Altegrity Kroll: Under Financial Pressure

October 30, 2014

Most of the name surfing search experts—like the fellow who sold my content on Amazon without my permission and used my name to boot—will not recall much about Engenium. That’s no big surprise. Altegrity Kroll owns the pioneering company in the value-added indexing business. Altegrity, as you may know, is the owner of the outfit that cleared Edward Snowden for US government work.

I read “Snowden Vetter Altegrity’s Loans Plunge: Distressed Debt”. In that article I learned:

Altegrity Inc., the security firm that vetted former intelligence contractor Edward Snowden, has about six months until it runs out of money as the loss of background-check contracts negate most of a July deal with lenders to extend maturities for five years.

The article reports that “selective default” looms for the company. With the lights  flickering at a number of search and content processing firms, I hope that the Engenium technology survives. The system remains a leader in a segment which has a number of parvenus.

Stephen E Arnold, October 30, 2014

Google Compared to Mainframes

October 23, 2014

I read ”Peak Google.” I found the analysis interesting. You can work through the 2,000 word write up as your time permits. I want to highlight one facet of “Google may be toast” analysis.

The hook is a chart that shows how mainframes were eclipsed by PCs. This is the first time I have seen the fortunes of Google compared to those of the mainframe.

The suggestion is that upstarts will capture and dominate Google in native advertising. Okay.

But the comparison to the mainframe sector? Ouch.

Stephen E Arnold, October 23, 2014

Hakia Offline

October 22, 2014

In April 2014, I cited a report that suggested Hakia was moving forward. It now appears that the Hakia Web site has gone dark. Information about Hakia’s semantic system is available in this interview with Riza C. Berkan.

Stephen E Arnold, October 22, 2014

SLI Systems: Stunning Factoid

October 21, 2014

SLI Systems reported its financial results in mid October 2014. The numbers were interesting. The company reported revenue of $22.1 million, which is good for search software. However, the company said that it lost $5.9 million. See “SLI Systems Poised for Continued Growth in Rapidly Expanding E-Commerce Industry.”

In the write up was a remarkable factoid; to wit:

More than 500 e-commerce businesses are using SLI’s solutions, which can service more than a billion queries in a single month,” said SLI CEO Shaun Ryan. “That’s ten percent of the volume that Google reportedly serves in North America in the same time frame. And with continued growth, we expect to continue adding scale to our high-margin business.”

From my point of view, this is an intriguing number. In order to break even, SLI Systems needed almost $30 million in 2013-2014. Based on the information I have gathered over the years, search vendors dependent on venture funding find themselves in an SLI Systems boat frequently.

Keep in mind that the cost of maintaining a search system is often higher than revenues can support; therefore, search vendors face red ink each time the accountant tallies up the numbers.

Why not get more customers? Well, that costs money.

Why not charge more? Well, savvy customers may look at open source options like Magento.

Well, why not come out with a killer product? Most search vendors believe they have killer products.

Convincing analysts and prospects is a different type of pizza. But if the factoid is correct, SLI Systems is generating hefty traffic when aggregated. Is it time for a revised business model?

Stephen E Arnold, October 22, 2014

Hewlett Packard Autonomy: Law Firm Spat

October 20, 2014

I read “HP Shareholder Wants Scrutiny of Wachtell Role in Controversial Settlement.” Quite an interesting write up. The proper nouns alone make the article a stunner. Here’s a sampling:

  • Wachtell Lipton Rosen & Katz
  • Skadden, Arps, Slate, Meagher & Flom;
  • Proskauer Rose, Choate
  • Brown Rudnick
  • Cotchett Pitre & McCarthy
  • Robbins Geller Rudman & Dowd
  • Greenfield & Goodman

The proper nouns point not to actual humans in most cases but to law firms.

In addition to the HP management decision to buy Autonomy for billions of dollars, the litigation is acting like a magnet for attorneys eager to help their clients and help blind justice remove the occlusion from her eyes.

Here’s a passage I noted:

“Wachtell inappropriately represented simultaneously both HP and the individual director and officer defendants,” the brief said, “and seemingly succumbed to the pressure to construct a settlement that unjustly benefited the individual defendants and provided, at best, nominal value to the company. Since the interests of the company were wholly incompatible with the goal of the individual defendants to eliminate their liability, Wachtell should not have provided such de facto dual representation.”

Would a law firm behave in this manner? I assume that the resolution of this matter will clarify the situation. I had the same silly notion about the settlement between i2 and Palantir. I am hopeful, however.

Stephen E Arnold, October 20, 2014

IBM: Did Watson Predict This?

October 20, 2014

I read “IBM Paying Globalfoundries $1.5 Billion to Take Unit in Retreat From Chips.” Sounds like a good deal. IBM pays $1.5 billion for a company to take a money losing chip operation.

I thought the idea was to buy low and sell high, not pay and then pay high someone to take a product or business. I know the notion of “freemium” gets some chatter, but I think we need another word for this business maneuver.

The write up said:

“IBM has always taken the long view of its business strategy, continuously reinventing,” Tom Rosamilia, IBM’s senior vice president of the systems and technology group and integrated supply chain, said in a blog post today, calling the deal “one more step in the company’s reinvention.”

I wonder if this is a business recommendation from the almost mystical Watson system or if it was the work of humans. If this was the work of Watson, is it a good example of a solid business answer. If it were humans, well, perhaps we learn more about what happens when a company runs out of management steam?

Either way, a business school has a case to feed to the young sharks hungry for business acumen.

Stephen E Arnold, October 20, 2014

Harvard and Loeb Digital Library

October 18, 2014

Hungry for a digital version of Fragments of Old Comedy, Volume 1: Diopeithes to Pherecrates? Navigate to this Loeb link. You may want to consider this question from Hacker News’ user Miles:

Why are they charging for access to ebooks, many of which are already in the public domain and available at

I assume the answer is “money.” Harvard’s endowment piggy bank contains about $30 billion, according to US News’s 2013 estimate. Latin and Greek readers are flush with cash. Get with the program. Pony up.

Stephen E Arnold, October 18, 2014

Earnings and Google

October 17, 2014

I read the dead tree version of “analysts Ask What’s Next for Google.” You can find the write up in the New York Times in section B, page 1 and 2 of the October 17, 2014 edition. You may find the story online at this link but no promises. (As you can see, I am indifferent to Google’s rules for linking. Too bad.)

In the write up, there were two quotes to note. I invite you, gentle reader, to consider each carefully:

  1. “The thing that worries investors, though, is that the company’s golden goose—its search engine—is showing signs of age.”
  2. Google executives grow annoyed with analysts’ fixation on clicks and cost per click.”

The first quote seems to indicate a growing realization that Google’s core technology is more than 15 years young. The innovations are mostly wrapper code and tweaks that generate more money for Google. Keep in mind that the vaunted business model is pretty much what GoTo/Overture/Yahoo had and did not leverage. We have, therefore, a bit of Clever, some voting, and the PageRank method disclosed in a patent held by Stanford University. The innovation engine at Google has been to graft GoTo/Overture/Yahoo with a bit of Oingo (Applied Semantics) and ignite the race to be number one on a page of Google results. Ta da. A business model that works. Keep in mind that Google is, as Steve Ballmer said, before he bought a basketball team, a “one trick pony.” A monoculture of money with an ageing DNA. Eeek.

The second quote shows what happens when a non math club member questions the appropriateness of the math club’s penchant for doing mathy things. In my high school math club, we fooled with machine readable tests, hid books in the library, and dodged confrontations with football players who did not enjoy our sense of humor. Think of it. Google is annoyed with analysts. Don’t those folks have an influence on institutional investors and others with big piles of money to invest? In my math club, we were quite arrogant when the principal attempted to reign in our antics. I can report that the principal put the brakes on our mathy antics. Nevertheless, we were incensed. A mere non math person was poking his nose into our Euler crankcase. Bah.

Google faces several challenges:

First, it has to find a way to generate more money because the company is spending lots and lots of money. Spending is okay as long as there is a payback. Spending to buy balloons, barges, and a solution to death is noteworthy. Pumping bucks into infrastructure is like feeding a youth soccer team at Pizza Hut after a match on a chill autumn day. Fighting legal battles consumes bales of bucks. There are other cost issues, but the GOOG has one source of revenue…after 13 years of trying to generate other revenue streams.

Second, search remains important. Search systems that return results that are not useful face some headwinds. In my view, Google’s precision and recall leave something to be desired. Google forces me to search silos of information within the Google empire to get a reasonable comprehensive view of what Google has indexed. Really useful information like “date indexed” and explicit easy access to book and scholarly content would be a plus. Right now, when I search Google, I see the fruits of much labor in the advertising functions. The relevant results function seems to have been kicked to the side of the information highway.

Third, Google’s enterprise search system has fallen behind the search service available on Amazon Web services. Google tried to disintermediate the information technology professional in an organization. Now, Google has an expensive system that is a lot of work to make useful to the annoyingly youthful users in an organization. In 2002, I figured Google would own enterprise search. Well, that hasn’t worked out. That market should have been a slam dunk for the Google. We do have Google Glass, however.

Google faces some “interesting” challenges. I am confident the math club approach is correct. After all, who cares what an annoying principal or non mathy person thinks?

Stephen E Arnold, October 17, 2014

Search and Deceptive Ads

October 15, 2014

Short honk: I read “Study Says Google, Yahoo And Bing Are Running ‘Deceptive’ Ads — And Regulators Are Doing Nothing To Stop It.”

I assume this statement is a surprise to some folks:

Now, disclosure text has become very small, and the shading very subtle, meaning users often don’t realize they are clicking through to ads rather than the most relevant result for their query.

In an increasingly important quest for revenue, these allegedly deceptive ads may be just the beginning of math club maneuvers. Relevance has a new meaning. Perhaps it is a synonym for revenue?

Stephen E Arnold, October 14, 2014

Chiliad Offline: A Precursor for Other BI Outfits

October 13, 2014

According to PacerMonitor, Chiliad, Inc. filed for bankruptcy on August 6, 2014. As you may recall, the company was a Washington, DC area analytics firm founded by Christine Maxwell of McKinley Group and Magellan fame. (Magellan became part of Excite, which also faded away.)

About two years ago, Beyond Search wrote about Chiliad and its big rocks. Also, in 2012, the company named Craig Norris, as chief executive officer. Mr. Norris (an industry leader according to Reuters)  had been the CEO of Attensity, sentiment analysis outfit, which has experienced its share of strong headwinds. In the news release about his appointment, he said:

“I am excited to be joining Chiliad at an important stage in its growth. What makes or breaks an analytics company is the quality and usability of its core technology. Chiliad’s offering has proven its ability to extract critical findings from data at massive scale for both Government and Commercial customers. I am eager to see us gain recognition for our technology leadership.”

The news release included assertions by Patrick Gross (Chairman of the Chiliad board of directors) that I have encountered many times in the last five years; to wit:

“Chiliad has already solved two very challenging problems. The first is the ability to rapidly search data collections at greater scale than any other offering in the market. The second is to allow search formulation and analysis in natural language. This means that no longer is an elite class of analysts required in order to generate meaningful results, thus reducing the personnel training and skills shortages that plague alternative solutions and put timely discovery at risk. The explosion of ‘Big Data’ is real and valuable findings are buried in vast collections for both enterprises and governments. Chiliad has the opportunity to integrate its innovative, massively scalable solutions with emerging open source software to build customized solutions for the largest-scale clients.”

Businessweek described the company in this way:

Chiliad, Inc. provides data analysis solutions for various clouds, agencies, departments, and other stovepipes. The company offers Discovery/Alert, a platform that enables investigators, business analysts, and knowledge workers to securely reach, find, analyze, and continuously stay on top of big data—whether structured or unstructured, and classified or unclassified. Its software solutions include Iterative Discovery cycle that allows analysts and researchers to reach various content silos, find what matters, analyze it to find meaning from the information relationships presented and continuously monitor changes; and Architecture, a virtual consolidated data center that enables multidimensional analysis and ranking. It serves government/intelligence, law enforcement, healthcare, pharmaceutical, insurance, and other markets. Chiliad, Inc. was founded in 1998 and is headquartered in Herndon, Virginia.

I have highlighted the buzzwords that were designed to generate sales leads and revenue. I can only assume that the verbiage and the Attensity management touch fell short of the mark. How many of the “analytics” and “business intelligence” companies will follow Chiliad’s path? Good question but I keep asking it.

Stephen E Arnold, October 12, 2014

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