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A Few Questions For Joe Kraus

By - January 24, 2007

Joe K

Joe Kraus, a co-founder of Excite (image credit), recently sold his latest company, JotSpot, to Google. I’ve known Joe for quite some time, and thought a quick email interview might be in order given his long history in search and Internet media. (Joe introduced JotSpot at the Web2.0 conference two years ago.)

Did Google buy JotSpot, or your team? If the former, what is the plan for the company? If the latter, what’s the plan for the team?

Simply put, I think Google bought both the technology and the team. In *most* acquisitions, you are acquiring both and ascribing value to both.

Google has invested substantially in collaboration (Groups, Docs&Spreadsheets, Google Apps for your Domain) and JotSpot is a part of that trend. In my opinion the first wave of productivity apps (seen in the 80s) was about making an individual more productive. Word, Excel, Powerpoint were all about making me, as a worker at my desk, able to create more work per unit of time. But, I think we’ve eeked out the last bit of individual productivity gain at this stage. I mean, does the new ribbon on MS Word make me more productive as an individual? Probably not. It’s a great interface, but it’s unlikely that there is a massive gain in personal productivity.

This next wave that we’re in is about productivity gains achieved NOT by making the individual more productive, but by making groups more productive. The massive penetration of email means that we’re in touch with one another like never before and dependent on teams like never before. That means that there is a huge opportunity for productivity gains through more effective collaboration. That’s what Google is trying to do in their efforts and that’s the theme in which the JotSpot acquisition fits.

I can’t talk specifically about product plans, but I hope that the above gives you a general sense of direction.

It does, thanks.

Now, personally, isn’t it kind of a mixed emotion joining Google? I recall a conversation earlier – 2004 or so – in which you expressed some reservations at the giddy growth and presumptive optimism of the place. I think like many of us you felt perhaps Google was due a needed, well, life lesson, one that you learned at Excite, and I learned at The Standard. What say you now to such sentiments?

Well, I have to say that I think “the rumors are true”. Google has collected the smartest group of people I’ve ever encountered under one roof.

In terms of emotion, you know, it’s an understandable question, but honestly, there’s no mixed emotion — I’m honestly just excited to be here. I think that comes from two things — more than the former founder of Excite, I was most recently fully occupied as the CEO of JotSpot. I had 28 employees that were working very hard, who had given up other very good opportunities and and for whom I wanted a great outcome. There’s no better outcome than to be at Google (it’s a wonderful nerd paradise — a place that nerds like me can thrive in) and there is great satisfaction in that. Second, I left excite 6 years ago, and at a personal level, my life has gotten a lot more rich and fullfilled from a variety of sources — marriage, kid, non-profit work (as well as my for-profit work). So, it’s not that I don’t love my work and feel very passionately about it — it’s just that I’m not defined by it the way I was when I was in my 20s.

What can you do at Google that you can’t do outside of Google? And a follow up, what can’t you do at Google that you “gave up” to be there?

What can I do at Google that I can’t do outside of this place? I think there is a lot here, but the short answer is the pretty obvious one. Google operates at a scale that startups don’t approach. And, while that provides its own challenges (making sure your stuff can handle high numbers of users), it provides a ton of opportunities to get your ideas exposed to a large number of people and get a large amount of feedback. Also, if you are pursuing very forward-looking ideas then a larger company like Google provides staying power in the market. There’s that old adage in startups “being early is the same as being wrong”. In a startup, if you’re too early for the market, it feels like there is no market at all. It’s hard in a startup to really tell the difference between early and wrong and in most cases it leads to startup death. Google is a place where there is strong interest in the long term and that is a very unique thing.

Thanks Joe!!

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Davos

By - January 21, 2007

Tnbt Logo White

Every couple of years I am invited to the World Economic Forum at Davos, and even better, they give me a reason to come – an honor, or a club to join, or some such. This year I was invited onto a media council and am moderating or sitting on panels on Beyond Web 2, Privacy, the Future of Talent, and more. I’m very pleased that some of the folks at the WEF came to our Web 2 conference last year and were inspired to start the WEF “bloggregator” – part of an ongoing effort to open up the WEF to all comers. Jeff Jarvis, Arianna Huffington, and many others are involved. Check it out.

And I hope to be posting on my experiences there, though having been before, I’ll admit it’s quite a trip, and it’s not always easy to stop and get perspective while on the merry go round. I’ll do my best.

If anyone reading this is going, please do let me know in comments or via email. Thanks!

Yahoo In The Crosshairs

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Semel

Catching up on stuff I’ve missed last week…The Wired piece, and the response to it, strikes me as perfect for Yahoo – it really can’t get much worse. The bar has been lowered. Now jump over it, folks…. I mean, you have the resources. The brand. The technology. The good will. Go. Do. It.

Update – Wired posted Yahoo’s response to the piece, and Henry adds some thoughts.

NYT: No, No, NO!!!

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The approach the NYT takes, editorially, to describing “user generated content” (what I prefer to call Conversational Media) is so dismissive, so backhanded, it makes me want to scream. Here’s how Richard Siklos defines it in today’s paper (the piece is entitled “Big Media’s Crush on Social Networking”).

User-generated content is basically anything someone puts on the Web that is not created for overtly commercial purposes; it is often in response to something professionally created, or is derivative of it. So, it could be a blog, a message board, a homemade video on YouTube, or a customer’s book review on Amazon.com.

Richard and his editors so deeply want to believe that conversational media is dependent on “professionally created” media. But it’s not, any more than it’s “not created for overtly commercial purposes.”

Certainly, conversational media will comment on packaged goods media, and lord knows the reverse is certainly true these days (The Times is the biggest commentator of them all, it can’t get enough of covering this space.) But there are so many examples of great conversational media that is both commercially driven and entirely independent of “professional media” (in our industry alone, there’s Om, there’s Matt, there’s Mike, there…and, and, and….), that making such a sweeping statement seems either ignorant or simply wishful thinking. Harumph.

Prepping For Competition

By - January 19, 2007

Goog Ads

Google’s Adsense service is totally dominant in the marketplace. Yahoo’s YPN – so far anyway – has proven feeble, and Microsoft’s AdCenter has failed to move out of early stages. Game over? Hardly. Hardly at all. Both these major players are going to push hard in 2007 to win in syndicated paid results, and then there’s Ask, AOL, and many others who have intentions in this space. Not to mention all the other folks who hope to out-Google the leader – from Tacoda to Quigo, and back again.

So, with that in mind, Google is shoring up its defenses. Laying down some new rules while it can, so to speak. What am I talking about? Well, nothing less than this:

Competitive Ads and Services

In order to prevent user confusion, we do not permit Google ads or search boxes to be published on websites that also contain other ads or services formatted to use the same layout and colors as the Google ads or search boxes on that site. Although you may sell ads directly on your site, it is your responsibility to ensure these ads cannot be confused with Google ads.

Google has “updated” its Adsense policies, the above is new. The industry is noticing, trust me (though apparently, there’s some upside to this too). And do you remember this debate? Uh huh. Thought you did.

But wait, isn’t the blue, green, and black on white approach, well, pretty much diluted by now? Isn’t the way Google displays text ads, well, isn’t that so industry standard as to be, well, indefensible?

Good question. Watch this space. I am guessing Yahoo and Microsoft are. One thing I do know. Most folks who surf the Internet care not at all about this. Which is why it’s such a Big Deal.

A Few Questions for Dave Morgan, Founder Tacoda

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Dave Morgan

Dave founded Tacoda, a behavioral ad network, six years ago now, and recently inked a deal to add Comscore demographic information to Tacoda’s network. Tacoda is an FM partner, so read with that caveat, but I found our email back and forth interesting, and hope you do too.

Like Tacoda recently did, Google incorporated Comscore some time ago. Why is yours better?



Because TACODA is capturing and can target ads against anonymous browsing behaviors from more than 15 Billion page views per day on 4500 of the top news, entertainment and information sites on the web, from NYTimes.com to MSNBC.com to Orbitz WSJ.com to FM Publishing. This gives TACODA the broadest, deepest and most diverse database of user content browsing anywhere – more than Google or Yahoo! – though they certainly have a lot more search data.

By matching this browsing data to anonymous ComScore data, we now know not only what content they surf, but marketer sites they are visiting online and what e-commerce categories they are buying online. Since we can associate this with time, we can see users much higher up the purchase funnel than search marketing. We can see the users when they are still in the brand consideration phase. By the time that users get to Google, like yellow pages offline, they generally already know what they are going to buy, it’s just a matter of price and vendor.

Will there be any change in how you charge for this?



We sell on a CPM basis only, since our efforts are focused on brand and branded response advertisers – folks that care who sees their ads and where they see them – rather than direct response. We see video as a big part of this future, whether it is on the computer, of IP-driven television or on mobile devices. Nothing beats sight, sound and motion for delivering brand advertising.

Given that you sell on CPM, but are a network, don’t advertisers still want to buy site by site? Will you ever get into that business, or do you think all the behavioral and demographic data obviates site-specific selling?



I expect advertisers to buy both behavioral networks and site-by-site in their media mix. They buy individual sites for the strong, integrated branding opportunities, but they have to live with limited inventory and premium prices. Buying behavioral is a nice complement to that. With TACODA’s behavioral network, they get the audiences that they want on clean, well-lit sites. They get a lot of scale. They get lower prices. However, it will never replace site=specific selling. When someone wants a Wall Street Journal reader or a Boing Boing reader, the only place that they can be certain to reach them, and the only way to fully-leverage the sponsorship value of a great publisher brand, is to buy it site-specific.

As a behavioral network, I do not expect TACODA to get into the site-by-site selling business. It is much better served by direct or specialized sales forces working on behalf of the sites. We are focused on selling people, not pages. When advertisers want to talk to certain types of people, TACODA will be there. When they want to their messages on certain kinds of pages, that will be for other sales organizations.

So how is business at Tacoda? Can you give us a sense of your scale in terms of revenue and margins?



TACODA is doing great. As a private company, we don’t release specific numbers on our revenue or margins, but I can tell you that our last quarter’s revenue was up several hundred percent year over year, our margins are strong and growing, and our team has grown from 25 or so a year ago to more than 90 today, thanks in large part to the work of Curt Viebranz our CEO, who was our COO for the past two years and was the former CEO of HBO International and Time Inc. New Media. Over the past year, our publisher network has grown by 10X as have the number of marketers and agencies that advertise on our network. 2007 is starting out very well and we expect the strong growth to continue.

Can you be more specific on the size of the publisher network?



TACODA’s network today has more than 4500 branded content publishers – folks NYTImes.com, Dow Jones/WSJ.com, Orbitz, Cars.com, NBC, Tribune, BusinessWeek.com, Technorati and FM Publishing. These sites deliver 15-20 Billion page views per month to an unduplicated US audience of more than 140 million unique visitors and deliver real-time anonymous content browsing behaviors to TACODA’s servers with virtually every page and person that they serve. Since TACODA’s market focus is brand advertising, not performance and direct response, its advertiser customer base is quite different than other online ad networks. Among its top advertisers in Q4 were Coke, Snapple, American Express, FAO Schwartz

In your estimation, what are the hurdles/gates in the online advertising business right now?



Advertisers need more scale and less friction and there is a looming shortage of quality inventory at cost-effective prices. If General Motors wanted to appreciably increase their online ad spend this year, they would have a tough time doing it economically and efficiently. All of the substantial auto content sites are largely sold out for 2007. Search usage is growing, but not nearly at the rate that online ad spend is increasing, and the rates for the best search terms are already pretty high. The vast majority of web pages viewed every month – probably 80% of them – can’t currently support premium advertising. They either lack an intuitive and valuable commercial context – they have news, social, email, photo and video sharing content, not technology, travel, cars or health – or they have unsuitable content. Unfortunately, these non-premium content pages are growing much faster than the premium pages. The majority of ad view growth on the web in 2006 was in social and photo and video sharing. Finally, while the “sight, sound and motion” of video advertising on the web certainly offers an attractive vision for the future, it is going to take years for it to truly come to fruition.

Any other thoughts for 2007?

I think that the big online ad stories in 2007 will be brand dollars, targeting and scale. This should play very well for all networks, but particularly those that they serve the needs of brand advertisers – who care about who sees their ads and where they see them. I think that we are going to see a lot of attention, and a lot of money, flow to sites further down the food chain than those few that have dominated this sector historically. The really big guys will do fine, but the mid-size and smaller folks will do even better.



Thanks, Dave!

Google, The Eternal Media Question

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Eun

Friend or foe? The media industry’s struggle with this question is its defining story. Here’s another beat in the ongoing drama, a Hollywood Reporter interview with Google’s VP of content partnerships, David Eun. It seems clear to me that Google is trying hard to position itself as a friend, a non-threatening friend, to the content industry.

From it:

The Hollywood Reporter: A company of Google’s size is going to invite controversy. Do you think the company is misunderstood?

David Eun: Yes, but not by everyone. I think there’s a lot of questions, but if you take a step back, we’re an 8-year-old company. So we’re still very young. Things move quickly for Google as well as the space that we’re in. So when you get into a space like content, and you come at it from a technology perspective, I think what we haven’t focused on as much — and this is something I’m trying to do — is really explain in (plain) English what it is we aspire to do and what frankly our objectives are. Fortunately or unfortunately, depending on your perspective, there’s a lot of noise out there about us trying to get into certain businesses or having designs to do X, Y and Z.

Eun is a key player in this. Prior to joining Google, he lived in the belly of the beast: Chief of Staff for the Media & Communications Group at Time Warner. His job is to explain Google’s intentions in the media/advertising space. He seems quite articulate and clearly experienced. But something he says here make no sense to me. He says:

THR: How much of the TV advertising business does Google aspire to take?

Eun: We paid out over $780 million last quarter alone to the Web sites we’ve asked to have relationships with. We do that not by going after the big advertisers. You’ve heard of the long tail of content — there’s a long tail of advertisers, too. There’s the successful entrepreneur who owns 20 different retail establishments who would love to find a way to advertise online, through newspapers and perhaps local TV, but they don’t know how or it’s just too difficult or it seems scary or inefficient. It will go as far as the people who want the inventory want it to go.

Excuse me? Google is NOT going after big advertisers? Now, that may be what the major content companies want to hear (their business model, in the main, is cutting multi-million dollar advertising deals with American Express, GM, Intel, etc), but man, it’s certainly not true. Perhaps the interview was edited poorly?