April 5th, 2008
UPDATED: Apple’s secret plan to grab a chunk of the search market
I’ve had my iPhone since the day it came out. I love everything about it except the phone part (AT&T is nowhere as good as Sprint).
As soon as I got my phone I noticed: Searching for search on the iPhone - where is it?
We are not far from the 1 year launch anniversary. And there is still no search function on the iPhone.
There have been many software updates sine the iPhone was released. And still no search function on the iPhone.
This is not an omission, it has to be deliberate. The reason has to be that Apple is about to launch a search engine.
It makes sense.
Here is my reasoning:
The difference between search engines is narrowing. I trust Google but I use it out of habit. I don’t know if it has the best search results, I have trust that it does.
Take a look at this study, it is small but indicative of the power of brand:
href=”http://searchengineland.com/070628-094242.php”>Study: Good Brand Can Make Search Seem More Relevant
The study showed that when a searcher was given an identical result set across Google, Yahoo, Windows Live Search and an in house search engine, Google and Yahoo came out as more relevant. Why? Because of the brand of the search engine.
Despite the results pages being identical in content and presentation, participants indicated that Yahoo! and Google outperformed MSN Live Search and the in-house search engine.
Trust is in the realm of brand management. I have trust in Apple products, I use them a lot. If Apple Search launched and it could search my iPhone as well as the Internet, I would have trust in Apple and judge it a good service. I might even start using the search serrvice using it on my Mac, especially if it is part of Safari.
Also, consider this: The web browser and search service have become the operating system for our online world. Apple is all about owning the OS.
Apple has its Safari web browser but it does not have a search service. Again, Apple is all about owning its own OS.
Microsoft has its own OS, web browser and search service, and it trying to grab more of the search services market by acquiring Yahoo!. MSFT is all about owning the OS.
(Google’s proxy in the browser space is Mozilla.)
There is more here(click here for more…)
April 1st, 2008
UPDATED: User generated content bubble popping
[Updated: To clarify Videoegg is not closing, it is closing its doors to user generated content.]
User generated content was supposed to be a goldmine. Get users to generate text, photos, videos and then they tell all their friends and family and you monetize all that free content, free marketing and free traffic.
Well, it doesn’t quite work that way.
Videoegg is closing its doors to user generated content and told its users on April 1st that they should come and download their content off of its servers by the end of May. Stage6, another video hosting site closed down completely earlier this year.
my.videoegg.com will be decommissioned and services will end as of May 31, 2008. Upload features have already been disabled. Please plan accordingly and see the FAQ for more information.
There are well over a hundred similar sites just in the video space. This is bad news for user generated content if we see more of this.
Why should users go to all that trouble of creating and uploading and then marketing their stuff to their friends and families if their content might not be there in a few months or a year? They won’t.
What’s the future? Host it on your family server. We’ll have an always-on broadband wireless world sooner than later, and we have tons of cheap storage. (We don’t need no stinking YouTube servers…. :-)
March 31st, 2008
Monkeys throwing bananas…and other great lines from the Troll culture
Trolls are anonymous people that take the time to write abusive jibberish in comment sections and in online forums.
But there are literary giants among the trolls, and they peak through the online chatter now and again.
“Monkeys throwing bananas at keyboard could have written a better post,” is one of my favorites, from a comment left on my other blog Silicon Valley Watcher.
I’ve used a variation of this when writing about why ads on Facebook are so bad “the contextual algorithm seems to have been written by monkeys throwing bananas at a keyboard.”
Has anybody else come across any great Troll comments?
March 25th, 2008
Are trolls the rednecks of the social media world?
The topic of trolls, people who take time to leave inane, usually abusive comments, that kill conversation on blogs, and forums, and other types of social media is interesting.
Check back later this week for more on trolls and my theory about troll culture...
March 24th, 2008
Signs point to Benioff to succeed Ellison at Oracle
The more I look at it the more I’m convinced that Marc Benioff, CEO of Salesforce.com, will replace Larry Ellison, CEO of Oracle when he retires.
Of course, that would mean Oracle acquiring Salesforce, but Apple got back Steve Jobs when it acquired his Next corp. And I have heard from a very good source that earlier this year Salesforce had approached Oracle about a possible buyout at $75 per share, which would be a 50 per cent premium at the time, a reasonable premium.
Larry Ellison is now 63 and very close to retirement and Marc Benioff is by far and away the best candidate for the job.
One of my commenters asked why would Mr Benioff want to run a dinosaur such as Oracle?
Consider this: Oracle has a 100bn market valuation versus Salesforce at $7bn. Oracle profit margin is 24 per cent Salesforce is 2 per cent. Oracle revenue is $20bn, Salesforce revenue is $749m.
Salesforce could become the next Oracle but it would take a decade or more of tough competitive battles. Salesforce could become Oracle sooner than that if it were acquired. Why wouldn’t Marc Benioff want to be king of the hill rather than stuck in an online software company that is in direct line of fire from several competitors and several key internet trends?
Oracle has a lock on massive markets that won’t change much anytime soon. Salesforce is in the on-demand software market which means customers can cut and switch services much more easily than payments to Oracle.
Mr Benioff is cut from the same die as Mr Ellison, he is an Oracle veteran.
Take a look at this excerpt from Fortune magazine December 2004: The Big Benioff - by Daniel Roth
At 21, Benioff joined Oracle and quickly rose through the ranks: at 22 he was named Rookie of the Year; at 25 he became the company’s youngest vice president; later he ran marketing. Over the years, he developed a close relationship with CEO Larry Ellison.
It was clear why: Benioff was Ellison 2.0. “Marc would get people believing in his vision and supporting whatever project he wanted to do,” says Ray Lane, former Oracle president and now a partner at venture capital firm Kleiner Perkins. “That’s Larry.” At global management meetings, Lane would have Benioff and other development managers come to discuss their projects. “These other guys would put the crowd to sleep,” says Lane. “When Marc talked, these people would jump to their feet and say, ‘This is what I want to sell!’
Fortune - The Big Benioff
Yes, Mr Benioff has said unkind things about Oracle and the rest of the enterprise IT giants such as SAP, but that’s just showmanship.
Take a look at this from just a few days ago on News.com: Benioff takes stock of software shifts - by Charles Cooper and Dan Farber.
When I left Oracle nine years ago, Oracle’s revenue was $10 billion a year. Today it’s $20 billion a year. Where Oracle has innovated is in the business model. You’ve seen substantial growth and a substantial return to Oracle shareholders through that change. With SAP, you really have not seen innovation in the last 10 years. If you think about what is the one thing that SAP has ever innovated, what have they created that’s unique to the industry or value-added technology? I have a hard time thinking about what SAP is going to be known for at the end of the day.
Benioff to succeed Ellison. It all makes sense, IMHO.
March 22nd, 2008
Will the burden of the Long Tail kill Internet commerce?
I’ve been thinking about the economics of Long Tail businesses. Check my math:
Long Tail businesses are based on aggregating huge numbers of micro-markets. GOOG, Facebook, YouTube, and many other online businesses are Long Tail businesses–they make money from servicing micro-markets.
The content needed to attract traffic to micro-markets is free (harvested by servers scraping sites as GOOG does, or content is user generated and uploaded.)
The traffic to the content is free, users want to find something, or they send links to friends and family to content they’ve uploaded, such as pohtos and videos.
The costs of maintaining micro-markets is very low, data storage and servers are cheap and getting cheaper.
The number of micro-markets is increasing at a tremendous rate. The increase is greater than the increase in traffic.
The cost of storage and serving Long Tail micro-markets is is a micro-cost per market but it soon adds up. There will come a time when maintaining mountains of Long Tail markets will exceed the profits that can be generated by all those markets.
There will come a time when companies will have to dump unprofitable micro-markets. They will dump photos of grandma, they will dump videos of grandma. That will cause millions of broken links, the permalink culture of the Internet will be dead.
This will dry up user generated content. Why spend hours creating and uploading and linking to your content if it might not be there in a year or more? Will this kill a Long Tail business such as YouTube? It could…less new content means less reason for return visits.
For a company such as Amazon, why support a micro-market of people interested in an obscure episode of a TV program? Etc. The burden of supporting many hundreds of millions of micro-markets will have to be lifted because profits will suffer.
Culling the Long Tail will be necessary to preserve the profitability of Internet commerce. Otherwise the Long Tail will kill Internet commerce.
Here is a longer essay on this topic: Saturday Post: Choking On The Long Tail - The Unbearable Burden
March 20th, 2008
Have we misinterpreted the business value of the long tail?
I’ve been thinking about the economics of the long tail and its impact on the business of Silicon Valley’s largest Internet companies and discovering some very interesting issues, which have lead me to some startling conclusions. But please check my math…
My thinking about the long tail was triggered by a conversation earlier this week with David Scott, the CEO of 3PAR, which provides highly automated data storage systems for massive server farms. This is data storage for what these days is known as cloud computing, which was sometimes called utility computing, and which also supports Software As A Service companies (SAAS), and enables Services Oriented Architecture (SOA) IT.
3PAR customers are among the world’s largest online services companies such as MySpace, and Savvis, which runs a global network of 24 data centers providing IT infrastructure services on-demand. They service hundreds of millions of users.
3PAR enables what is known as thin provisioning, it is the ability to quickly reconfigure data storage on-the-fly.
It is a just-in-time approach to IT systems in the same way manufacturing lines were streamlined in the 1990s and made more agile and efficient through tight control of supply chains.
In addition to cutting IT costs through better utilization of data storage resources, 3PAR systems also eliminate the tedious and expensive human admin tasks required to run data storage systems. Labor cost cuts provide customers with huge savings that can be kept to improve the bottom line or invested in generating new business.
Mr Scott was telling me that 3PAR focuses on the transactional data storage market rather than the low end of the market, such as providing data storage for long tail services such hosting a photo of his grandma.
I asked why? “I might view a photo of my grandma, and that might be once a year or less. Yet that data still has to be hosted, secured, managed, and backed up. What is the business case for that photo? The cost of keeping that photo and others like it, will continually force companies to cut their storage costs and that will lead to them to storing the data themselves on cheap disk drives.”
That makes perfect sense. Clearly, there is little money to be made, and nothing to gain from 3PAR providing storage for long tail data because it eventually leads to the loss of business rather than a returning customer.
It is better for it to target the high margins in providing storage for transactional data.
That’s what got me thinking about the long tail and reaching some startling conclusions.
March 17th, 2008
Google should close down “evil” Performics business
Google’s recent acquisition of ad network Doubleclick means it is also owner of Doubleclick’s Performics, a leader in search engine optimization (SEO) services. Google is in constant battle with SEO companies because they go beyond its basic SEO rules and trick its algorithms into a higher rank for a web site.
This pollutes its search index with what are essentially paid inclusions, and also takes away revenue from GOOG’s text ad links business.
This is why the influential Danny Sullivan, from SearchEngineLand recently called upon Google to sell Performics as soon as possible.
In his post Open Letter To Google: Do The Right Thing, Divest Yourself Of Performics, he writes:
Conflict of interest? You bet. And worse from an image perspective, the purchase puts Google in the paid inclusion business, something it dissed as evil back in 2004, when it went public…
It just doesn’t feel right. To me, it’s the same thing as if the New York Times owned a PR company, where much of that company’s main work focused on getting articles to show up in the New York Times. It’s a conflict that will hurt Google’s trust…
He points to Google’s 2004 IPO filing and the “Don’t be evil” section:
Google users trust our systems to help them with important decisions: medical, financial and many others. Our search results are the best we know how to produce. They are unbiased and objective, and we do not accept payment for them or for inclusion or more frequent updating…
Our search results will be objective and we will not accept payment for inclusion or ranking in them…
Mr Sullivan says Performics should be sold as quickly as possible. But if Google sells Performics it will essentially be allowing it continue its work of polluting its search index with paid results.
I disagree. Google should close Performics, forgo the $70m in revenues, and employ the workers in doing good instead of engaging in actions it defines as “evil,” imho.
March 13th, 2008
Tech giants reveal their agenda
The CEOs of the largest US tech companies this week lobbied the government for protection against patent infringement lawsuits, and for support of several key policies.
Technet, the organization representing the chief executives of the largest US tech companies, unveiled its “2008 Innovation Policy Agenda” at an event in Washington, D.C.
These are its top concerns, presented, presumably in order of importance:
Green Technologies Initiative: Promote and highlight new technologies and innovation as a critical part of the solution to national security, economic competitiveness and global energy and environmental challenges and encourage a national commitment for investment in and adoption of innovative green technologies. In addition, encourage public policies, best practices and initiatives to spur the development and adoption of new technologies to enhance energy efficiency, encourage use of renewable energy and protect the environment.
Education and 21st Century Workforce: Develop initiatives to improve science and math education, and increase the number of Americans attaining degrees in science, technology, engineering and mathematics through new programs and resources that strengthen our public schools.
Immigration Reform: Promote comprehensive highly skilled immigration reform including an increase in the H-1B visa cap and reforms to the employment-based green card process to ensure the U.S. has a highly skilled workforce.
Basic Research: Support strong national investments in research and development through increased federal funding for basic research and a permanent R&D tax credit.
Patent Litigation Reform: Advance proposals with the goal of ending abusive lawsuits brought by plaintiffs using patents as a means of obtaining settlements from legitimate technology businesses.
Trade and Public Diplomacy: Work closely with national policymakers to enact trade agreements that strengthen our companies through expanded market access overseas. Our members increasingly rely on international markets for growth and we will work to support legislative efforts to enter those markets as well as agreements that guard and protect intellectual property. TechNet will also support public diplomacy initiatives, expanded trade as well as dialogue with policymakers regarding key issues including China policy.Broadband and Internet Policy: Provide strong support for the growth and vitality of the Internet and accelerated broadband deployment by advocating for consumer access to Internet content and services and a permanent Internet tax moratorium.
Sarbanes-Oxley Rational Relief: Work to reduce the Sarbanes-Oxley Act’s compliance burdens and impacts on small companies, while maintaining the integrity of the Act’s corporate governance goals. This will reduce unnecessary costs and mitigate unintended consequences of the Sarbanes-Oxley Act that are impacting innovation.
I would have ordered this list far differently. It’s back-to-front, almost.
These are the four most significant issues, imho: [My italics.]
Broadband and Internet Policy: Provide strong support for the growth and vitality of the Internet and accelerated broadband deployment by advocating for consumer access to Internet content and services and a permanent Internet tax moratorium.
Sarbanes-Oxley Rational Relief: Work to reduce the Sarbanes-Oxley Act’s compliance burdens and impacts on small companies, while maintaining the integrity of the Act’s corporate governance goals. This will reduce unnecessary costs and mitigate unintended consequences of the Sarbanes-Oxley Act that are impacting innovation.
Patent Litigation Reform: Advance proposals with the goal of ending abusive lawsuits brought by plaintiffs using patents as a means of obtaining settlements from legitimate technology businesses.
Trade and Public Diplomacy: Work closely with national policymakers to enact trade agreements that strengthen our companies through expanded market access overseas. Our members increasingly rely on international markets for growth and we will work to support legislative efforts to enter those markets as well as agreements that guard and protect intellectual property. TechNet will also support public diplomacy initiatives, expanded trade as well as dialogue with policymakers regarding key issues including China policy.
March 10th, 2008
Where is Hewlett-Packard heading?
The highlight of the Hewlett-Packard’s Labs event late last week was Shane Robison, the chief strategist laying out the industry trends and HP’s planned response . It was by far the most lucid presentation I’ve heard on HP’s strategy. I distilled it down to 9 minutes. Essential viewing (or listening…)
Tom Foremski reports on the business and culture of Silicon Valley and beyond. And also blogs at SiliconValleyWatcher.com See his full profile and disclosure of his industry affiliations.
Recent Entries
- UPDATED: Apple’s secret plan to grab a chunk of the search market
- UPDATED: User generated content bubble popping
- Monkeys throwing bananas…and other great lines from the Troll culture
- Are trolls the rednecks of the social media world?
- Signs point to Benioff to succeed Ellison at Oracle
Most Popular Posts
- Signs point to Benioff to succeed Ellison at Oracle
- Will the burden of the Long Tail kill Internet commerce?
- Monkeys throwing bananas...and other great lines from the Troll culture
- Are trolls the rednecks of the social media world?
- UPDATED: User generated content bubble popping
- Google should close down "evil" Performics business
Top Rated
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- Will the burden of the Long Tail kill Internet commerce?+1 vote
- Where is Hewlett-Packard heading?+1 vote
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