Tuesday, August 22, 2006

'Google-creep' strikes again as website puts itself up for sale

An American online calendar company has been forced to put itself up for sale on eBay after the internet giant Google moved into its space with a rival product.

The demise of Kiko.com, which has gone up for sale with a reserve price of $49,999, has raised questions about the growing threat posed by "Google-creep".

The company, based in Mountain View, California, is increasingly moving into areas only loosely connected with its core search engine product. As well as letting its engineers experiment with their own pet projects, Google has extensive financial resources that it can throw at new business areas.

This has generated several successful spin-offs such as the email service Gmail. The company has also started developing its own desktop applications, though it runs them as web-hosted services. Its own team recently launched a test spreadsheet application and, in March, it bought the word-processing application Writely.

While strengthening Google's position against rivals such as Microsoft, the company's development power creates a headache for start-up companies. It only takes Google to experiment in a particular online area to kill off fledgling businesses. That appears to be what happened to Kiko. Google launched a test version of its Google Calendar application in April, and that seems to have rung the death knell for Kiko.

The founders of Kiko, which is one of the growing band of so-called web 2.0 applications, have put the site's domain name, web hosting account and its intellectual property up for sale on eBay in an auction that ends on Saturday.

On the eBay site, the founders, Justin Kan and Emmett Shear, say: "We are selling Kiko because we want to have time to work on other projects as a development team."

But Paul Graham, whose Y Combinator investment vehicle bankrolled the start-up of Kiko, said on his blog that: "What nailed Kiko was Google Calendar. Once that came out, not only did Kiko's growth stop, but a lot of existing users defected."

Kiko is not the only business to have been put up for sale through eBay, though it is the first that has been publicly pushed overboard by Google. In the spring, the six-year-old online advertising group AffiliateAnnouncement put itself on the site, while last December a porn video company was put up for sale. The starting bid was $100,000 and the lot included 12,000 DVDs and enough equipment to start making films, including a "complete soft-lighting kit".

Nor is Kiko the only web 2.0 firm that has used eBay to get a valuation. Feedpass.com, which makes setting up news feeds easy for web users, recently appeared on the site with a note from its owners saying "the bottom line is we're curious to see what the market value might be for such a valuable domain and the code that runs it".

Sunday, August 20, 2006

Google CEO wants $74 billion TV ad market

Google CEO Eric Schmidt believes television viewers should not have to stand for tv commercials that are “a waste of your time.”

Schmidt is frustrated that “When you watch the television you see ads that are clearly not targeted for you.”

What does he plan to do about it?
Google is preparing to deliver “targeted measurable television ads” and Schmidt says Google has “a good shot at it.”

Schmidt expressed his enthusiasm for the $74 billion TV ad market at the Search Engine Strategies Conference earlier this month and described it as a:
Big opportunity to provide greater value to advertisers.

Schmidt believes Google should be “using our advertising system, our targetability, for every form of advertising.”

In “Google developing social and interactive television applications for 'mass personalization'” I present Google research on “Social and Interactive Television Applications”:
focused on using broadcast viewing to automatically present relevant information on a web browser…The system could keep up with users while they channel surf, presenting them with a real-time forum about a live political debate one minute and an ad-hoc chat room for a sporting event in the next. And, all of this would be done without users ever having to type or to even know the name of the program or channel being viewed.

Taking this further, we could collect snippets from the web describing the actors appearing in a movie or present maps of locales within the movie as it takes place (no matter if users are watching it as a live broadcast or as a recoded broadcast).

Google is currently recruiting software engineers for television applications:
Software Engineer, Television Technology - Mountain View. This position is based in Mountain View, CA. Multiple positions available in Mountain View, CA Software Engineer, Television Technology - Seattle/Kirkland. Multiple positions available at our Seattle Engineering Center located in Kirkland, WA Google's designs on the $74 billion TV ad market follow its targeting of the $20 billion plus radio ad market.

Google has recently integrated AdSense with its dMarc Broadcasting operations and believes it is on the cusp of “revolutionizing” the radio advertising business, and continuing to grow Google profits.

Google CEO Eric Schmidt, at last months Q2 earnings conference call, reconfirmed:
we are in the search business, so we need all of the information. We want to partner with people to get information so our search end users can see it.

We're also in the advertising business, and we'd like to provide advertising services to people who have their own proprietary content. So depending on where we are in that spectrum, we either do an advertising deal or a content deal or a hybrid deal.

But ultimately our goal at Google is to have the strongest advertising network and all the world's information, that's part of our mission.See “Google AdSense for Radio: Google diversification win?” and “Google Audio: Google dMarc radio ad product coming soon” and “Google AdSense for Radio, 'XM in your car': personalized radio ads?”

Friday, August 11, 2006

Google Blogger Service Available in China

Google’s free Web log service, Blogger, is once again accessible from Beijing without the use of a proxy server, indicating that apparent government efforts to block the site have been lifted.
Access to Blogger was restored on Thursday. The site has largely been inaccessible from China since late 2002, when government censors apparently blocked access to Google’s search engine and other sites. Last year, Blogger was accessible during a three-month period that stretched from mid-October until December, when the service once again became inaccessible.

Chinese officials rarely discuss their Internet censorship efforts.The lack of disclosure sometimes makes it difficult to determine when a site is being blocked or is not accessible for technical reasons. However, in cases such as Blogger, where a site is inaccessible for long periods of time, the culprit is usually government intervention.

The lack of access to Blogger has not affected the growing popularity of blogs in China. Of China’s 123 million Internet users, 24 percent report reading blogs "frequently," according to a recent study by the China Internet Network Information Center, which tracks Internet usage habits.
Today, there are dozens of Chinese websites that offer blog services in addition to U.S.-based services, such as Microsoft’s MSN Spaces and Six Apart’s TypePad services, which can be accessed in China.

Tuesday, July 25, 2006

New Google service for developers

In a post that was designed to get us all talking, Greg Stein builds suspense on the opening day of OSCON — the Open Source Convention. His article, "A New Google Service" on the Google Code Blog says that he and his team have been working on a new service for the open source community, but refuses to give us the juicy details.

At first I was thinking it might be be something to do with GWT or Eclipse, but his hints suggest it's a "service" — narrowing down what he might be talking about. I would not refer to Eclipse or GWT as a "service", so I'm going to dismiss that as a possibility.

What could the open source community benefit from then? Well, I am speculating here, but wouldn't it be great if Google provided a service like Source Forge with the search capability of Krugle , excellent revision control using SVN and continuous integration with Cruise Control?
Gary Stein has a history filled with open source involvement — currently he is Chairman of the Apache Software Foundation and is an engineering manager at Google. He has worked on projects like Subversion (SVN), and WebDAV (Web-based Distributed Authoring and Versioning) in the past — can you fill in the blanks here?

They could be setting up a public code repository for developers. Now that would have people talking! One thing Google really needs now is a community of developers — and a great place to find one would be OSCON. If the word "Google" ever becomes synonymous with "code" in the eyes of the open source community, that would be very interesting — especially since a large portion of open source developers aren't exactly pro-Microsoft.

Tuesday, July 18, 2006

Click fraud soaring on Google and Yahoo!

The amount of click fraud taking place on search giants such as Yahoo! and Google has increased since the beginning of the year, despite efforts to curb the practice.

Click fraud happens in pay-per-click online advertising when people or computer programs click on an advert and imitate legitimate users. This generates a fraudulent charge per click to the advertiser. Click-fraud scams can be perpetrated either by competitors trying to deplete rival marketing budgets, or by the advertisers themselves wishing to push their adverts up the search rankings.

According to a report published by click-fraud reporting service Click Forensics, the click fraud rate for tier one search providers, including Google and Yahoo!, rose from 12.1 per cent in the first quarter of the year to 12.8 per cent in the second quarter.

For high-priced search terms — those that generate more than $2 per click, and which often make up the majority of an advertiser's total spend — the click-fraud rate over the industry was 20.2 per cent, according to the Click Forensics survey of over 1,300 advertisers and agencies.
Tom Cuthbert, CEO of Click Forensics, said warned that those companies buying the higher priced search terms are unfortunately leaving themselves vulnerable to the greatest levels of fraud.

The overall industry average for click fraud rose to 14.1 per cent in the second quarter, from 13.7 per cent in the first quarter. The greatest percentage of click fraud – more than 88 per cent, originated from North America.

Friday, July 14, 2006

Google's pay-per-click algorithm change is ruffling feathers

With the recent changes Google has made to its pay-per-click algorithm -- intended to thwart the misuse of landing pages with little or no real content -- apparently these changes have caused many Google advertising partners to throw their collective hands up in complete disgust. The changes apparently have unintended effects -- or shall I say, effects that were not at all communicated to some of Google's largest ad vendors -- who are now seeing bid prices for Google pay-per-click keywords skyrocket in price. Ouch.

This blog post indicates that Google can't really judge what is a poor-quality landing page and what is a good-quality landing page. The author here rides Google pretty hard on the judging of "Quality" that Google stipulates in the official Google AdWords policy -- and to a point, I have to agree: how does Google judge quality? If this is performed automatically by machines and algorithms, oh boy. Is AI really all that advanced with recognizing the subtle nuances of how quality is perceived by the human brain?

Google advertisers over at the ClickBankSuccessForum are screaming for blood as well. With the new Google landing page policy, it appears that the "quality" of some previously high-quality keywords and products on certain content pages are no longer being deemed as high-quality by the recent Google change -- and in effect, many products are falling off the Google radar. Lost sales hits home in the hardest way, so these Google ad partners have quite a few legit beefs here. So, this is a test -- will Google listen to customer complaints well and try to resolve the situation as amicably and nicely as possible? Some of the street cred of Google is at stake, so let's hope so.

As this story develops, I'll post updates. This is apparently causing a major uproar as of today and I'm sure it'll get messier.

Tuesday, June 27, 2006

Ten Possible Consequences of Google's GBuy

Why does Google want to automate the advertiser click cycle and make it as fast as it possibly can?

The first reason is obvious: Google makes money on click conversions. The more clicks done quickly, the more money for Google, and the happier the advertiser. The second reason is that by automating the click cycle, Google will be vastly improving the efficacy of its search results, and how searches correlate with adWords. Unlike destination sites that measure success by how much time is spent on a page, Google measures success by how quickly a user navigates off Google. The company is constantly testing out data centers to see which center returns the best results that get users off Google quicker.

There are other reasons: Google will begin compiling transactional data. That data alone, even without trending analysis, is worth billions. Google will also become the first company to own not only the method of advertising, but also the data on what advertising works best. Perhaps most importantly, GBuy, when combined with Google's new Cost Per Action feature, has the potential to significantly reduce click fraud.

But there's the rub. Will merchants actually use GBuy?

Of course, you say, why would they not? You could use Google for everything! AdWords, Page Creator, Analytics, GBuy ... it's a virtuous circle of Googledom. And yes, even a curmudgeon like me is attracted to the idea of one Google to rule them all.

But let's not forget this has been tried before. It was called Yahoo PayDirect. Yahoo started the service as a competitor to PayPal. Unlike Google, Yahoo had a product incentive for this service. That is, Yahoo had a then-robust classifieds and auctions business that it wanted to tie PayDirect into. The math was simple: User browses Yahoo products, users buys with Yahoo system, Yahoo gets profit. PayDirect was free (most of the time), but it didn't work. Yahoo folded PayDirect in 2004, mostly because PayPal simply owned the market. Of course, Google has several competitive advantages that Yahoo did not have. But what Google doesn't have -- and this is important -- is product to sell.The main reason PayPal succeeded was because eBay was developing at the same time. There was no other easy way to pay an auctioneer, so users turned to PayPal. The two companies became so closely intertwined that eBay decided to buy PayPal and integrate it directly. Purchasing PayPal made perfect sense. As a merchant, why would eBay want give another vendor control of its clients?

This is the challenge that Google faces with GBuy. If you talk to a lot of retailers, I think you'll hear them saying the same thing: "Why would I give Google control of my customer?" Google's not selling anything. And traditionally, the merchant takes payment for an item because it's the merchant -- not Google -- that has to fulfill the order.Of course, there is a new breed of merchant online that just aggregates content and has no interest in owning customers at all. Think Shopzilla. For sites like those, perhaps GBuy is the golden ticket.But back to the traditional merchants. Online merchants already track purchases made via Google adWords. They've already bought software to track orders, or they've integrated a code into their inventory system that correlates a sale with an AdSense referral. There's an entire marketplace of shopping cart software that's already integrated PayPal.So the question inevitably becomes: If I'm a merchant, and I've already gone through the trouble of integrating PayPal, and PayPal is cheaper and it's trusted, why would I switch to GBuy?One possible answer to that question is that GBuy is free for AdWords customers. Yes, that's a great incentive. But don't expect GBuy to eclipse PayPal with that feature alone. Companies with large marketing budgets will be advertising over multiple sites, not just with Google adWords. Does it make sense to switch to GBuy for a 1-2 percent gain? Perhaps.At any rate, the market will decide. I'm still cautiously optimistic about GBuy. If merchants can be incentivized by the potential to reduce click fraud, and if they're not leery of giving too much control to Google, perhaps they'll switch.Below, ten possible effects that GBuy might have on Google, search and other companies.

1. Google changes how AdWords are bought. As more and more advertisers use GBuy, Google will collect data on which adWords are most effective at converting clicks, and which clicks convert to sales. Google would then be able to set adWords prices based the average ROI to advertisers for that word.

2. Google personalizes your search results like Amazon. You may start seeing "people who searched for this also search for..." Google may be reticent to much with its core search though. This feature could be a powerful add-on, like Google Desktop search.

3. eBay steps up their advertising campaign and partnership with Yahoo. eBay throws more dollars at its contextual ad system, adContext, and its keyword-based text ad product, eBay Keywords. (In the Yahoo PayDirect days, Yahoo allowed both PayPal payments and PayDirect payments on its auction site. I wonder if Yahoo and eBay will have anything to do with GBuy.)

4. GBuy fails. The feature fails to fulfill a marketplace need, since PayPal owns the space and does it cheaper. Ad money starts flowing back to the content providers, a la Leo Hindrey's famous prognostication.

5. Google begins offering targeted ads to users based upon a user's purchases.

6. GBuy will change how search results are returned by factoring in which online stores convert the most sales.

7. Merchants will devote fewer resources to design and more resources to structuring of data.

8. Google builds a valuable offline database of consumer information.

9. GBuy will alienate site owners who both sell their own products and have adSense on their site. If the Google ads that appear on those sites are for competing products, and those ads have a GBuy icon, then Google will be competing with its own customers.

10. Nefarious site owners will use all the old tricks to raise their SEO for all the terms that use the most popular GBuy adWords. I leave the rest to you, my smarter and more resourceful audience. What other effects do you see coming from Google's GBuy? I'm especially interested in the merchants out there. What payment system do you use now, and will you switch to GBuy?

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