eBay’s Challenge in 2009: Googzilla

December 31, 2008

In my September 2007 study Google Version 2.0, published by Infonortics Ltd. in Tetbury, Glou. here, I commented on Google’s eCommerce capabilities. I included a diagram that outlined one of the scenarios that was taking shape as I did the research for that report. The idea was for Google to ignore Amazon and focus on a weakening eBay. Without fanfare, Google would attract sellers. Then Google’s “as is” back office capabilities were known mostly by AdSense participants who received accounting reports and checks from the GOOG without much fuss or hassle. Flash forward to 2009, and we see more of the Google eCommerce strategy becoming visible. First, Google uses the Amazon service to deliver music to its Android based mobile devices. And, Pete Barlas, Investor’s Business Daily, summarized data about Google’s growing influence in eCommerce. You can read “Google’s Product Search Catching Up Fast with Shopping Rivals” here for a short period of time. (Yahoo News stories often go dark quickly, so you may have to hunt around for this December 29, 2008, news story.) For me, the key comment in the article was:

Google Product Search had 11.8 million unique visitors in November. That’s up a whopping 786% from the year-ago period — the biggest one-year increase by far of any online comparison shopping service, says market tracker comScore.

Mr. Barlas includes other useful nuggets in his story; for example, the display of “sample searches” to intrigue shoppers. But I wanted to add two comments about this Google service not discussed in Mr. Barlas’ article:

First, eBay is a wounded duck. The signals of discontent have been flashing for a while. Fees have gone up. The issues about fraud and PayPal’s customer service continue to spark discussions among eBay users. The shift to fixed price items produces a more predictable shopping experience, but Amazon and now Google offer more efficient mechanisms. The eBay model is wearing out. When I look for a computer part, I have to wade through pages of irrelevant listings. Try a search for NC6000 and you will see hundreds of batteries and components. There is no way to limit the scope of the query to a working laptop computer.

Second, Google moves slowly and on numerous fronts at one time. As a result, it is easy to ignore a Google activity. Competitors like eBay have not figured out how to identify key Google moves, track them, and put defensive actions into play. Google seems to be floundering along with lava lamps and Odwalla juice and then the Google’s shadow falls across the eBay business. Surprise. Google has been a player in eCommerce for six or seven years. Now, Googzilla is in the front yard. Eeek.

In Google Version 2.0, the investments Google made in R&D make it clear that there are six business sectors in which Google is making similar strategic moves. Eeek is not a satisfactory response. By the time research data shows the shift is underway, the damage is done. Remediation is difficult, expensive, and likely to be ineffective. In my opinion, 2009 will be a pivotal year for eBay.

Stephen Arnold, December 31, 2008

Spreadsheet Fever: Information Overload Cost Estimate

December 31, 2008

Trophy kids with MBAs seem to have migrated from banking to consulting, or at least some did. When I read “Info Overload Costs $900 Billion, Blame Mr. Rogers” in Ars Technica here, I laughed–a while in fact. The Ars Technica story reported findings from a study generated by a New York azure chip consultant. As you may know, there are blue chip consultants like McKinsey and Bain. Then there are azure chip consultants. These are outfits hoping that the intellectual wavelength shifts to allow their firms to jump to the blue chip level. With studies like the one referenced by Ars Technica, it will be a while before the recruiters for the blue chips beat a path to the wizards behind the Information Overload Calculator here. You must visit the link, plug in your values, and get your rock solid cost estimate. The outfit behind the Calculator is Basex here. The firm’s tag line is a great one indeed: “Management science for the knowledge economy.” From my mud floored office in Harrods Creek, the “knowledge economy” does not look too peppy at this point in time. As a survivor of the original Booz, Allen & Hamilton meat grinder, I am also skeptical of “management science.” In my opinion, “management science” is an oxymoron, but what do I know. Earlier today I learned to great fanfare that Microsoft is a software company. Man, what an insight was that revelation. Ars Technica handles the write up of the Calculator with journalistic objectivity. The comment in the article that interested me was this one about search:

Another big time sink, says Spira [an expert cited by Ars Technica] , comes from the need to sort through reams of data to find the particular piece of information a worker needs. He claims that about half of web searches fail—other estimates put the figure closer to 30 percent—and that almost half of what those users regard as successful are really partial failures, because the information recovered is outdated or inaccurate. Part of the solution, Spira argues, is better search algorithms. “Most search is done now by keyword,” says Spira, “and that’s a terrible way of searching—by itself. It’s not terrible when it’s done in conjunction with taxonomies. But if I can’t narrow down my search, how does the search engine know what my goal is?”

You can figure out whom the Ars Technica reporter is interviewing. For me, this is one more trip down the return on investment garden path. Estimates of time wasted are not useful in my opinion. I worked on a year long study of innovation for a Fortune 50 company for a year. I watched quite a few geniuses and wizards in action. I recall thinking that these guys and gals fiddled around a lot. One wizard at a large defense company told me that ideas came while she slept. She worked on “work” on weekends. During the work day, she fiddled around. The product emerging from this clear example of wasting time was the machine gun ammunition clip for a high speed cannon.

The leap to search is a common mental jump among trophy and entitlement thinkers. The idea of remembering, analyzing, and synthesizing data over time is a novel one. Check out the article and copy down the data. I think quite a few azure chip outfits will be recycling the data or inventing their own content free calculators. In my view, using the Calculator wastes just wastes time.

Stephen Arnold, December 31, 2008

SAP CEO Revelation: Costs Are Bad

December 31, 2008

The only reason I pay any attention to SAP, the German software giant founded on IBM-type thinking, is that the company has a search system called TREX (few know much about this puppy), the company pumped several million into Endeca (a search vendor), and demonstrated an interest in hooking SAP into SharePoint for information access. I have to admit that there is not much information available about any of these search related activities. I do get pumped into my digital playpen quite a few news items about annoyed SAP customers and resellers. Based on my narrow view in Kentucky coal country, I think these news items underscore problems with bloated, expensive, time intensive middleware. Search is not much of a priority, if my reading of the news items is accurate. Imagine my surprise when I read Spiegel Online International’s interview with SAP co founder, Hasso Plattner, here. The Der Spiegel article is in English, so maybe the translator muddied some of the crystal clear ideas. Herr Plattner is described as a “benefactor,” a surprising adjective for a fellow who can get millions from a client before the SAP system is up and running. Might be a translation issue? Several points warranted my jotting them down; to wit:

  1. No reference to search. I assume that its omission is related to the news hole into which the article had to squeeze.
  2. The present financial crisis is due to greed.
  3. Americans have minimal health insurance.
  4. Americans bought “massive cars”. (Some of these are German vehicles and some American companies bought massive, bloated, expensive middleware from German software companies I opined.)

For me the most significant comment was this whizzer:

The financial crisis was unbelievably quick to affect real business. Many companies are considering layoffs. Not even a success story like SAP can give a clear outlook for 2009.

SAP is a success story. I wonder if some of the stakeholders would agree with this view? Check out this interview. I wish information access, content processing and search had been discussed. I think 2009 will be a challenging year for SAP and those who have a big position in the company. A London investment banker told me that he was certain SAP would not go away. I am not as confident.

Stephen Arnold, December 31, 2008

Tough Love: Search Engine Land Style

December 31, 2008

I steer clear of the search engine optimization mavens. Every once in a while, I see a post from the SEO world that embraces my much smaller, much narrower vision of information access and content processing. You will want to read the 6,000 word write up called “Tough Love for Microsoft Search.” The author is the person who has covered search “a long time–13 years” and often quoted Dan Sullivan, formerly of Search Engine Watch and now Search Engine Land. The article is here. Take off is a bit unusual. Mr. Sullivan he delivered a guest lecture at Microsoft about search in June 2008. He then moves through a number of references to the high profile journalists who cover search. Then he gets down to the meat of the article. Three points jumped out at me, but when you read it, you will probably have more gems tucked in your treasure chest of search wisdom. Let me highlight the three keepers for me and then offer a comment or two.

The first point that stuck me was that Google and Microsoft are different. The top guns at Microsoft don’t appear at conferences. The Redmond giant does not include the word “search” in its catchphrase; Google does. I found this insight quite remarkable.

The second point was that Microsoft sees the world of search as software. Google doesn’t. I had not realized that Microsoft’s history of selling software as shrink wrapped boxes and licenses to computer builders had escaped me.

The third point was that Microsoft’s got some brand issues. I noted this as well.

I think Mr. Sullivan does a good job of summarizing some of the core issues that Microsoft must address if it wants to do more than battle with Ask.com for search share.

In my view, the issues for Microsoft are somewhat similar, but I have been fumbling along for a year or two in the search space with a different set of perceptions; to wit:

  1. Google is a company that marks a turning point in information access. As a result, its actions disrupt. Microsoft wants to compete the way Roman centurions did. Google is fighting like the 18th century American revolutionaries. Microsoft is the British; Google is the colonial army. The British had a tough time adapting. Microsoft is in the same battlefield situation. The reasons run deep because the British had a mindset (what today we might call a business model), and the mindset made perception of the American’s strategy difficult.
  2. Google is hardly a spring chicken. The company has been chugging along, fueled by math club geeks and gals with soldering irons and metaphorical slide rules, for a decade. In that time, Google has faced zero competition. So now it is no surprise that as people realize its market lead, various “problems” can be easily identified. Nope. Same problem as in 1998. Google built for a network services approach to computing. Most of its competitors build for some other reason. Shifting gears is probably impossible for many organizations disrupted by the GOOG. In today’s business climate, the money to challenge Google may be harder to get. And the cost of challenging Google will be very high. The fatuous estimate of $300 million to do Web search that Yahoo offered earlier this year is just plain wrong.
  3. Advertising is one component of the Google business model. It is as much the business model as the technology for Google. In fact, the two are entangled in the theoretical physics sense of the term. The key for Google is that customers get some services for free while someone else pays the bill. The business model is more than advertising. Consider the deals in school districts or for Google Maps. An organization pays something, but the pay off is the cost reduction or the simple delight in something that works. Google appears to be a one trick pony, but it is not and the earning potential of its business model’s different facets will become more visible in 2008. There are parts to Google’s business model. Fixating on Web search and advertising is a symptom of misdiagnosing the Google pain.

So, my take is that Mr. Sullivan identifies points that describe the surface of the problem. My thought is that Microsoft’s issues are deeper, anchored in culture and a business model, not just technology. More importantly to me, Google’s business model will disrupt more than telecommunications and online advertising. Four or five sectors will find themselves caught in the same enigma as Microsoft.

The problem, therefore, is larger than Microsoft. What’s your take?

Stephen Arnold, December 31, 2008

Google Disses Internet Explorer: A Preview of 2009

December 31, 2008

Network World’s Gregg Kelzer’s “Gmail Notice Touts Chrome and Firefox, Dismisses IE” here is worth reading. The article reports that the GOOG is not an avid supporter of Microsoft’s browser, Internet Explorer. Mr. Kelzer runs down reasons for its suggestion that users rely on Google Chrome, but the big message is not included in the article. In my opinion, the Google is taking off its bunny rabbit suit. More companies will face the real Google, which looks a bit less attractive than a bunny rabbit. The dismissal of the aging, security challenged Internet Explorer is a signal of a speeding train called the Google Flyer. Get off the tracks is how I read the Gmail notice.

Stephen Arnold, December 31, 2008

ClickZ: Year 2008 as Search Terms

December 31, 2008

For you search engine optimization lovers, navigate to “The Year in Search: A 2008 Review” by Enid burns, ClickZ here. Ms. Burns has gathered the top searches for 2008. The resulting word list provides you with an indication of what will suck traffic to your Web site. It may help if your Web site is about one of the topics in the word list, but I know a couple of Web site wranglers who worry more about spoofing Google, Microsoft, and Yahoo, than about content. Use the list as you will. The Lycos system returned “poker” as the number one search term. If you want to buy a portal and risk your savings, acquire Lycos. None of the terms is surprising because the search terms mirror what’s hot. Web search is different from enterprise search in many ways, but I have yet to see Louis Vuitton or Clay Aiken in the enterprise search logs I have had the opportunity to review.

Stephen Arnold, December 31, 2008

Google Joins EU Privacy Commission Advisory Group

December 30, 2008

Out-Law.com here reported that Google’s privacy law expert has snagged a seat on a committee which will provide input to the European Commission about data protection. You can read the story here. For me the most important comment in the story was:

Google prompted a debate on retention when it announced it would no longer keep logs indefinitely, but would delete them after 18 months. Data protection authorities argued that logs should be kept for no longer than six months. Google eventually conceded that the EU’s Data Retention Directive did not apply to the information, and has said that it will now only keep records for nine months.

The thought that I had was, “Why keep them any longer than necessary?” The GOOG crunches the data in near real time, tokenizes it, and stuff the outputs of its processes into its nifty data management system. Inside the GOOG, various systems and methods grind away, feeding outputs into other Google operations. The 18 months, the nine months, even the six months of retention are red herrings. The GOOG zooms through data so chopping “months” down may be a negotiating tactic. In my experience with government and quasi government advisory bodies, pertinent facts and solid technical knowledge can be as hard to find as a pig in the hollow who volunteers to become a Kentucky ham.

Stephen Arnold, December 30, 2008

Cruel to Cuil

December 30, 2008

TechCruch pushed the boulder off the hill, and now the avalanche is crashing down on Cuil. I wrote about this service when it first rolled out. You can read that article here. You can find CNet’s take on the failure of Cuil here. Matt Asay’s “Breaking the Google Habit” summarizes the Web search traffic chasm between the GOOG and every other Web search service. Keep in mind that the Google is not doing as well in China, India, Russia, and a couple of other places. But for most of the US of A, search means Google. (When I make this statement in my public lectures, I get entitlement children and trophy crazed 20 somethings chewing on my ankle. Folks, I am just reporting data, not imagining them. What do you call a 65 to 70 percent market share in Web search and nearly 26,000 Google Search Appliances and nearly complete saturation of US government mapping activities with Google Maps?) Mr. Asay picks up the theme of search as a habit. I have mentioned this characteristic of online once or twice in the last 30 years, but it’s a novel idea for CNet. The point is that Cuil started strong and ended up sucking air behind such stars as Ask.com and AOL.com. For me, the most important comment in Mr. Asay’s write up was:

..for competitors looking to kick the Google search habit, you can’t take the Cuil route and compete on search. It just won’t matter if you’re better. You need to create a different, compelling habit.

Wait a minute. I need to get out my acid free paper and archival ink. I want to write that down. I bet the Cuil venture fund check writers would prefer to capture their thoughts with branding irons on Cuil flesh.

Stephen Arnold, December 30, 2008

Wring Value from Google Analytics

December 30, 2008

I fielded several questions in the days before the ghost of Christmas present visited the coal country where I live in rural Kentucky. One question pertained to Google Analytics. If you haven’t seen analytics in action, point your browser to http://trends.google.com and you can see some of what’s possible. A Google search for “Google Analytics” works well too. To dig more deeply into Google Analytics, you will want to read Kissmetrics’s article “50 Resources for Getting the Most Out of Google Analytics” here. My Web log gets so little traffic, analytics depress me. But you, gentle reader, probably have a high traffic site, and you will benefit by clicking through sites and services grouped by useful headings; for example, “Beginner” and “Plugins, Hacks & Additions”. Very useful collection of information. Highly recommended.

Stephen Arnold, December 30, 2008

Microsoft in the Crystal Ball

December 30, 2008

Five scenarios for Microsoft’s future made the shortlist at InfoWorld. You can read the full, remarkably choppy story here. I don’t want to spoil your fun as you scan the five scenarios the wise journalists cooked up for today’s intellectual meal. I can mention one of the scenarios, however. For example, after noting that Microsoft has wandered a bit in 2008, one of the future scenarios is a gentle drift downwards. When I read this, I thought, “If the economy tanks, how gentle will that crash be for the Redmond wizards?” In my opinion, not too gentle. You can work through the other four scenarios which strongly suggest that someone at InfoWorld might want to sign up for an evening MBA program at one of the universities near the InfoWorld offices. The scenario that I think warrants a bit of thought is the break up. The company may be worth more chopped into three or more segments. With a stock price in the $20 range, beleaguered investors and users who have to clean up Word’s crazy behavior on a Windows machine by firing up Word for a Mac may force the issue. If more trouble looms, maybe Mr. Gates will come back. Marketing is not closing the gap between Redmond and the GOOG. Technology, not Zunes, is necessary. And quickly. Time is dribbling away. The company’s 2008 acquisitions provide additional evidence that Microsoft finds itself in a strange new Googley world.

Stephen Arnold, December 30, 2008

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