Verizon Microsoft Love Fest
January 9, 2009
Update: January 9, 2009, 2 49 Eastern: A reader alerted me to this Business Week article about the Verizon Microsoft search deal. According to Rob Hoff here, Microsoft’s consideration to Verizon is in the $650 million range. I don’t agree with Mr. Hof about the importance of this win for Microsoft or its impact on Google. I don’t think the GOOG is going to be affected by this tie up. But the dollar amount is an indication of what Microsoft perceives the cost of thwarting Google is.
Original Post
I spoke with a couple of real live professional journalists today. I was answering my phone. I assume that other people were busy wheeling and dealing as I floated aimlessly in my coal drainage pit in rural Kentucky. The topic of the day was Verizon’s selecting Microsoft as the vendor to fuel Verizon mobile search. My view of this announcement was, based on the annoyed silences the professional journalists offered me, is different from the received wisdom. If you want to know what “everyone” is thinking about this deal, check out the CNBC story here. This General Electric organ is not going to get too frisky in my opinion. The story by Ritsuko Ano and Sinead Carew (assisted by Franklin Paul and Tiffany Wu with editing by Derek Caney and Matthew Lewis) “Verizon Picks Microsoft Search Over, Google, Yahoo” explains that the two corporate giants have a “long term deal.” The CNBC reporters included this insight from a pundit: “It’s certainly a feather in Microsoft’s cap.” I like that, “feather”. Amazing what a team of six professionals can do.
Okay, here’s my take. Verizon is on one side of the fence, confident its billions and brand can overcome any obstacle, even Google. Yahoo does not matter. On the other side of the fence is Google and the cadre of Open Handset Alliance folks, two thirds of the Internet Web search traffic, and about 19,000 allegedly arrogant non-Bell heads. Verizon skipped over the Kindle for mobile books, even though the other players are not doing particularly well. So Verizon picked Microsoft which in my opinion is not doing too well in the mobile department. Verizon’s less concerned with what may be the consumers’ choice and more concerned about Verizon’s choice.
Oh, and there’s the matter of “consideration”. I have zero knowledge of this particular Verizon deal. However, I opine that Microsoft paid for a chance to dine with the Verizon wireless executives. There will be some bells and whistles on the consideration, but that is standard operating procedure.
Alleged picture of the Verizon Wireless headquarters. Source: http://www.naiop.org/developmentmag/images/200203/doy-01.jpg
Will this deal make a difference?
The answer is, “It depends.” For Google, this deal means little or nothing in terms of user behavior. As it stands, users decide what service to use. Unless Verizon locks the user to a specific search system, users will select a search system. If the lock down is a burden, the Verizon mobile customer will switch. Telcos like Verizon deal with churn every day of the week. Losing and acquiring customers is the business. Excellence is not measured by relevancy scores or user satisfaction.
For Verizon, I don’t think the standardization on Microsoft means much either. There will be the usual promotions that are designed to keep or acquire customers. But a deal with Microsoft is one tiny component of the mobile decision. The package is important. The price is important. A single feature is important only when it contributes financially. Verizon will know whether the Microsoft deal makes sense in a year. Not before.
For the Verizon mobile user, the deal means zero. I am a Verizon high speed wireless customer. I noted today that the service was able to display four Web sites in 30 minutes. In short, I was not a happy camper. The core service did not work the way I expected or the way it was described in the Verizon promotional literature. Will I switch? Sure. But wireless high speed access in the US is pretty crappy. I got better connections at Norway’s sliver of the arctic than I did at lunch today. Microsoft search won’t make any difference to a user. In fact, at lunch a person wanted to know how to get from the rat hole diner in Harrod’s Creek to the big city of Louisville. We showed her directions on the iPhone using Google Maps. I think she will become a Google Maps user, regardless of her wireless service. The clarity of the map and the nifty look did the selling for the AT&T iPhone service with Google Maps as the data source.
Bottom line, step back. The big picture is that Verizon is a phone company. It has the DNA of Bell heads. Microsoft is an on premises software company. You figure out how well that will work for a user looking for information on a Verizon wireless device.
Stephen Arnold, January 9, 2008
dtSearch: At a Crossroads
January 9, 2009
For years, vendors with a snap in solution to Microsoft SharePoint were like a soccer player with an unobstructed path to the goal. Microsoft kept out of the way. As long as the vendor had a way to “fix” the baked in SharePoint search system, the vendor had a shot at a sale. Often the only risk was that a competitor would block the shot. Life was good.
The Microsoft changed the rules for SharePoint search. First, the company gave away a baby search application. Next, it included a beefed up version in SharePoint but asked customers to license a separate server to get the system. Then, when that MOSS (Microsoft Office SharePoint Search) system bumped against an internal document limit, Microsoft bought Fast Search & Transfer SA for $1.23 billion.
Since the deal went through last year, Microsoft has not made substantive changes in the Fast Search technology. In fact, the changes have been in trade show swag (see illustration below), the cloud of silence dropped over the police action taken against the company in Norway for alleged wrong doing, and more aggressive sales tactics.
The only difference in booth handouts has been the addition of the phrase “A Microsoft Subsidiary.” Otherwise, same old, same old.
Here’s how the Microsoft sales tactics are alleged to work. I want to avoid talking about foam booth handouts and police investigations. These are matters for wiser geese than I. Microsoft visits with a customer with a clutch of Microsoft products and servers. The Microsoft sales professionals assert that the Microsoft solution is the optimal approach. The customer says, “I want to buy the Google Search Appliance or some other search system.” Microsoft sweetens the deal. The customer says, “I will use Microsoft and its search solution.” The idea is not new. Incentives are standard in search licensing. Microsoft now has a third party solution that is okay if properly resourced. Just make sure you know the implications of “resourced”.
What does this mean to vendors who are dependent on Microsoft’s lousy native search system to create a market?
That’s a good question. I had arranged to get the answers directly from the senior managers at dtSearch last year. Then without warning, dtSearch refused to participate in the Search Wizards Speak series. You can find the list of wizards who have participated here. So far about 30 firms have participated. The holdouts are Google (no big surprise there. The company wants this goose killed and grilled.), Microsoft (on going investigation so no comment I was told), and dtSearch (Microsoft centric search vendor).
Without input from dtSearch, I decided to take a quick look at what the company’s products do and then ask myself some questions about the firm’s reluctance to talk after agreeing to my terms. Brutal are these terms. I submit written questions, prepare a draft, and allow the company to review my final write and suggest changes. So far, the interview subjects have been reasonably happy. One outfit–Paris-based Exalead–reprinted the interview which was subsequently picked up and reproduced in publications as far way from rural Kentucky as Japan.
I remain curious about the impact of the Microsoft Fast tie up on companies like dtSearch. These are smaller firms who could easily be crushed beneath the wheels of the giant Microsoft marketing machine.
dtSearch
Based on the open source information available to me, dtSearch is a privately held company operating in Bethesda, Maryland. Not quite a suburb, Bethesda is home to a number of companies, including the super secret mapping unit of the US government.
The system can be used for publishing and searching database-driven Web sites, incorporation into information management applications, searching of technical documentation, incorporation into forensics applications, email filtering usage, and incorporation into a broad range of vertical-market applications (legal, medical, financial, recruiting and staffing, etc.)
The company advertises in dead tree publications. The firm’s search system is also heavily promoted by Programmers.com and its ecommerce site doing business as Programmers’s Paradise. You can get a full run down on the dtSearch prices by running the query “dtSearch” and clicking through the choices. The system reports that dtSearch begins at $189.99 for a Desktop with Spider v7.55 up to $2,375 for a three server version. Developer versions incur higher license fees, but these require what amounts to a custom price quote.
The features of the three-server versions are:
Social Search: Manipulating for Money
January 9, 2009
Mike Elgan wrote “How China’s 50 Cent Army Could Wreck Web 2.0” here. The point of this article is that a person with money can hire Chinese computer users to insert comments into social networks. The infusion of posts would, in effect, distort the much-ballyhooed wisdom of crowds. Mr. Elgan does a good job of explaining how these army works and pointing out the fragility of user-dependent Web 2.0 services. I think he strays from the tethering ring when we asserts that the Chinese “army” can undermine free speech, but otherwise, he’s spot on.
However–and I know you relish my “howevers”–a few of my addled goose observations are now in order.
First, the “social network” revolution is not as zippy as most pundits assert. Mr. Elgan’s write up explains how the person with money can pay to make a specific issue, product, or person percolate upwards. Money can’t buy happiness but it sure can buy visibility in a Web 2.0 service that depends on user inputs.
Second, social networks is more of marketing story than a technology innovation. Sure, MySpace.com and Facebook.com move well beyond discussion fora and individual Web pages. These sites have knitted together functions and surfed on young-at-heart users who need a way to connect in today’s Jetson’s world. As the young-at-heart grow old and infirm, their use of network communication methods will persist, but these methods are extensions of older technologies, not sudden inventions.
Third, the implications of a technology cannot be accurately predicted. As a result, when an issue arises with a technology application or suite of technology applications like social networks, the “fix” will be more technology. My concern with MySpace.com and Facebook.com stems not from what they do, but my concern arises from the new technologies these services will require to handle the problems. For example, what’s the fix for the Chinese “army” issue? Think more stringent controls. The casualty is not free speech. It is freedom.
Stephen Arnold, January 9, 2009
Google and Newspapers: The Saga Continues
January 9, 2009
A pretty good Web log I follow is PaidContent.org. The story “Google Won’t buy Ailing Newspapers, Could Merge without Merging” popped up in the Washington Post here. I found this interesting.
The core of this story is that newspapers wanted Google to “save” them. If the US government can “save” investment banks, newspaper wizards figured it was worth a shot to solicit the country of Google to save newspapers. Google’s top dog told another dead tree outfit (Fortune Magazine), “No way.” Google, however, wants to help, a fuzzy concept in my mind. I picture Google as the video monster Godzilla wearing a Google T shirt. I guess the fuzzy notion works for the newspaper industry.
My thoughts on this weird acknowledgment that the Web does a better job of reporting “news” than dead tree publications are:
- For most dead tree outfits, it is too late. Costs and customers have moved on.
- The Web is a news generation and distribution system that operates without the intermediating steps so essential to the ego and business paradigm of dead tree outfits. Game over.
- The consumers don’t want to fiddle with dead tree stuff. Newspapers are becoming like pale imitations of komikku , filled with soft features and pablum.
I am willing to listen to a counter argument. I enjoy hearing from professional publishers who are de facto monopolies. For most professional publishers, the days of increasing subscriptions is almost over. I also like the brilliant arguments advanced by book, magazine, and newspaper owners who tell me to look at their outstanding Web sites. Folks, building traffic asking me to look at your Web sites won’t do much today. I am also fascinated by the scientific-technical-medical crowd who relentlessly assert that their information is high value. Keep in mind that I am an addled goose happy if I can find an edible crust of bread in the coal mine runoff, I am happy. Stakeholders in the dead tree outfits want more than stale crusts of bread. Stakeholders want payoff, not promises in my opinion.
Stephen Arnold, January 9, 2009
Google Revenue: Why the One-Trick Pony View Persists
January 9, 2009
A one trick pony is a pony that does one thing. Like let kids sit on its back. The one-trick pony is highly prized among certain carnival concession owners. Kids who afraid of big animals may also cotton to the one-trick pony. Wall Street likes any type of animal as long as it makes a lot of money. Google’s viewed as a one-trick pony because the company makes money from advertising. Ignore the boundaries that separate Google’s different types of advertising. The one-trick pony at the carnival might do some more interesting things in its stall at night with another pony. For the carnival impresario and the Wall Street crowd, Google’s a one trick pony shown below:
Google Blogoscoped presented a textbook example of how the one-trick pony view of Google is perpetuated. Navigate here and scan the table that shows “how Google makes money”. The useful list of more than 80 products and services includes three ways to make money. For each product and services, Blogoscoped tallied how Google monetizes these services. The three ways for Google to make money are–you guessed it–one trick ponies. There are ads and some fees to get involved with ads; for example, to be an AdWord advertiser, Google charges. But this is a variation on the one-trick pony’s ribbons, not a change to the one-trick pony.
I think it would be useful to consider these types of revenue horses. In 2009, a couple of them will be given their heads. competitors may find these ponies harder to ride than the docile one-trick pony that sits quietly as noisy kids climb on and off; to wit:
- Payments from educational institutions for various Google services. Example: the fees paid by New South Wales to license Google services for school kids
- License fees from the oft-reviled but highly-disruptive Google Search Appliance
- Subscription fees to commercial Google products and services; for example, Google Earth or SketchUp
- Payments from partners to become one of Google’s best pals
- Fees assessed to organizations when one of their top dogs decides that paying Google for Postini email archiving is better than getting caught unprepared for a discovery process.
Do you want to be standing flat footed in front of this group of ponies. Source: http://www.summers-photo.co.uk/Feb2007/images/Stampede_jpg.jpg
My list of other revenue ponies is longer than this group of five. Looking at the GOOG too closely or from one narrow angle makes it difficult to perform these tasks:
- Assess which pricing models could be implemented with little or no warning for unmonetized products and services; for example, charging me to look at pages when running a Google Book Search
- Place Google in a competitive context where advertising will not work; for example, Google charges for certain content constructs that it creates and are not available from other online services. Think a directory of specialized vendors in a specific market like video production.
- Understand what business models Google will have to implement in order to meet its financial objectives and Wall Street’s expectations; for example, if travel advertising goes down, what monetizing options are available to Google to address that shortfall.
If one wants to understand Google, one may want to keep track of the revenue herd. Granted ads generate a whopping 95 percent of Google’s “now” revenue. But going forward I like to watch those ponies. One or two may grow up to be different revenue animals. More about these options appears in my forthcoming Google and Publishing study available this spring from Infonortics Ltd. here.
Stephen Arnold, January 9, 2009
The Problem of Branding: The Live Search Edition
January 8, 2009
I have just about finished the book Buyology by Martin Lindstrom. His thoughts about the value of brands in today’s world are interesting. Brands can be like religions. But if not integrated, brands lose their zing in out information-charged world. SeattlePI ran an interesting news story “Microsoft Actively Considering Rebranding Live Search.” You can read the story here. The article references a Microsoft spokeswoman who allegedly asserted a brand change was under consideration. The new name for Live Search? Kumo is mentioned. Microsoft is proud of its search deals with Dell and Verizon. Can a name shift change market share? Stepping away from the name “Vista” might work. But search is different fish. I think that the search experience is more important than the name. The present Live Search renamed or rebranded as Kumo will still be judged by users against the Google. With Google’s market share increasing and Microsoft’s slipping, more than a name change is needed. But name changes are easy. Catching Google and its multi-year lead in search is a horse of a different color, not a fish at all.
Stephen Arnold, January 10, 2009
Search Goes Down, Google Turns on the Juice
January 8, 2009
I saw several Web log posts and major media (dead tree outfits) articles about the decline in Web travel searches. A representative story is “Internet Travel Searches Drop 42 Percent” here. UK journalistic endeavors amuse me no end. Honk. Honk. Laura Dixon wrote:
Internet searches for flights were down over 40 per cent in the week after Christmas according to Hitwise, a division of Experian. Traffic to travel Web sites for the same period – up to the week ending January 3 – was also down 16 per cent.
Interesting but not the sort of data that makes me flap my wings. The addled goose thinks that a quick visit to Google.com is in order. I wonder if Ms. Dixon has entered this query in the Google search box: SFO LAX. That’s it. Two three letter strings. These abbreviations refer to airports. Here’s what the GOOG displayed for me:
My thought is that if the number of queries is down, what’s the value of appearing as one of the seven featured air ticket sources underneath the structured query insert? In fact, in the last few months, there’s been some shuffling of the featured carriers. Notice too that the Google system automatically converted the airport pair into a query. Set the dates, pick a vendor, and bingo you get a list of options. Pretty handy for mobile phone users too. I wonder if Microsoft will offer this feature on its forthcoming Verizon service.
To me the downturn in flight searches means that the Google will turn on the juice to get more revenue from advertisers who must get traffic. That’s a more interesting angle for the addled goose to consider. But I live in rural Kentucky and am not affiliated with an oh-so-excellent dead tree publication. There you go.
Stephen Arnold, January 8, 2009
Gogimon: Borrowing Exalead’s Catchphrase
January 8, 2009
I have tracked Exalead for a number of years. Since the company opened its doors, its founder and technical guru has slipped the phrase “search by serendipity” into his conversations and even his interviews and public presentations. When I hear the word “serendipity”, I think of Exalead. I was quite surprised to read this headline “Gogimon Machine Delivers Serendipitous Search Experience.” The story was written by Jack Germain and published in eCommerce Times here. My hunch is that the use of this term was a headline writer’s attempt to catch my attention. It worked.
When I looked at the story, a couple of points jumped out at me. First, I wondered if the Gogimon system was built using the Exalead technology. I am on the record as a person who finds the Exalead engineering among the top tier in the search and content processing world. I mentioned this in the three editions of the late, not so beloved Enterprise Search Report, published by a content management consulting firm for several years, my “Beyond Search” study for a Boston consulting and conference company, and in the comments to my interview with Exalead’s founder here. I did not see a reference to Exalead in the story.
The Gogimon system installs on the user’s desktop computer. The system is smart and includes highlighting. Gogimon does not track user activities. Mr. Germain wrote:
The Gogimon Search Machine has a feature that is truly mind-bending. I clicked the Mind Reader icon at the top of the display after I browsed though a few of the narrowed search results. A separate window below the search results in each tabbed page opened with a list of suggestions for related topics. The Mind Reader feature analyzes the page contents from the existing search and offers up to 10 relevant links based on search results in all of the tabbed searches. Using Mind Reader makes it efficient and effective to narrow a search without running new searches. It also finds related topics that I normally would not have considered in my initial search.
The system is available for the Microsoft Windows platform. A Linux version is in the works. I installed the system and formulated these ideas:
- A metasearch system that reminded me a bit of the Autonomy kinjin system
- The system automatically identifies sites that present the sites most likely to have the needed information
- The business model appears to be anchored in advertising.
I suggest you download the system and give it a try. My other idea is that the phrase “change search into find” may be more pleasing to my ear that using Exalead’s term, but that’s just an addled goose’s opinion. Gogimon will have its work cut out for it. Google, Microsoft, and Yahoo offer downloadable systems which include search. You can also find other useful tools; for example, I still rely on Copernic for certain types of research. I noticed in the Copernic quarterly report here that the firm’s revenues from advertising declined. Gogimon may have to paddle upstream due to the present weakening in certain online advertising sectors.
Stephen Arnold, January 7, 2008
Google and Its Hardware Dependence
January 8, 2009
The commodity hardware used by Google works reasonably well. Drive failures, fan failures, and power supply failures are routine problems. Google’s solution for cheap hardware crapping out is very expensive and sophisticated software. I receive emails and telephone calls about the joy of using Hadoop, Xen, and the other quasi-Google open source tools. I listen and make a neutral comment, eager to bail out of the conversation. Here’s why:
- Google can use crappy hard drives because it figured out how to let software be smart about scattering data and ensuring that data exists in multiple copies. Short of a nuclear attack on most of Google’s data centers, the GOOG will not lose too much data. I know the Google trashed emails and has experienced other problems. I remind myself that Google crunches petabytes every 24 hours, and overall, the company has figured out how to retain and recover data reasonably well. The key point is that Google does not have to use exotic drives, controllers, and cabling. Big cost savings. Software, once written and debugged, is cheap to operate. Invest once. Operate for as long as possible at a lower cost.
- Google can use average CPUs, riding the Moore’s Law wave. I learned in 2002 or 2003 that the GOOG can mix CPUs in a server rack. Matching CPUs means that you have to buy specific CPUs with in parameter stepping rates to keep the server from stumbling over its shoelaces. Not the Google. Again software works the magic and eliminates the need for expensive, high end CPUs. As high end CPUs get commoditized, the GOOG can use these and get performance gains. Again, the focus is on pragmatic ways to hold down costs with software and systems engineering. Exotic data center hardware is expensive. With massive buying power and the ability to use CPUs that deliver cycles plus low cost, the Google is a force in hardware and will be for the foreseeable future.
- Google can chop out some of the expensive bodies required to babysit, bathe, and feed server farms. Software is Google’s secret weapon. Same idea. Eliminate costs and inefficient humans with smarter software.
You get the idea. So, why is it suddenly a big surprise that for certain pieces of hardware, Google wants gizmos its way. Google is fiddling with motherboards in order to eliminate components, thus reducing costs and energy consumption. The GOOG is into power supplies because it wants to standardize on specific outputs tailored to meet Google’s needs. Google is poking into the router closet to see what can be done to breakthrough the leading vendors’ self imposed limitations on ports, fractionalizing, smart sniffing, et al. The router story caught the attention of the non-nerds at Barron’s here. I even received an email from a Wall Street wizard sharing the news about Google and hardware. Do a search for hardware related patent applications filed and inventions involving the GOOG. Hardware has been an interest for years, nine in fact.
With upwards of 32 data centers and a million or so servers online, the GOOG is a market unto itself. A more interesting question is, “Will the GOOG make its gear available to a special few or will it offer its hardware on the open market?” My thought is that like other items in Google’s bag of tricks, money alone won’t work. The Google is a fierce competitor and it also likes to haggle. What would a partner give up to get access to some Google hardware goodness? Any thoughts? Think cost control? Think leverage. Think Google-izing the world of Google-friendly partners, users, and advertisers.
Stephen Arnold, January 8, 2009
Google Semantics Surfacing
January 8, 2009
ReadWriteWeb.com (January 6, 2009) ran an interesting article that tiptoes around Google’s semantic activities. You will want to read “Did Google Just Expose Semantic Data in Search Results”. Google won’t answer the question, of course. But the addled goose will, “Yep, where have you been since early 2007?” Let me point out that Marshall Kirkpatrick has done a good job of tracking down “in the wild” examples of Google’s machine-based semantic methods. These examples (and others in Google open source documents) make it clear that the semantic activities are chugging along and maturing nicely. “Semantics” as used in this write up means “figuring out what something is about.” Once one knows the “about” part of an information object, then other methods can hook these “about” metadata together. If you want to get a sense of the scope of the Google semantic system, click here. I have a checking copy of the report I wrote for BearStearns before that outfit went up in flames or down the drain. (Pick your metaphor.) My write up here does not include the detail that is in the full discussion in Google Version 2.0 here. But this draft provides some meat for the “in the wild” examples found in Mr. Kirkpatrick’s good article. How significant is the investment in semantics at Google? You can find some color on the sweep of Google’s semantic activities in the dataspace white paper Sue Feldman and I wrote (September 2008). You can get this report from IDC; it is report number 213562.
Let me close with three observations:
- Google is deeply involved in semantics, but with a Googley twist. Watching for examples in the wild is a very useful activity, especially for competitors
- The notion of semantics is sufficiently broad to embrace metadata generation and new types of metadata so that new types of data constructs can be automatically generated by Google. Think publishing new constructs for money.
- The competitors chasing Google face the increasingly likely prospect that Google has jumped over its own present position and will land even farther ahead of the likes of IBM, Microsoft, Oracle, and SAP. Yahoo. Forget them. The smart Yahooligans are either at Google or surfing on Google.
Now I expect some push back from the anti Google crowd. Have at it. Just make sure you have internalized Google’s technical papers, Google “talks”, and the patent documentation. This goose is not too interested in uninformed challenges. You can read more about Google semantics and in my forthcoming Google and Publishing study from my trusty publisher Infonortics Ltd. located near Oxford, England, in the spring.
Stephen Arnold, January 8, 2009
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