free html hit counter July 2009 | John Battelle's Search Blog

The FCC No Likey What Apple Did to Google, Either

By - July 31, 2009

And they are opening an investigation into it.

According to a Dow Jones Newswire report, on Friday afternoon the FCC sent letters to Apple, AT&T, and Google. The federal inquiry asks Apple why the Google Voice application was rejected from its App Store for the iPhone and iPod Touch, and why it removed third-party applications built on the Google app that had been previously approved. The federal commission also asks whether AT&T was allowed to weigh in on the application before it was rejected, and seeks a description of the application from its creator, Google, according to the report.

For background, see my piece chastising Apple here.

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Thinking About New Models for Search

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Yesterday I spent an illuminating hour with the folks behind Wowd, a still-private-beta search upstart that is taking a new approach to, well, just about everything in search as we traditionally understand it.

In a odd coincidence, this morning Venturebeat published a thoughtful piece on how search might shift when more data, in particular social data, is added to the mix.

I point these two links out as a marker of sorts, I’ve got a much longer piece brewing in me about Wowd’s approach to search, and how the Big Guys might respond should an upstart like Wowd get traction. More on that soon. Meanwhile, the Wowd guys posted on Tim and my Websquared paper here.

Questions On the Yahoo Bing Deal

By - July 30, 2009

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Unfortunately our schedules didn’t match up yesterday, and I did not get a chance to talk to the folks now responsible for the Yahoo Microsoft deal.  

But as I thought through the deal and its implications, a ton of questions came to mind, and it seems worth the time to write them down. Perhaps folks can answer them in this thread- I know there has been a lot of information flying around, and it’s entirely likely that many of these questions have been posed and answered elsewhere.

So where to start? On its face, the deal is pretty clean. Microsoft runs the technology and owns the long tail, self service advertisers through AdCenter, Yahoo owns sales with larger customers and will keep the lion’s share of the revenue its site generates.

But when you start thinking about it, a lot of questions remain unresolved. To wit:

- What will become of all of Yahoo’s efforts in search, many of which were, philosophically at least, quite promising? In particular, what becomes of Yahoo BOSS? Of Yahoo’s philosophy of “open search,” (witness SearchMonkey), which I find compelling? Does that all go away now?

- Related, the deal states that Yahoo is free to build its own user interface on top of Bing on its own sites. But Bing’s interface is actually, to my mind, one of its core strengths. Will there be an open API and SDK for building innovative interfaces on top of Bing, or will this essentially fork between what Microsoft does on sites it controls, and Yahoo’s approach on sites it controls? I for one think it’d be really smart to let a thousand developers bloom with Bing/Yahoo.

- Will the two companies work together to develop an alternative to AdSense? So far, it’s a one company race in that world.

- What will happen to all the technologies (and people) related to Yahoo’s current search platform? Will it be sold to a third party, retired, or continued on some other fashion?

- Will the combined companies go after other major distribution points like AOL, Ask, etc? Will they work together or will that be Microsoft’s role alone, and does Yahoo have any say in how those deals might work, given it provides the majority of the distribution?

- Related, and critical, how will data be shared between the companies? What data will be shared, and to what end will it be used?

- Again related, but how will that data be used in each company’s display platforms? Yahoo has “apt”, Microsoft has aQuantive…both have exchanges, ad networks, and display infrastructure. Will they continue to compete, or might they find a deal, at least in “performance display”? In premium display, which is clearly where both companies will compete, how will search data be leveraged?

- The initial market response to the deal is that Yahoo looks weaker. How does Yahoo respond to that sentiment?

- Related, what is the vision for Yahoo now that it has exited the search business? What is the core mission and vision for the company – is it no longer a technology play? Pure media play?

- What about mobile search? Does this deal extend to mobile? Local (where I thought Yahoo always did best).

That’s my first set of questions, I’ll add more as you send em in to me…

UPDATE: Both Yahoo and Microsoft have been in touch about chatting further, and we hope to slate time later in the month (as I am on “vacation”)….more as I have it.

Yahoo and Microsoft Announce Deal

By - July 29, 2009

NYT has a good story:

The terms of the 10-year agreement call for Microsoft to license some of Yahoo’s search technologies, and Yahoo will initially receive a lucrative 88 percent of search-generated ad revenue from Yahoo sites.

Cnet does as well. Many folks are noting Yahoo’s shares slide at the open this morning. No “Boatload” of cash upfront…

More as morning coffee kicks in.

Update: YHOO is down nearly 10%, Wall St. no likey. Given the deal was already priced in, that’s interesting. MSFT is slightly up.

The formal statement is here. A marketing website called “ChoiceValueInnovation” is now up too. Really.

Update 2: I am trying to slate some time to talk with the principals involved, if I do, I’ll write it up here later. In short, though, watch two things: 1/How yahoo plans to “own” the UI on top of Bing – given Bing’s UI is key to its differentiation, and 2/Who owns the data and how is it getting used to leverage competing display advertising platforms….

New Twitter Homepage

By - July 28, 2009

What I find most interesting in Twitter’s homepage overhaul is the focus on search. I mean, it’s all about search. That might confuse some folks who don’t understand what Twitter really is. And there’s no explanation of that on the home page…So…what do you all think?

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Is Being In the Mobile Biz License to Ignore the Internet?

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sadmac.gif…and by the Internet, I mean the *values* of the Internet, in particular, the values of a platform. When you build a platform that leverages the Internet, it strikes me you should act like a player in that space – IE, not acting like a monopolist, a bully, or in your own self interest at the expense of those who use your platform – like your customers and developers.

Such seems the case with Apple’s refusal to allow two Google apps into the iPhone App Store. Yesterday’s ban – on Google Voice – is easy to understand – at least if you are venal and driven by the same corporate interests as your partner, AT&T. Voice bypasses AT&T’s networks and means less cabbage in AT&T’s pockets.

But Apple also banned Latitude, a mapping application. Why? Might it be because Apple has designs on that category? Or does AT&T?

In any case, if Apple wanted to give Android a boost, it sure as hell has done it. Actions like this are totally contrary to the spirit of the Web, and I hope Apple loses, big time, for taking them. At the very least, it feels like it’s time for Eric Schmidt to leave Apple’s board.

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Google MAKES Money on AOL Writeoff

By - July 27, 2009

aol-2-tm.jpggooglogo-tm.jpgBack in 2005, Google bought 5% of AOL for $1 billion. Today, Time Warner disclosed it had bought that 5% back from Google for….$283 million.

Ouch. But wait. There’s a silver lining.

Back when the deal was done, analysts like…me… suggested that AOL was going to go public, and that Google was going to profit from that. Well, looks like AOL will go public…but not at the lofty valuation 2005 seemed to promise. Of course, Time Warner dithered for five years about whether to spin the damn thing out (I pleaded in a blog post in 2004 that they do this). Had they done in then, or even in 05 or 06, I’d wager Google would have looked pretty damn smart.   

Now, they’ve lost $717 million on the deal, but let’s not forget, they did keep the AOL distribution for their search services, and that’s certainly worth a lot. Not to mention, Google really owes AOL one for the solid that company did in giving their business to Google back in 2002. That deal pretty much set Google’s table for a good seven year feast, one that was so rich, Google can afford to write down more than half a billion dollars. And as you may recall, the company already has. Looking at the math, Google wrote it down $726 million back in Q1. That means, if my math is right, Google in fact MADE $9 million on the deal. Whadya know?!

Will Yahoo Bing? Pay Attention to the Display Side

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We’ve been talking about a search deal between Yahoo and Microsoft for so long (no, really, read this piece I wrote over two years ago) that it feels, to me anyway, like the deal’s already been done. But it hasn’t.

Today new details are coming out, thanks to a report in Ad Age (Ad Age? Breaking search news? I really must get back to reporting, eh?). While there’s nothing particularly new in the report – Yahoo will sell ads on its own site as well as Bing.com, Microsoft will focus on the technology, and both will split revenues – what is new is the claim that the deal will be announced “as soon as this week.”

I for one sure as heck hope it will, so we can move on from this slow motion train wreck of a negotiation. Valuable time has been lost – with clarity, both teams can focus on competing and winning, rather than arguing over a diminishing share while Google runs away with the game.

Which raises the question: “What *is* the game”? It’s one worth asking.

It’s very clear that Yahoo and Microsoft should partner on search. What I find more interesting is whether they will partner on display – both companies have major ocean-boiling platforms in development, and neither seems anywhere near where they should be. This is an area where Google is vulnerable.

What do I mean? Well, Yahoo bought Right Media and a few other ad network plays, and pre Bartz, was intent on creating a soup to nuts display marketplace. Microsoft bought Acquantive. Both did so in response to Google’s purchase of Doubleclick. While the first wicket of the search game is over and Google has won, display is another beast entirely. Billions of dollars have been invested in owning display inventory and platforms, but it’s not clear those dollars will return effectively. For now, they seem content to focus on what’s called “performance display” – in other words, display ads driven by the same direct-response mentality as search.

There’s certainly a good market out there for performance display, but it’s not a game changer. The game changer is in building a platform which works for the other side of the marketing equation: branding. And as far as I can tell, none of the major players seem to be paying attention to that opportunity. They should be.

I’ll be writing more on that topic in the coming weeks.

Twistory 101: It's All About Small Business

By - July 24, 2009

biztweetbird.pngThe world’s abuzz this week with word that Twitter is getting serious about business – the proof point being Twitter’s new subdomain “business.twitter.com” and the “Twitter 101″ handbook currently living there, a white paper of sorts aimed at helping companies figure out how to leverage the sometimes befuddling service.

This all reminds me of Fall 2004. Back then, Google was coming on hard in search. And while the world viewed Google as an upstart stealing query share from the incumbent Yahoo, the real drama was happening on the business side. By the Fall of 2004, Google’s AdWord and AdSense solutions were warranting serious attention from the same ecosystem of SEO/SEM that previously had focused on Overture’s offerings.

In this Fall, 2004 thread on Webmasterworld, where SEO types hang out to talk shop, search marketers debate the relative performance and profitability of Overture compared with Google. Prior to that year, Overture was the undisputed king of paid traffic. But in ’04, Google started pulling ahead, and since that time, it’s never looked back. Why?

Well, there are myriad reasons: Google had a better consumer facing search experience than Yahoo (Yahoo bought Overture in 2003), and Google’s AdWord service including a quality ranking score (as well as paid ranking like Overture), for example. But I believe something else was at work, an upward spiral of adoption by small business advertisers.

What do I mean by that?

Well, I was covering the search space pretty closely back then, and one of the metrics touted by both Google and Yahoo were the number of advertisers who were using their service. Google didn’t publicly announce those numbers, but my sources inside the company did whisper them to me from time to time. Overture, on the other hand, touted their “active advertiser” numbers in their public filings. Its number of active, paying advertisers crossed 100,000 around the time of the Yahoo acquisition, and upwards of 200,000 a year later. Who were all those advertisers? That early in the search revolution, they sure weren’t the Fortune 500, or even the Fortune 5000. They were SMBs – the lifeblood of the US economy, responsible for two thirds of jobs and the driving force of a nascent recovery from the 2001-03 recession. These businesses live on the edge of profit at all times, and they are always the first to find tools that might help them succeed. By ’04, tens of thousands of them had found paid search.

As far as I could tell, Yahoo stopped disclosing the figure after the acquisition closed. And as I was strolling the halls of the first Web2 conference (October 2004), I got a phone call that might explain why. The call was from a source at Google, who wanted me to know that Google had eclipsed Overture in the number of total active advertisers. I couldn’t confirm that number, nor could I get Overture/Yahoo to respond, so I dropped the story (can you imagine a blogger in the tech world not printing a story like that now? How times change.).

twit101.pngAnyway, I was reminded of this anecdote while reading through “Twitter 101″ and it occurs to me that to really succeed, Twitter must be useful, really useful, to small businesses. It was those tens of thousands of small businesses who drove success at Overture, and then at Google. Search became an essential channel for lead generation, and Google became the dominant player in that channel.  

Billions ensued.

While a lot of the attention around business success on Twitter focuses on big brands like Comcast, JetBlue, or WholeFoods, the ecosystem that will really drive value, revenue, and profit for a TweetSense like execution will be the small business ecosystem. And absent a clear service like AdWords for Twitter, a user manual of sorts that explains why Twitter can help business makes an awful lot of … tweetsense.