Google has been getting into many more things than just search for many years. Over the same period of time they have been fierce defenders of the kind of open Internet that allows the kind of innovation that has allowed the space to flourish. The government body chartered with the policing of that freedom is typically the FCC. That much maligned body, who I always associate with their long term persecution of Howard Stern, has regulated that Internet providers may not prevent their subscribers from attaching ‘non harmful’ devices to their network. In other words, if you wanted to hand a small home server off your network to allow all your family access to the content you have purchased online, your ISP couldn’t stop you. Google has been a long-term supporter of this open Internet “net neutrality” approach to the growth of the web, and they have benefited from it greatly over time.
Not Surprisingly the FCC has taken them to task and is asking Google to please explain what on God’s good green earth they are thinking of. Their restrictions are doubly puzzling given that only a few months ago they were lobbying for net neutrality from an exactly opposite position. No doubt many lawyers will now rush in argue both sides. Although this feels like a very geeky minor point, in fact it’s potentially a huge issue. If Google wins they will pave the way for our ISPs to significantly limit what we can do with the ever-expanding bandwidth we are paying for. I worked hard for that bandwidth, and I’d like to keep what I do with it up to me not my ISP.
If you work in the online space, it’s hard to avoid the Russian influence… and it’s not typically good. Much of the fraud comes from our friends in Russia; indeed the word “hacker” has almost become synonymous with “Russian.” Back in the late middle ages, when I worked for one of the major search engines which specialized in non US search traffic, we took a serious look at doing a Russian search. It was an extraordinarily complicated and challenging project that was further complicated by our inability to figure out who we should be selling the product to or how we’d get paid for our efforts. At the time, the leader in the still very early Russian market was Yandex… and it has pretty much stayed that way since then. Yandex has pulled off a feat that very few companies can boast… they kept Google to a minority market share. They remain clear leaders at 62%, with Google lagging a distant 37% behind Yandex.
The reason I bring this up is that the search world just marked the passing of one of its founders. Ilya Segalovich, CTO and one of the co-founders of Yandex, died in London last Thursday (or Friday…there was apparently some confusion) at just age 48 from meningitis; which was a complication from the stomach cancer he has been battling for some time. In Russia the average male life expectancy even now is only 64.3 years, so dead at 48 isn’t quite as shockingly young as it would be in the US, but it’s still somewhat shocking to see one of our own dead at such an early age.
Yandex (a name created by Ilya from “Yet Another Index” in a homage to Yahoo “Yet Another Hierarchical Officious Oracle”) has become a Russian success story worth in the region of $10Bn today having raised over $1Bn a few years back through that rarest of things… a successful Russian IPO. For them to conquer the linguistic craziness of Russian, a language so complicated that the past tense of “truck” is “Yellow” (or some such madness), and make it a commercial success with Google breathing down your neck is very impressive. How Yandex will fare without the technical genius of Segalovich is anybody’s guess. How would Google Fare without Brin? We know how Apple is doing without Jobs and it’s less than perfect, we will see how Yandex gets over this sad loss.
Facebook has suffered many bloody and frequently well-deserved beatings over recent months, ever since their less than well-managed IPO. So it’s a nice change to note that FB absolutely killed their last quarter posting over 50% Y/Y growth… and predictably, it’s pretty much all coming from mobile. We see similar things in our part of the world. Before their recent release of more closely targeted mobile campaigns and ads in the news feed, advertising on FB was something akin to shouting out of your window in the hey general direction of a crowd of passers by. Their new offerings clearly do work much better, and even highly targeted local folks like us can use them with a reasonable degree of success. The big brands typically slow to jump into any new media have finally figured out that FB is here for the long haul, and are lavishing display revenue on them… which also can’t hurt.
Where they continue to ignore staggering opportunity, with what feels like obdurate blindness is search. Don’t get me wrong, they do process a lot of searches (some sources say about a billion per day), but their search revenues are less than 8% of Google’s… even though they have an enormous fraction of the civilized world heavily engaged in their products. Their blind spot revolves around intent. Google works because search terms let them figure out what people want right now. FB collects massive amounts of target-able data, but just because I play tennis does not mean that I’m looking for a new racket right now. Wilson might well target tennis ads at me as I post about my kids and dogs… but that’s not the same as a search for “Wilson Hyper Hammer.” Their solution is to use the opinions, interests, posts, and pictures of the people I know to answer my questions about tennis rackets. Put simply, it sounds silly…what if I don’t have any tennis playing friends? What if they don’t know anything about that racket? It makes more sense for things like restaurants and hotels (even then we have Yelp and TripAdvisor), and by all means blend in relevant feedback wherever you can find it – like what Google tries to do with Google+. But, relying on their Social Graph to answer questing where the Graph has no content is (IMHO) just dumb.
Facebook has the users and it has a pretty huge amount of queries that is typically serves poorly. Having proven that they can do mobile and display and get pretty good results, why don’t they put a team of their brightest and best and come up with a killer search which answers every question and is augmented by the Graph as it grows… but then… what do I know?
Google announced today its latest foray into the world of tablet devices with their new Nexus 7. After the horribly botched launch of the original Nexus, we have to hope this one goes better. On paper it’s a great spec, hopefully setting the feature bar higher and price lower for the other guys we really buy our tablets from… by which I mean Apple. I really don’t care that much, as long as I can play Stupid Zombies and watch movies perfectly on my iPad Mini. What I was a little miffed by is their announcement of the Chrome Cast widget. This looks like a fat USB drive and plugs right into the HDMI port of any TV. It then allows you to stream almost any content from pretty much any device over the local WiFi network for just $35, it’s a stroke of Genius.
My miffed-ness springs from my love affair with the classy, elegant Apple TV; which just got nailed by Google’s cute, trashy, and cheap friend. I have three of the little critters plugged into the HDMI on all my TVs and with them I can stream from iTunes, HuLu Plus, YouTube, HBOGO, and a multitude of other content sources… just like the new kid on the block. Hopefully this too will inspire Apple to get innovating again. It’s certainly another win in the eternal battle against merciless, and excessive, TV advertising. As you may recall… I’m physically allergic to most all advertising (ironic, given that it puts food on my table). The growth of alternate content providers like HuLu and Crackle; which deliver top-notch content with minimal (if any) advertising in the way is encouraging. The other night I was watching Comedians in Cars Getting Coffee, which is an excellent vanity project by Jerry Seinfeld distributed on Crackle. Apart from some of the minor resolution issues, which occasionally pop up even in a Fios world, it was a pretty seamless experience. By no means as seamless as the iTunes experience, (which is quite superb) but pretty darned good. On that topic, the next thing we need is WiFi devices that drop off the network if they aren’t being used. Even with colossal bandwidth, by the time you tack on 4 iPads, 3 Apple TVs, a smart TV, an Xbox and four cell phones (the normal in my house), we are back to late 1990’s bandwidth. At any one time, most of those devices are not doing anything much… so why are they taking up any bandwidth? OK, let me get off my soapbox now and make arrangements to attend the Apple TV funeral… no flowers by request.
Google announced good but not spectacular Q2 numbers last week (if you can call $14Bn revenue “not spectacular”), and the Wall Street pundits will no doubt gnash their teeth over what could be considered a minor miss. I thought the fact that big G. is spending roughly $3Bn in revenue shares to publishers was fascinating. That’s a number they could so easily increase, and in doing so, drive their top and bottom lines even higher. However, instead of opening the flood gates a little wider and allowing a few more publishers to dine at the top table they remain determinedly focused on keeping as many marbles as they can, which in return limits their ability to grow as fast as the market would like. Truth be told, there is actually a ton of great traffic and revenue out there (including mobile) which Google is not taking advantage of. I completely understand and respect that they hold the quality of the product they offer to their advertisers sacred, but with the extreme checks and balances they have a place to be secure. The purity of the church could allow more in to dine, and greatly increase their own revenues at the same time.
The other striking Google data point is that it now serves roughly 25% of all internet traffic in the U.S. That’s kind of amazing… over 60% of us use at least one Google service every day and they serve more stuff per day than Facebook, Netflix, and Twitter combined. At peak usage (the evening movie spot), Netflix takes up about 30% of the US Internet. However, I guess if we average it all out and add in YouTube, it makes sense that Google does indeed carry that much load. That entire cost is essentially funded by Google Ad revenues, which has been under pressure of late… another good reason why the powers that be, might take another look at letting a few more of us mere mortals dine at the top table.
Our busy friends at Facebook rolled out their Graph Search to us U.S. English speakers today. Always one to have a go, I sat down and tried to make sense out of it. So far… not so good. I’m pretty sure I have lamented the awful (Bing powered) search on Facebook several times over the past months. Given the astronomical number of page views they get, not providing their users with a terrific search experience always struck me as at best careless… at worse perverse. So it was with some interest that I tried it out today. I should preface this review with the observation that I’m not a huge fan of all things social media. It’s not that I don’t see the value (especially as a potential advertising platform), it’s just that I’m personally not particularly social and frankly could care less about the activities and thoughts of folks I may know (perhaps only vaguely). I have about 170 “friends’ on Facebook which puts me a tad under the average (190), but not embarrassingly so, and I think I may have posted perhaps five times in my entire history. Conversely I have about 1,200 contacts on LinkedIn. In any event the new “Graph Search” is based on the assumption that the people you know may well have an answer for what you are looking for. That might be OK for things that people you might know may have experience of (like restaurants, hair salons and plumbers), but is much less useful for questions like “best picture nominees in 2012” and “what time is sunset” both of which Google or even Siri do a better job with.
Not to be put off by something as obvious as the entire idea soundings flawed from the get go, I put a towel over my head and tried to figure it out. First I figured l would try a couple of queries which people I knew might know about. There is a new Kabob place opening in town so I tried “Greek Restaurant” and Facebook duly produced a reasonable set of results for restaurants which have Facebook pages with options to sort by things like Restaurants liked by my friends, family, specific individuals or towns. Not surprisingly the moment I filtered by “My friends” the list got a lot shorter and less useful, as many of those friends don’t live near me. In comparison to my normal weapon of choice, Yelp was a pretty feeble experience and lacked the kind of features and reviews we have come to expect. No disrespect to my friends but I’d rather read ten reviews on Yelp than trust a like or two from folks who may, or may not know, what they are talking about. If you add in the fact that so many places ask for likes, or offer them in exchange for some kind of discount, I’m not sure I’d believe it even if they were liked by one of my friends. Similarly the query “Hair Salon” yielded a set of local locations, but when I filtered by “friends” the results fell apart, I have a lot of friends on the east coast so their opinion is much less interesting… it did point out that my niece likes a place near her… in the UK. To take the search away from very social areas, I tried “Pool table repair”. Although I didn’t specify a location, Facebook knows where I live and can look up my IP address. The result was frankly, feeble; it had no local content and had little if any actionable results… certainly if I were looking to repair a pool table… I’d be back on Google in a hear beat. At that point I gave up.
To put it politely, it doesn’t appear to be entirely “ready for prime time” and although I’m probably not a great use case for it, the results I was getting were patchy at best and seemed to over rely on businesses already heavily engaged in Facebook. In many (if not most) cases, folks in my limited Facebook world won’t have a useful contribution to make. Where they do, I get that including them in the mix like Google is threatening to do with Google+ makes some kind of sense. The rest of the time you are stuck with the (still) awful standard Bing powered Facebook search.
If you listen carefully, you can hear the sigh of relief coming out of Mountain View.
Anyone who lives eats and sleeps search has to watch the gyrations of Google pretty closely. They can be brilliant, opaque, capricious, and occasionally look illogical. This week, however, has been an especially tough one for the very bright young things in Mountain View.
I have commented several times over the years on how much the EU just hates Google. This hate, hate relationship started many years ago when Google swept into the market essentially giving away, or paying, to power search which essentially, pretty much over night, made the EU entirely dependent on the CA giant for all things search. They have compounded the problem multiple times by doing things like comprehensively avoiding paying any EU taxes on massive profits and pushing back on various EU attempts to make them pay for content which more traditionally minded EU publishers regard as being stolen by the search giant. This week the litany of EU pain continued with instruction by multiple EU regulators, which require that Google substantially change their data collection protocols or face legal action. This complaint springs from multiple origins; from the fiasco of private data collection during the creation of Google Street View to the more recent concerns generated by the admittedly creepy Google Glass the EU Mandarins don’t like or trust Big G and if they can’t stop EU users loving their products then they are going to make them miserable by legal means.
Back in the US, Google has once again come under fire for trafficking in ads for pharmacies that offer (potentially/supposedly) counterfeit drugs. I find this continuing problem utterly incomprehensible. We are a frequent advertiser on Google… and it’s tough. They have very strict guidelines that we have to follow and if the page, URL, or keywords aren’t up to snuff, then we can’t even get them to take our money and show our ads. How then is it possible that the same people who make it so tough for us to advertise for plumbers can blithely take and display ads for fake blue pills? I simply don’t buy that it’s a rogue algorithm… follow the money… these guys spend huge amounts of money, and for the right amount of money it looks like the same checks and balances don’t apply. I could be wrong but the Attorneys General of Nebraska and Oklahoma aren’t buying it either. Whilst I hate to make an obvious suggestion, Google could solve this in a heartbeat by requiring that advertisers for any of these kinds of products go through a positive vetting program to prove that they have the right to sell what they sell, and what they sell is FDA approved.
As a final embarrassment for the week G has just launched the first love child from its $12.5Bn shotgun marriage to Motorola a while back. The Moto X is their new smartphone aimed at the already very crowded middle market. With iPhones 4 and 5 selling from $140-$175 in main street stores and their partner Samsung already establishing a strong position with Android phones. The Moto X (who names these things!) is at the very least a day late and a dollar short. Even given that Google got some cash, made some IP deals and will make further savings as they integrate, they are still left holding a $4.5-5 Bn baby which is a non trivial price to pay for the IP to use against Facebook and Apple in their continuing legal disputes. 20:20 hindsight says if they had waited just a bit longer they could have got Motorola, Blackberry, and maybe even a good chunk of Yahoo for the same amount of cash. Oh well… maybe things will look up next week.