Oedipus Search: FT Agony
July 11, 2008
I feel sorry for the Financial Times. It has a wonderful newspaper. The company relies on a quirky orange tint, making it easy to spot a free one at Gatwick from 60 meters. The parent of the Financial Times–hereinafter, FT–owns half of the Economist, the oh-so-snooty must read for power mongers.
The FT had a bit of bad luck with its search engine a couple of years ago. Now, after a rethink, the company is back on track with the help, according to my sources, of Siderean Software. I have written happy thoughts about Siderean, and the FT online is improving. This may be a rumor but the FT Web site was looking better the last time I checked it.
Then, the tragedy. You can read the full story here ComputerWorld’s Mike Simons reported that the FT’s servers were stolen from a data center in the quite lovely Watford.
Bad luck that. Details are quite muddled. Cable & Wireless, a services provider to various government agencies, including the not-so-flexible managers of the UK Police National Network, suffered a break in.
There are supposed to be various security measures in place; for example, key card access, concrete barriers to keep car bombs from driving up to the front door, reinforced roofing, no windows, and other niceties of hardened facilities.
To cut to the chase, servers were stolen. My thought: inside job. The FT’s thought, “Are we antagonists in a Greek tragedy?”
Stephen Arnold, July 11, 2008
Artificial Intelligence: Once Again Safe to Use the Term
July 11, 2008
For years, I have been reluctant to use the phrase “artificial intelligence”. I danced around the subject with “computational intelligence,” “smart software,” and “machine intelligence.” Google aced me with its use of the term “janitors” to refer to a smart factory that generated smart digital robots to clean up messes left from other data processes.
Now, the highly-regarded Silicon.com has made it okay for me to say, “artificial intelligence” and use the acronym “AI” without fear of backlash. Tim Ferguson has an essay “Artificial Intelligence–Alive and Kicking” built in part upon an interview with Professor Nigel Shadbolt, head of artificial intelligence at Southampton University.
The point of the essay is that AI continues to thrive without the wackiness that accompanied the hype from a decade ago. Examples of practical AI are voice recognition (my phone often doesn’t understand me when I am driving) and vision processing software (works okay for certain types of object recognition but not others).
The key point in the essay was this statement attributed to Profession Shadbolt:
What we’re seeing with the web is the way in which it can bring those things that computers are good at in co-ordination with what people are good at. You use people’s innate intelligence and ability, you connect them up on planetary scale and you’ve got a new kind of assisted intelligence. It isn’t an AI because it’s not in any way self aware – but it’s a phenomenal, powerful thing.
Bingo. What people are calling social search, collaboration, and intelligent systems is a mash up. I quite like the phrase “assisted intelligence.” Software can be more intelligent when the inputs and outputs of humans are factored into the probabilities used by algorithms to “decide”.
I will promptly co- opt the phrase “assisted intelligence”. I will give Messrs Ferguson and Shadbolt credit in this essay. I know that subsequent uses will be less disciplined about giving credit where credit is due. “Assisted intelligence” is a useful coinage.
I would like to offer three observations, which is my prerogative in my own personal Web log:
- Artificial or assisted intelligence is going to require a heck of a lot of resources, particularly if the volume of digital information continues to go up. How many companies will have the appetite to craft a large-scale system. Certainly police and intelligence authorities, companies like Google and Microsoft, and giant multi-nationals like big pharma.
- The spectrum of AI applications will range from the mundane (my thermostat adjusting itself to keep my environment a constant 72 degrees Fahrenheit to the exotic (the aforementioned janitors doing the work of human subject matter experts inside Google’s data centers). At the same time we become indifferent to AI, some applications will make headlines. There will be some debate of artificial and assisted intelligence going forward.
- AI (both assisted and artificial) will disintermediate some people along the way. Life will be good for wizards and rocket scientists. Life will not be so good for those displaced; for example, why would a start up publisher want to use the job descriptions for a traditional printed newspaper publisher. Better to trim the staff, focus on software, and keep the costs low and the margins as high as possible.
AI is back. I don’t think it ever left. The media veered into more trendy subjects. Let the applications flow.
Stephen Arnold, July 11, 2008
Hakia to Accelerate Semantic Analysis of the Web
July 10, 2008
A somewhat bold headline hopped from my news reader screen this morning (July 10, 2008). A news release from Hakia, one of the players in the semantic search football match, told me: “Hakia Leverages Yahoo Search BOSS to Accelerate Its Semantic Analysis of the World Wide Web.” You can get a copy of this release from Farrah Hamid (farrah at hakia dot com). As of 8 50 am, the news release is not on the Hakia Web log nor is there a link to this Hakia announcement.
The key point in the news release is that Hakia is using Yahoo’s Build Your Own Search Service or BOSS. The idea is that Hakia will use Yahoo’s search infrastructure to “accelerate Hakia’s crawling of the Web to identify quality documents for semantic analysis using its advanced QDEX (Query Detection and Extraction) technology. The “its” refers to Hakia’s patented technology, not Yahoo’s BOSS service.
Using Yahoo makes sense for two reasons. First, scaling to index Web content is expensive, a fact lost on many search mavens who don’t have a sense of the economics of content processing. Second, Yahoo’s BOSS makes it reasonably easy to tap into Yahoo’s plumbing. I wondered by other semantic search vendors have not looked at this type of hook up to better demonstrate the power of their systems. A couple of years ago, Siderean Software processed the Delicious.com content, and I found that a particularly good demo of the Siderean technology as well as providing me with a very useful resource. I have lost track of Siderean’s Delicious index, so I will need to do a bit of sleuthing later today.
Also, you can refresh your recollection of BOSS at http://www.developer.yahoo.com/boss. While you are at the Yahoo site, check out Yahoo’s own semantic search system, which left me a trifle disappointed. This system is shod with this url http://www.yr-bcn.es/demos/microsearch/. My write up about yr-bcn is here. One hopes the Hakia system raises the bar for Yahoo-based semantic efforts. It would be useful if Hakia puts up a head-to-head comparison of its system compared to Yahoo’s. You can see the Hakia comparison with Google here.
The choice of the BOSS service is understandable. Yahoo these days seems pliable. Cutting a deal with Google is fuzzy, often depending on which Googler one tracks down via email or at a conference. In my opinion, Google has been playing hardball in the semantic space. I am starting to think Google has designs on jump starting the semantic search “revolution” and putting its own systems and methods in place. The semantic Web certainly has not taken off, so why not entertain the notion of Google as the Semantic Web? Makes sense to me.
Microsoft, fresh from its hunt for semantic technology, is a big outfit, so it is also difficult to find an “owner” of the task a company like Hakia wants to use. Microsoft can put a price tag on accessing its index, which one cheery Redmonian told me now contained 25 billion Web pages. I told the Redmonian, “My tests suggest that the index is in the 5 to 7 billion page range.” I was told that I was an addled goose. So, what’s new.
Yahoo–troubled outfit that it is–probably welcomes an opportunity to allow Hakia to get the portal some positive media coverage. But if I had been advising Hakia (which I am not), I would have suggested Hakia give Exalead in Paris, France, a jingle. Exalead’s Web index is fresh, contains eight billion or so Web pages, and its engineers are quite open to new ideas. Yandex also might have made my list partners.
Check out the Hakia system at http://www.hakia.com. When I get additional information, I will try to update this post.
Stephen Arnold, July 10, 2008
Update: July 10, 2008, 10 am: My Hakia post is part of a larger fabric of Yahoo BOSS coverage. You will want to read “Yahoo Radically Opens Web Search with BOSS” in the July 9, 2008, TechCrunch. Mark Hendrickson’s coverage is a very good summary of the information on Yahoo’s Web site. He also takes a positive stance, noting “BOSS is the second concrete product to come out of Yahoo’s Open Strategy. The first was Search Monkey back in April [2008].” I am not ready to even think about being positive. These types of announcements are coming when the firm is in disarray. Any announcement, therefore, may be moving deck chairs on the Titanic. I will take a more skeptical position and say, “Let’s see how this plays out.” Yahoo is in flux, and its own semantic search system, referenced in the essay above, is not too good.
Update 2, July 10, 2008 10 10 am Eastern time: Hakia provided this information to me just a few moments ago.
- The news release is on the Hakia Web site at http://company.hakia.com/pr-070308.html. Don’t forget the dots. (How about an explicit link on the splash page, Hakia?)
- You can find other Hakia news releases at this location http://company.hakia.com/press.
- The “official” Yahoo release is here: This url is too crazy to reproduce.
Revisiting Jim Gray’s Three Talks 1999
July 9, 2008
Navigate to http://research.microsoft.com/~gray/Talks/Scaleability_Teminology.ppt and download a presentation by Jim Gray and his colleagues at Microsoft in 1999.
I worked through this deck again this evening (July 8, 2008) and came away with one question, “What went wrong?” This presentation identified the options for large scale systems, what we now call cloud systems. The presentation reviews the trends in storage, memory, and CPUs. The problems associated with traditional approaches to optimizing performance are clearly identified; for example, I/O bottlenecks and overheating, among others.
Why did this one question push others from the front of my mind?
At the time Mr. Gray and his colleagues were wrestling with large-scale issues so was Google. Microsoft had more resources than Google by orders of magnitude. Microsoft had market share, and Google had only a quirky name. Microsoft had a user base, which in 1999 was probably 90 percent of the desktops in the world plus a growing share of the server market, Windows Server 2000 was big technical news. Google had almost zero traffic, no business model, and a rented garage.
Any one looking at Mr. Gray’s presentation would have concluded that:
- Microsoft’s engineers understood the problems of scaling online services
- The technical options were clearly identified, understood, and quantified. Mr. Gray and his colleagues calculated the cost of storage, racks of servers, and provided enough data to estimate how many system engineers were needed per cluster
- Google’s early engineering approach had been researched and analyzed. In fact, the presentation provides a clearer description of what Google was doing in the first year of the company’s existence.
Yet if we look at Microsoft and Google today, roughly a decade after Mr. Gray’s presentation, we find:
- Microsoft making home run acquisitions; for example, Fast Search & Transfer, Powerset, and most likely some type of deal with Yahoo. Google buys companies that are known only to an in-crowd in Silicon Valley; for example, Transformic.
- Microsoft is engaging in marketing practices that pay for traffic; Google is sucked forward by its online advertising system. Advertisers pay Google, and Google makes many of its products and services available without charge.
- Microsoft is now–almost a decade after Mr. Gray’s deck–is building massive data centers; Google continues to open new data centers, but Google is not mounting a Sputnik program, just doing business as usual.
- Microsoft has not been able to capture a significant share of the Web search market. Google–except in China and Russia–Google is pushing towards market shares in the 65 percent and higher range.
What happened?
I don’t have my data organized, but tomorrow, I will start grinding through my digital and paper files for information about Microsoft’s decisions about its cloud architecture that obviously could not keep pace with Google’s. Microsoft hired Digital Equipment wizards; for example, Gordon Bell and David Cutler, among others. Google hired Jeff Dean and Sanjay Ghemawat. Both companies had access to equivalent technical information.
How could such disparity come about?
I have some ideas about what information I want to peruse; for example:
- What were the consequences of embracing Windows “dog food”; that is, Microsoft’s own products, not Linux with home-grown wrappers used by Google?
- What were the cost implications of Microsoft’s using brand name gear from Dell and Hewlett Packard, not the commodity gear Google used?
- What was the impact of Microsoft’s use of tiers or layers of servers, not Google’s “everything is the same and can be repurposed as needed” approach?
- Why did Microsoft stick with SQL Server and its known performance challenges. Google relied on MySQL for fiddling with smaller data sets, but Google pushed into data management to leap frog certain issues in first Web search and later in other applications running on Google servers?
I jotted down other points when I worked through a hard copy of the presentation this evening. I am tempted to map out my preliminary thoughts about how the Microsoft engine misfired at the critical point in time when Google was getting extra horsepower out of its smaller, unproven engine. I won’t because I learned this week that when I share my thoughts, my two or three readers use my Web log search engines to identify passages that show how my thinking evolves. So, no list of observations.
I don’t want to make Google the focal point of this two or three essays on this topic. I will have to reference Google, because that company poses the greatest single challenge Microsoft has faced since the days of Netscape. I won’t be able to reproduce the diagrams of Google’s architecture. These appear in my Google studies, and the publisher snarled at me today when I asked permission. Sorry.
I will make a few screen shots from the materials I locate. If a document is not identified with a copyright, I will try to have one of my researchers track down the author or at least the company from which the document came. I will be working with digital information that is about 10 years old. I know that some of the information and images I reference will be disinformation or just wrong. Please, use the comments function of this Web log to set me and my two or three readers straight.
Over the next week or so (maybe longer because I am working on a new for-fee study with my colleague in England), I want to post some ideas, some old diagrams, and some comments. Nothing gets fewer clicks than discussions of system architecture from the dark ages of online, but this is my Web log, and you don’t have to read my musings.
One reader asked me to post the documents I mention in my essays. I checked with my attorney, and I learned that I could be sued or forced to remove the documents. Some of the information in my paper files is no longer online. For example, there was an important paper on MSDN called Architectural Blueprint for Large Sites. I found two pages of my hard copy and my archived copy is corrupt. If anyone has a copy of this document–sometimes called the DNABlueprint–please, write me at seaky2000 at yahoo dot com.
Stephen Arnold, July 9, 2008
Yandex: Adding Video Services, Keeping the GOOG at Bay
July 9, 2008
Russian search engine group Yandex has launched the public beta of Yandex.Video. Service users can search and share videos clips online, as well as view the most popular videos. See an article about it here (http://www.telecompaper.com/news/article.aspx?cid=626524).
Yandex.Video currently searches about twenty video hosting services including youtube.com, rutube.ru, video.mail.ru, smotri.com and myvi.ru. The service’s video search method is based on analysis of names, tags, descriptions and other video clip attributes. Search results are ranked according to user ratings.
Yandex.Video continuously updates the most popular videos shown on its front page, as it receives information about new comments and new videos posted in blogs from Yandex’s Blog Search service. Service users can upload an unlimited amount of video files and create their own favorite lists. The service currently indexes over 2 million videos. Yandex is a portal with a wide variety of services, including the ubiquitous text search.
Yandex search software offers a set of tools for full-text indexing and text data search “understanding” Russian and English language morphology. Beyond that, Yandex mirrors search portals like Google and Yahoo! by including things like images search, latest news and weather, maps, free mail, free web hosting, Yandex.Money (like Paypal) and much, much more. There’s a much more complete list in this article at The Search Engine Journal. (http://www.searchenginejournal.com/yandex-russian-search-engine-spotlight-4/2157/)
That article also says “Given Yandex’s vast offering of services along with WiFi, RSS Search, and a pay system; sounds like it’s a model for Google and Yahoo to follow in terms of network building.” Sounds like to me it would also be a good buy for a company looking to catch up to Google. Yandex has a diverse number of pieces parts in its repetoire, content that would be costly to reproduce. Why reinvent the wheel? Just buy it in Russian.
Jessica Bratcher, July 9, 2008
MSFT vs GOOG: Cloud Gas War on the Horizon?
July 8, 2008
Mary Joe Foley, author of an interesting book about the “new” Version 2.0 Microsoft, wrote “Microsoft to Sell Hosted Service Subscriptions for $3 a Month”. You can read her essay here in the All about Microsoft information service. This is one of the ZDNet Web logs, which I find pretty darn useful to me.
Her point is the price. But the most interesting passage for me was this:
Over the past couple of years, Microsoft has been attempting to persuade its partners, especially those who’ve built businesses around hosting Microsoft software for their customers, that Microsoft isn’t going to steamroll them with its new managed-service offerings. Microsoft execs have been warning partners to get out of the plain-old hosting business and to, instead, focus on more of the value-add they can provide on top of hosted services.
I am not a Microsoft partner. I have watched as Certified Gold Partners innovated in search and add-ons for SharePoint, to cite two examples. Then, with each new release of SharePoint, the features that partners figured out how to make work and educated the customers to appreciate would migrate into the SharePoint platform.
My conclusion was, “Wow, that’s pretty risky for a partner investing big bucks in a value-add, enhancement, or snap-in gizmo for a Microsoft core product.” Well, this is another example of how large companies in their quest for revenue can take actions that put pressure on partners. When I was in South Africa, one guide told me, “When elephants fight, only the grass gets trampled.” Okay, this price war may not be real, but the price cut is.
The target is Google, Salesforce.com, and other vendors who like Macbooks and OSX.
The “grass” may be pretty sparse right now, but any firm thinking about getting into commodity services via the cloud may want to sharpen their pencils and revisit their business plans.
Kudos for Ms. Foley for snagging this information. I want to add three observations, which is now standard operating procedure for this Web log with two or three readers:
- A dollar amount play is dangerous. The major competitor has a different business model, and I think Google will use it to further provoke Redmondians.
- Customers don’t know whether $3 is too high, too low, or just right. Penetration of for-fee hosted services remains modest. In the enterprise, I saw figures that were in the 10 percent penetration range. This price point may become the benchmark, which if usage spikes could be a big cost hit for Microsoft as it rushes to scale. Google is getting beat up because some of its services are not scaling fast enough. Google’s stuff is free, which muffles the snorts. I will have to wait to see how the service scales, if it even has to scale.
- At least one Certified Gold Partners is making plans for life without Microsoft. I spent time with one big Gold outfit, and I thought I heard words to the effect, “To heck with them.” If this anti Microsoft flu spreads, the result might be quite interesting competitively.
You can get a another interest view of this from ReadWriteWeb here.
Agree? Disagree? Don’t be shy?
Stephen Arnold, July 8, 2008
Autonomy etalk Bags an Industry Award
July 8, 2008
When I give my lectures, I get dinged when I point out that the high profile enterprise search vendors are no longer in the search and retrieval business. This morning I was interviewed by a nice young journalist, and I trotted out my “search is dead” and the “big name vendors are morphing into other services”.
Let me call your attention to why I think “search” is a silly term to apply to what people must do to access information. Two heavy hitters in customer support–Technology Marketing Corporation’s (TMC) Customer Interaction Solutions magazine (http://www.cismag.com)–awarded Autonomy the 2008 IP Contact Center Technology Pioneer Award. You can read the full story here. (This is a news release, and the link will go dead in a heartbeat. Click quickly, gentle reader.)
Is this search? Well, it depends on how you look at each user of the service. Here’s the official description of Autonomy etalk’s Qfiniti solution:
[A] robust and reliable IP recording for enterprise contact centers and mission critical business environments. This solution offers full customer interaction recording for compliance, risk management, and quality. Qfiniti delivers IP recording through SIP and vendor specific protocols for leading vendor platforms such as Cisco, Avaya, Genesys, Nortel, and Alcatel-Lucent. Customers that use Qfiniti IP recording benefit from streamlined architecture, global scalability, centralized management, and flexible deployment through a single, unified platform.
If you are looking for something, this is a search system. If you are trying to manage a contact center, the Autonomy system is a god send. It puts many geese into one fenced area, making it easy to manage the unruly beasts.
Kudos to Autonomy, of course. I do want to offer several observations, apparently one of the reasons I have two or three regular readers of the Beyond Search Web log:
- Search is no longer the Playboy or Playgirl “model of the month”. Anyone with a year or so of computer science can download Lucene of Lemur FLAX and deploy a perfectly usable enterprise search system. Sure, you will not be able to index some documents, but most enterprise search systems are pretty erratic when it comes to indexing content, most users will adapt despite their grousing.
- The problems organizations have are where big money is at stake. Let’s face it. General document indexing is a secondary, maybe a tertiary concern. Call centers and customer support are money pits. Screw up customer support and you spend money and revenues drop. Do customer support intelligently and you reduce costs and revenue bleeding can be slowed, maybe revenues can rise. So it doesn’t take an MBA from Wharton to figure out that if an organization has $700,000 to spend, a vendor who solves the customer support type problem will get more of the available money.
- The issue is information access as it relates to work employees do. Search–at least key word search–forces employees to spend time hunting for information-filled nuggets. Wrong. Employees want answers quickly. A vendor who can show useful information access in the context of work managers want employees to do will win contracts.
So, I am quite confident that when Autonomy wins this type of award I have another case example to support my content that search vendors aren’t going to be in the traditional search business much longer, not if these companies want to keep growing.
Agree? Disagree? Help me learn.
Stephen Arnold, July 8, 2008
More Transformation Goodness from the Googleplex
July 8, 2008
In press is one of my for-fee write ups that talks about the black art of data transformation. I will let you know when it is available and where you can buy it. The subject of this for-fee “note” is one of the least exciting aspects of search and content processing. (I’m not being coy. I am prohibited from revealing the publisher of this note, the blue-chip company issuing the note, and any specific details.) What I can do is give you a hint. You will want to read this Web log post at Google Code: Open Source Google. News about Google’s Open Source Projects and Programs here. You can read other views of this on two other Google Web logs: The Official Google Web log here and Matt Cutts’s Web log here. You will also want to read the information on the Google project page as well.
The announcement by the Googley Kenton Varda, a member of the software engineering team, is “Protocol Buffers: Google’s Data Interchange Format”. Okay, I know you are yawning, but the DIF (an acronym for something that can chew up one-third of an information technology department’s budget) is reasonably important.
The purpose of a DIF is to take content (Object A in Format X) and via the magic of a method change that content into Format Y. Along the way, some interesting things can be included in the method. For example, nasty XML can be converted into little angel XML. The problem is that XML is a fat pig format and fixing it up is computationally intensive. Google, therefore:
developed Protocol Buffers. Protocol Buffers allow you to define simple data structures in a special definition language, then compile them to produce classes to represent those structures in the language of your choice. These classes come complete with heavily-optimized code to parse and serialize your message in an extremely compact format. Best of all, the classes are easy to use: each field has simple “get” and “set” methods, and once you’re ready, serializing the whole thing to – or parsing it from – a byte array or an I/O stream just takes a single method call.
The approach is sophisticated and subtle. Google’s approach shaves with Occam’s Razor, and the approach is now available to the Open Source community. Why? In my opinion, this is Google’s way of cementing its role as the giant information blender. If protocol buffers catch on, a developer can slice, dice, julienne, and chop without some of the ugly, expensive, hand-coded stuff the “other guys’s approach” forces on developers.
There will be more of this type of functionality “comin’ round the mountain, when she comes,” as the song says. When the transformation express roars into your town, you will want to ride it to the Googleplex. It will work; it will be economical; and it will leapfrog a number of pitfalls developers unwittingly overlook.
Stephen Arnold, July 8, 2008
Microsoft Architecture in 1998
July 8, 2008
At the time Google was hatching, Microsoft had made decisions about its architecture. I was prowling through my archive of online information, and I found a reference to a document called “Challenges to Building Scalable Services: A Survey of Microsoft’s Internet Services” by Steven Levi and Galen Hunt.
I went looking for this document on July 7, 2008, and I was able to find a copy here. In terms of computing, this decade old write up is the equivalent of poking around a dirt hill on Mykonos looking for a pottery shard. I scanned this document and found it remarkable because it revealed the difference between Google’s engineering decisions and Microsoft’s. I believe that these differences, so clear now, contribute to Google’s lead in Web search, advertising, and some Web services.
I cannot summarize a document that runs more than 8,000 words. What I can do is identify three points that I want to explore in the months ahead:
First, Microsoft’s approach identifies hot spots resulting from read-write disc accesses. Microsoft addressed the problem using “farm pairs”. Google adopted a massively parallel, distributed set up with the Google File System and a master that pushed messaging down to workers, thus reducing message traffic.
Second, Microsoft’s approach relied on human system administrators to handle certain routine tasks; for example, dealing with server failures in server “farms”. Google decided early on to let the Google File System and other proprietary techniques deal with failures; in effect, reducing the need for large numbers of system administrators and technicians in data centers.
Third, the “farm” used clones and packs of partitions running on name-brand hardware. Within the architecture, databased content lived in partitions with a “temp state” running on a separate replicated “pack”. Google did the opposite. Commodity hardware could be dynamically allocated. The Google approach slashed operating costs and added flexibility.
There are more differences, and I will comment on some of them in future discussions of the differences between Google and Microsoft a decade ago. If you have an interest in how Microsoft approach online at the moment when Google began its rise to 70 percent market share, the Levi and Hunt document is useful.
Stephen Arnold, July 8, w008
Google’s Economist Clarifies Transparency
July 7, 2008
My hard copy of the venerable New York Times and my news reader made it difficult for me to overlook the essay by Steve Lohr, another in the growing cadre of Gray Lady journalists covering the Google. “Google, Zen Master of the Market” is a benchmark in mass media’s discussion of Google. This addled goose cannot summarize the article; however, I can identify one key point and offer several observations. (You can get other views such as Clickety Clack’s here or Ross Mayfield’s here.)
Before identifying the crux of the analysis for me, I want to congratulate Mr. Lohr for skipping right over the lava lamps and the free Odwalla beverages, the great free lunch, and the wacky antics of the world’s smartest people. That is a refreshing change in my opinion. Please, let this editorial policy stick.
The Key Point for Me
Now, the crucial point for me in my hollow in rural Kentucky. Mr. Lohr writes:
Google, it seems, is the emerging dominant company in the Internet era, much as Microsoft was in the PC era. The study of networked businesses, market competition and antitrust law is being reconsidered in a new context, shaped by Google. Google’s explanation for its large share of the Internet search market — more than 60 percent — is simply that it is a finely honed learning machine. Its scientists constantly improve the relevance of search results for users and the efficiency of its advertising system for advertisers and publishers.
I agree. Please, read the entire piece in the increasingly hard to find paper version or the pop up ad covered online version here.
What’s striking about this passage are its assumptions, compressed like bits in a tarball. For example, here’s how I interpreted some of the words in this passage:
- “Seems”. Mr. Lohr is reluctant to come out and say that the Google is search, a monopoly, and still growing as a reasonable clip even in the lousy economic environment that has [a] destabilized poor, old Yahoo, [b] squeezed competitors in enterprise search, [c] chilled the blood of Verizon-type companies, and [d] triggered in Microsoft some pretty wild and crazy business actions such as paying for traffic, buying search technologies that are probably impossible to integrate, and putting its share price right in the middle of the “value stock” category;
- “Emerging dominant”. Mr. Lohr and other pundits cannot grasp the fact that Google is not emerging. The company is now 10 years old and getting close to puberty.
- “competition and antitrust law is being reconsidered in a new context” hip hops over Google’s operating as a supra national entity that is tough to regulate. Think about set theory. Google just isn’t in the set in which most regulations were designed to work. Anyway, by the time regulations are Google-ized, Google will be different.
- “Learning machine” is a nice way to say super computer with systems and methods that are automatically able to stay one step ahead of most users, most competitors, and most regulators. The more people use the Google, the more expertly the Google morphs into Google subscript n+1. Stated another way, you can’t pull the plug to allow the competition to catch up. Only a pile of lawyers can trip the Google at this time. To catch Google, a competitor has to stop Google’s “motion”. Failing that, closing the gap requires solving the “bridge” problem with which I close this essay.
Okay, I am tired of this little exercise in deconstruction.
My Telco Experience and How It Relates to Mr. Lohr’s Analysis
One final point before I offer some observations. Remember your university economics class. I sure do, and I don’t have a clue what my professor talked about. I graduated at or near the top of my class with a Summa cum laude designation from an unknown university in a corn field, but I remember the “cloud of unknowing” that settled over me.
An economist explaining transparency strikes me as amusing. Wait. Not amusing. The combination is like a a pause in Waiting for Godot. Google appears to be talking more. Whether it is the Excite and JotSpot founder Joe Kraus to Jeffrey Dean explaining for the umpteenth time how MapReduce works to Eric Schmidt explaining how to fix American innovation–these are efforts to humanize an entity that is not accurately perceived.
Let me give you an example. Ask your broker what business occupies Google. She will tell you that Google is a Web search company that sells advertising. Yes, the revenue comes from millions of people competing to buy key words displayed to user’s of Google search. Business school wizards at Harvard and Wharton will tell you that Google’s other revenue generating attempts have not as yet generated substantial revenue. Ergo, as Steve Ballmer accurately asserted, Google is a one-trick pony, or as I prefer, a one-trick Googzilla.
Now, I have written two studies–The Google Legacy (2005) and Google Version 2.0 (2007) which you can buy here–that argue Google is a company with a business model that is manifesting itself in this “advertisers pay” character that Wall Street loves so much. My research asserts that this business model is extensible to other business sectors. When pundits narrow their vision to the neighbor who sells quilts with AdWords, the bigger picture is blurred. Google’s disruptive force is the seeping of its business model into other business sectors; for example, mobile telephony.
I did a few briefings for telco senior managers. After my review of Google’s hook-them-when-they-are-young strategy, the telco executives snorted. College students were perfectly happy with the existing mobile services. Then I explained Google’s “pull strategy” where traditional direct sales is not emphasized. The telco executives explained that store fronts, promotions, and TV advertising were the keys to success. I explained that Google had dabbled with some unusual telco-related technology as early as 1998. The telco executives laughed and said, “We have decades of technology and no one can leap frog us.” In short, Google’s nine years of patent applications, technical papers, and presentations were dismissed as trivial, amateurish, and irrelevant. “Wow,” I said to my colleague who witnessed these reactions. “How can Google hire people from Bell Labs, let them innovate, and then dismiss former telco wizards as dorks?” Telco executives just did not make sense to me.
So what happened after my briefings?
Sprint swizzled into financial muck. Verizon got tangled in an auction and had to concede to open a tiny bit of its business to outsiders. The outsider (the Google, of course) became the camel getting its nose in the telco tent.
Now I have been around camels quite a bit for a Kentucky lad, and you want to keep these beasts out of the tent for sure.
Then Google rounded up two dozen partners in telephony. Next Google rolled out a beta mobile operating system. A developer conference followed. In short, by not doing much of anything that works by an objective yard stick like counting ad revenue, the Google has destabilized mobile telephony triggering wierd stuff like Nokia’s buying Symbian and indicting that it would become a software and services company.
You can read more about Google’s impact in my studies, and I think you can see that the business model is more abstract and therefore significant than selling online advertising. What is this business model? Again, some analysis appears in my studies, but it is larger, more potent, and more impactful than twisting Mr. Ballmer’s plans for online search.
My Observations
Let me conclude with three observations:
- When the calculus swept Europe, mathematicians had to use it because it worked. Doing stuff with zeros was illogical, but it worked. I think Google is this type of contribution to business. Economists–even those working at Google–don’t have the tools to understand the Google calculus, but, hey, it works.
- Analysis of Google–after 10 years–is beginning to become more rigorous. My hope is that the trend continues. No, Google is not making anyone stupid. Lots of people are already stupid, and Google is an entity that can derive benefit from stupid and brilliant people. Right now, Google’s ability to do this is orders of magnitude more efficient than its competitors’ instrumentality.
- Perception of Google will remain difficult because the company is polymorphic. The rate of change in the systems and methods is modest, but when an adjustment occurs via its “finely honed learning machine”, it is difficult to perceive its effects. This is not a “network effect”; it is a different type of behavior, closer to nuclear physics than analogies about the value of facsimile machines.
The good news is that more thought is now being given to the Google. The bad news is that the pundits are starting a decade behind. I could explain how this works with more references to calculus, but I will not. Here’s an analogy. To catch up with the Google, a competitor needs technology, people, and money. No problem. The absolute is time.
Google has changed the time value for its competition by using fast local changes within larger chunks of time; for example, Google Talk versus the Android developer play–each with a different time to payoff clock.
Stick that ploymorphic stuff into a traditional economic model and what emerges is one of those problems in getting from here to there without a bridge or the materials to make a bridge.
In short, the Google is one place. Everyone else at this point in time is somewhere else. Pretty clever, no?
Agree? Disagree? This backwoods fellow can still learn. Just include pertinent data, not that stuff from college econ classes.
Stephen Arnold, July 7, 2008
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