Online Evil has a Name – Googopoly

Google’s unchecked online dominance may finally be coming to a close. The company just had its 10 year anniversary and in that time it is hard to argue that they have not established monopolies in both online search and advertising. With its next three large initiatives, Android, Chrome and O3b, it has become clear that Google wants to own and monetize every action we do online. While most of Google’s projects have failed, its successes may now warrant antitrust evaluation.

The Justice Department is currently looking into whether it should launch an antitrust case against Google regarding its search advertising deal with Yahoo. It seems clear that a deal that would give 80+ percent of the search ad business to one company is bad for advertisers, consumers and innovation. Sounds like a monopoly too, which may be why the California Attorney General is also looking into the matter.

Then on Friday, the New York Times broke the Sourcetool.com scandal that may prove to be the straw that broke an empire. It appears as though Google’s algorithm may receive human assistance in the process determining what business are allowed to succeed online. One day earlier, CNet News uncovered Google’s log anonymization propaganda that proves the company plans on tracking the indivudual search history of its users indefinitely. Even more disturbing is the npGoogleOneClick5.dll plugin that is installed onto every existing browser on a computer when a user downloads Chrome. It then sends all URLs a user clicks back to Google, regardless of the browser you use. It fits the very definition of spyware and at minimum violates a certain code of ethics with consumers.

Don’t be evil. It was a great idea while it lasted.

Gmail vs Outlook(Exchange) – Is This a Joke

In the last couple weeks two top tier blogs, Lifehacker and ReadWriteWeb have posted stories on how Google’s beta Gmail not only competes with, but is better than Microsoft Outlook for business communication. Lifehacker’s post came out first and received a lot of attention, mainly because it was such a radical concept. It stuck with me though and I became perplexed when just two weeks later highly respected ReadWriteWeb proposed the same idea.

I believe all ideas have merit, but it is simply wrong to suggest Gmail has dethroned Microsoft’s Outlook and its Exchange service. I am not alone as the comments for both posts disarm and criticize the analysis or lack there of as one commenter suggests. In fact what both were really arguing was Gmail versus Outlook with Exchange, but for some reason ReadWriteWeb in a particular consistently focused on Outlook alone. Of course Outlook is not mobile, but Exchange is the most powerful mobile email service available. Hopefully this is just two misinformed Gmail fanboys stirring the pot, and not something more insidious like Google prepping for Gmail coming out of beta by engineering positive posts for the product’s business usability. I am not a conspiracy theorist, but this all just comes off as way to coincidental. Perhaps I need not worry about the integrity of Google because how could one question a company that has “Don’t be evil” hanging on their wall.

Not so Cuil

Great marketing can only take a product so far. This is as true with the half price coupon as it is with an incredible opening day launch due to strong PR. Take Cuil as exhibit A. I was genuinely excited when I read this article. A Google killer with a new search design, a larger search index, unique relevance algorithm and privacy by not storing IP information. It had glowing posts from all the top tier bloggers right out of the gate, even though it became clear none had actually tested it yet.

Then it happened, bloggers started using it and all that great PR went for not. In fact, I think it is arguable that due to Cuil’s PR blitz earlier in the week, it received an even greater backlash when it became clear it was simply an average alternative search engine and was not ready to go up against the incumbent big four (Google, Ask, Yahoo and Microsoft).

Cuil’s launch provides several lessons and maybe a future PR case study. First, if you are a search engine and you do not appear in you own first page of results, perhaps you should delay the launch a bit. Another is do not over promise and under deliver. In hindsight, it is laughable to believe a startup could go head to head with Google on day one. Google has too much money, experience and scale. A company could grow to eclipse Google over time, but not until after extensive real world adoption and testing. Smart startups do not let their PR run wild. Lastly, we need more restraint and journalistic responsibility in our blogoshere media. No longer should pure speed dictate new media, but instead accuracy because that is true journalism. Except for the fake news anomalies seen in the Onion and the SportsPickle, people read news to learn truth about their world. New media is now the media as professional journalist are blending with former ameatuer blogoshpere titans. We do not have room for fanboys, we need journalists.

BrowseRank – PageRank Killer?

While we still wait for proven online semantic search to emerge, Microsoft unveiled what could be a notable improvement to the current search environment. Last week a paper was released that introduced BrowseRank, a new method for determining Web page importance based on user behavior.

This method is in contrast to Google’s PageRank, which utilizes complex algorithms that look at the number and rank of sites that link to any given page to determine its search value. This method has driven Google to its current dominant status in search, but it can be gamed by link farms and other search engine optimization methods – impressively spawning the SEO industry. 

BrowseRank measures the time users spend on pages and sites to calculate their search importance. This is even more brilliant than utilizing actual total and unique visitors to sites through intranet provider statistics. 

I am encouraged and look forward to continued innovation in online search. Google has gone stale with a lack of competition and there is good reason to believe Microsoft’s plan to reinvent itself in the online world starts with reinventing how we use the internet – both through search and cloud computing. Microsoft is entering both areas a bit late, but its failed bid to purchase Yahoo may prove the internal motivational push it needed to start change within instead of the slow monolithic growth method of acquisition. No one can compete with Google within the confines of today’s current search arena, but unlike the numerous startups out there, Microsoft has the size and resolve to compete and move the search game to its next iteration. I suspect we will see a very different search environment before April of next year that will include BrowseRank, mobile search, CPA and maybe even semantic.

Piracy does not equal Privacy

Great news came out his week regarding internet video. Google has been ordered to provide Viacom the log files of YouTube users. This data will be used to prove that copyright infringing videos are the significant majority of content actually watched, demonstrating that YouTube’s traffic and success is built on piracy instead of user generated content. Viacom has stated that this data will not be used to target and bring charges against individuals, and in fact the company will be held in contempt of court if it uses the data for anything beyond determining the popularity of pirated content.

Unsurprisingly, much of the media is up in arms on privacy concerns and the influential nonprofit advocacy group Electronic Frontier Foundation (EFF) released strong criticism. The top issue is the belief that the collected user name and IP address could be used to identify individuals, however the court used Google’s own data retention policies to justify its order. I did find this civil disobedience suggestion on TechCrunch amusing though.

Personally, I think our country must come to terms with the fact that anything you do online can be seen by others. Privacy on the Internet is a joke and goes against the open, unwalled garden theme in which the internet was designed. I do not know how to hack, but I have the ability and tools at my disposal to locate a wealth of information about anyone I want. Businesses for a few years now have used the internet as a type of background check for potential hires. The information is there, the true issue is perhaps what people do with their time when they think no one is watching. Well, people are watching. What videos you watch really is not infringing on your privacy. If there is a battle to fight, it is figuring ways to securely transfer financial data digitally. To my earlier premise though, this may be a pipe dream.

I feel confident in what Viacom will find in this discovery process. People use YouTube to find short clips of pirated content. Want to see a quick clip of the Birthday Cake dunk you heard about or Beckham’s highlight real? Thanks to YouTube this is simple, unfortunately it violates copyrights. As a user, I do not care how I see it as long as I can see it now. Mark Cuban was always right about the demise of YouTube, but in its ashes will grow a legal way for users to locate this content and much like new services coming out that deliver full TV episodes, it will probably have significantly better video quality too. YouTube is the Napster of video. It changed the way we use the internet, but it will not reap the benefits because its base is rooted in piracy. RIP YouTube.

Digital Immersion…We are Almost There

Today was a bonanza regarding distribution of digital content online. Google, RealNetworks, Sony and Amazon all had significant announcements that impact how consumers can access video series, music, movies and books respectively. They all break new ground in some respect.

Possibly the most interesting development is that of Google, who inked a deal for distribution of a new animated web series by Seth MacFarlane through its AdSense network. This strategy blurs the line of content and advertising on the web because the two minute length clips will appear in the space normally dedicated for advertising on sites. Additionally, it could provide a new distribution system for high quality produced series. I expect it will increase clicks (prior to each segment an advertisement will play), but I fear that if it is to successful we will be inundated with web series “ads.” In terms of distribution, I think a better model can be seen with Hulu, though I understand Google’s desperate desire to entice visitors to take a glance at the advertising ghetto portion of web pages.

Moving along, RealNetworks announced that its Rhapsody music service will now offer 5 million DRM free songs at 256k-bit rates. This means the mp3s will play on any device at a higher sound quality than those from iTunes. While this is similar to recent offerings from Amazon and Napster, Rhapsody will also provide full length streaming to Yahoo! Music, MTV.com and others.

Changing topics, Sony plans to test a new movie distribution model via its Bravia TVs. The company will allow consumers to view the movie Hancock on Bravia TVs with internet access before releasing it on DVD. This could be the precursor to the end of set top boxes and the ability to surf the web directly from your TV without a separate computer connection. Interesting. Lastly, Amazon’s Kindle got a boost with news that Princeton University will begin making its textbooks available for the digital reader. It is the fourth university to do, but I still question if consumers will ever embrace reading novels and longer text on screens rather than pages. While I am a digital enthusiast, I still prefer reading off of paper.

Why Yahoo is Right and the Media Majority is Wrong

Perhaps it is possible you were not aware Microsoft was attempting to acquire Yahoo. I would wager that this has been the number one story in the tech community since February and most suggested Yahoo would be foolish not sell. Some felt that the internet had passed by the company, while most purely view this as a financial story. Meaning take the fast money now instead of building and maintaining a pillar of the digital world.

I have been outspoken about the ignorant and short sighted view of nearly everyone in the media, however I became incensed with this highly questionable post on TechCrunch after Yahoo announced its partnership to outsource a portion of its search advertising to Google that effectively ended any potential deal with Microsoft. This motivated me to finally outline publicly why Yahoo made the best deal for the longevity and health of the company. I am also an active investor that is disgusted by those who seek short term profits versus decisions that will strengthen a company for the long term. Invest in a company you believe in and want to see succeed in business, not to cash in quick by stripping the company of all its assets. Here is my reply to the TechCrunch article:

Beginning of the end for Yahoo? It is beyond me why the media keeps suggesting Yahoo and Google are in the same business and that search is everything. Google does one thing well. The majority of their products are worthless. Yahoo is a content portal. It has the number one site for Finance and Sports (by traffic) and the top email. They also lead the industry in display advertising, which is significantly more important/useful for marketers. Search ads…seriously, who is really clicking on this. If Microsofts CPA model catches fire, advertisers will revolt against the fraudable CPC model of Google.

Surely Yahoo is going to only farm out the low profit search terms to Google to maximize revenue. Yahoo is using Google as a tool because thats all they are. Beyond all of that…why is there not more discussion on Google diversification. Everything it does that provides revenue is tied to search. Thats great when you have the best search, but there has been plenty of articles outlining how the industry can be improved and if Google cannot figure it out, the house of cards falls down.

 Yahoo is fine. It hovers between the number one or two most visited site in the world. Unlike social networking sites, it also has a clear and viable way to monetize this traffic. One being display advertising, which Yahoo is the industry leader. Why would they sell to a company scrambling to find its place online that would only dissolve the Yahoo name in a few short years (much like the iconic Kinko’s that is now no more). I am not the only one who feels this way though as it looks like even Carl Icahn is warming up to an independent Yahoo. Moreover, Google is not going to eat Yahoo nor should this deal bring about antitrust concerns. Search is not the end all be all for the internet as TIm O’Reilly states and the two companies are not really competitors. Yahoo creates content. Google does not. Google is a tool, while Yahoo is a destination. Yahoo has interesting new products such as Yahoo Buzz (a Digg killer) and Go 3.0 and I expect the company to still be a thriving and relevant five years from now.

Can $1 Billion Solve the Online Video Conundrum?

During the past few months it seems that online video has become the most important issue for the internet. Some the myriad of topics include monetization, distribution, infrastructure, network neutrality and piracy. The Viacom vs Google lawsuit directly and indirectly touches on many of these issues and could have a dramatic impact in determining the future of the internet. Viacom wants Google’s YouTube to better police its site and remove copyright violations, where Google contends that the DMCA only requires that it remove copyright material after receiving a request from the content owner.

While Google appears to be technically compliant with the law, clearly this represents a major problem for growth in online video because content owners cannot possibly expend the needed resources to monitor and track all violations across the web. BusinessWeek provides a scalable solution where both content owners and online video sites would share the responsibility. It would provide greater management of copyrighted material as well as allow start up sites to thrive and innovate (which is the true purpose of the DMCA).

Additionally, Ars Technica digs deeper to uncover how Viacom and other content owners can beat piracy of its content through pure good old capitalistic competition. The article looks at how consumers are drawn to services that provide the best balance of price, convenience and quality. It is fairly hard to beat piracy on price (free), but there is absolutely room to undercut them on convenience and quality. Great examples on the industry moving in this direction can be seen in Hulu and Comedy Central.com

Search Adv…You Get What You Pay For

Last week Microsoft announced the launch of a new search advertising model that gives cash back for completed purchases. Live Search Cashback is an about-face to Google’s search advertising model that in my opinion provides more value to advertisers. Google search advertising is based on  cost-per-click (CPC) where Live Search Cashback is cost-per-action(CPA). This means merchants only pay for an advertisement when it directly leads to a sale instead of merely interest (or accidental clicks).

I believe this would eradicate the click fraud issue with CPC. Moreover, surely the CPA fee charged by Microsoft is more than that of a Google’s CPC, which could provide more revenue to Microsoft once Live Search Cashback gains a foothold and it starts to retain some of the fee instead of handing it all to customers. Simply put, CPA makes more sense and I am all about innovating systems for greater usability and efficiency. While I dont think this alone will defeat Google, I do think it will push the industry toward more effective search and likely overall online advertising.

 The Future of Search agrees and even looks at how Microsoft’s acquisition of Farecast could play a huge role. Results will crown the victor here and advertisers will determine whether quantity of clicks or quality wins out. Im betting on quality.