Too Large To Sue?

The clock is counting down on the FTCs two year investigation of Google. The government has spent a hefty chunk of our tax dollars to see whether Google is a monopoly which acts against the interests of the market. A horde of heavily biased search ‘also ran’ companies has lobbied to have Google either sued (probably the largest action since Microsoft in the 90’s) or reach a deal with Google which would in their minds level the playing field. Word is that most of the FTC favors moving ahead against Google….but I wander if that really would do any good.

It’s a tricky situation. Google is undoubtedly a monopoly, but if you didn’t have search life would go on…no babies in incubators would die. However they are the fulcrum of a huge amount of the new economy so to have them favor their own projects and harm the competition could be a problem. What I found rather distasteful was the spectacle of Silicon Valley Congress people writing to the FTC suggesting that they back their tanks off Google lawn lest their actions harm the economy….really? Google is now too big to sue?

Google is a monopoly in terms of overall search traffic and especially in terms of the crucial commercial search market. They are aggressive and unwavering in their pursuit of their interests….but this is America they are allowed to be. I long since gave up trying to keep up with the endless parade of “next Googles” in search. The short answer is the next Google might be Facebook…or Apple.   Remember when Microsoft was an evil Monopoly…before browsers took so much of the desktop over…before Apple surged back and Google cornered search, before Microsoft got fat and lazy? There are serious threats to Google in the search world. If Facebook cuts a deal with Yahoo, Siri continues to grow, Amazon continues to establish mastery of shopping search and we continue our dash to mobile there will be ample opportunity for Google to step up or others to step in.

I suggest the FTC strike a deal to the effect that Google will clearly label all advertising from any source and will undertake not to unfairly promote their own products above others….then let the market vote with its feet.

iPhone 5……..Searching Better by Degree?

Having just followed the blog feature by feature iPhone announcement I’m struck by the incremental impact this may have on search. Some will doubtless criticize Apple for a product which is only better by degree…a bit thinner, a bit longer, a bit faster (maybe a lot faster), a better camera, better sound, better microphone the list goes on. What I’m more intrigued by are the incremental incursions into search iPhone 5 points to. Apple has added Siri to the iPod Touch, its added Siri coverage to many of the kind of queries that are central to search such as sports, movies and restaurants. None of these incremental additions are complete game changers on their own, just as arguably none of the individual features make the iPhone5 a game changer but they point to a growth in App based engagement which means we are searching in many more places than we ever have and on many more devices. The Kelsey projections have desktop search surpassing desktop inside of two years. Apple was focused today on what they rather neatly call a “post PC” world. The tablet part of that world is already heavily Apple centric with a 68% market share but interestingly they also claimed that the  “Our notebooks rank #1 in the US in market share for the past three months.” These trends point to the continuing struggle for dominance between Microsoft, Google, Apple and increasingly Amazon. Search is one of those key battle grounds. Apple has historically never been a search leader yet in a Post PC world there may be very little stopping Apple becoming an inadvertent search leader….one incremental feature at a time.

Up the Amazon Without a Paddle?

We use search for just about everything, Google has famously become a noun, a verb and who knows..is about to become an adjective too. Whilst it’s awesome to find out things like (after watching Clinton last night) which amendment would we have to repeal in order to re-elect him (the 22nd) it makes its money from shopping searches. Those shopping searches have traditionally come from desktop users using Google to price compare for both online and offline purchases. However there is an interesting argument emerging that says that Google might end up duking it out with an unexpected rival…not Yahoo! or Bing or even Duck Duck Go….but Amazon. The little book seller who could has become the unexpected gorilla in the room in online sales and may end up as an inadvertent search gorilla too. With the continued growth of mobile devices and the increasing trend for users to cut out the middle man and go straight to Amazon to compare and shop there is at least some danger that Google will be left holding the proverbial 22nd amendment query baby while the shopping search goes straight to Amazon.

Obviously this isn’t going to hurt the mighty Google badly anytime real soon.  Amazon revenues are in the same ballpark as Google but their margins are much thinner. However Google’s juicy margins are driven by shopping searches and the average price per click Google is achieving has been in pretty steady decline for a year. As I reported in an earlier post the move to mobile is driving this trend more than any other single factor. To add insult to injury mobile users are increasingly bypassing Google entirely and comparison shopping on shopping apps like Amazon….it will be interesting to see how this plays out.

Rolling Back Search?

I’m a huge Amazon fan…most people are…what better way to avoid California sales tax on the widest range of electronics at great prices? I was interested to read today that Walmart is rolling out their new Polaris shopping search for their online properties which have always struggled to keep up with the much sexier and frankly less overweight Amazon. That’s a slightly odd name as Polaris is the name of the ICBM nuclear missile program prominent in the Cold War…the might just as well have named it their new engine “The Brezhnev” but I guess their assumption is that nobody studies history anymore so what the heck.

Just in case you care, they are featuring several things which are interesting if not necessarily useful. The first is semantic search which essentially tries to figure out what were really searching for as opposed to what you actually searched for and give you more options. This isn’t new. We were working on this back in the late Middle Ages (2002) at Fast Search and Transfer my Alma Mata of search. It’s subsequently been done a dozen different ways by just about everyone in search…but good for Walmart for catching up. The second is using social signals as indicators of quality. Essentially they collect Pinterest posts or Facebook likes along with a range of other social signals and use them as a scoring factor when delivering results. It’s not a bad idea, thou not one without potential challenges.

The premise that something is good because it has lots of likes is open to debate. Justin Beiber has over 46 million likes even Toddlers and Tiaras has three quarters of a million. The other problem with likes is that they cost so little effort to garner and are open to corruption that the moment it becomes clear how likes can be used to twist rank to commercial advantage you can be sure folks will be doing it in their droves (is that like spam?). Perhaps a better indicator is the review metric. I bought a new laptop on Amazon yesterday and the reviews were an important factor. In fact what I did was sort the result set by number of positive reviews then manually scanned down it for a laptop from a manufacturer I like at a price point I could afford. I like reviews as they are inherently more effort to carry out and potentially less open to corruption. If I went by likes I would be pushed towards Dell who has over three times as many likes as Asus. However if you compare the Amazon user reviews between the Dell equivalent of the Asus I ended buying the Asus is a hands down winner.

I took a quick swing through Polaris today and overall it’s pretty good. When I gave it very general searches like “Gold” it came back with gold jewelry, books, some music, xBox live gold membership, a blue and gold tent even a gold metal detector. Not bad for an almost impossibly vague query but in truth all over the map. What it doesn’t do is give a “more like this” option to allow you to zoom in on what you did mean. With a difficult query with relatively few good matches like “Private Parts” it returns the Howard Stern movie first then an interesting range of stuff ranging from books for children on how to avoid abusers “keeping private parts private” to Saving Private Ryan, a Shirley Temple movie and a twisted metal curtain rod where it appears to be ranking based on having the phrase “Includes all necessary parts.” In contrast the same search on Amazon also yielded a range of choices but the results presented many more choices focused on the more likely intent options those of gold jewelry and the Howard Stern Movie. That was an awfully cursory test but initial verdict? “Close but no cigar”.

The Great Media Game

It’s not the first time I can recall that Google has run an ad on the blank front page of Google.com but it’s certainly the first I can recall in a long time. The ad is (naturally) pushing their new 7″ tablet the Nexus 7. The new device has great reviews and at $199 it’s aimed squarely at the Kindle. Aside from the overall weirdness of having a huge ad on the front page the Nexus is an interesting departure for Google and another facet of what I believe is a much bigger media game.

For years we poor media consumers have had to put up with roughly 20 minutes in the hour of commercials…often poorly produced and repetitious. As a rough number I have seen the case made that for every hour of TV you watch advertisers are paying about 30 cents for access to your time. Then Satellite radio emerged with ad free music but horrible ads on their speech channels. Then came Pandora and a range of competitors offering essentially ad free or nearly ad free listening. Now we have Hulu, Hulu plus, Amazon Prime, iTunes and a range of video on demand offered by cable companies. The ad free content offered in many cases tends to be a little less current than prime time but if you don’t mind seeing earlier episodes or last quarter’s movies you can get a ton of pretty good content for about $20 a month, pretty much entirely ad free. Interestingly you can get almost everything you might want to watch except tonight’s new episodes live entirely without your cable provider. My youngest son recently took occupancy of his new off campus apartment and he’s proud to live a cable TV free lifestyle, no doubt he is an early adopter but it’s an option which wasn’t even available until quite recently.

So if you can live without tonight’s episode of Dancing With The Stars you can trade commercials for $20 and also get access to lots of content which wouldn’t be normally available. Catalyzing this dramatic shift in behavior are several key drivers including immersive high speed internet/wifi, mobile devices like the iPad or Nexus 7  and technology which seamlessly transfers content to the large flat screen which is a feature of pretty much every household in the US. It took about seven years for the flat screen to go from expensive luxury to commonplace. It’s taken less than two years for the tablet to make the same transition. The explosion of content sources (HuLu, iTunes etc) and the wireless integration technologies (Apple TV, Roku, Slingbox, Boxee etc) have all happened in just the last nine months. The adoption curves are shortening in real time.

We aren’t (yet) at the point where we can access all the content we want commercial free on any device in the house or outside for a total cost of about $100 per month…but I believe that’s visible from here.

Going Local…..Getting Closer to Home

Several interesting items have crossed my screen recently and they all point to the increasing importance of all things local.  For example eBay has just launched same day delivery for some of its products in certain markets….as always San Francisco gets to go first along with Las Vegas….(SF always gets to play with the cool stuff first). In general terms if it can’t be streamed real time I can wait a day or so to get something delivered. eBay is initially targeting local businesses looking for same day delivery of business supplies. I think that’s a little like cheating as these companies are typically set up for same day in town delivery so it’s a natural fit. It’s going to be harder to shorten those delivery chains for products not already set up for same day delivery. I recall back in the early days of dot com 1.0 there were a bunch of companies attempting to do things like grocery delivery and pretty much anything else online. Amazon has made a huge business doing what Sears and Roebuck was doing back in the days of the wild west. It’s a traditional paradigm brought up to date and made more local by technology. What’s much tougher to do is changing the paradigm rather than substituting sub components…either way local is driving the opportunity. Google recently announced ZIP code targeting and congressional district allowing politicians of all stripes to reach out to their constituencies through search. Will it make politicians more honest or interesting….probably not, but it will allow those who want to to target down to a level which they used to have to do door to door. It’s the same problem with a technology solution.

At the base of much of this change is the smart phone which is revolutionizing how we do a range of things. Amongst them is search. Mobile search is showing dramatic growth and as always the advertisers are lagging  behind usage. We spend over 10% of our time looking at mobile devices but they only garner 1% of ad spend. The logical advertiser base for the kind of intensely local products and services is also the most technology averse and skeptical group; the Small to Medium Business. That audience loves proven ROI…let’s expand the paradigm to a larger audience, imagine a scenario where a local business could advertise on search to a hyper local audience paying commission on deals driven to them through search or mobile media. Social media should (in theory) be a great source for similar transactions.

The lines of communication are compressing, we can order anything online and maybe get it delivered locally same day. Our politicians can get to us easier, advertisers, national and local can reach out to us based on our location and interests. The traditional barriers to privacy and access are being chipped away at as part of our pact with technology and convenience. Feeling a little claustrophobic by now…yeah me too.

Searching for the Amazon

It’s a rare week when the good folk at Amazon done come up with something to remark upon. This week, although they are set to benefit from the partial settlement of the recent anti-trust suit filed by the government, “search” has starred in Amazon’s remarkable week.

Amazon has used search in large volumes for a good while. You are using search every time you interact with their products. A few years ago, they deployed and have continued to develop their powerful A9 search platform, and now you, too, can use A9 in the cloud for a fraction of the cost of traditional search.

I love search. It’s cool and I know a lot of people who make their bills each month with search. So I had a slight intake of breath for my friends and former colleagues when I read today that Amazon is making powerful and flexible cloud-based search available on a pay-as-you-go basis. This isn’t the Mickey Mouse search offered by the Google Appliance guys, rather this is a full-bore-in-your-face-read-em-and-weep, enterprise-level search that has traditionally been provided by the big guys and used by the elites. This kind of technology has been available to the hyper-geek crowd through open source products like Lucene or Nutch for several years, but the level of tech-pertise needed to create a functioning product from those search starter kits was far above the interest level of most users. It would be like a clothing store manufacturing their own cash registers.

Given that enterprise search is (was?) too hard to make or manage yourself, companies turned to the big players who either offer search as a separate discipline or as a component of a larger system (Microsoft, Sun, Autonomy, Oracle, SAP etc…). What Amazon has done by making powerful and readily tunable enterprise level search available in the cloud on a pay-as-you-go-basis is to potentially reduce the available client pool for the large search providers.  From what I can gather, pretty much any reasonably competent web developer can now build and manage the kind of search deployment that would have cost a Porsche to buy and an Audi to run each year for the price of a mid-sized motorbike paid on a monthly installment plan.

It’s likely to make high-quality, flexible search much more widely available, which dove tails nicely with the democratization of technology that has continued to gather steam in recent years.