John Battelle's Searchblog

This movie is thought provoking. The Database of Intentions gone wild. Too bad at the end, the page doesn't resolve.

GOOG is not doing well after releasing earnings. AP is calling it an "earnings miss."

Google reported adjusted earnings of $1.54 per share, well below Wall Street's forecast for $1.76 per share, even though it brought in higher revenue than expected.

Google shares were halted for the early part of the aftermarket session, then dropped significantly when trading resumed. Shares were down $68.17, or 15.8 percent, trading at $364.49 on the INET electronic exchange, from their close on the Nasdaq at $432.66.

From Google's release:

"We are very pleased with our results for the fourth quarter as we
achieved excellent performance across our businesses," said Eric
Schmidt, CEO of Google. "We generated significant revenue growth in
our core search and advertising business, driven by continued strength
in traffic and monetization. We will continue to invest significantly
as we develop innovative new products and as we extend our core
technologies to new user access points and to different channels."

Q4 Financial Summary
Google reported revenues of $1.919 billion for the quarter ended
December 31, 2005, an increase of 86% compared to the fourth quarter of
2004 and an increase of 22% compared to the third quarter of 2005.
Google reports its revenues, consistent with GAAP, on a gross basis
without deducting traffic acquisition costs, or TAC. In the fourth
quarter, TAC totaled $629 million, or 33% percent of advertising
revenues.

Huh. I am not a stock picker, but I guess the fellow from Yahoo is feeling pretty smart about now.

Continue reading "Did Anyone Notice..." »

Hey Searchbloggers - Thanks to FM's team of coders, I've installed a new feature, one I have always wanted to have. I'm calling it "Recent Comment Spotlight." It's up there on the left at the top. I read every single comment you all put on the site (including the ones left by knuckleheaded spammers,) and I love em all - and often, they get lost or overlooked. So to highlight one from time to time, I made the Spotlight section. Right now I'm highlighting a comment about MSFT and data privacy, but it'll change pretty frequently.

From BizWeek:

Shares of Napster Inc. skyrocketed in premarket electronic trading Tuesday, as investors responded to a report that the online music store is being eyed by Google Inc.

The Internet search giant, which is due to report fouorth-quarter results after the bell Tuesday, is considering an "extensive alliance" with, or possibly a takeover of, Napster, according to a published report.

The New York Post, citing sources within the music industry, said Google wants to "align with Napster' in lieu of creating its own music store.

This strikes me as fantasy. Why does Google need to buy Napster? The company could build a great music store by itself. Or perhaps....it's buying Napster's relationships....Reuters story. Original Post story.(reg required).

Update: Google is playing this down. (Thanks, OB)

Spotted on Digg: The URL sharelive.com resolves to Google (www.sharelive.com/forums/ also resolves to Google, though to a non working page.) Odd, in that ShareLive used to be a file sharing site. From the Internet Archive: August 2002, June 2004, (something called oZone), Feb 2005 (back to ShareLive). Nothing after March of 2005. It apparently shutdown in May of 2005, due to lack of funding (and probably legal issues?). Could Google be getting ready to launch its P2P service? (Thanks, Andreas)

Continue reading "We Asked Microsoft..." »

A while back I had the opportunity to speak with the folks behind Nexidia, a company that takes a unique approach to solving the audio (and by extension video) search problem. Gary has briefly grokked Nexidia in the past, but this was my first chance to dig in and see what they have to offer. In short, it's pretty cool, and the implications, should the company scale and get access to large datasets (ie become a consumer property or inform one), are significant.

I spoke with Nexidia's SVP/Media, Drew Lanham. He told me Nexidia is already a profitable company, due in large part to its call center business. For that segment of the market, Nexidia provides audio mining technology that allows companies to identify patterns in customer contact, for example, and design better customer interactions (are you listening, Dell?).

Most stuff I've seen about audio and video search uses either text (ie closed caption) or tagging and metadata as a solution. So how does Nexidia work? In short, the company's technology reduces speech to phonemes, the most basic unit of language, and uses those base units in much the same way that a text engine uses words. This approach is not novel, but Nexidia has apparently figured out a tack that not only works, it also scales, which is critical to the problem at hand. From Drew's follow up notes to me:

" For example, if you assumed daily additions of 10,000 hours, a taxonomy of 10,000 words, and 50 dual processor boxes, it would take about 8.7 hours to index (produce XML for location of word, file name, quality of phonetic score, frequency of word, language, etc. to be combined with other relevant metadata). I find the 10K hours relevant because if you assume CNN broadcasts 16 hours of content per day, then it would be cheap to index all audio and video created across 600+ radio and television stations (a rough guess of all the spoken word content on a daily basis created in North America). As you know, 50 boxes is trivial."

Google showed us that when you push to a new level in scale, all sorts of previously unimagined applications can be found. Nexidia is already being used in call center applications, as I mentioned, and counts the "homeland security" industry as a client as well. But what gets me excited is the potential in media search, which is Drew's focus as well. Nexidia turns any search query (a text input) into a phonetic code, which is then matched against a database of audio and video files. The potential here is rather large - coupled with a smart query UI, one can imagine a new approach to finding relevant data inside non-textual corpuses. Imagine - search all podcasts for a mention of "Google China" for example. Or all newscasts for coverage of "Iraq War Oil". Should audio/video search become this easy, advertising models open up, as do commerce opportunities (show me every movie where "rosebud" is spoken...). And don't get me started about what might happen if you mix Nexidia with Skype....

For now, Nexidia plans to work as a back end supplier to consumer sites, but I wouldn't be surprised if they decided to go it alone and try to become a consumer facing engine that crawled the web as well. I asked Drew about that, and he said only that the company wasn't going to take that option off the table. What I saw was impressive, though as faithful readers know, I am no technical expert. Regardless, this seems one to watch in 2006....

From Kottke:

In 2002, Dave Winer of Scripting News and Martin Nisenholtz of the New York Times made a Long Bet about the authority of weblogs versus that of NY Times in Google:

In a Google search of five keywords or phrases representing the top five news stories of 2007, weblogs will rank higher than the New York Times' Web site.

I decided to see how well each side is doing by checking the results for the top news stories of 2005....

...So how did the NY Times fare against blogs? Not very well. For eight top news stories of 2005, blogs were listed in Google search results before the Times six times, the Times only twice.

Kanoodle is pleased to report it has snagged MSN Spaces as a text link ads partner. What this brings up for me is the question "Yeah, but for how long?" I've asked MSN before about its intentions to get into the syndication space (ie, to do YPN or AdSense). This deal seems to indicate it's at least a year away.

Searchblog reader Adam asked me:

1) "Given a list of search terms, can Google produce a list of people
who searched for that term, identified by IP address and/or Google
cookie value?"

2) "Given an IP address or Google cookie value, can Google produce a
list of the terms searched by the user of that IP address or cookie
value?"

I put these to Google. To its credit, it rapidly replied that the answer in both cases is "yes." Just FYI.

All I will add is this: If you are an agent of the US Government charged with tracking domestic terrorism, might you have an interest in answering questions like the ones posed above?

As the Chinese curse goes (oh, the irony), may we live in interesting times.

This speaks for itself.

The leading US-based Internet companies are showing little interest in attending a Congressional briefing on worries that the firms are bending to the wishes of China's censors.

Microsoft and Cisco Systems have refused to attend the event, while Google and Yahoo are non-committal, officials said.

So AOL, Yahoo, et al have given the DOJ a sh*tload of data. Here's an idea - show all of us what you gave them! BB posts about it here. I like it! (From an original Gilmore post).

I've been quite heads down on FM stuff these past two weeks, forgive me. But using Google lately (as a registered user) I've noticed something new, and readers are also tipping me to it. You can now remove results from future searches. I wonder how many folks are actually doing this?

Who says Google doesn't play the tagging, sharing, social search game? Not Google. Today it released a new version of its toolbar that's very....well...Web 2.0.

From SEW coverage:

Google has enhanced its toolbar for Internet Explorer, introducing several new features that will appeal to regular users of the program.

The new features include enhanced "suggestions" that appear on the fly as you type a query, the ability to add custom buttons to search your favorite sites, the ability to create and save online bookmarks and to share web pages with others.

"One of the areas we wanted to focus on was to empower users more," said Sundar Pichai, Google group product manager.

Nor can I. Thank God for Rebecca.

Continue reading "fraught with clickfraud" »

Remember how Pontiac was pushing its line of cars by asking you to "Google Pontiac"? (See here for the background). In my post, I wrote: Now, when I Google Pontiac, I see two sponsored links up top, both from Pontiac (if I were, say, Toyota, I might just think about bidding that keyword....but I digress).

Well, Toyota didn't take the bait, but Mazda sure did.

...is that Google is, for the first time, being a content editor. I've written extensively about how Google, by its very DNA, does not like to be an editor of content. But in China, it's doing exactly that. (SEW)

Google's first big editing job? Deciding which sites to exclude because they might offend the Chinese government. There's still time to pull out, guys. I've read your rationalizations, and Uncle Bill's as well. I don't buy them. I don't buy that this is what, in your heart, you believe is right. Sure, I understand the logic. But, well....in your heart, is this what you wanted to do? No? Then why did you do it?

I was having dinner with some dear friends tonight. They asked me why did Google do this? My answer: I think they convinced themselves it was the right thing to do. They thought themselves into it. And deep down, they aren't sure they did the right thing. At least, that's what I want to believe. Sure, Microsoft is going to go in. Yahoo and IBM are going to go in. But Google? We thought...well, we thought you were different.

That this slipped by: Google AdSense begins rich media beta test.

In other words, "floating ads", interstitials, and expanding ads...oh my!

I'm speaking with these guys next week. For now, you can read about them here....(SiliconBeat)

Meet Anand Rajaraman and Venky Harinarayan, two of the co-founders at Junglee, and who twice seriously considered acquiring Google in its early days, but decided their friend Brin was too bold, if not arrogant, to deal with.

Now they plan to officially launch an ambitious search engine company, Kosmix at the Demo conference to begin the week of Feb 6 in Phoenix. They've also raised $7.4 million in venture capital.

They are making an audaciously risky bet that they can crack the code on a vexing problem in search: finding the meaning, or at least the topic of a Web page.

A reader asked me:

Does Google keep logs of searches correlated with IP address or
other personally identifiable information for users who have not
logged in?

I knew it kept parts of this data, but was not sure. So I pinged Google PR, which checked in for me (thanks!). The response was to quote Google's privacy FAQ:

Like most Web sites, our servers automatically record the page
requests made when users visit our sites. These "server logs"
typically include your web request, Internet Protocol address, browser
type, browser language, the date and time of your request and one or
more cookies that may uniquely identify your browser.

In other words, yes, Google does record this data. But, does it KEEP that data, I asked? The answer:

Yes, we do.

It's simple to stop this, of course, just set your browser to not accept cookies. But if you do, you lose out on the services that cookies enable. I for one keep my cookies intact. But know that yes, your data is kept by Google and yes, your searches can be correlated to IP data.

Who wants to have stories like this written? It just feels so ... wrong.

A day after Google's buggy censorship of sites for Chinese-users was revealed, the search giant has responded by fixing its filters so topics such as beer and jokes are no longer deleted.

An

investigation published Thursday by CNET News.com showed that Google's new China search engine not only censored criticisms of the Chinese government, but went further than similar services from Microsoft and Yahoo by targeting sites related to teen pregnancy, alcohol, dating and homosexuality.

On Friday morning, however, those previously verboten sites became available through Google.cn. That brings Google's filtering in line with blacklists used by Microsoft and Yahoo.

But it's worse. For more, read Gary, and Philipp. In short, Google used to have a page in its help area that said this:

But now it says this:
.

Update: Google explains its policy of engagement here.

Update 2: Google's new explanation of its censorship policy is up (SEW).

In a PDF report (download from Searchblog), Bear Stearns Analyst Robert Peck speculates that Google will launch a music store soon. Sure they will, and it will take lessons from video. Gary Price groks it here. From Peck's report:

Why is Google Tunes attractive to Google? According to Nielsen/Net ratings, unique visitors to Apple’s iTunes site
increased 241% YoY to 20.7M, for a 14% reach. Further, Nielsen indicates that iTunes users form a distinct target
audience with brand preferences along autos, alcohol beverages, magazines, and television.
*** We would expect Google to rollout a Beta service within 3-6 months. We note that Google has not confirmed our
expectations, and that our thinking is based on Mosaic theory. However, we do think this fits with Google's recent
moves and its ultimate goal of organizing the world's information.

From the Seattle PI:

"We made a big mistake," Mayer, who oversees all of Google's search products, said Tuesday. "You can't come out and launch a product like Google Video and say 'CSI' and 'Survivor' are there if they're not on the home page."

I'm still thinking about this, but this is an interesting development. Yahoo and Microsoft can go into China no problem, but once Google does, then the US Congress gets into the act.

Om reports from a Yahoo retreat (I wanted to go, but had a school board meeting, sounds like it was really interesting!).

My contention is that forget search, because Yahoo has something better than that.

My.Yahoo.Com is no longer a portal page, but instead an “attention page” which can be and should be leveraged to become the aggregator site for complicated digital life.

I consider search the interface for all this, in fact. Om also notes that Yahoo's new Chief Product Officer, Ash Patel, is a recent Mac convert.

Long week here in Searchblog land. And much, much happening. Here's my roundup. I am working on longer posts on Google/China and Nexidia (an interesting phonetic search company) but running out of steam for today. FM, the company we're building so that creating Searchblog-like sites is easier, is taking a lot of time right now, but I expect that to slow a bit later in the month. Meanwhile....

Andy finds an odd Googlebug. Seems to push IE users to download Google Desktop. More here.

Slate has fun with the Google/DOJ story - some good editorial cartoons. Click around (thanks Bill).

B2.0 names Google the smartest company this past year. But the company also is mentioned in the "Dumbest" category too.

Mary Meeker (MorganStanley) groks the DOJ implications. PDF download.

Google, Sun, others join "StopBadware" campaign.

Yahoo says, Are You Kidding? (In response to reports it has given up on catching Google).

The host of Xooglers gets busted for violating AdSense TOS. Oh, the wonderful irony.

TechCrunch has the scoop on new Windows Live services at MSFT's search champ camp.Speaking of which, MSFT announced two new labs (via SEW) as well, one focused on Search...

YPN (Yahoo's AdSense competitor) will be gearing up this Spring, here's a list of how.

Brin defends his position on China.

Dan Gilmor learns in public, reminds us why we like him so much

BigDaddy (Google's next big algo update?)

GM says Google Pontiac. Perhaps the first time a major (and I mean really major) marketer has used search marketing so directly in a television campaign. From the MediaPost coverage: Television ads often stimulate Internet search behavior by increasing brand awareness or sparking curiosity, as often demonstrated by Hitwise. But this GM spot was significant because it ended with an unusual call to action: "Don't take our word for it. Google Pontiac and discover for yourself." And the ad ended not with a URL or phone number for a local dealer, but an actual Google screenshot with Pontiac typed in.

This is a regional campaign, and certainly demonstrates how Google has become an authority/integrity call to action for marketers. Screenshot here.

Now, when I Google Pontiac, I see two sponsored links up top, both from Pontiac (if I were, say, Toyota, I might just think about bidding that keyword....but I digress). In any case, since many folks have no idea that those blue shaded links are in fact ads, I am sure that they are going to be making Google a lot of money over the course of this campaign. Innaresting.

As reported earlier, Google decided to go into China a while ago. I spoke to Sergey about this very question a year ago, and he expressed his reservations and his thinking - on balance, Google in China, even if it's playing by the Chinese government's rules, is a good thing. Weds, Google will make it official (Seattle PI). They're in - they're not standing up to the Chinese government. (Apparently, the DOJ and Wall St., Google can say no to. China....not so much.) The site will be google.cn (not live yet).

Via Hawk: Yahoo Giving Up on Quest for Search Dominance.

I don't know ... this quote sure ain't in character with the folks I know at Yahoo:

"We don't think it's reasonable to assume we're going to gain a lot of share from Google," Chief Financial Officer Susan Decker said in an interview. "It's not our goal to be No. 1 in Internet search. We would be very happy to maintain our market share."

Thoughts?

Update: Hawk covers Caterina's response: Blathering bullshit!

From his post:

I'm disappointed in the government for wanting to use the online behavior of millions of people in an attempt to justify a law that many of those million are likely against. I'm disappointed in them for making people even more fearful of "being tracked online" and the Bush Administration's attempts to keep an eye on the public.

I'm disappointed in those companies that appeared not to put up a fight, notify their users, or explain what happened in a timely fashion. I'm disappointed in them for not providing an opt-out mechanism. I guess that's everyone but Google so far.

Is it too much to ask, I keep asking, to ask our online services to provide us:

- Access to a record of all the information they keep on us and how they use it
- The ability to challenge that data's accuracy, and edit it for accuracy
- The ability to opt out (with a clear understanding of the resulting loss of services and opportunities that might result)
- The ability to set permissions as to who else might see the data
- The right to maintain a user copy of that data for archival purposes
- The right to share in the value of that data on negotiated terms

Is that so freaking hard to do? I sense that, increasingly, there is a market opportunity in doing this. I bet 95% of the public will never edit, or even view the data more than once. But the sense that the control panel is there, just in case, will be invaluable to establishing trust.

This is Ask's first "internally created" image search. I've played with it a bit, looks good, will update with more when I can....

When I was in London a while back, I got the chance to spend time with the BBC. These guys are fun to talk with. Then they came by my offices (in Ross, before we moved to Sausalito), and that ended up on the Money Programme, which takes an indepth look at Google.

Well, it's finally happened. It's only been four and a half years, but Google News is out of beta. They have new personalization widgets (see Greg's take here), and some other features like story history and feeds.

It's been a not so great quarter for earnings in our world, and now comes news (via SBeat) that a Yahoo employee (Amr Awadallah) is posting musings about why he thinks Google might be in line to miss earnings, or, at the very least, has employed tried and true tricks to increase its revenues in the past, and is not doing so this time.

This is why I love the blog world. You keep finding gems like Amr.

Here's MSN's response. In short: We gave info to the govt, but there was no personal info released.

Last night I watched Enemy of the State, which was one hell of a programming coup for ABC given the recent news. When it came out I was told it was a paranoid fantasy, by folks I know who would be in a position to know - at least back in 1998. But it's a fantasy that I sense is shared, in a perverse way, by a lot of folks in the current administration. If only we had those kind of tools....

It's been seven years since that movie was made. What's happened in seven years? Well....Google, for one thing. And warrantless wiretaps, for another. And a major move from the ephemeral to the eternal. Fasten yer seatbelts, it's going to be a bumpy ride.

The last graf of Steven Levy's Newsweek piece:

Though the government intends to use these data specifically for its COPA-related test, it's possible that the information could lead to further investigations and, perhaps, subpoenas to find out who was doing the searching. What if certain search terms indicated that people were contemplating terrorist actions or other criminal activities? Says the DOJ's Miller, "I'm assuming that if something raised alarms, we would hand it over to the proper [authorities]." Privacy advocates fear that if the government request is upheld, it will open the door to further government examination of search behavior. One solution would be for Google to stop storing the information, but the company hopes to eventually use the personal information of consenting customers to improve search performance. "Search is a window into people's personalities," says Kurt Opsahl, an Electronic Frontier Foundation attorney. "They should be able to take advantage of the Internet without worrying about Big Brother looking over their shoulders."

He riffs on DRM and Video, which I find interesting in any case, but it's the last two grafs of this post which really nail it:

Privacy is for Google what security is for Microsoft. At some point Microsoft realized that a chain of security disasters was one of the few things that could knock the company off its perch. And so Bill Gates famously declared security to be job one, thousands of developers were retrained, and Microsoft tried to change its culture to take security more seriously.

It’s high time for Google to figure out that it is one or two privacy disasters away from becoming just another Internet company. The time is now for Google to become a privacy leader. Fixing the privacy issues in its video DRM would be a small step toward that goal.

ABC News will broadcast its news tonight from Google headquarters. This was planned well before the DOJ kerfluffle, though I imagine that news peg only helps. I find it intriguing that as a "news event" Google now ranks - alongside hurricanes, wars, and earthquakes - as worthy of having an entire newscast based on location.

ABC came to FM's offices earlier this week to talk to me about the company. I have no idea if they will air anything, but FYI...set yer Tivos.

...in the Google v. DOJ case? Well, I've argued it's the slippery slope. But reading through the subpoena, it's clear that from where Google stands, there's something else at stake.

Remember this whole goat rodeo (on the size of indexes)? Remember how slippery both Yahoo and Google got when we tried to figure out exactly how many documents were in their indexes? Well, turns out, that's pretty much what the DOJ is trying to do as well. Hence, Google's defense on a "trade secrets" basis.

Apparently, the subpoena originally asked for a lot more than just a million addresses, as reported Thursday. From the motion the DOJ filed to force Google to comply with the subpoena:

"The subpoena asks Google to produce an electronic file containing '[a]ll URL's that rea available to be located through a query on your company's search engine as of July 31 2005."

and

"all queries that have been entered on your company' search engine between June 1, 2005 and July 31, 2005."

HELLO. You think Google is going to give that over? Me no think so.

This is why Google originally fought the order. The DOJ then narrowed its request to a random sample of one million URLs and agreed to not ask for personally identifying info on the search queries, but it still wants all search queries for a one week period. No way in hell Google would give that up, given the company's penchant for secrecy. Sure, the DOJ might guarantee that the data would not enter the public record, but, once in the DOJ's hands, it's out of Google's control.

So how to fight it? Well, standing up to the DOJ and getting major praise for doing so is a very smart strategy, in my book. As much as I'd love to believe Google is fighting this for heroic reasons, I'd wager that the data has more to do with it.

Also, just a note, but it's interesting to note that Google now has its very own DOJ case, just like Microsoft did.

(Gary has a thorough overview of the docs in the case here).

A wonderful trip down memory lane...

And the mashup continues.

SEATTLE - Amazon.com Inc. plans to broadcast on its Web site an original show hosted by Bill Maher and featuring performers and authors touting new releases — which, not coincidentally, will be for sale at the online retailer.
ADVERTISEMENT
click here

The 12-episode Webcast series, which will begin airing June 1, is the first offering in what the Seattle company says is a broader plan to add more original programming to its Web site.

Next up: Yahoo sells books, and Google sells videos. Oh, wait, that's already happening...

No, I don't know...but I do wonder, how many videos Google will sell in its first month? Anyone care to start a wager? Recall that when iTunes launched, Apple pretty much queered the market for secrecy: it proudly tells us when it sells it's millionth, ten millionth, and so on, of any thing (including videos). Will Google do the same?

I'll toss out a wager and say Google will sell less than 100,000 videos in its first month. After all, they have limited inventory, and the product is getting a slow start. No, wait, we have to be specific, to win. OK, Google will sell 95,567 videos in its first month. What do you say? If Google ever does tell us, I'll send the winner a signed copy of my book. How great is that?

From my book, written a year or so ago:

As we move our data to the servers at Amazon.com, Hotmail.com,
Yahoo.com, and Gmail.com, we are making an implicit bargain, one
that the public at large is either entirely content with, or, more likely,
one that most have not taken much to heart.

That bargain is this: we trust you to not do evil things with our
information. We trust that you will keep it secure, free from unlaw-
ful government or private search and seizure, and under our control
at all times. We understand that you might use our data in aggregate
to provide us better and more useful services, but we trust that you
will not identify individuals personally through our data, nor use
our personal data in a manner that would violate our own sense of
privacy and freedom.

That’s a pretty large helping of trust we’re asking companies to
ladle onto their corporate plate. And I’m not sure either we or they
are entirely sure what to do with the implications of such a transfer.
Just thinking about these implications makes a reasonable person’s
head hurt.

From the Mercury News, today:

The Bush administration on Wednesday asked a federal judge to order Google Inc. to turn over a broad range of material from its closely guarded databases.

The move is part of a government effort to revive an Internet child protection law struck down two years ago by the U.S. Supreme Court. The law was meant to punish online pornography sites that make their content inaccessible to minors.

In court papers filed in U.S. District Court in San Jose, Justice Department lawyers revealed that Google has refused to comply with a subpoena issued last year for the records, which include a request for one million random Web addresses and records of all Google searches from any one-week period.

The Mountain View-based search engine opposes releasing the information on a variety of grounds, saying it would violate the privacy rights of its users and reveal company trade secrets, according to court documents.

Nicole Wong, an associate general counsel for Google, said the company will fight the government's effort ``vigorously.''

...The government indicated that other, unspecified search engines have agreed to release the information,but not Google (emphasis mine).

Of course the Bush administration started with the cover of "fighting child porn." Do you think that's all they've asked for?

Of course not.

Bravo, Google, for fighting this. Don't give up the fight. It's not just about this one request. This is a major, major moment. And shame on the other engines for not standing up and fighting.

(And while I'm tossing out kudos, bravo on the two tier Internet stance, as well.)

Update: Philipp has a hilarious send up here - "Patriot Search."

Update Two: This is an awesome, up to the minute resource, over at SEW, on this story. Xeni at BB is also pursuing the story, and has news that the DOJ got info from MSFT, AOL, and Yahoo. Key detail: So far, no personally identifying info. That, I imagine, is buried in a Patriot Act request.

My AppleMail is acting really cranky lately. Why? Well, I had 34,000 messages in the "sent" folder. A couple well informed Apple geeks told me that was simply bad hygiene. My sent folder dated back to October of 2004.

Just cleared out enough to have just one year there. So how many mails did I send in one year, from Jan 2005 to Jan 2006? About 29,000.

Jesus.

Yeah, I know, if I had Gmail....I do have it, but I prefer mail clients on my Mac. Call me old fashioned.

So why did they do it? And what about that huge earnout? More than a billion dollars? My God! How did that come about? (Besides, of course, dMarc's extremely Googley "innovation through automation" tagline).

My guess is that this is an artifact of the deal. Here's a totally speculative scenario. Either through direct intent or serendipity (ie someone says to a Googler: Hey, you guys should check out dMarc!) Google decides it wants to do to the radio market what AdWords has already done to online - and by extension, print. In other words, redefine it, make it more efficient, invert the model, all the stuff we already know. OK, fine. But Google knows exactly zip about radio advertising.

So Google approaches dMarc (or vice versa), and the meetings ensue. Visions are whiteboarded. My God! the two parties rhapsodize, we just might redefine the entire multi-billion dollar radio business!

Google goes into buyer mode. It makes a flat our acquisition offer. Maybe it was $100 million to start (that's what the deal was for, setting aside the earnout), maybe it was for more or less. Doesn't matter for this scenario.

What happened next is the interesting part. The folks at dMarc said, essentially, No. We're not going to sell so cheap to Google, just because you're Google. We have a great market position, great relationships, and the ability to leverage this company without your help, thank you very much.

Now, that's not a response Google is used to hearing. Usually it's more like the Keyhole response: "When Google called, I realized that I was being tapped into the great fraternity of High Holy Possibility, and I couldn't refuse. After all, Google has the resources and market position to make my wildest dreams for (insert business here) come true."

But the guys from dMarc didn't see it that way. Sure, they saw the upside of plugging into Google's infrastructure and ad network. But they also knew they could shop this deal to Yahoo, or MSFT, or AOL, or even go it alone. So they had leverage to capture the direct upside that dMarc might represent in the form of a major payout. (And, of course, when Google bought Keyhole, or other companies in the past, they could say that the options which came with the deal were going to be worth a hell of a lot. But convincing someone that your stock is going from 465 to 500 or 600 is more of a stretch....)

Voila, Google's second major business development deal for which they had to compete (first, of course, was AOL). Once again, signs of a maturing business.

That's a lot of facts.

But not great enough. Stock was down more than 10 percent in after hours. Ouch.

Now, I don't think this is the sound of a bubble deflating. I don't think we're in a bubble. But maybe this is a reminder that outsized expectations are, well, outsized.

He finished his manuscript - The Long Tail. Man, I know how good that feels. Way to go! Can't wait to read it...

Well, stuff that's worth grokking:

Om on copyright and video. He's got a point.

Google Talk is federating (Ie, cross platform).

A Yahoo exec exits for the wilds of the startup life (welcome!). Rob Solomon has joined SideStep as CEO.

Thomas Weisel Partner's Internet Monthly: A field guide to the trends moving the Internet (PDF download). The headline: Internet Display Ads Could Be the Surprise of 2006

I've been predicting that AdWords and the TV upfront will merge for years. Along the way, I should have mentioned radio as well.

From the release:

MOUNTAIN VIEW, Calif. - January 17, 2006 - Google Inc. (NASDAQ: GOOG)
today announced it has agreed to acquire dMarc Broadcasting, Inc., a
Newport Beach, Calif.-based digital solutions provider for the radio
broadcast industry.

dMarc connects advertisers directly to radio stations through its
automated advertising platform. The platform simplifies the sales
process, scheduling, delivery and reporting of radio advertising,
enabling advertisers to more efficiently purchase and track their
campaigns. For broadcasters, dMarc's technology automatically schedules
and places advertising, helping to increase revenue and decrease the
costs associated with processing advertisements.

In the future, Google plans to integrate dMarc technology into the
Google AdWords platform, creating a new radio ad distribution channel
for Google advertisers.

Hey Searchbloggers - One of Searchblog's ad clients was wondering if they could engage you in a short survey. If you're game, please answer these 6 simple questions, it'll help tune the ads on the site. (For the survey to be useful, I can't say who the advertiser is!)

I promise not to do this very often, and appreciate your help. Thanks.

Apparently German media giant Bertelsmann will head the Franco-German Google killer, Quaero. Good f'ing luck, boys. Apparently France is kicking in 150mm euros, and Germany a similar amount. Memo to Europe: Google's annual capex is approaching $1 billion US. Anyway.

PS - Might start spending that $300mm on buying the rights to http://quaero.com/.....

Sometimes you just wonder where folks have been.

PS - The article does claim that Google pays "78.5% back" to publishers. That number is from looking at Google's TAC in its filings, not a direct quote. Er, your mileage may vary (though you'd never know it one way or another).

Can't figure out where you stand on the Google v. Book Publishers?

You can watch this video, to see Lessig's view (Pro Google) and read this rebuttal, from Brian Dear.

Gaynelle Grover, whose blog I've just begun to read, has a good point about Google Video Store and why folks are not so happy with it. In short, it's because it's called a store, but it doesn't act like a store.

I agree. Stores have merchandising, special offers, architecture based on consumer flow. Stores are not driven by the principles of organic search. Stores are driven by the dollar, and so is search within stores. Consumers expect this, and put on a different lens when they know they are in a "store." This is new to Google. But give the company time. I'd willing to bet it will figure this out, and quick.

UPDATE: This has also gotten me thinking about brand and product marketing, which is again, something Google does not really do (save B2B AdWords and a little B2B print). But if Google wants to play in music, books, video - all areas it is already playing in - it will have to market, and market well, the way that so far is has not had to.

This year will mark the third annual Web 2.0 conference. It's not till November (the 7th-9th in SF, for anyone marking their calendars), but it's never too early to start thinking about it, at least, if you're the program chair like I am.

One thing we have to do is give the conference a tagline, sort of like a theme in four words or less. The first year, we declared "The Web Is a Platform." That felt spot on, because the idea of the web as a place you could build on the work of others was a pretty new idea. Last year we tagged it "Revving the Web," because it was all about the services and businesses and opportunities that arose from the Web - all of which taken together made the web more robust and more exciting.

This year Tim and I have been bouncing around some ideas, and I'd love your take on what you think is an overarching theme to the Internet business for the year to come.

I've got one that I can't seem to get out of my teeth, so as with all things, I wanted to bounce it off you all. I think this is the year of Disruption - the year the Web - in all its forms - really flexes its muscle and begins to seriously turn the soil of the global economy in deep and permanent ways. Think of the disruptions in the media and entertainment industries - probably the deepest disruptions so far. But we're only in the first inning or so of the disruptions in the mobile and communications space (how excited do YOU think AT&T is about Google offering free Wifi, for example? Or eBay buying Skype?). And the disruptions of search and clickstreams on commerce is only now beginning, and the same is true for the massive IT industry (Microsoft Live, anyone?). And the disruption on our cultural life - in government, for example (can you say warrantless wiretaps meets the Database of Intentions?) - is only beginning to dawn on all of us.

What do you think of the theme? The goal is to tie together a lot of issues, companies,and ideas. I think this one does it. What themes do you think might work?

I've spent a bit of time in the past few weeks getting to know FAST Search and Transfer, the company that, prior to my recent conversations, I best knew as "that Norwegian company that sold alltheweb.com to Overture."

As I wrote in my book and elsewhere on this site, I've not exactly been a huge fan of enterprise search. Save my long diversion into WebFountain, I've pretty much focused on the consumer space. SEW's Gary Price, on the other hand, has been declaring the importance of enterprise search, and in particular FAST, for a long time.

So when the folks at FAST called me and asked if I'd speak to them about their new products, and perhaps even come to their conference next month and give a talk, I thought it was high time I listened. I accepted their invitation and I spent some time on the phone with them recently. The result: I got smarter about FAST, and we also agreed to a partnership: FAST is marketing its event through my publishing company FM. I'm pleased that FAST is offering a discount to its conference for Searchblog readers - of nearly 30%, no less - because of that partnership. (I mention this because it's my policy to disclose any dealings I might have with companies in Searchblog's space. They are few and far between, and if they do happen, they happen because I personally believe in the quality of the company I'm working with, and on the condition that I disclose them here.)

I'll write up my thoughts in more detail after the conference, but I did come away from my initial talks with FAST's CTO and other executives convinced that many of the more difficult problems of search - user interface, for example, or structured data search - are being attacked in interesting ways in the enterprise. And I realized that my definition of enterprise search was too narrow - as consumers, we touch it every day.

The conference will be addressing many of these issues, focusing on real world examples. And there are tons of them. If you accept the premise that search is becoming the de facto navigational interface to the web, enterprise search picks up where Google et al leave off - once you get to a site like Career Builder, or The New York Times, or Dell, or hundreds of others - a company like FAST takes over. In other words, it's not just for intranets anymore, and enterprise search has much to teach us about where giants like Google and Yahoo might be headed next.

St. Lawrence of Google. In which the Economist catches up on what we've been talking about for some time.

Keyword prices dip.

Via SEW, more mainstream coverage of China and the Great Firewall.

Congrats, Toni - leaving Yahoo for startup land...

Kottke: Digg v. Slashdot

New Zeitgeist page, now with 15 queries! Top gainer this week: Vince Young. YAWN.

Is Google Evil? You be the judge.

Read Jarvis on Businessweek on the Google Boogeyman.

What happens when I try to give 300 or so folks at Google NY a straight answer about the future of Google? This. (Video of my talk at Google NY, which the Google video blog posted today).

Thanks to a partnership with Superpages.

(Also: MSFT looking to change the ad game with its new "adLab").

Great SEO Roundtable post, chronicling the apparent tit for tat between Google and MSFT with regard to Vista, IE 7, and search engine default settings. (Thanks Nacho!)

Now here's something I just might start using right away, because, honestly, I hate my Treo, it promises so much, and delivers so little. Why? Because I am a mobile moron - it's too much work to make it work right. Might Google help me with this? We'll find out. Google today announced the Google Personalized Home for mobile devices. Carlo has more here.

Two Google notes: One, Google is testing local ads on Maps, Beal has the story. Second, have you all checked out how Google is doing music lately? Not bad, though you can't buy anything yet. I searched for "Orbital" and got this (a highly stylized, non web search interface) as my only result yesterday, though now it's back to this (a standard one box interface). I rather like the interface.

Searchblog reader Brad Twohig, based in the midwest, is seeing a promotion for Google Video Store and Pack on the home page. He queries: "It would be one thing if they were using the NBA and CSI as a promo to get people to just use Google Video, but it is paid content they are promoting and thus I view it as their first Homepage advertisement. It has no images like Yahoo's but it is still a promotion for a VOD product."

I don't see this promotion here in California. Do others see it around the country and the world?

Update: One reader posits that this is a Mac thing. I bet that's right.

This morning you may notice some subtle changes to Searchblog. We're working to fix some design inconsistencies, clean up the back end code, and streamline the search and archives function. Please give me feedback! Thanks.

Way back in the early days of this site, when its pagerank crossed 5 or so and traffic started to pick up, I got hit by some pretty hardcore comment spammers. This was not hand rolled stuff, this was robot love, and lots of it. It brought the CPU to its knees, hitting my site with multiple sessions and scores of links in each comment.

Of course, we all know why folks comment spam - to gain search juice. My fearless sysadmin and I fought back with all manners of countermeasures, and we ultimately found a solution which pretty much defeated the robots - a neat little hack that pretty much ensures robots cannot get in. Humans, however, can still get in, in particular if they obey some simple rules - no more than two embedded URLs in the comment, and no previous record of bad behavior.

Well, I'm sad to say it seems that a new form of comment spam has sprung up - the human comment spammer. I've been somewhat bipolar about these guys - I mean, they have to earn a living, and sometimes their attempts at feigning relevance are hilarious - but it's time to draw the line. More often than not, they leave relatively inane comments, like the one in the title of this post, and are nearly always hopelessly polite. They usually have no more than one link, often to some random site in Germany or Bulgaria looking for search wuffie.

I'm tired of it, and so I'm declaring here, and now, that I'm going to get cruel with my comment culling. If the comment doesn't add value, I'm going to bong it. If you're a normal person who isn't a comment spammer, and you are getting bonged, by all means email me and tell me what a d*ck I've been, and I'll restore your comment. But a great site is all about a great conversation, and it's my job as the den mother to lay down some rules from time to time.

OK. I feel better already.

PS - This is NOT a note about my frequent or even sometimes commentators, I LOVE your thoughts, and pray you keep them coming...

Well, this ought to catch some folks attention, written by the fellow who called Amazon $400:

I'm just laying out a scenario that could kneecap Google and take its stock back to, say, $100 a share.

Google's major weakness is that it is almost entirely dependent on one, high-margin revenue stream. The company has dozens of cool products, but with the exception of AdWords, none of them generate meaningful revenue. From an intermediate-term financial perspective, therefore, they are irrelevant.

So, the question is, what could happen to AdWords, and what will happen to the company (and stock) if it does?...

... let's say click fraud continues to increase as a percent of total clicks (which seems perfectly plausible to me). Eventually, all else being equal, ROIs will start to decrease, as the $1.00 keyword that delivers a profitable sale today will deliver an unprofitable one tomorrow.

Alexandre Douzet, Co-Founder and Vice President, Marketing at job site TheLadders.com, has authored a paper on PPC search and the cost of acquisition. I'm not all the way through it, but it feels like a good read for those who are interested in a general overview of PPC marketing, and some conclusions on how best to employ. PDF download here.

I'm focused on pushing a rev of the new FM site this week, so my posts are short, not very analytical, and basically not very fun. For me to write, or, I imagine, for you to read. But I do have a lot on my mind, so stay with me through this week...thanks.

Sure, I'm a Mac bigot. But w000000000000000t!

Man, lots of M&A. Truveo video search was featured at the Search SIG I moderated a couple of months ago. AOL now owns it. From the release:

AOL’s acquisition agreement with Truveo was signed and closed on December 21, 2005. Financial terms were not disclosed. Truveo was previously privately held, and financed by strategic venture and angel investors.

Truveo ( http://www.truveo.com ), based in Burlingame, California, was co-founded by CEO Dr. Tim Tuttle and CTO Dr. Adam Beguelin in January 2004. Truveo subsequently launched its premier video search engine technology in September 2005.

Truveo's approach to video search utilizes a proprietary web crawling technology called "Visual Crawling". This unique technology has enabled Truveo to amass one of the most comprehensive indexes of high-quality, current video on the web. The strength of Truveo's Visual Crawling is its ability to automatically discover video files and related information on complex, dynamic web pages – a task that has been notoriously challenging for existing conventional crawling technologies.

Miva, which plays in the second tier of PPC networks (it used to be called FindWhat), is "considering strategic alternatives." I've heard a lot of scuttlebutt that Miva's network is fraught with clickfraud and other traffic of not so great intent. I wonder how this will play out. The company does have pay per call technology as well. Release.

Tristan has the scoop and an interview with the founder.

A few minutes ago, I learned that Yahoo! acquired WebJay, a site that allows for categorization, editing, listening, and sharing of playlists online (In a way, it can easily be compared to del.icio.us for multimedia.) WebJay was created in early 2004 as a way to create the internet equivalent of mix tapes. Lucas Gonze, the creator of WebJay agreed to taking a few minutes of his time to do a quick IM interview between meetings. Following is the transcript of that interview:

Jakob posts. Danny responds. Great stuff.

Last Friday it was a minor delay. But now we're several days in...

Chris has a nice write up of a SEMPO (Search Engine Marketing Professional Organization) report.

The report had both predictable findings and a few surprises. According to the study, the U.S. and Canadian SEM industry has grown from $4 billion to $5.75 billion, with paid placement accounting for 83% of the total spend.

Despite its demonstrated effectiveness and the amount of time and energy search marketers spend discussing organic search engine optimization techniques, SEO accounted for just 11% of overall spending, or $643 million.

But if a powerful distribution partner wants to do one, well, we're in!

I love seeing the Times give Henry a direct link to his (relaitively) new blog, where he ponders Google's valuation (based on Safa's 600 call). The big question, again, on Big Media's mind is "Are we in a bubble, and is Google the Soap?" I thought we settled this (OK, all I really did was toss in my two cents), but apparently not. Honestly, I think the media is terrified of screwing this story up again - of believing in it too much, or perhaps worse, of missing the boat if this time it turns out the Web really is a Super Big Deal.

When John H. writes about Microsoft, we should read, he wrote a great book on the company back in the late 90s....

Way back in 2002, Josh Quittner, who is a pal and also the Editor of Business 2.0, took a risk on a down-and-out dot-com publishing exec and contracted me to write a column for his magazine, the only one left after the Standard and its ilk bit the dust. But when I got the Time Inc. contract (B2's owners,) I was bereft. I had an issue with the fact that what I wrote would be behind AOL/TW's paywall. So I requested, nice as pie, that I be able to post my columns here, on this site. Josh agreed, and the rest is history.

Well, all that's moot now. CNNMoney is picking up my column, and all of B2 for that matter, and it's all free.

Here's everything I ever wrote for Josh!

Enjoy, I sure as heck will!

Gary discovers a Waterloo, Canada based company that Google purchased - mobile software, including browsing and email. I must say, it must not suck to be Google if you're in charge of biz dev.

As I posted earlier, I had the chance to talk with Marissa Mayer about Google Pack, and Jennifer Feiken, who runs Google Video. I'd have posted earlier, but I was under embargo.

The news is out now, and the analysis begins (live coverage at Engadget here). My two cents on both: Google is now officially a Really Big Company, and is acting like one. Diversify your revenue streams, for one thing. Leverage and consolidate your core strengths, for another. And protect your vulnerable flanks, for yet another.

The ability to sell video is great, but not news. We've known that was coming. What is really interesting is the pricing leverage: Google is splitting revenues 70/30 - that's 70 to the content producer. Also very important is that the producers of content are the ones who set the price - again, totally different from traditional models. Thirdly, Google is doing its own DRM. That's very interesting, and probably best left as the subject of another post. Producers can decide to not use DRM, as Charlie Rose did, Feiken told me.

This is a major step toward entirely new models of content distribution, and if I were Comcast, DirecTV, the telcos, or frankly anyone in the traditional video business, I'd be a bit concerned. It gives content producers far more power to connect directly to audiences, and the leverage will only increase - in five years, it won't be 70/30, it'll more likely by 80/20. Gary has a good roundup of some of Google's competitors in video. (And Tristan has an overview here that is useful too). Clearly they are not the only player here, and the video/content industry has no interest in insuring that one party owns distribution.

What I really wonder is what the split to producers like CBS or the NBA is with traditional players like Comcast. I'm guessing it ain't even close to 70/30. This is market disruption at its finest, assuming the service actually works (it was delayed at the time of posting.) And, of course, that a critical mass takes it up on both ends. Feiken told me that they currently have "thousands" of videos up for sale or rent, and about 40 major content partners. She also said she expects that the major movie studios will join up soon.

Another very important part of this announcement is ranking and relevance. I asked Feiken how Google plans to rank Google Video searches - clearly this ain't no simple PageRank play. Will they rank by popularity? Profitability? Metadata? "We realize this is a difficult problem to solve and we are definitely innovating in this area," Feiken told me.

Watch this space. From my book (p 241-42):

Google is clearly in the process of declaring its position relative
to the content industry, and it seems to be this: we will become your
distribution sugar daddy. We’ll be Switzerland—allow us to index
your content, and when people find it through us, we’ll enable you
to sell it. This approach became more apparent with the discussion
and disclosure of a 2004 patent application in Google’s name that
creates a system by which media is discovered and then paid for.
In such a system, one can imagine that Google has or will cut
deals with any number of content owners and somehow incorporate
that content into its index (the company has been rumored to be do-
ing just that, but refuses to comment). When you search for some-
thing, let’s say “usher,” the actual content that Usher has created will
come up in the results, and thanks to the distribution deals Google
has cut, you can buy that content right there on the spot. Everyone
gets paid!
With Yahoo, of course, this already happens. But for Google to
put itself into the position of media middleman is a perilous gam-
bit—in particular given that its corporate DNA eschews the
almighty dollar as an arbiter of which content might rise to the top
of the heap for a particular search. Playing middleman means that
in the context of someone looking for a movie, Google will deter-
mine the most relevant result for terms such as “slapstick comedy”
or “romantic musical” or “Jackie Chan film.” For music, it means
Google will determine what comes first for “usher,” but it also
means Google will have to determine what should come first when
someone is looking for “hip-hop.” Who gets to be first in such a sys-
tem? Who gets the traffic, the business, the profits? How do you de-
termine, of all the possibilities, who wins and who loses?
In the physical world, the answer is clear: whoever pays the most
gets the positioning, whether it’s on the supermarket shelf or the bin
end of a record store. As Yahoo also becomes a superdistributor of
media content, I have no doubt the company will figure out some
way to index and distribute media content that is moderated by the
traditional market forces of who pays the most, and what is the most
popular.
But Google, more likely than not, will attempt to come up with
a clever technological solution that attempts to determine the most
“objective” answer for any given term, be it “romantic comedy” or
“hip-hop.” Perhaps the ranking will be based on some mix of
PageRank, downloading statistics, and Lord knows what else, but
one thing is certain: Google will never tell anyone how it came to the
results it serves up. Which creates something of a catch-22 when it
comes to making money. Will Hollywood really be willing to trust
Google to distribute and sell its content absent the commercial
world’s true ranking methodology: cold, hard cash?

We'll see.

Finally, Feiken is not immune to the joints after midnight implications of Google Video. "We see this as a historic event," she said. I have to agree.

OK, enough said on that point.

Now, Google Pack strikes me as an obvious play for Google, the company has made no secret of its intention to poke Microsoft in the eye from time to time. And honestly, they are right - setting up and maintaining a PC is a right pain in the ass. I very much hope this thing works, and plan to try it out on a new PC Federated Media is buying this week. (More on Pack here at SEW).

I spoke to Marissa Mayer about Pack, and she had some fun stuff to say about it. I noticed no version of Open Office in the Pack, and she reminded me this is just the first version of the Pack, and since it updates itself automatically, why, there might be Open Office in an update shortly. They are in active discussions, I was told.

Pack, if it becomes popular, will bring a whole new set of users to Google, mainly because it includes Toolbar and Desktop, which of course means more searches, and more data, and more money for Google.

"We realize software distribution will have to become one of our core competencies," Mayer told me.

"Some of (the applications in Pack) will result in increased revenue to us," she also noted.

Well, I asked, might you ever include Microsoft products in a Google Pack? "If they are interested," the ever on her feet Mayer responded, "we'd be more than willing to discuss it with them." Over to you, Mr. Ballmer....

Terry Semel's big news this morning was Yahoo Go, more on it here from Charlene Li, and Yahoo News. Remember my mobile prediction? There was a lot of news in this space, Google and Yahoo and Motorola, for example. More coming, I am sure....

Maybe this is true. But I hope not. Would Google want to get into this business so directly? Well, perhaps it would want to mimic Yahoo, which bought HotJobs, but really, honestly, this feels totally out of character. Recall my DNA posts way back, about how the two companies are different in their approach to content and community? Should Google buy Monster, well, next stop would be an entertainment guy running the show. I hear Ovitz has some time on his hands....

The big news today is clearly Google's move into selling video (read: an entirely new revenue stream and a very disruptive market force for cable, on demand, DirecTV, etc) and its more aggressive focus on becoming a desktop software distributor (with Pack).

I'll have more to say on this, but I'll have to be content with taking a "second day" approach to the story. Why? I'm under embargo. I spoke with Google about this stuff earlier in the week, and agreed to not divulge the contents of our conversation until Google lifted its embargo (in this case, it's when Page speaks today). This practice of embargo is fine with me, nearly every tech commpany does it. And I always honor them, though I have a policy of writing about things if they break early, as this news did.

But because our conversation had more details than have hit the press, I'm going to wait to post. It's Friday in any case, and who knows what else might come up?

Xeni at BB notes an offensive - though not clearly intentional - result at Walmart.com.

This product listing on Wal*Mart's website for a Planet of The Apes DVD suggests films about black historic figures Dorothy Dandridge and Martin Luther King, Jr. as "similar items."

Reader comments continue:

I recall seeing something like this before. In that case, inappropriate Amazon books were recommended, such as sex guides being shown for people browsing a Pat Robertson book. It was theorized that a large number of people caused this by visiting one page then the other, in order to game the system.
Perhaps the same thing is happening here.

We all know about Google Bombing. But Recommendation System Bombing? That's a new one to me!

More noise from the telcos that they want a multi-tiered Internet. Watch this space. Paid Content reports from CES:

Verizon CEO is now on the band(width)wagon...in a Q&A at CES, Verizon CEO Ivan Seidenberg said that providers of bandwith-intensive Internet applications, including Google and Microsoft, should "share the cost" of operating broadband networks. He joins AT&T (then SBC) CEO Ed Whitacre, who last year put his foot in the mouth in a rather harsh interview with BW.
According to Seidenberg, Verizon and Google are already talking about how such compensation might be structured. While Seidenberg said Verizon "intuitively" believes that the Internet should be open to all applications, he also said that "we need to make sure there is the right economic model," especially in regards to so-called "free" or advertising-supported applications, which generally do not offer any direct compensation to the network service provider.

Update: Good comments starting to flow below, and this Journal story focuses on the issue, though it's paid walled. From it:

The phone companies envision a system whereby Internet companies would agree to pay a fee for their content to receive priority treatment as it moves across increasingly crowded networks. Those that don't pay the fee would find their transactions with Internet users -- for games, movies and software downloads, for example -- moving across networks at the normal but comparatively slower pace. Consumers could benefit through faster access to content from companies that agree to pay the fees.

Er, EXCUSE ME? Am I not already PAYING these companies for HIGH SPEED ACCESS? That's what the web services companies are saying:

"They want to charge us for the bandwidth the customer has already paid for," said Jeffrey Citron, chief executive of Vonage. Customers who already pay a premium for high-speed Internet access, he said, will end up paying even more if online services pass the new access charges to consumers. "The customer has to pay twice. That's crazy."

Mr. Citron said he thinks that if the Bells tack on extra charges, cable companies that also provide broadband will soon follow.

Google, Yahoo, and others are in discussions with the telcos. I'd love to be a fly on THAT wall.

Update: I got a call from Google saying that the Journal story got it wrong - Google is NOT in talks with Verizon about a two tiered pricing scheme, and Verizon wants to clarify as well, though I await a call from them. This is a TOUCHY issue, and it will only get more interesting. We'll tackle it at Web 2.0 this year for sure.

In conversation with folks equally besotted with all things search and marketing, the talk often turns to click fraud.

After some mandatory clucking of tongues, I go off on my own little riff about the subject - how it's difficult to prove as a percentage of overall PPC revenue (beyond the anecdotal), and how - for the time being anyway - it really doesn't seem to matter. Click fraud is something of an ecosystem "tax" - advertisers who are putting $1 into AdSense, for example, are (usually) getting more than $1 back. Whether they get $2.00 or $1.75 is not that important, if, say, 12.5% of the clicks are fraud, who cares? You can always petition Yahoo or Google for a refund (though not all do).

Only when they start getting back 99 cents (or less) for that $1.00 will the "margin pressure" build to "do something about click fraud" in any real sense. In the meantime, advertisers are happy with AdSense, because, well, it works well enough, and there's no incentive to change it.

This post about a recent earnings release from FTD, written by Jeff Matthews, struck me as a potentially important insight with regard to all this. Matthews likes to stare at corporate behavior and find the stuff that perhaps others have not thought about. From what I can tell, he's not a search fellow, but, a reader pointed me to his stuff, and it's good.

From his post:

“During the Christmas season, certain online search engine costs increased significantly over the prior year, and as such we made the decision not to pursue the resulting high cost order volume.”

That comment was contained in the long first paragraph of a press release from FTD Group, the flower delivery people, that was issued at 5:54 E.S.T. last Thursday night, when almost nobody was around to care.

Now, I don’t follow FTD closely, but its business model depends more than you might guess on internet searches—after all, somebody searching for “flowers” on Google is probably not doing deep scientific research into botany. They are very likely a guy, running late, kicking himself for putting it off until the last minute.

...What is also interesting about the FTD release is that the company states that despite a pull-back in online ad spend and the resulting revenue shortfall, the company will still hit its EBITDA and earnings targets...

...This suggests that at least in the floral delivery category of online search, and assuming FTD is not just blaming an innocent bystander like some companies we could imagine, the marginal cost of a new customer has reached parity with the marginal profit from that customer. Which is not something anybody expected happening any time soon.

So what is FTD doing about this turn of events?

“…we have begun making additional investments in our marketing staff to help build a more diversified marketing portfolio. We believe these initiatives will enable us to regain our competitive position in the marketplace and continue to deliver long term bottom line results for our shareholders.”

A possible conclusion? Search marketing may be on its way toward a slowdown, if not a plateau. And while this is entirely anecdotal, and certainly nothing to base decisions upon, it points to the margin pressure idea, and, I think, validates it. At least as far as FTD is concerned...

Thanks, Searchblog reader Philip!

Innaresting, check this out. Google News as a tag cloud, from the fellow who brought you Buzzingo.

Every so often I use this site to promote something - well, something besides the book, of course. This is one of those times, so bear with me. FM is hiring. If you're interested or know someone who might be, here's the info....

Now, look. I've been to a lot of CES's. I'm not there this time, but.... this is a big deal. You have three major CEOs/Founders - Gates, Semel, Page - duking it out to be the most spectacular, most important, most talked about (oh, and yeah, Dell, Otellini, Stringer...). Really cool.

So Gates started today. Semel is later in the week. Then Page Friday. All will make announcements, I am sure. Gates already did. All about search and entertainment. Scoble's notes are here.

Update: Journal is reporting (via CMP) that Page will release a full throated, pay service video and a software bundle. I'll have more to say on this Friday afternoon. WSJ link.

This is worrying. Xooglers, keep it up, and don't let them twist your arms...(hat tip Philipp)

Nope. (Thanks, BB).

From the post:

Vast deposits of personal information sit in databases across the internet. Terms used in phone conversations have become the grounds for federal investigation. Reputable organizations like the Catholic Worker, Greenpeace, and the Vegan Community Project, have come under scrutiny by FBI "counterterrorism" agents.

"Data mining" of all that information and communication is at the heart of the furor over the recent disclosure of government snooping. "U.S. President George W. Bush and his aides have said his executive order allowing eavesdropping without warrants was limited to monitoring international phone and e-mail communications linked to people with connections to al-Qaeda. What has not been acknowledged, according to the Times, is that NSA technicians combed large amounts of phone and Internet traffic seeking patterns pointing to terrorism suspects.

"Some officials described the program as a large data mining operation, the Times said, and described it as much larger than the White House has acknowledged." (Reuters)

Combining a data mining operation with the Patriot Act's power to access information makes it all too easy for the federal government to violate the Constitution's prohibition against unreasonable search.

And.....the denouement:

It used to be you had to get a warrant to monitor a person or a group of people. Today, it is increasingly easy to monitor ideas. And then track them back to people. Most of us don't have access to the databases, software, or computing power of the NSA, FBI, and other government agencies. But an individual with access to the internet can still develop a fairly sophisticated profile of hundreds of thousands of U.S. citizens using free and publicly available resources. Here's an example.

There are many websites and databases that could be used for this project, but few things tell you as much about a person as the books he chooses to read. Isn't that why the Patriot Act specifically requires libraries to release information on who's reading what? For this reason, I chose to focus on the information contained in the popular Amazon wishlists.

Amazon wishlists lets anyone bookmark books for later purchase. By default these lists are public and available to anybody who searches by name. If the wishlist creator specifies a shipping address, someone else can even purchase the book on Amazon and have it shipped directly as a gift. The wishlist creator's city and state are made public on the wishlist, but the street address remains private. Amazon's popularity has created a vast database of wishlists. No index of all wishlists is available, but it remains possible to view all wishlists by people of a particular first name. A recent search for people named Mark returned 124,887 publicly viewable wishlists.

For an all inclusive search by name, you could compile a comprehensive list of first names and nicknames from the baby names databases available on the internet. Armed with this list, and by recording the search results for each first name, it is possible for you to retrieve the vast majority of public wishlists on Amazon.

For the purposes of this exercise, only a single name was chosen – a common male name that returned over 260,000 wishlists. I'm not going to divulge what name was actually used. Let's pretend it was "Edgar," in honor of former FBI director J. Edgar Hoover.

It goes on from there. Hmmmmmm....

Make sure you scroll down for the Google Maps API mashup of readers of 1984.

So Larry Page is giving a keynote at CES this Friday, which is what got the whole Google Cube/PC thing fibrillating, but Om thinks what he's going to launch is some kind of Google Video enhancement/deal.

Longtime readers will note I do not post on the Google doodles, which honestly, I don't much like (hey, I know folks love em, but I'm allowed to dissent). But I love this one. Today is the birthday of Louis Braille.

From Reuters. I have no doubt they are considering it. But I'm not so sure it will happen. Remember, they recently got divorced with regard to ad systems (MSFT used to use Yahoo's Overture service), and it's not clear what MSFT brings to Yahoo's party that the company does not already have. Thoughts?

This looks like a useful search engine for podcasting. From its FAQ:

PODZINGER takes search a step further by searching the spoken words inside the podcast in order to find more specific and relevant results. The text-based search results include snippets from the audio to help you figure out if the result is relevant. You can even click on the words to listen to the audio from that point.

Many readers have asked me - "Hey John, why so silent on the rumors that Google might 1/create a parallel Internet using portable containers and massive bandwidth (see Cringely here) and 2/connect them to cheap and powerful "Google Cubes" that do everything we wish Apple, Dell, and Tivo would do but for some reason are not?" (see more Cringely, Cnet, and the LA Times).

The simple reason: I find both hard to buy. Really hard to buy. Why? Well, it's not like Apple, Dell, and tons of others don't want to make the same thing (the cube, anyway), and it's not like they haven't thought it through. I know, I know, plenty of folks were playing in search when Google came along....so... I'll keep watching, and thinking, but....well, it feels a bit like our the Google Rorschach effect at work....for now.

Update: Google has denied the PC angle, in any case.

Scoble gets down on his employer (MSFT) for taking down a Chinese blogger. Good for him.

About a year ago I was included in a 60 Minutes piece on Google, produced by Rome Hartman and reported by Leslie Stahl. It was a fun process, and as it turns out, they used a lot of my thoughts in the piece. I figured I'd be lucky if they boiled me down to one not so stupid sounding bite, but instead, I was on for nearly as much time as the Google founders. Go figure. (My mom was ecstatic).

One year later, Rome Hartman has been elevated to Executive Producer of all of CBS News, and that Google piece won an Emmy. I'd like to thank my family, my readers, my....wait, you mean they don't give statues to the people *in* the piece?! Sheesh.

No ads on the Google search homepage, period. That's been the Google mantra. But what about....Google Belarus? Astute Searchblog reader Michael Estes came across this recently, and I have to say, if this is the future, I'll take the past!

Update: You know, I really should have asked first, but....I figured, no way would someone be able to get away with having "google.by" who wasn't, well, Google. I was wrong. From Google PR:

This site (http://google.by) is not owned, operated or controlled by Google.
We are aware of this site and our legal counsel is investigating the matter.

Piper analyst Safa Rashtchy says GOOG will hit 600. The report is not online. But here it is for ya (PDF download).

Then read Burnham's posts covering the year that was, 2005. Start here, then go here (best performing), here (worst) and here (IPOs).....

Retrievr: An experimental service that lets you search images by drawing a sketch. I only wish it worked better. Clearly a proof of concept only. Thanks Research Buzz...