Entrepreneur Watch

Google vs. eBay

SEO Blog raises an interesting question about Google competing with eBay. With eBay continuing to raise prices in a counter-productive attempt to increase profits, why doesn't Google create a competing auction service?

I've long assumed that this is not necessary for Google. eBay auctions seem to be increasingly geetting away from the true auction concept, selling more and more items at set prices. AdSense is a good alternative to that.

There have been a couple reports, one in the NYTimes about a year ago, saying some eBay sellers are already abandoning the site in favor of Google ads. The people quoted found it a cheaper alternative.

I used to buy parts for my classic Volvo 1800 on eBay. But the last time I checked there, a few months ago, there was nobody selling parts anymore. So I decided to do a Google search, and several ads came up from people selling parts. I clicked on one and found the part I needed. The guy selling used to sell over eBay--he had me check his reputation there. No wonder eBay is in trouble!

But it would be useful for Google to at least set up a service that would rate sellers, and an auction system would let people sell one-time items. SEO Blog suggests that Google could even run the auction service for free and support it with ads. I like that scenario.

Right now, however, I find Craig's List to be a great alternative to eBay. We'll have to keep an eye out for any Google moves in this direction.

Help Me Before I Praise Google Again!

For those of you interested in people's likes and dislikes about Google, check out a thread I started on Google Blogoscoped asking for opinions. Google's secrecy is a big theme, but customer service seems to be a big problem with Google. This company seems to spend all its time talking to itself, and little time talking with others, including customers. And a lot of people hate Google's use of CAPTCHA to verify you're human.

Google's one-trick pony

Charlene Li at Forrester has a very good blog about Google's supposed "one trick pony" -- and she's concerned that people will think she's going soft on Google! She points out that Google's new products are actually growing nicely, and Google is patient. People forget that when Microsoft was moving from operating systems to applications, everyone said the company would never make a major impact there. I covered Microsoft at Business Week for about a decade, from 1985 on, and I saw it exercise patience and tenacity. Lotus Development, for example, first came up with the idea of suites of software, but then gave up on it before it took off. Gates once told me in an interview that he was surprised that Lotus gave up so quickly. He stole the idea and made it a hit. Google is the same way.

John at Random Culture makes an excellent comment on Charlene's blog that the stats tend to measure Google's success for its product relevant to Google's search engine, not against the market share relevant to competitors. Does anyone know where that data resides?

Li, and others, still worry that Google is too reliant on advertising. But that is a pony with long legs. Google dominates online advertising, the only ad market that's still growing in double digits. Google's revenue and profit in the last quarter doubled from a year ago. I don't know if Google will find other forms of revenue. I hope not. By relying on relevant ads, it is able to offer its "products" for free. Even Steve Ballmer at Microsoft has suggested that Google is in danger of becoming a monopoly in advertising, a bit ironic coming from him. But that is a real danger. I'm skeptical that Google can make an impact in offline advertising, however, unless it figures out how to bring relevancy to print in a way that others can't.

The Dark Side of Google

My friend Shel Israel, the co-author of Naked Conversations who has been trying to get me to properly blog for a year or so, thinks I'm too soft on Google. He suggested in his blog that I either write some mean stuff about Google or buy some Google pom poms. Maybe I am too naive about Google. This is only the second time in some 20-odd years that Shel has accused me of being too soft on a company. And the first time, he was right.

Further, Curt Monash thinks I'm too soft on Google as well, although he says on his blog that I'm not usually biased. Curt's a very smart guy. Jason Cormier at the marketing and PR firm Room 214 thinks maybe I'm onto something, but that just reinforces the idea that I'm an unpaid flak for Google.

I just don't see much evil there. The one big, gaping, horrific, inexcusable flaw Google has is it paranoid shizophrenic secrecy. My theory is that this secrecy is the source of all the complaints about Google. Does it deal with click-fraud appropriately? Who knows? Will it really protect all the data it collects about our online activities? Who can say? Did it really turn to the dark side when it set up shop in China? No, but the company has done an abysmal job of defending itself.

So tell me. In what way do you dislike Google? Do you see the dark cloud of evil creeping into this capitalist machine? What do you think are Google's biggest flaws? Give me examples. If you like, I'll pulish them in my book. Whenever that happens.
 

Erich Schmidt at CES

It's interesting what different writers took away from Eric Schmidt's talk at SES. It's like blind men describing an elephant.

Here are just a few examples:

ZD Net's Donna Bogatin ins obsessed with the answer to the question she managed to ask Schmidt: Are Google's ads too expensive? With convoluted logic she argues that without set prices, the ignorant public is bidding them up too high.  Wall Street brokers used the same argument against Google's Open IPO: Don't worry your pretty little heads, we're experts, we'll set the fair price for you. What these folks don't understand is that Google believes in the Wisdom of Crowds. So do I. A crowd does a better job of setting a fair price (among other things) than any small group of experts. In the case of AdSense this is a straight matter of supply and demand.  People are paying more for ads because they think it's worth it. It's the fairest system possible. If Google's competitors start getting a bigger percentage of ads, Google's prices will drop. That's as it should be.

Donna also weighed in with a rant about Google's secrecy when it comes to its measurements of click fraud. I think Donna is anti-Google. Fair enough.

China View was interested in the fact that Schmidt said governments were the worst threat to privacy. The site has a .cn domain and is published in several languages, including two Chinese dialects, but Google News directed me to the English .com domain. I don't know enough Mandarin to tell if the same articles appears in the Chinese version. But the English version is a bit of subversion through innuendo. Schmidt's speech seems primarily focused on the U.S. government until  he says, as quoted by China View, "The more interesting question is something where a government, not just the U.S. government but maybe a non-U.S. government would try to get in Google's computer systems."

Search Engine Journal covered everything.

News Briefs 8/7 - 8/14

Aug 10 -- Google Checkout is a loser so far. Donna Bogatin makes that assertion in a ZDNet blog, based on a lack of buzz at the Search Engine Strategies conference. Nice story. Google hasn't figured out how to make this one work yet.

Aug 10 -- Forbes takes up the click-fraud issue with an antagonistic view towards Google's defense of its polices. Rachel Rosmarindoes an excellent job pointing out that Google is way too secretive (what a surprise) about its own click-fraud statistics. A company that hides things is a company with something to hide. The article makes a good suggestion that Google consider a partnership with the commercial click-fraud-measuring companies. I wish Rachel had quoted someone other than the click-fraud companies supporting that idea, though. We also don't hear any arguments against the scheme. I tend to agree with Rachel, but I'll reserve judgment until I hear both sides of that story.

Aug 7 -- Yahoo has a new service allowing people to put specialized search engines on their site. As reported by CIO magazine, if you have a baseball site, you can select which other baseball sites for your personal search engine to search through. Seems like a good idea for search, but I wonder how many other baseball sites people will select to include in the engine. If it's just a few, can't they just list those sites, as bloggers do? But it could be a good specialization to give an edge over Google's general purpose search engine. Personalization is the future.

Aug 7 -- Google signs an exclusive deal with MySpace. LA Times says Google is paying MySpace $900 million to be the exclusive search engine on the social networking site. That's a lot of dollars to be made up with ad clicks. But Google is wealthy and is willing to spend a lot to increase its advertiser network. It's trying for a Network Effect, making it unnecesary to advertise elsewhere.

Sunday Google news summary: july 30 - aug 6

July 30 -- Eric Schmidt says Google will emphasize partnerships like the one with Dell. Good idea to avoid lawsuits, but content partners ought to get it through their heads that it's a good thing to let Google drive traffic to their site, without forcing Google to pay. Donna Bogatin in a ZDNet blog gives some details.

Aug 2 -- RealNetworks, Firefox and Google in bundling deal. An attempt to team up against Microsoft. Let's hope it's not another distraction like the old, ill-fated consortia from Sun, H-P, IBM and others to try and kill Microsoft Windows.

Aug 3 -- Google agreed to pay AP for using its articles and pictures. This seems like a really dumb idea. News organizations that sue Google for driving traffic to their sites have apparently never heard of blogs. It's like suing somebody for giving the classified section of their paper to a friend. iTWire thinks the deal makes sense because Google does not drive traffic to AP, it drives traffic to sites that buy AP articles. But that inspires pubs to buy more AP articles and increases ad views so they can afford to buy more articles. Good deal for AP, it's like getting paid for readership acquisition. But it will apparently be part of a separate service than Google News, which also strikes me as a dumb idea. Google News drives people to the most popular articles. So now it's going to send people to AP articles that nobody reads? We'll see when the new product is introduced.

Aug 3 -- Google signs deal with XM Satellite Radio to place ads on  non-music XM channels.  OK, a potential expansion of Google's ad market, and an attempt to give small advertisers more access to new markets. But can these new markets work for Google? Where's the relevancy between ads and content? I don't understand Google's print ad efforts either.

Aug 3 -- Taiwan's Alpha Networks is ready to produce a Google Talk-compatible phone. Will Google end up as our phone company someday?

Aug 5 -- Google says it's not interested in entering the music sales business -- right now. Company probably figures Apple has it covered. Google mumbles something about the opportunity lies in moving music to other devices. Can Apple keep up with songs from non-signed artists, though? If not Google will probably help people find them, and will no doubt end up linking to pirated music. More lawsuits!

Aug 6 -- Google signs a deal with Viacom to put video clips on Google site. International Herald Tribune reprints an article by NY Times that says it's a good deal all around, an indication of Google's willingness to do things legally. I linked to IHT instead of NYT because you don't have to register for IHT. Will NYT sue me now?

Aug 6 -- UC is in negotiations to add its library books to Google's Digital Library project. Libraries get it, too bad publishers don't. They don't like the other library deals. Will this one be any different?