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Google+: Now Serving 90 Million. But…Where’s the Engagement Data!

By - January 20, 2012

Google didn’t have a great earnings call today – the company missed Wall St. estimates and the stock is getting hammered in after hours trading – it’s down 9 percent, which is serious whiplash for a major stock in one day.

But while there’s probably much to say about the earnings call – in particular whether Google’s core CPC business is starting to erode (might that be due to Facebook, Wall St. wonders?) – I’m more interested in Google’s jihad against samesaid competitor, a jihad called Google+.

And in the earnings call, Google+ was identified as one of the shining stars of the quarter.

Here’s a quote from the press release, the very first quote, attributed to Larry Page. I’ve highlighted the parts where Google+ is mentioned.

 “I am super excited about the growth of Android, Gmail, and Google+, which now has 90 million users globally – well over double what I announced just three months ago. By building a meaningful relationship with our users through Google+ we will create amazing experiences across our services.”

You getting that? The lead quote had to do with Google+, pretty much, not the company’s earnings, which ended up being a miss (Google is blaming fluctuations in foreign currency for much of that, and I have no idea whether that’s true, false, or silly).

But here’s my question: When is Google going to release actual engagement numbers for Google+? Because in the end, that’s all that really matters. As I have written in the past, it’s pretty easy to get a lot of people signing up for Google+ if you integrate it into everything Google does (particularly if you do it the way they’ve done it with search).

But can you get those folks to engage, deeply? That’d be a real win, and one I’d give full credit to Google for executing. After all, it’s one thing to get the horse to water…another to have it pull up a chair and share a few stories with friends.

Now, Page did talk about engagement in his comments today, but as far as I can tell, it was not specific to Google+ (though it was crafted to be easily conflated, and in reports I’ve seen across the web, it has been). He certainly led with Google+, but this is what he said:

“Engagement on + is also growing tremendously. I have some amazing data to share there for the first time: +users are very engaged with our products — over 60% of them engage daily, and over 80% weekly.”

Er….so you’re saying the folks who use Google+ use *Google* a lot. That’s not surprising – most of them came to Google+ because they were already using Google a lot. But what about minutes per month using Google+? I’m guessing if Google had good news on that particular front, they’d be trumpeting it in a more direct fashion.

Look, I’m being critical here, and perhaps unfairly. But like many others, I’m a bit baffled by Google’s moves last week around search integration, and I’m looking forward to Google addressing the mounting criticism from not only its competitors, but its fans as well. So far, the company has decided to ignore it – both in its earnings calls, and in my own communications with company representatives. That only leads to speculation that Google is doing this on purpose, to get to critical mass with G+ before, cough cough, apologizing a month or so down the line and “fixing” the approach it’s taken to search integration.

I’m going to be down there soon, talking to key execs in search and, I hope, at Google+. There are always more sides to the story than are apparent as that story develops. Stay tuned.

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On The Problem of Money, Politics, and SOPA

By - January 19, 2012

(image) Earlier this week I ventured down to the Silicon Valley from my lair on the side of Mt. Tamalpais in Marin. Those of you who have visited Marin might understand why for me, after more than 25 years of working across the bridge in San Francisco and on planes around the world, I find it rather pleasant to just stay in my office and Think Big Thoughts whenever possible. But duty called, Jonathan Zittrain (who I’ve interviewed here) had asked me to participate in a conference he was hosting called “Ideas For A Better Internet,” and it was an honor to be asked.

Not to mention, I needed to get down to the Valley to see a few folks at Facebook (more on that in another post).

Given the conference convened on the eve of yesterday’s historic SOPA protest, the room was laden with potential energy. Groups of students presented their ideas for improving the Internet, and various luminaries pronounced on the issues of the day.

Toward the end of the evening, we had a panel with various notables (and me, for some reason). SOPA threaded in and out of that discussion, and I’m sure I had any number of things to say about it which were perfectly forgettable. But I do recall one thing that I said has stuck with me: We can’t afford to not engage with Washington anymore.

Now, plenty of folks have said this, and a few have even made it their life’s work in the past several years. Silicon Valley is waking up to the fact that we have to be part of the process in Washington – for too long we’ve treated “Government” as damage, and we’ve routed around it.

The battle over SOPA and PIPA is a signal event in the history of our industry. The bills were breezing their way through the final days of Congress’s pre-holiday session, and just about everyone thought they’d pass. But thanks to Reddit, Boing Boing, and countless other independent voices, the issue caught fire across the Internet, and we all realized we had an existential threat on our hands. Protests were organized, large companies like Google and Amazon joined the movement, and within two weeks, the Obama administration had come out against key provisions of the legislation (doing it on a Saturday, perhaps hoping no one would notice, but at least they did it).

But the fight isn’t over. In fact, it’s only starting. And the folks who basically wrote SOPA/PIPA are pissed, and they plan on using the same tactics they always have when they don’t get what they want: They’re throwing around their money. Or, put another way, they’re withdrawing it. Go read this article to see what I mean:

EXCLUSIVE: Hollywood Moguls Stopping Obama Donations Because Of President’s Piracy Stand: “Not Give A Dime Anymore”

Does this matter? Damn straight it does. In politics, money not only talks, it seduces, it cajoles, it forces, and it commands. And this is one of the boldest declarations of what’s wrong with our political system I’ve seen in quite some time. Major Obama donors in Hollywood assumed they were buying their way into legislative protection of their threatened business models, and when the President didn’t do their bidding, they “leaked” their displeasure to Finke’s widely read blog. But to call it displeasure is a disservice. It’s more like the tantrum of gods who have come to realize that no one believes their myths anymore.

Check this quote: “God knows how much money we’ve given to Obama and the Democrats and yet they’re not supporting our interests.” 

Are. You. Kidding Me? What exactly *are* Hollywood’s interests? As far as I can tell, they don’t want their movies and music pirated. I can get behind that concept, no problem, and so can most reasonable people (the President said as much on Saturday). And we already have laws that make piracy illegal. If they’re not enough (I honestly don’t know one way or the other), let’s be serious about how best to strengthen those laws, that shall we? Gutting the Internet as we know it so as to protect an industry that is already immensely successful is, well, beyond silly.

There are deeply naunced arguments to be had about this issue, and I’m not going to get into all of them here. What I do want to talk about is this issue of money in politics.

Bear with me as I tell you another story. A few weeks ago I ran into a fellow who I won’t call out publicly, because I like him too much and haven’t asked for his permission to use his name. He’s a very successful businessman who has worked tirelessly on behalf of President Obama’s various political campaigns, mainly in the area of fundraising. And to make a long story short, he essentially offered me an opportunity to brainstorm with the President and various members of his staff on the subject of tech and Internet policy.

The catch? It’d cost me about as much as a year’s tuition at any one of our nation’s finer private educational institutions. Which is….a lot of fucking money.

Why am I telling you this story? Because I was tempted to pay that fee so as to get in front of the President. But upon reflection, I realized I would be doing exactly what Hollywood has done, playing the same game, and expecting the same results. Were Obama to sign legislation I disagreed with, I’d feel cheated  – “Hey, that’s not what I paid for!

Not to mention, it struck me that if the President and his staff truly valued my input, they’d ask for it without requiring a check at the same time. I’ve been paid an awful lot to opine on any number of topics over the course of my career. I’m not looking to BE paid – in fact, I’d be proud to offer what advice I can simply to be part of the process. But to ask to PAY, well, it just feels wrong. Here’s how I put it in an email to that businessman friend of mine:

Fact is, Obama or his team should be sitting down with people like me to get smarter on tech policy (and in my case, on media and marketing regulation). They should be seeking out people like me in all fields. Instead, they cannot afford to do it unless a steep price tag is paid – it fucks up the social relationship totally and changes the dynamics of how the world actually works in normal information sharing scenarios between smart people. 

My friend the fund-raising businessman agreed with my point, but he’s a realist: This is how the world works, he told me. We have to pay to play.

I think that’s a tragedy. I’ve pointed out on Twitter that at the moment, Hollywood has given seven times more money to the various backers of SOPA than our industry has. Many in our industry believe the way to tip the balance back our way is to simply play the same game, and out-donate the bastards. (Lord knows we have the money…)

But that sure as hell doesn’t sound very Internet-y to me. We have a problem on our hands, folks. In our own businesses, when faced with a problem, we find innovative solutions. We don’t just throw money at it. That’s the beauty of our industry.

There’s got to be a better way. And as I said at the Stanford conference, I for one am committing myself to helping figure this out. My first step will be to read this new book from Larry Lessig, an intellectual warrior who many (including myself) lament as bailing on our core issue of IP law to tilt at the supposed windmill of political corruption.

But I think, upon deeper reflection, that Larry is simply playing chess a few moves ahead of us all. It’s time to catch up, and move forward together.

Update: Larry spoke the same night as I did, at the Long Now Foundation. I would have been there had it not been for my commitment to Zittrain, who is Larry’s replacement at Harvard, in a funny twist. Anyway, here’s the link to Kevin Kelly’s very cogent summary. Totally worth checking out. 

What Might A Facebook Search Engine Look Like?

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(image) Dialing in from the department of Pure Speculation…

As we all attempt to digest the implications of last week’s Google+ integration, I’ve also be thinking about Facebook’s next moves. There’s been plenty of speculation in the past that Facebook might compete with Google directly – by creating a full web search engine. After all, with the Open Graph and in particular, all those Like buttons, Facebook is getting a pretty good proxy of pages across the web, and indexing those pages in some way might prove pretty useful.

But I don’t think Facebook will create a search engine, at least not in the way we think about search today. For “traditional” web search, Facebook can lean on its partner Microsoft, which has a very good product in Bing. I find it more interesting to think about what “search problem” Facebook might solve in the future that Google simply can’t.

And that problem could be the very same problem (or opportunity) that Google can’t currently solve for, the very same problem that drove Google to integrate Google+ into its main search index: that of personalized search.

As I wrote over the past week, I believe the dominant search paradigm – that of crawling a free and open web, then displaying the best results for any particular query – has been broken by the rise of Facebook on the one hand, and the app economy on the other. Both of these developments are driven by personalization – the rise of “social.”

Both Facebook and the app economy are invisible to Google’s crawlers. To be fair, there are billions of Facebook pages in Google’s index, but it’s near impossible to “organize them and make them universally available” without Facebook’s secret sauce (its social graph and related logged in data). This is what those 2009 negotiations broke down over, after all.

The app economy, on the other hand, is just plain invisible to anyone. Sure, you can go to one of ten or so app stores and search for apps to use, but you sure can’t search apps the way you search, say, a web site. Why? First, the use case of apps, for the most part, is entirely personal, so apps have not been built to be “searchable.” I find this extremely frustrating, because why wouldn’t I want to “Google” the hundreds of rides and runs I’ve logged on my GPS app, as one example?

Secondly, the app economy is invisible to Google because data use policies of the dominant app universe – Apple – make it nearly impossible to create a navigable link economy between apps, so developers simply don’t do it. And as we all know, without a navigable link economy, “traditional” search breaks down.

Now, this link economy may well be rebuilt in a way that can be crawled, through up and coming standards like HTML5 and Telehash. But it’s going to take a lot of time for the app world to migrate to these standards, and I don’t know that open standards like these will necessarily win. Not when there’s a platform that already exists that can tie them together.

What platform is that, you might ask? Why, Facebook, of course.

Stick with me here. Imagine a world where the majority of app builders integrate with Facebook’s Open Graph, instrumenting your personal data through Facebook such that your data becomes searchable. (If you think that’s crazy, remember how most major companies and app services have already fallen all over themselves to leverage Open Graph). Then, all that data is hoovered into Facebook’s “search index”, and integrated with your personal social graph. Facebook then builds an interface to all you app data, add in your Facebook social graph data, and then perhaps tosses in a side of Bing so you can have the whole web as a backdrop, should you care to.

Voila – you’ve got yourself a truly personalized new kind of search engine. A Facebook search engine, one that searches your world, apps, Facebook and all.

Strangers things will probably happen. What do you think?

Update: Facebook’s getting one step closer this week…

 

Our Google+ Conundrum

By - January 14, 2012

I’m going to add another Saturday morning sketch to this site, and offer a caveat to you all: I’ve not bounced this idea off many folks, and the seed of it comes from a source who is unreservedly biased about all this. But I thought this worth airing out, so here you have it.

Given that Google+ results are dominating so many SERPs these days, Google is clearly leveraging its power in search to build up Google+. Unless a majority of people start turning SPYW (Search Plus Your World) off, or decide to search in a logged out way, Google has positioned Google+ as a sort of “mini Internet,” a place where you can find results for a large percentage of your queries.(My source is pretty direct about this: “Google has decided that beating Facebook is worth selling their soul.”)

But to my point. An example of samesaid is the search I did this morning for that Hitler video I posted. Here’s a screenshot of my results:

 

As you can see, the Universal search feature kicked in, and put News results at the top. I know that news results won’t get me straight to the video, I want the YouTube or Vimeo page, not a story about the video. So I look to the results below. The next four results are from Google+. Right below the fold is the actual YouTube video. I didn’t see it on first blush.

So I found that video by clicking on someone’s Google+ post about it (see how the first one is purple, and not blue? That’s the one I clicked on). Some dude I don’t know posted it to Google+, I clicked through to his post (gaining Google another pageview), then clicked through the video to YouTube. That’s lame. That’s not a Googley search experience.

But if that’s how the world of Google works now, that means it’s very important that you tend your Google+ pages, so that you rank well in Google search. Google has pretty much gamed its own search engine to insure Google+ will succeed.

This is what happens when you tell your entire staff that your salary depends on winning in social. 

Now, this presents us all a conundrum. If a large percentage of people are logged into Google and/or Google+ when they are searching for stuff, that means Google+ pages are going to rank well for those people. Hence, I really have no choice but to play Google’s game, and tend to my Google+ page, be I a brand, a person, a small business…. are you getting the picture here? If you decide to NOT play on Google+, you will, in essence, be devalued in Google search, at least for the percentage of people who are logged in whilst using Google.

I dunno. This strikes me as wrong. I’ve spent nearly ten years building this site, Searchblog, and it has tens of thousands of inbound links, six thousand posts, nearly 30,000 comments, etc., etc. But if you are logged into Google+ and search for me, you’re going to get my Google+ profile first.

Seems a bit off. Seems like Google is taking the first click away from me and directing it to a Google service.

Now, if I decide to protest this, and delete my Google+ account, I better pray no one else named John Battelle creates a Google+ account, or they will rank ahead of me. And while Battelle is a pretty unique name, there are actually quite a few of us out there. Imagine if my name was John Kelly? Or Joe Smith?

Yikes. Quite a conundrum.

Again, just sketching on a Saturday morning. It’s a beautiful day, so I think I’ll stop, take a ride, and think a bit more about it before I write anymore.

Related:

It’s Not About Search Anymore, It’s About Deals

Hitler Is Pissed About Google+

Google Responds: No,That’s Not How Facebook Deal Went Down (Oh, And I Say: The Search Paradigm Is Broken)

Compete To Death, or Cooperate to Compete?

Twitter Statement on Google+ Integration with Google Search

Search, Plus Your World, As Long As It’s Our World

 

It’s Not About Search Anymore, It’s About Deals

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As in, who gets the best deal, why didn’t that deal go down, how do I get a deal, what should the deal terms be?

This is of course in the air given the whole Google+ fracas, but it’s part of a larger framework I’m thinking through and hope to write about. On the issue of “deals,” however, a little sketching out loud seems worthwhile.

Go read this piece: Facebook+Spotify: An ‘Unfair, Insider, Anti-Competitive’ Relationship…

It’s a common lament: A small developer who feels boxed out by whoever got the sweet deal. In this case, it’s on Facebook, but we all know it happens inside the Apple store as well (whoever gets top billing, gets sales).  Closed ecosystems controlled by one company create this dynamic. There’s only so much real estate, and the owner of the land gets to determine the most profitable use of it.

Google now appears to be acting the same way, cutting Google+ a “deal” so to speak, giving it the best real estate for all manner of search queries. That’s not how search was supposed to work. Search was supposed to reflect the ongoing conversation happening across all aspects of the Internet. If you were that small developer, you worked hard to get your service noticed on the web, and as it picked up a following, search would notice, start raising your profile in search results, and a virtuous loop began. Is that concept now dead?

Search isn’t supposed to be about cutting a deal to get your company’s wares to the top of relevant searches. In my reporting over the past week, most of my source conversations have been about failed deals – between Google and Facebook, or Google and Twitter. But search is supposed to be about showing the best results to consumers based on objective (or at least defensible and understandable) parameters, parameters *unrelated to the search engine itself.*

With Google Search Plus Your World (shortened by many to SPYW, which is just laughably bad as an acronym), it’s rather hard to tell the two apart anymore. When I wrote last year that Google = Google+, I meant it from a brand perspective. I didn’t realize how literal it’s become. Because with SPYW, all I’m getting is Google+ at the top of my results. I know I can turn SPYW off, and I probably will. Or, I can bail on Google+ altogether. But there is a real conundrum in doing so – more on that in my next post.

Some are arguing that search is no longer about results anymore, and that for years search has pretty much been about paid inclusion anyway (either paid through SEO,  or paid through ads, which increasingly don’t look like ads). That now, Google is focusing entirely on getting you an answer, and surfacing that answer right there on the results page. Perhaps the “right answer” is best found through cutting deals.

But I hope not. Because for me, search is a journey, not an answer.

This SPYW story has raised so many questions, it’s rather hard to sort through them all. I guess I’ll just keep writing till I feel like the writing’s done…

Related:

Hitler Is Pissed About Google+

Google Responds: No,That’s Not How Facebook Deal Went Down (Oh, And I Say: The Search Paradigm Is Broken)

Compete To Death, or Cooperate to Compete?

Twitter Statement on Google+ Integration with Google Search

Search, Plus Your World, As Long As It’s Our World

Hitler Is Pissed About Google+

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Just saw this hilarious Hitler video. If you know the genre and have been reading about Google+, then you know everything you need to know to enjoy this.

(By the way, someone told me about this, so I searched for it on Google. And all I got was Google+ results, not the actual video, even though I searched for it by name. Therein lies the problem, Google).


Google Responds: No,That’s Not How Facebook Deal Went Down (Oh, And I Say: The Search Paradigm Is Broken)

By - January 13, 2012

(image) I’ve just been sent an official response from Google to the updated version of my story posted yesterday (Compete To Death, or Cooperate to Compete?). In that story, I reported about 2009 negotiations over incorporation of Facebook data into Google search. I quoted a source familiar with the negotiations on the Facebook side, who told me  “Senior executives at Google insisted that for technical reasons all information would need to be public and available to all,” and “The only reason Facebook has a Bing integration and not a Google integration is that Bing agreed to terms for protecting user privacy that Google would not.”

I’ve now had conversations with a source familiar with Google’s side of the story, and to say the company disagrees with how Facebook characterized the negotiations is to put it mildly. I’ve also spoken to my Facebook source, who has clarified some nuance as well. To get started, here’s the official, on the record statement, from Rachel Whetstone, SVP Global Communications and Public Affairs:

“We want to set the record straight. In 2009, we were negotiating with Facebook over access to its data, as has been reported.  To claim that the we couldn’t reach an agreement because Google wanted to make private data publicly available is simply untrue.”

My source familiar with Google’s side of the story goes further, and gave me more detail on why the deal went south, at least from Google’s point of view. According to this source, as part of the deal terms Facebook insisted that Google agree to not use publicly available Facebook information to build out a “social service.” The two sides had already agreed that Google would not use Facebook’s firehose (or private) data to build such a service, my source says.

So what does “publicly available” mean? Well, that’d be Facebook pages that any search engine can crawl – information on Facebook that people *want* search engines to know about. This is compared to the firehose data that was the core asset being discussed between the parties. This firehose data is what Google would need in order to surface personal Facebook pages relevant to you in the context of a search query. (So, for example, if you were my friend on Facebook, and you searched for “Battelle soccer” on Google, then with the proposed deal, you’d see pictures of my kids’ soccer games that I had posted to Facebook).

Apparently, Google believed that Facebook’s demand around public information could be interpreted  as applying to how Google’s own search service was delivered, not to mention how it (or other products) might evolve. Interpretation is always where the devil is in these deals. Who’s to say, after all, that Google’s “social search” is not a “social service”? And Google Pages, Maps, etc. – those are arguably social in nature, or will be in the future.

Google balked at this language, and the deal fell apart. My Google source also disputes the claim that Google balked at being able to technically separate public from private data. Conversely, my Facebook source counters that the real issue of public vs. private had to do with Google’s refusal to honor changes in privacy settings over time – for example, if I deleted those soccer pictures, they should also be deleted from Google’s index. There’s a point where this all devolves to she said/he said, because the deal never happened, and to be honest, there are larger points to make.

So let’s start with this: If Facebook indeed demanded that Google not use publicly available Facebook data, it’s certainly understandable why Google wouldn’t agree to the deal. It may not seem obvious, but there is an awful lot of publicly available Facebook pages and data out there. Starbucks, for example, is more than happy to let anyone see its Facebook page, no matter if you’re logged in or not. And then there’s all that Facebook open graph data out on the public web – tons of sites show Facebook status updates, like counts and so on in a public fashion. In short, asking Google to not leverage that data in anything that might constitute a “social service” is anathema to a company who claims its mission to crawl all publicly available information, organize it, and make it available.

It’s one thing to ask that Google not use Facebook’s own social graph and private data to build new social services – after all, the social graph is Facebook’s crown jewels. But it’s quite another thing to ask Google to ignore other public information completely.

From Google’s point of view, Facebook was crippling future products and services that Google might create, which was tantamount to an insurance policy of sorts that Google wouldn’t become a strong competitor, at least not one that  leverages public information from Facebook. Google balked. If Facebook’s demand could have been interpreted as also applying to Google’s search results, well, that’s a stone cold deal killer.

I certainly understand why Facebook might ask for what they did, it’s not crazy. Google might well have responded by narrowing the deal, saying “Fine, you don’t build a search engine, and we won’t build a social network. But we should have the right to create other kinds of social services.” As far as I know, Google didn’t chose to say that. (Microsoft apparently did). And I think I know why: The two companies realized they were dancing on the head of a pin. Search = social, social = search. They couldn’t figure out a way to tease the two apart. Microsoft has cast its lot with Facebook, Google, not so much.

When high stakes deals fall apart, both sides usually claim the other is at fault, and that certainly seems to be the case here. It’s also the case with the Twitter deal, which I’ve gotten a fair amount of new information about as well. I hope to dig into that in another post. For now, I want to pull back a second and comment on what I think is really going on here, at least from the perspective of a longer view.

Our Cherished Search Paradigm Is Broken (But We Will Fix It….Eventually)

I think what we have here is a clear indication that the search paradigm we’ve operated under for a decade or so is broken. That paradigm stems from Google’s original letter to shareholders in 2004. Remember this line?Our search results are the best we know how to produce. They are unbiased and objective, and we do not accept payment for them or for inclusion or more frequent updating.

In many cases, it’s simply naive to claim Google is unbiased or objective. Google often favors its own properties over others, as Danny points out in Real-Life Examples Of How Google’s “Search Plus” Pushes Google+ Over Relevancy and others have also detailed. But there is a reason: if you’re going to show results from all other possible contenders, replete with their associated UI and functional bells and whistles (as Google does with its own Maps, Pages, Plus etc.), well, it’s nearly impossible now to determine which service is the right answer to a particular person’s query. Not to mention, you need to put a deal in place to get all the functionality of the service. Instead, Google has opted, in many cases, to go with their own stuff.

This is not a new idea, by the way. Yahoo’s been doing it this way from the beginning. The contentious issue is that biasing some results toward Google’s own products runs counter to Google’s founding philosophy.

I have a theory as to why all this is happening, and I don’t entirely blame Google. Back when search wasn’t personalized, Google could defensibly say that one service was better than another because it got more traffic, was linked to more (better PageRank), and so on. Back when everyone got the same results and the web was one homogenous glob of HTML, well, you could claim “this is the best result for the general population.” But personalized search has broken that framework – I lamented this back in 2008 with this post: Search Was Our Social Glue. But That Is Dissolving (more here).

With the rise of Facebook and the app economy, the problem of search has become terribly complicated. If you want to have results from Facebook in your search, well, that search service has to do a deal with Facebook. But what if you want results from your running app (I have hundreds of rides and runs logged on AllSportGPS, for example)? Or Instagram? Or Path, for that matter? Do they all have to do deals with Google and Bing? There are so many unconnected pieces of the Internet now (millions of apps, most of our own Facebook experiences, etc. etc.) that what’s a good personal result for one person is not necessarily good for another. If Google is to stay true to its original mission, it needs a new framework and a massive number of new signals – new glue – to put the pieces back together.

There are several ways to resolve this, and in another post, I hope to explore them (one of them, of course, is simply that everyone should just go through Facebook. That’s the vision of Open Graph). But for now, I’m just going to say this: The issues raised by this kerfuffle are far larger than Google vs. Facebook, or Google vs. Twitter. We are in the midst of a major search paradigm shift, and there will be far more tears before it gets resolved. But resolve it must, and resolve it will.

Compete To Death, or Cooperate to Compete?

By - January 11, 2012

(image) **Updated at 3 PM PST with more info about Facebook/Google negotiations…please read to the bottom…**

In today’s business climate, it’s not normal for corporations to cooperate with each other when it comes to sharing core assets. In fact, it’s rather unusual. Even when businesses do share, it’s usually for some ulterior motive, a laying of groundwork for future chess moves which insure eventual domination over the competition.

Such is the way of business, particularly at the highest and largest levels, such as those now inhabited by top Internet players.

Allow me to posit that this philosophy is going to change over the next few decades, and further, indulge me as I try to apply a new approach to a very present case study: That of Google, Facebook, and Twitter as it relates to Google’s search index and the two social services’ valuable social interaction datasets.

This may take a while, and I will most likely get a fair bit wrong. But it seems worth a shot, so if you feel like settling in for some Thinking Out Loud, please come along.

First, some abridged background. Back in 2009, on the Web 2 Summit stage of all places (yes, I was the emcee), Google, Microsoft, Facebook and Twitter announced a flurry of deals, some of which were worked out in a last minute fury of negotiations. Early in the conference Microsoft announced it would incorporate Twitter and Facebook feeds into its new search engine Bing. Not to be outdone, Google announced a deal with Twitter the next day. However, Google did not announce a deal with Facebook, and the two companies have never come to terms. Meanwhile, Microsoft has continued to deepen its relationship with Facebook data, to the point of viewing that relationship as a key differentiator between Bing and Google search.

All of these deals have business terms, some of them financial, all with limits on how data is used and presented, I would presume. Marissa Mayer of Google told me on the Web 2 stage that there were “financial terms” in Google’s deal with Twitter, but would not give me any details (nor should she have, frankly).

Fast forward to the middle of last year, when the Google/Twitter deal was set to expire. At about the same time as renewal was being negotiated, Google launched Google+, a clear Facebook and Twitter competitor. For reasons that seem in dispute (Google said yesterday Twitter walked away, Twitter has not made a public statement about why things fell apart), the renewal never happened.

And then yesterday, Google incorporated Google+  results into its main search index, sparking a debate in the blogosphere that rages on today – Is Google acting like a monopolist? Does Facebook or Twitter have a “right” to be included in Google results? Why didn’t Google try to negotiate inclusion with its rivals prior to making such a clearly self-serving move?

Google execs, including Chair Eric Schmidt, told SEL’s Danny Sullivan that the company would be happy to talk to both companies to figure out ways to incorporate Twitter and Facebook into Google search, but clearly, those talks could have happened prior to the G+ launch, and they didn’t (or they did, and did not work out – I honestly have no idea). When Danny pointed out that Twitter pages are publicly available, Schmidt demurred, saying that Google prefers to “have a conversation” with a company before using its pages in such a wholesale fashion (er, so did they have one, or not? Anyway…). He has a point (commercial deals are de-rigueur), but…that conversation happened last year, and apparently ended without a deal. And around we go…

What’s clear is this: All the companies involved in this great data spat are acting in what they believe to be their own self interest, and the greatest potential loser, at least in the short term, is the search consumer, who will not be seeing “all the world’s information” but rather “that information which is readily available to Google on terms Google prefers.”

The key to that last sentence is the phrase “what they believe to be their own self interest.” Because I think there’s an argument that, in fact, their true self interest is to open up and share with each other.

Am I nuts? Perhaps. But indulge my insanity for a bit.

The Cost of Blinkered Competition

Back in the Web 1.0 days, when I was running The Industry Standard, I had a number of strong competitors. It’s probably fair to say we didn’t like each other much – we competed daily for news stories, advertiser dollars, and the loyalty of readers. The market for information about the tech industry was limited – there were only so many people interested in our products, and only so much time in the day for them to engage with us.

My strategy to win was clear: We’d make the best product, have the best people, and we’d win on quality. When I heard about one of our competitors badmouthing us, I’d try to ignore it – we were winning anyway: We had the dominant marketshare, the most revenues ($120mm in 2000, with $21mm in EBIDTA), and the best product.

Then something strange happened: an emissary from a competitor called and asked for a meeting. Intrigued, I took it, and was surprised by his offer: Let’s put our two companies together. Apart, he argued, we were simply tearing each other down. Together, we could consolidate the market and insure a long term win.

I considered his idea, but for various reasons, we didn’t take him up on it. I felt like we had the dominant position, that his offer was driven by weakness, not intellectual soundness, and I also felt that a combination would require that my shareholders take on too much dilution.

Two years later, both of us were out of business.

Now, I’m not sure it would have mattered, given the great crash of 2001. But what is certainly true is that I could have thought a bit deeper about what this fellow was proposing. Back in the days of print-bound information, we were essentially competing on what were publicly available assets: stories, particularly interpretations and reportage around those stories, and people: writers, editors, ad sales executives, and management. Short of combining companies, there wasn’t really any other way for us to collaborate, or at least, so I thought.

But perhaps there could have been. It’s been more than a decade since that meeting, and I still wonder: perhaps we could have shared back-end resources like operations, publishing contracts, etc. and saved tens of millions of dollars. We’d compete just on how we leveraged those public assets (stories, people). Perhaps we might have survived the wipeout of the dot com crash. We’ll never know. Since those publications died, the blogosphere has claimed the market, and now it’s far larger than the one we lost back in 2001. Of course I started Federated Media to participate in that model, and now FM has as large a revenue run rate as the Industry Standard, across a far more diverse market.

Why am I bringing this up? Because I think there’s a win-win in this whole Google/Facebook/Twitter dust up, but it’s going to take some Thinking Differently to make it happen.

Imagine Twitter and Facebook offer efficient access to all of their “public” pages – those that its users are happy to share with anyone (or even just to their pre-defined “circles”) – to Google under some set of reasonable usage terms. Financial terms would be minimal – perhaps just enough to cover the costs of serving such a large firehose of data to the search giant. Imagine further that Google, in return, agrees to incorporate this user data in a fashion that is fair – ie doesn’t favor any service over any other – be it Twitter, Google+, or Facebook.

Now, negotiating what is “fair” will be complicated, and honestly, should be subject to iteration as all parties learn usage patterns. And of course all this should be subject to consumer control – if I want to see only Twitter or Facebook or Google+ results in particular searches (or all results for that matter), I should have that right.

And this leads me to my point. Such a set up, regardless of how painful it might be to get right, would create a shared class of assets that would have to compete at the level of the consumer. In other words, the best service for the query wins.

That’s always been Google’s stated philosophy: the best answer for the question at hand. Danny gets to this point in a piece posted last night (which I just saw as I was writing this): Search Engines Should Be Like Santa From “Miracle On 34th Street”. In it he argues that Google’s great strength has been its pattern of sending people to its competitors. And he upbraids Google for violating that principle with its Google+ integration.

It doesn’t have to be this way. It’s not only Google that’s at fault here. Facebook won’t share with Google on any terms, Facebook and Google have not been able to come to terms on how to share data (more on that below*), and Twitter clearly wants some kind of value if it is to share its complete firehose with the search giant. Imagine if all three were to agree on minimal terms, creating a public commons of social data. Yes, that would put Google in an extreme position of trust (not to mention imperil its toddler Google+ service), but covenants can be put in place that allow parties to terminate sharing for clear breaches which demonstrate one party favoring itself over others.

Were such a public commons to be created, then the real competition could start: at the level of how each service interprets that data, and adds value to it in various ways.

Four years ago to the month, I wrote this post: It’s Time For Services on The Web to Compete On More Than Data

In it I said: It’s time that services on the web compete on more than just the data they aggregate….

I think in the end, Facebook will win based on the services it provides for that data. Set the data free, and it will come back to roost wherever it’s best used. And if Facebook doesn’t win that race, well, it’ll lose over time anyway. Such a move is entirely in line with the company’s nascent philosophy, and would be a massively popular move within the ouroborosphere (my name for all things Techmeme).

Compete on service, Facebook, it’s where the world is headed anyway!

Two and a half years ago, as it became clear Facebook’s “nascent philosophy” had changed (and as Twitter rose in stature), I followed up with this post: Google v. Facebook? What We Learn from Twitter. In that post, I said:

 

I think it’s a major strategic mistake to not offer (Facebook’s pages and social graph) to Google (and anyone else that wants to crawl it.) In fact, I’d argue that the right thing to do is to make just about everything possible available to Google to crawl, then sit back and watch while Google struggles with whether or not to “organize it and make it universally available.” A regular damned if you do, damned if you don’t scenario, that….

For an example of what I mean, look no further than Twitter. That service makes every single tweet available as a crawlable resource. And Google certainly is crawling Twitter pages, but the key thing to watch is whether the service is surfacing “superfresh” results when the query merits it. So far, the answer is a definitive NO.

Why?

Well, perhaps I’m being cynical, but I think it’s because Google doesn’t want to push massive value and traffic to Twitter without a business deal in place where it gets to monetize those real time results.

Is that “organizing the world’s information and making it universally available?” Well, no. At least, not yet.

By making all its information available to Google’s crawlers (and fixing its terrible URL structure in the process), Facebook could shine an awfully bright light on this interesting conflict (of) interest.

Thanks to Google’s inclusion of Google+ in its search index, that light has now been shone, and what we’re seeing isn’t all good. I’m of the opinion that a few years from now, each and every one of us will have the expectation and the right to incorporate our own social data into web-wide queries. If the key parties involved in search and social today don’t figure out a way to make that happen, well, they may end up just like The Industry Standard did back in 2001.
But not to worry, someone else will come along, pick up the pieces, and figure out how to play a more cooperative and federated game.
*Update: I’ve heard from a source with knowledge of the Facebook/Google negotiations over integration of Facebook’s data into Google’s search index. This source – who while very credible does come from Facebook’s side of the debate – explained to me that during the 2009 negotiations, Google balked at Facebook’s request that Facebook data be protected in the same fashion as it is in Facebook’s deal with Bing. In essence, Google claimed no way to keep data within circles of friends in the context of a Google search. According to this source: “Senior executives at Google insisted that for technical reasons all information would need to be public and available to all.” But the source goes on to point out that in Google’s own integration of Google+, Google does exactly what it claims it could not do with Facebook data. “The only reason Facebook has a Bing integration and not a Google integration is that Bing agreed to terms for protecting user privacy that Google would not,” this source told me.
Also, and quite interestingly, Google also refused to agree to a clause which stated that Google could not use the data to build its own social network. Now, this is where things can get very dicey. It’s very hard to prove whether or not a company is using the data in particular ways, and had Google agreed to that clause, it might have severely limited its ability to build Google+. What is clear is that Microsoft agreed to Facebook’s terms.