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Google to Offer Payment Service

By - June 17, 2005

The other revenue shoe drops. Not confirmed, but…this from the Online Journal.

Google Inc. this year plans to offer an electronic-payment service that could help the Internet-search company diversify its revenue and may heighten competition with eBay Inc.’s PayPal unit, according to people familiar with the matter.

Exact details of the search company’s planned service are not known. But the knowledgeable people say it could have similarities with PayPal, which allows consumers to pay for purchases on Web sites by funding electronic-payment accounts from their credit cards or checking accounts. Some consumers like PayPal for the security it offers, since it allows them to share their banking or credit-card numbers only with PayPal without having to divulge the information to merchants.

Spokespeople for Google and PayPal declined to comment.

More on this later, but…if you want to think about it, read this

essay from Paul Ford.

Update: Gary has found the “Google Payment Company,” which Google filed paperwork for in CA.

More: Carl Bialik of the Journal kindly offers this free link to the Journal story.

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Friday

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Ah, it’s Friday. Travel day for me, left Laguna and Safa’s excellent conference this morning. Over the three days we heard from an interesting mix of international CEOs (Tom Online, Hurray!!, Daum), and a lot of search/ecommerce (Marchex, WebSideStory, Overstock, Indeed). Safa did not do the typical investor conference, where CEOs just present company Powerpoints, he really drew folks out into conversations. I enjoyed it a lot. The highlight for me was last night, when I joined a panel with Steve Jurvetson and Jerry Yang, quite an honor. Jurvetson invested in Baidu, HotMail, Skype, and many, many other successful companies, and it was fun to hear his thoughts on Yahoo, MSFT, Google et al. Jerry was his usual understated self. Over and over he said “We can’t presume (insert competitor here) will stumble, we have to assume they will succeed.” He said he keeps working because the thinks the competition is getting really strong, and he wants to continue to help guide Yahoo through this phase of the battle.

Steve pointed out that it was going to one hell of a battle, that in fact MSFT was girding for a company wide holy war, one that he thinks they must win. Now it gets interesting….

A company that was much discussed during the week was MySpace, which is owned by Intermix Media. The CEO presented there, and the stock shot up during the week. That might have something to do with the fact that the company settled (without admitting wrongdoing) an adware/spyware case based on practices it claims it has since abandoned, but also, there were an awful lot of investors in that conference room, and on the second night Safa had a really interesting and entertaining panel of teenagers who told us how they use media (I asked him if we could steal the idea for Web 2.0, and he gave his consent….). All of them used MySpace, it was pretty much a clean sweep. None of them used anything else for social networking and the like. I think the investors were taking notes….it felt like ICQ all over again.

FM News

By - June 16, 2005

Lots going on this week over at FM, for those Searchbloggers who are interested…

YubNub

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YubnubI’ve been pointed twice in one week to YubNub, which bills itself as a “(social) command line for the web.”

YubNub is the result of a “program like hell for 24 hours” project, in fact, it came out of one guy’s attempt to win a contest around the new Ruby on Rails framework.

The idea of search as the command line for the web is well established, this takes the idea one step (or more) further, letting you set up commands in the search line itself. You can use the search line as a single point of reference for searching just about any web resource, and you can add your own, if you’re geeky enough (others will do it for you if you’re challenged like I am). From the post explaining YubNub:

I was tired of setting up the same Firefox keywords on each of the 5 computers that I use. By putting my keywords into YubNub, I can hit “am mark twain” for an Amazon search, or “gmap vancouver” for a Google Maps search, no matter which computer I’m on.

But on a bigger scale, YubNub is the realization of a very big idea: the URL command line of the web OS.

Web applications were once considered slow and unreliable, compared to their desktop counterparts. But these days, people are increasingly choosing web applications over desktop applications. Amazingly, GMail is found to be faster than desktop email programs. The snappy Google Maps interface feels as responsive as a desktop application. The web is morphing into the desktop, and today we are witness to the command line making its appearance in this new world, as YubNub, the (social) command-line for the web.

The beauty of YubNub is that anyone can help to extend it. If there is an existing web service with a submit form, they can add it pretty easily (like I did with the Amazon example above). But even more interesting is the adding of complex data-processing services (like validating an RSS feed, or converting webpages to audio using text-to-speech).

Very Web 2.0.

More On ClickFraud

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Wired News throws another log on the click fraud fire here. This is the story of BlowSearch, a meta search engine which has discovered that click fraud is rampant and is creating a tool to deal with it.

Let’s pull back to 50,000 feet here for a second. Advertisers and SEMs are saying that clickfraud, in aggregate, accounts for 15-20% of all spending (I had two major agencies confirm this figure to me again this week). Why do they say this? Because they are on the front lines and see the non-performing clicks, the domain parking lots filled with AdSense ads, the odd patterns of clicks in the middle of the night from what have to be robots or armies of third-world paid-to-clickers. It’s hard to substantiate these claims, but let’s think about this for a minute: 20%! That’s more than a billion dollars in fraud in an industry growing faster than anything else in the media business.

Now, it’s in the advertisers’ best interest to claim this kind of fraud, for the more they can say some clicks are fraudulent, the more refunds they get from Google et al, and the higher their “real” conversion rates are. So, caveat number one, take advertisers claims with a grain of salt.

Now, on the other end of the spectrum, folks at both Yahoo and Google have sworn up and down to me that click fraud is not a very big deal, that the level of fraud is, by their estimation, in the low single digits. Why would they say this? Why, because they see everything, of course, and are deeply motivated to not only find fraud, but to ferret it out. After all, if their networks are seen as scamming the advertiser, everyone loses.

Except, let’s examine the motivations on this side of the equation. Clearly, it’s in the engines’ best interests to say that clickfraud is not a major issue, and that they have it under control. It’s also in their best interests, at least in the short term, to allow a bit of fraud to happen. After all, it’s just a tax on what is still an incredibly efficient method of marketing. Clearly advertisers are not stopping their spending because of what they see as 20% clickfraud. Search marketing is so efficient that a 20% “clickfraud markup” is justified in the advertiser mind. The market will bear it, so why not let it happen?

The truth is probably, as always, somewhere in the middle. There is probably more fraud happening than the engines will admit, or find, and less than the advertisers claim. But it’s maddening that we don’t have a way of knowing for sure, because Google and Yahoo will not engage with the advertisers in a high level dialogue of trust, one where the two sides can compare notes. I hope that changes soon.

UDPATE: After some feedback, I’ve realized that my post may have led some to think that I believe that the major engines are in fact actively allowing fraud to occur. I don’t think that is the case. In fact, it’s in their long term interest to eradicate it, which is why I think it’d be great if they worked with major agencies/advertisers to combat it in a unified fashion. I sense that for every ten smart engineers Yahoo and Google have working on detecting and beating click fraud, there are 10,000 folks trying to game the system. Unless both advertisers and engines work together in a trusting relationship to compare notes and figure out how to fix this, the Force Of Many will outpace the engine’s best efforts (and the advertisers will always claim that there is more fraud than the engine’s claim there is).

Yahoo Integrates Paid Subs, Newstand Model Ho!

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YahoosubI’ve been on about this for a long time, how Yahoo and Google can and should be the distributor of choice for the publishing industry, if the publishers can only get out of their own way with regards to their old business models. It’s the music industry and digital distribution story all over again. Consumers want their music a la carte, but it took the labels forever to ween themselves off the pre-packaged delivery system of CDs. But sell songs the way consumers want to buy them, and for less, and all of a sudden you will see a massive uptake in purchasing, as well as new models like subscription.

Well, the same can be said of publisher’s content. Especially stuff like LexisNexis, or Thompson/Gale, or the Wall Street Journal. Yahoo today announced that they have cut deals with all these publishers, among others, to include their content, or at least summaries of it, in Yahoo searches (some are forthcoming, others are in at launch). Yahoo is calling this services “Yahoo Search Subscriptions.” Unfortunately, the publishers are not letting Yahoo do what, really, Yahoo should be doing, which is acting as a central clearinghouse for transactions and subscription fulfillment/services. You still have to manage your sub with each individual publisher, which is way too much friction to activate the long tail user of paid content. But it’s a step, and I think once the publishers dip their feet in, they’ll realize the water is just fine.

In essence, publishers are terrified that if they allow their content into search engines, they’ll never get paid for it, and they’ll lose the relationship with the customer to boot. The database aggregators like LexisNexis, In particular, are wary of search. But if I could find LexisNexis articles in a Yahoo search, and easily click through and read them for a small fee (or a Rhapsody like option that lets me buy an unlimited sub for say $10 a month), why, I’d do it all day long. But don’t ask me to log in to LexisNexis each time. Let Yahoo handle that. And don’t make me pay $5 for each article. I’ll never do it.

Paid Content coverage notes that no money is yet changing hands, it’s simply a hand off between Yahoo and content partners. That is silly. When will publishers realize that Yahoo is the new newsstand, and they’ve earned their cut?

Gary has a long and well thought out overview here.

Press release in extended entry.

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Miva: Overthinking the Logo

By - June 15, 2005

Miva AdI just saw a Miva ad that explains how they came up with their vaguely alien logo/typeface, which honestly, I did not like much when I first saw it (Miva is the old FindWhat plus whatever they bought over the past few years). Apparently, they combined the symbol for infinity with an arrow that goes up and to the right. If ever there were an example of packaging irrational exuberance into a neat corporate logo, here it is. Then again, I did pay attention to the ad, so there you have it.

Google And Pre-Fetching

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MozillaGoogle has found itself in the midst of another tempest, whether this particular one is in a teapot or not depends on your point of view. The issue has to do with “pre fetching” – a practice for which Google got some heat back when it introduced its web accelerator.



I first saw note of this on Dave Farber’s IP list. From the original post, by privacy advocate Lauren Weinstein:

…about a month ago, Google started triggering “prefetch”

page data for the top listings in search results. This behavior is

reportedly currently limited to users on Mozilla-based browsers

(Mozilla, Netscape, Firefox…)

The goal of this procedure is to allow users of those browsers to see

the top link results faster, since they’d already be cached locally.

But there are big downsides to this process.

One obvious problem is that it can distort Web server statistics, by

creating “hits” from users who never actually chose to visit the

sites in question, but were prefetched when their search listed those

sites at the top of results. For some sites, this may be a mere

annoyance, for others it could be a significant problem that could

affect their revenue patterns. This also has the side-effect of

creating a sudden artificial boost in Mozilla-based browser usage

statistics.

A much more serious issue is that the prefetching causes users to

actually access sites without ever having touched the associated

links — and this includes the receiving of cookies. …..

….This means that your IP address and other typical connection data

have *already* been dropped into that site’s logs, even though you

never chose to access that site, and you may now already be holding

cookies from them as well.

… imagine if an innocent search returned results where the

top-listed site contained information you’d never want to be

associated with nor access in any way (child porn, browser exploit

sucker-bait sites, illicit files — you name it). Keep in mind that

such sites will often use various techniques specifically to boost

their rankings in search results….

…Bottom line: Creating a situation where users are “automatically”

accessing search-result sites without their having taken explicit

actions to do so is very bad policy. This problem is not the fault

of Google alone — the prefetching mechanism has been present in

Mozilla-based browsers for quite some time.

However, when the planet’s major search engine begins to routinely

use this technique in the manner that Google has done, it at the

very least suggests that they did not fully think through the

potentially serious anti-privacy ramifications of their actions, when

applied on the vast scale of their user base.

Tim posted on this issue as well, offering a clarification that Google only prefetches the first result.

I called Google and spoke to some folks there, they acknowledge that Google does the pre-fetching for Mozilla clients. But they argued that Google is doing it in a fashion that is compliant with web standards, and for a good reason: to speed up the web. Sophisticated webmasters can easily filter out pre-fetches from other kinds of requests, so logs won’t be inflated, and users can turn fetching off it they want. For more on this issue, Google pointed me to Mozilla’s link prefetching FAQ.

Google Will Eat Itself

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…when a company gets this kind of attention, someone should write a book about it (hey, wait…).

This project, as I understand it, is a meditation on the economics of Google. The angle:

We generate money by serving Google text advertisments on our website GWEI.org. With this money we automatically buy Google shares via our Swiss e-banking account. We buy Google via their own advertisment! Google eats itself – but in the end we will own it!

This is pretty much a Friday afternoon kind of site, but what the hell. Check out their fake site too. From their theoretical explanation of the project:

Google’s position is predominant in the same moment it entered a new business field with a new service. It’s the Google effect: creating consensus on a new business, even if it instantly got the predominant position. The greatest enemy of such a giant is not another giant. It’s the parasite. If enough parasitites would suck small amount of money in this self-referentialism embodiment, they will empty this artificial mountain of data and its inner risk of digital totalitarianism.

As I like to say from time to time…exhaaaaaaale…..

(Hat tip, Philipp).

Who Will Google Buy Next?

By - June 14, 2005

You decide. (Or see what Slashdot has to say).

This is a thread at Kuro5hin, a tech/culture site. It also gives an overview of companies Google has already purchased, and speculation on companies Google might buy (Koders, T’rati, Answers…most of them you’ve read about here….)

BTW, who will buy MySpace?