got about the book. I was too soft on them about privacy and other issues that show how evil they are.
Great opinion, but in my opinion a paranoid one. Look, I address those issues in the book I just don't buy the argument that they're evil. I did a lot of reporting, and everyone -- I mean EVERYONE -- I could find who knows and/or worked with them said they're honest, idealistic, and really feel that internet search is too important to corrupt in an attempt to make an extra buck.
In fact, that's why Google is successful. Gues what? If you actually focus on your customers, put them first, make them more important than advertisers, Wall Street analysts or stockholders, then you win in the market. Is this such a strange concept? Are people that cynical?
What's disturbing to me is what I believe to be the reason for the criticism. People have come to believe that ALL corporate executives are evil and have no priorities other than making themselves rich. Unfortunately, that's largely true, but not universal.
In 30 years of covering business, I have never come across anyone who seems to be as trustworthy as Larry and Sergey. And that's not just because I wrote a book about them. I also wrote a book about Jeff Bezos, and he doesn't come close to the idealism and honesty of Larry and Sergey.
If you think Google is evil, tell me why. I'll debate it with you. But the fact that they collect data about you online does NOT make them evil. I've got news for you, there are thousands of organizations collecting data about you every day. Get over it. Google is the only one that promises not to sell your data to others. (No, it does not sell it to advertisers. Google matches up your interests or Web sites with the ads, and Google decides where the ads go based on the data, not the advertisers.)
In fact, I'll go further and make you this offer: If you want to review the book -- on a blog, on Amazon, in an email to a friend, or just over the dinner table -- let me know and I'll send you a copy. Free. And I will not give, lend, sell or otherwise provide any information about you to anyone. Not even my wife.
Your review doesn't have to be positive, just honest. But be forewarned, I may respond in the Comments section wherever you review it, if there is one. I love honest debate and appreciate any help in spreading the word.
The Kindle Fire is out, and it's going to be the hottest Trojan Horse we've seen since .. the original Kindle. Jeff Bezos has started building computer hardware with one primary purpose in mind: to make Amazon a software company. An unusual approach, but one that will ultimately succeed.
Sure the Kindle Fire will be the only significant competitor to Apple's iPad, but it is also showing that Microsoft is still stuck in the 20th Century. (Have you noticed that Microsoft really doesn't generate much buzz these days?) Microsoft just hasn't figured out the Internet software business.
Bezos started selling hardware (books, then other physical consumer products) because the market for selling software through the Internet wasn't there yet. Now he's favoring electronic books, music, video and cloud computing services because that's where his real future lies. It costs nothing to distribute software, as long as there's a device out there to receive it. Much cheaper than UPS.
The market is different now. The 21st Century calls for great devices that get their software--this time in the form of content and services--through the Internet. So he's borrowing strategies from both Microsoft and Apple to make sure the hardware and software infrastructure is there.
Steve Jobs loves making hardware hardware AND software, and likes to integrate them into great products. His hardware products are great showcases that create whole new categories of consumer electronics. He also gets the advantage of using the devices to sell his own software--music, books, video, etc. Jobs likes the high-margin strategy of building premium products and pushing old versions down the price ladder as he introduces new top-end products.
Bezos likes building harware and software primarily because he wants to sell software. Similar to Jobs's strategy, he puts out exclusive devices that run his software so that he can sell more of that software. So he makes sure that his products, while not as great as Apple's, are still impressive enough to compete with Apple while other hardware makers fail. And part of their appeal is the very fact that he has a lot of software to sell, making the hardware more appealing.
But Bezos is also copying pieces of Microsoft's strategy: start at the low end of the hardware market in order to sell his software, and build up. Microsoft ensured that Windows would be the operating system for the masses by licensing Windows to all PC makers, creating price competition and ensuring low PC prices and high Windows volume.
Bezos is aiming at the mass market with cheaper hardware that appeals to more that just the early adopters. The Kindle Fire doesn't have all the features of the iPad and is smaller, but is half the price. By creating his own hardware, he also gets Apple's advantage of selling devices that favor his own software. He'll sell you electronic books, movies, TV programs, and will throw in cloud computing services for free, just to make them more appealing. It's great that you can read a book on one device, then pick up where you left off on another device. That's because your books--and memory of what page you're on--is stored in the cloud, on Amazon's servers. The Kindle Fire will allow you to do the same thing with movies and TV shows.
But he wisely doesn't try to compete in the OS market for new devices. Increasingly, that's a war between Google and Apple (in this case, Google takes on Microsoft's old role.) Why should he? He gets the Android OS for free.
Microsoft just can't seem to compete with Apple, Amazon and Google in the Internet software business. It can't make inroads into the mobile phone and tablet markets. Sorry, Ballmer.
So look for Bezos to move deeper into the content and software services business. There have already been rumors that he would like to buy Hulu as well as Netflix's streaming movie service. He could have trouble keeping the rights to that content, but he's a tough-ass competitor, and if he (like Jobs) has the hardware to play it, the content producers will have to give in.
At least, once those content companies finally get the fact that the rules have changed in the 21st century.
We might also see Amazon making its own cell phones and other devices that will bring in service revenues. Technology is becoming a service business, and Amazon is becoming a technology retailer. It's got a great future there.
Thet's just hope that Jobs can remain active enough at Apple to ensure that Apple still has a great future as well.
First of all, you should know that I'm considered a Google apologist. I admit it, I like and respect Google. I have no relationship with the company, other than using Google ads on my blog, which has never brought me any income. I wrote a book about Google's founders and how the company got started. I was paid by the book publisher, not Google, and I used my own reporting plus the reporting and research of three other journalists, all of whom were paid by me. My opinions come from that reporting.
THE FTC IS INVESTIGATING WHETHER GOOGLE BIASES ITS SEARCH RESULTS
The FTC decision to investigate Google is utter nonsense, a waste of time and money that distracts the FTC from investigating real abuses. Here's what Google has to say about it. (Not much useful. Google is bad at defending itself.)
The Wall Street Journal broke the story that the probe was going forward yesterday. It pointed out that the probe will look into whether Google "unfairly channels users to its own growing network of services at the expense of rivals." The European Commission is investigating the same thing.
In an article today, WSJ says the probe could be "as much of a watershed event for antitrust policy as the Justice Department's landmark lawsuit against Microsoft Corp. in the 1990s."
GOOGLE IS NOT MICROSOFT
I was a reporter at Business Week, then editor of Upside magazine during the 1990s. I followed the Microsoft case carefully and wrote about it. Microsoft was using a clearly anti-competitive practice: PC makers had to put Windows on EVERY ONE of their machines, or they would have to pay a higher price. This wasn't simple volume discounting. If you sold 100,000 PCs a year and put Windows on every one, you got the cheapest price. If you sold a million computers a year and put Windows on 900,000 of them with 100,000 of them using, say Linux, you did not get hte cheapest price. It kept competing operating systems out of the PC market.
There is no smoking gun for Google, merely complaints from competitors offered without evidence.
SO WHY IS THE FTC INVESTIGATING?
The Journal article, like the New York Times, relies on an organization called FairSearch.org to articulate the complaints against Google. FairSearch.org exists only to raise these complaints against Google. It's sponsored by Google competitors who claim that Google doesn't put their result high enough in search results: Microsoft, Expedia, Kayak, Travelocity.
The comments from FairSearch.Org are as useless as the ones from Google. Quoted in the New York Times:
“Google engages in anticompetitive behavior across many vertical categories of search that harms consumers,” the organization said in a statement. “The result of Google’s anticompetitive practices is to curb innovation and investment in new technologies by other companies.”
What a bunch of boilerplate catch-phrases. Harm consumers. Anticompetitive practices. Curb innovation. Prevent investment in new technologies. Just the kinds of things you need to claim in order to get anti-trust organizations to investigate.
WHERE'S THE BEEF?
I looked into the "Fact sheet" at FairSearch.org. Nothing but bun.
Google has power: "On average, 34% of Google's traffic went to the No. 1 result." No kidding. That's true of any search results page. So Google is big. Being big, even being a monopoly, is NOT illegal, as long as you got your dominant market share legally.
It follows with more of the same: "Google dominates search and advertising." "This dominance adds up to power." Hold the presses! Important news if I've never heard any!
Search manipulation. "Google can program its algorithm to exclude, penalize, or promote specific sites or whole categories of sites." Notice that it says CAN, not DOES.
Oh, here's the evidence, according to FairSearch.org--In 1998 Google's founders wrote: : “[A] search engine could add a small factor to search results from friendly companies, and subtract a factor from results from competitors. This type of bias is very difficult to detect but could still have a significant effect on the market.”
This quote came from a paper Larry and Sergey wrote while at Stanford (you should read it yourself.) But this was an argument about why such practices should NOT be done. Nobody remembers that when Google was just getting started, Larry and Sergey did not want it to be ad-supported. Why? Every search engine on the market biased their search results toward advertisers. Larry and Sergey described this as "insidious" in that paper.
Excerpts from that paper: "we expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of theconsumers." "search engine bias is particularly insidious."
These were all arguments about WHY Larry and Sergey did not want an ad-supported search engine. When Google was released, it was the ONLY search engine that did not use this bias. It worked. Google gave better results. Eventually, Larry and Sergey decided that advertising was the only way to go, so they set their standards: Ads had to be useful and relevant to users, not annoying and distracting, and advertisers would never influence search results.
HAVE LARRY AND SERGEY CHANGED THEIR STRIPES?
Sure, the question now is, have they become corrupted over time? Isn't it inevitable?
As a journalist, I say unequivocably that it is not inevitable (your opinion may vary.) This practice has long been held by every respectable newspaper in the world. Advertising never influences editorial. At Business Week, the reporters were not even allowed to talk to the ad reps. Every news organization, including the New York Times and the Wall Street Journal, knows that if advertisers influence editorial, readers will notice, you will lose credibility, and people will stop paying you for your news.
Larry and Sergey know the same thing. Bias the search results and people will realize they're not getting the best results any more.
MY OWN TEST OF BIAS
Let's put it to the test. On FairSearch.org's site, they quote a MapQuest executive:
"When people are doing searches for maps or directions for the city of New York, Google Maps comes up as the first search result in the organic (not the paid ads) listings."
Go to Google's home page and type in the word MAP. The result I got was that Google finished the word with "quest" (It also offered to finish the word as "maps" "maplestory" "map my run" "maps.yahoo.com"
The results, in order:
1. Mapquest Maps - Driving Directions - Map
2. Directions - MapQuest.com Features
3. Yahoo! Maps, Driving Directions, and Traffic
4. MapQuest 4 Mobile for iPhone, iPod touch, and iPad on the iTunes...
The rest of the results on the homepage are for MapQuest, including the news section.
Finally, at the bottom, after 13 search results, you get "Pages similar to www.mapquest.com" with these results:
1. Google Maps
2. Maps & Directions (MSN's mapblast.com)
3. Rand McNally
So why the claim of bias agains MapQuestt? Because most people type "maps" instead of "map." When you do that, the results are:
2. Yahoo! Maps
3. Mapquest Maps
4. Bing Maps
5. Maps - National Geographic
...and so on. Why the difference? First of all, Only Google and Yahoo were smart enough to start their URLs with the word "maps" -- maps.google.com, maps.yahoo.com. So when you type 'maps' those are the best fits. MapQuest is www.mapquest.com.
This gives no evidence of bias. It could be that on the 'maps' search Google biases its own results over Yahoo, or it could be cecause more people use Google Maps and more people link to it. You need more evidence than that to find Google guilty of bias.
There are many other examples. Type a stock ticker symbol into Google (YHOO or GOOG, for example). You get a top line that lists the major finance sites for info about that stock. There is a bias: Google Finance is farthest to the left, followed by Yahoo Finance, MSN Money, Daily Finance, CNN Money, Reuters. But they're all on the same line. The first actual search result is Yahoo Finance.
I just don't see the evidence here. Check out the FairSearch.org fact sheet for yourself, and tell me if you see anything other than accusations and innuendo with no evidence.
So, fine, an investigation by the FTC and EU may help keep Google honest, if it isn't already. My gripe is that the whole thing unfairly biases people against Google in the press, which just reports the facts, not opinions like me.
But at least I back up my opinions with evidence.
Can you do better? I'd love to hear your evidence of bias. Come up with a good one and I'll buy you a copy of my book from Amazon. Or, if you prefer, my upcoming book on Jeff Bezos.
Notice how I snuck in those ads? Hey, I'm not above self-promotion. But this isn't a news or search site, it's my personal blog. And at least I'm honest about it.
Instead, Chromebook is the long-awaited competitor to the standard notebook PC. It's designed more as a Microsoft killer than as an Apple killer.
Chromebook addresses many of the shortcomings of a PC:
Big Windows operating systems take forever to load. Chromebook takes eight seconds.
Windows gets slower as you keep adding annoying updates and fixes. Google promises that its system will actually get faster as it automatically updates itself.
Windows faces millions of viruses. Google promises "many layers" of security so you never have to buy anti-virus programs. I'm sure the security systems will also automatically upgrade as well.
Still, you have to use Google apps. This is a computer designed to run in the cloud, where programs and documents are stored. I use mostly Google apps, so won't be much of a problem for me. EXCEPT: Google Docs is OK, but needs work. I have trouble with losing the formatting when I save docs as MS .doc files. I prefer OpenOffice from Oracle, a free program that has weaned me nicely from MS Office.
Larry Dignan at ZDNet has a first impression review. He loves the speed, doesn't like the rubbery case, print driver still in beta, and is not yet comfortable doing everything online.
Ed Baig at USA Today also has a review. Can't stream Netflix movies. (That's Netflix's fault. It doesn't support Chrome browser. I have to switch from the Chrome to IE to stream my Netflix. Either Microsoft is paying Netflix or the Google evangelists have to hit Netflix hard.)
These are just first impressions, because the device ain't done yet.
The big question is if cloud computing has reached the point yet where people are willing to live there instead of in their PC. To me, the biggest obstacle is the MS Office installed base. I need to exchange files in tracking mode with editors and keep the formatting exactly the same.
But if this does work, I believe it will be the next generation of computing. iPad is a different beast. The old DOS/Windows computers are an ancient, slow technology that needs to be replaced. I hope it works.
The devices will go on sale this summer.
ADDENDUM: Oh, and one really great feature I forgot to mention. Since everything is stored in the cloud, including apps and files, you don't have to back anything up. If your computer is stolen or if you drop it and smash it to smithereens, you just get a new device, turn it on, and everything is still there, intact.
Reports are coming out that Google TV 2.0 is in the works. AllThingsD reports that Google is acknowledging the fact that TV producers are going to block it for now, and the new version will emphasize adding Internet programming to the TV stuff you're already getting. Just needs some inroads.
The system also needs design improvements. ZDNet says it should get rid of the keyboard.
Someday the TV programming business is going to have to accept the fact that all programming will come through the Internet. Come on, everything digital is moving to the Internet. Legacy businesses just can't stand change.
Will this end up as another iPhone/Android competition between Apple and Google? We might have an idea next week when the new Google TV is announced at the Google/IO developer conference.
Here's the real reason why regulators are trying to build a case:
1. People love underdogs and fear dominant companies.
2. Competitors will attack companies in court when they can't compete in the market any other way.
3. Companies that can't game Google's ranking system to raise their results will try to hobble its power and get back the ability to cheat the search algorithms.
Here are the complaints Newman raises:
He quotes a release from the Senate Antitrust Subcommittee that says that some e-commerce sites that compete with Google CLAIM they're treated unfairly in their rankings.
Nonsense. See my point 3 above. Google got its start by refusing to bias search results. Every search engine used to rank paid advertisers higher in search results until Google came along. In a meeting with Google in 2001, an AOL executive meeting with Google said Google was "stupid" for not doing the same. Sergey Brin walked out of the meeting and said, loud enough for people in the meeting to hear, "Someone get me a can of gasoline. I have to set myself on fire to get rid of the scum of these people."
Larry and Sergey have always felt that they are trying to do something great for the world, something too important to cheat. My constant example: type a stock ticker symbol (GOOG or MSFT) into Google or Yahoo, and the search engines know you're looking for stock info, so they give links to Yahoo Finance and Google Finance. Both search engines list Yahoo Finance first, because more people link to it than to Google Finance.
The main point is that Google's honest search results work. They give better results, which makes Google more popular, which makes more people use Google. Why mess up a system that works?
Competitors also complain that they are treated unfairly in their ability to buy search ads.
Also nonsense. Google gives preference to advertisers who have relevant ads. If you pay $500 for an ad linked to a keyword that is not relevant, the ad will drop below someone who pays $10 for a more relevant ad. The ranking is based on how many people actually click on the ad. Google only gets paid when people click on an ad. So why accept irrelevant ads from companies willing to pay a lot of money, when nobody clicks on them? Google's entire revenue stream is from advertising, so eliminating relevant ads would be just plain stupid.
Newman also quotes Michael S. Lee, R-UT, who says Google's dominance "creates myriad opportunities for anticompetitive behavior."
See point 1 above. Yes, any dominant company has ample opportunity to cheat. But it's a sad indictment of modern capitalism that people assume that the OPPORTUNITY to cheat means a company WILL do so. I have found Larry and Sergey to be two of the most honest and idealistic business executives I have met in my 30 years as a business reporter. I see no evidence that they cheat, or even want to.
Lee also thinks Google's dominant position reduces its incentive to provide the best privacy protection.
However, Google has always shown a stronger willingness to protect privacy than its competitors. People cits the "wi-spy scandal," as Newman calls it, when Google collected private info from wi-fi signals when it was taking pictures for Google Maps. The company said it was a mistake, stopped the practice, and never did anything with the data. It would like to delete the data, but all the anti-trust suits force it to keep it for evidence. I'm more skeptical of corporate claims than most, but I do not see what Google could possibly gain from something like this except losing the goodwill of its users. Nobody has ever shown any evidence of Google misusing private data. If you think Google does misuse your data, then go to Bing. I'm sure Microsoft is more reliable.
Newman says that when Microsoft was being investigated by anti-trusters, some people said it was just being attacked because it was a dominant company, implying that idiots like me must be just as stupid as the Microsoft apologists. I covered Microsoft for a decade, and used to have great respect for the company, but the evidence of manipulating the market became clear, and I said so. Google is not in the same category.
Newman then gives a lot of "what if?" scenarios without providing any evidence:
Newman says Google is "in the business of reselling aggregated data," so "if" it isillegally breeching privacy, that's an anti-trust violation. Huh? I'm just too stupid to follow his argument. Google is in the business of selling ads, not data. Why screw up the huge ad business to benefit some supposed minuscule business of selling data?
Newman says Google is "accused" of manipulating search results to punish competitors. See item 2 above. Newman cites the case of Foundem, a UK search site, which saw its site disappear from Google search rankings for three years. No evidence that Google unfairly manipulated its system to demote Foundem, just an accusation. Google does manipulate search results in order to try and exclude sites that manage to game its system. Like when it demoted J.C. Penney for gaming the system so that it appeared first in search results for words like "dresses," "bedding," "area rugs," "furniture" and other items where JC Penney clearly does not lead. Punishing cheaters is not the same as punishing competitors. Any company that says Google is biased against it should provide some evidence that the company deserves to be higher in the results.
Google pulls up the sites that are most popular. That's why it wins. It's not a perfect system, because new sites that have not yet become popular are at a disadvantage. But that doesn't mean Google is cheating.
Newman says, without evidence, that it locks up the search syndication market with "exclusive" deals with PC makers, ISPs, software vendors and others. Really? That's one of Microsoft's own tactics. I can't say it doesn't happen, just that I've never seen the evidence. Show me the deals and I'll reconsider. My HP computer makes Internet Explorer and Bing the default programs. It even brings up a Bing search bar whenever I start up the computer, even though I've changed my default to Google. I have to close the Bing window every time. It makes me less likely to buy from HP again, because it's obviously making deals that are not in my best interest.
And finally, Newman says Google is accused of making it difficult for advertisers to port their data to competing ad platforms. I just wish he would show some evidence for this. His link on this topic just leads to another article that also makes the accusation without evidence. If the accusation is true, it should be possible to find someone who was not allowed to port their data, just as it was possible to find PC makers who said Microsoft charged them more if they didn't agree to use Windows exclusively.
So I don't get Newman's argument. He says the problems he listed means there should be anti-trust action against Google. "The question is why not force Google to act more competitively?" he writes.
I'm sorry, but without evidence that Google is unfair or uncompetitive, anti-trust suits are just pandering to companies that can't compete in the market. If competitors can force anti-trust investigations without evidence, it costs taxpayers and the accused company money, time and attention.
And that's what I would call unfair market hindrance.
Forget all those managment books about business as war and chasms and zen. Google is analyzing what makes a good manager within its own company, and came up with a surprisingly simple list. The thing about surprisingly simple stuff is that so few people actually follow it.
I know that some of my former managers would have benefitted from these rules, as would have I when I was managing people.
Interesting that Google went public with this just a few hours before it announced that Larry Page was taking over as CEO and Sergey Brin was going to take over strategic development. Google needs to get more products finished, and to better hit the mark when they release something. Did this experiment help them decide that they could do it with Larry and Sergey reasserting more control?
The New York Times has an article about what Google found. The list of rules is below.
NOTE: Sorry I didn't notice the rules were cut off on the right. Thanks Allan for providing the link:
I have always found Schmidt to be one of the more straightforward executives in technology. He said that the goal was to simplify management structure and speed up decision making. I believe him. I don't know if he decided to semi-retire or if Larry and Sergey decided it was time to take more control again, but I believe him when he says the hope is that things will improve under the new management structure.
New products are where the most improvement is needed. Did Project Oxygen find that the managers heading new products like Chrome and Android were following those rules, while the people heading, say, Buzz, were giving bad direction? Whether or not that's true, I'll bet Sergey is interested in trying his hand at this management style.
Sergey is one of those people who is so brilliant he was in danger of never doing anything very important. This was expressed by James Watson, co-discoverer of the structure of DNA. Truly brilliant people, having succeded so easily at everything, never learn to strive to do something challenging. They're just never been challenged growing up. It's a good thing he met Page, who pulled him into Web search.
Sergey now has a challenge ahead: Getting Google to get products out the door, and in good shape. Can he learn to be sociable and support his team properly? He loves engineers, but is a tough critic and knows his own genius.
Learning how to do that is going to be the biggest challenge he's ever faced. Good luck to him.
Google's Rules, in order of importance (with my comments on Sergey's ability to follow them):
Sources told Peter Burrows at Bloomberg BusinessWeek that Apple is working on a small, cheap (and out of control?) version of the iPhone to slow the infiltration of the Android from Google.
Really, really interesting, and a major strategy shift rom Steve Jobs if true.
Since his comeback, Jobs has seemed content to stick to his pre-firing strategy of capturing the high end of markets and letting the "clones" take the bulk of the business. That happened in PCs, where imitations of the Mac OS (a product from Microsoft called "Windows") took over the PC business, leaving the Mac as a niche player. An important, cutting-edge, Mercedes-type niche, but still a niche.
Jobs has seemed willing to continue that strategy in smart phones and now tablets, letting Google play the old Microsoft role: Imitate Apple's software and license it to all hardware makers. That means Micros- er, Google, sells more units and attracts more apps from the independent market over the long-term.
It's been working for Google. Canalys says Android phones have started taking over current sales of the smart phone market.
At the end of 2009, Android captured 9% of smart phones sales, while iPhone got 16%.
I figured Jobs was happy with this approach. After all, Apple's profits and stock price are outstanding. But I've had a bad habit of underestimating him. I admit it. He's a genius. (Well, I've always admitted that.) He's smarter than I. He's the greatest pioneer since Thomas Edison said "Let there be light bulbs." He will continue to surprise everyone, no matter how used we've become at being surprised by him.
Perhaps Jobs is entering a new phase: Undisputed market leader. Bad for Google if he decides to do that.
Maybe he's still just thinking about this mass-market iPhone. Now that the iPhone is coming out on the Verizon network, we'll have to see if Android will continue its momentum. If not, Jobs may not have to make this change. Or maybe he'll do it anyway.
Ed Burnette at ZDNET has a funny interpretation of the announcement that Microsoft and Nokia are teaming up to create a "new ecosystem" in smart phones.
I'm always wary of underestimating Microsoft. It tends to create good products after the third try. It created a nice search engine with Bing. And it's gaining. Hitwise reports that Google's market share is stalled at only 71% of the market, while Bing has risen a point or so in the last sixth months, powering up to about a 9% market share. Comscore says Bing is up to 11.5% while Google is only at 65.5%.
Besides, Bing is the new Yahoo! That oughta help.
So what's this new ecosystem stuff? A powerful new Smart Phone system based on Nokia hardware and Microsoft software!
Microsoft has done it before. I mean, Windows for the PC became a great ecosystem. Sure, it got a little head start by becoming the OS for the IBM PC back in the Lower Cretaceous Period of the PC. And Bill Gates was smart enough to keep the right to license it to others and take over the PC world like the marsupials that took over the dead dinosaur niche and eventually evolved into Bill Gates.
But, hey, now it's got Nokia to give it a ... well, a fourth place head start. I'm sure the same strategy will work as other smart phone makers jump on the "Nokia Windows Phone Smart Phone" (NWPSP) standard!
OK, it doesnt have the pizazz of the "IBM PC" standard. They're working on that, I'm sure.
Ballmer points out that there must be millions of apps companies who already know how to build Windows apps -- you know, those folks that build apps for PCs, like Word, Excel, PowerPoint, etc. -- and are anxious to leverage their Windows skills for the smart phone market. Or, at least, the apps developers hope they will find themselves in the pole position once the NWPSP ecosystem takes off the way Bing has.
Already, Ballmer says there are over 8,000 apps for Windows Phone. The iPhone apps market, by contrast, is stalled at about 300,000 apps.
He also notes that by combining Nokia's power in phone hardware and Microsoft's huge advertising budget, the two of them will create "a shared roadmap so that we can really align and drive the future evolution of the mobile phone."
God knows that's needed. Steve Jobs and Sergey Brin don't seem to have much of a road map.
Nokia and Microsot are now the underdogs in this fight, so they're going to fight harder. And they've both been there before. About 30 years ago.
A couple days ago, Google CEO Eric Schmidt announced that he was handing the company's reins back to Larry and Sergey.
Commentators have been focused on the wrong things. There has been a lot of discussion of Larry's new role as CEO. I think the important issue is Sergey's new role in all this.
Bill Saporito, blogging on Time.com, sees trouble. He thinks Google has become too big to be run as a "geek commune" any more. He thinks it may be a bad time to get rid of Schmidt's "adult supervision." Given the fact that the company is having trouble in social networking and its Chrome operating system, he writes, "It's possible that Google doesn't need a guy who can invent the whip -- it needs a guy who can crack the whip."
By contrast, Claire Cain Miller and Miguel Helft at the New York Times write that this is an attempt to revive its "start-up spark."
The Times is closer to the truth, but not because Schmidt is out and Page is in. The important change is Sergey Brin's new job.
According to Schmidt's blog, "Sergey has decided to devote his time and energy to strategic projects, in particular working on new products. His title will be Co-Founder."
Aren't the Chrome OS (which will run any iPad competitor Google will push,) social networking and Google TV (which has been struggling to gain momentum) just the kind of strategic products that Sergey will now head?
It used to be that Sergey focused on new technology, Larry headed new products and Schmidt ran the company's financial operations. But those roles were all somewhat fuzzy when the company was run by a triumvirate. All three had to make strategic decisions together. Now it's clear who is doing what.
Larry has the job of running the basic business of the company. He still has Schmidt as an advisor, and there are plenty of financial folks to help as well. And don't forget: financially, Google is doing fine. Larry just believes he's mature enough to run a company now, and Eric agrees.
But new product development has been spotty and disorganized. So the most important product and technology development is now focused under Sergey. By dedicating all his attention on important new products, he may be able to get them out the door faster, with smaller teams and better coordination.
Why the change with Schmidt? Who knows? But he has nothing to prove any more. He's wealthy and successful. Maybe he wanted to back off, or maybe Larry wanted the top job now that the VCs can't make him have adult supervision.
But I think what Schmidt says in the blog is, in fact, the main reason. "Larry, Sergey and I have been talking for a long time about how best to simplify our management structure and speed up decision making." This change looks like it may do just that.