John Battelle's Search Blog Microsoft

Do Not Track Is An Opportunity, Not a Threat

This past week’s industry tempest centered around Microsoft’s decision to implement “Do Not Track” (known as “DNT”) as a default on Internet Explorer 10, a browser update timed to roll out with the company’s long-anticipated Windows 8 release.

Microsoft’s decision caught much of the marketing and media industry by surprise – after all, Microsoft itself is a major player in the advertising business, and in that role has been a strong proponent of the current self-regulatory regime, which includes, at least until Microsoft tossed its grenade into the marketplace, a commitment to implementation of DNT as an opt-in technology, rather than as a default.*

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The Internet Big Five: Up $272 Billion in Six Months

Last December I posted on “The Internet Big Five,” noting their relative strengths and the market cap of each. Since that time, the Five have only gotten stronger, adding a cumulative $272 billion in market cap (much of that is Apple, but Amazon and Facebook – assuming the offering does as expected on Friday – have also increased quite a bit). All in all, nearly 30% increase in value for these five companies – sort of makes me wish I was an investor, rather than a writer and entrepreneur.

I’ll also check the number of engaged users for each platform, to see if there are any significant shifts, though I don’t recall seeing any in the news recently (save Facebook crossing 900 million users). It is interesting to note that Facebook, should it hold its supposed valuation, will be more highly valued than Amazon.

A reminder as to why I’ve made a point of watching the Big Five, from my original and secondary posts:

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San Francisco In The Spring: Come To Signal

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Over at the FM blog, I just posted the draft agenda for the first of five conferences I’ll be chairing as part of my day job at Federated Media. Signal San Francisco is a one-day event (March 21) focused on the theme of integrating digital marketing across large platforms (what I’ve called “dependent web” properties) and the Independent Web. The two are deeply connected, as I’ve written here. As we explore that “interdependency,” we’ll also be talking about some of the most heated topics in media today: the role of mobile, the rise of brand-driven content, the impact of real-time bidded exchanges, and more.

Signal builds on the format I spent almost a decade crafting at the Web 2 Summit – the “high order bit,” or short, impactful presentation, as well as case studies and deeper-dive one-on-one interviews with industry leaders. Those include Jeff Weiner, CEO of LinkedIn, Adam Bain, President of Revenue at Twitter, Neal Mohan, who leads Google’s ad products, and Ross Levinsohn, who runs Yahoo! Americas, among others.

Others represented include Instagram, AKQA, Babycenter, Intel, Tumblr, WordPress, ShareThis, Facebook, and many more. I hope you’ll consider registering (the earlybird expires next week), and joining me for what’s certain to be a great conversation.

Predictions 2012 #7: Shooting From The Hip

This year I tried something new with my predictions, writing deeper posts on each one. I got to six, but I underestimated how long it would take to write 1,000 or so words for each post. I’m pushing past 10,000 words for the past week, and “predictions season” is pretty much over. I think it’s about time I gave all of us a break, and just got down to some rapid fire predictions. This will be my last predictions post, and most likely the one most likely to bring down my year end grade, because I’m just going to shoot from the hip. It’s something I’ve never really done before, but that’s why I’m doing it. These are notions, hunches, itches I’ve not scratched. But what the heck, this is for the fun of it. To them:

– Google’s Chromebook will triple its marketshare by the end of the year. I can’t figure out what its marketshare is now, but it’s pretty small. Another way of putting this is Chromebook will be a success this year.

– Obama will win the 2012 election, thanks in part to the tech community rallying behind him due to issues like SOPA, visas, and free speech.

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Predictions 2012 #5: A Big Year for M&A

(image) One of the things that pops out of the “Big Five” chart I just posted, at least if you stare at it a bit, are the places where each company needs to get strong, quickly. Apple is weak in social and one dimensional in ad solutions. Microsoft needs to improve its device products, build out its entertainment distribution muscle, and keep improving search share. Google wants to get better in productivity software, social, and payments. Amazon needs help in devices, social, and OS. Facebook has work to do in many areas, including devices, search, payment, and voice.

When the five largest companies in our space have a lot of needs, they tend to pull out the wallet and go shopping. Sometimes they buy their way into partnerships, but often, they simply buy.

Hence my fifth prediction for 2012: Expect Internet M&A to heat up, big time. It’s not just going to be the Big Five who drive this trend, it’ll be a whole mess of players looking to consolidate power and press into the double-digit growth market that is the Internet (and by Internet, I also mean mobile and enterprise, of course). Yahoo’s new CEO Scott Thompson knows how to buy companies and has a data focus, for example. That could mean competition to purchase marketing, ad tech, and data companies like Blue Kai, Quantcast, or MarketShare. MediaBank is on a tear and will be on the lookout for similar kinds of companies. IBM has a deep interest in the marketing tech world, expect Big Blue to make some big moves as well. And Twitter will certainly be flexing its muscles, now that it’s bulked up with nearly a billion in fresh capital.

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The Internet Big Five By Product Strength

As I have written in previous predictions, I’ve been focusing on the Internet Big Five lately, and expect that to continue this year, as the group, collectively, are something of a “character” in my upcoming book (as is Twitter, the “free radical”). Other characters include “The Government” and “Corporations,” so expect predictions about those players in the next few days. But today, I want to focus on the Big Five as a whole. I’ve been staring at these companies, trying to understand their strategic imperatives, which is why I found myself making yet another chart.

This one focuses on core product lines where all (or most) of these companies are playing. For me, these product lines, taken together, are the basis of what we might call “the operating system of our lives.” And since the book is about how we will be leveraging our lives over digital platforms in one generation, it struck me as important to assess where each of the Big Five is right now (what they have already built) and where they are weak (what they need to build to compete).

Here’s the chart:

As you can see, I’ve laid out the same five companies, listed top to bottom by market cap. From left to right are columns of various product lines or offerings that I’ve determined are crucial areas that any player in the “OS of our life” must address. I’ve keyed each company against each product line with one of four scores, from “Strong” – where a company already dominates – to “Weak” – where a company either does not play, or has an anemic offering. The terms “Developing” and “Improving” demonstrate that the company is making progress in that area, from either a weak position (“Developing”) or a middling position (“Improving”).

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Predictions 2012: #2 – Twitter As Free Radical, Swiss Bank, Arms Merchant…And Google Five Years Ago

My predictions this year will be pretty focused on the Internet Big Five (Google, Microsoft, Apple, Amazon, and Facebook) but the first two focus on Twitter. Why? Because Twitter is poised to become a critical “free radical” whose presence affects the actions of all the Big Five players. And 2012 will be the year this becomes readily apparent. In short: In 2012, every Big Five Internet company will need to have a clear Twitter strategy. At the moment, not all of them do.

What do I mean when I use the term “free radical”? Well, taken loosely from molecular chemistry and biology, free radicals are particles with open shells or unpaired electrons – they cause change in otherwise stable systems. I take the term with a bit more license, however – to me Twitter is the only Internet service at scale that has yet to ossify into a predictable platform with a massive revenue base to protect. This fact, plus the company’s liberal philosophical bent toward free speech, positions Twitter as something of a shape-shifting arms merchant in the ongoing battle between the Internet Big Five. Believe me, any one of the Five would kill to own Twitter, several of them have tried to buy the company over the past few years. It’s now clear that Twitter’s path is one of independence. To succeed, it must become the Swiss bank of social intent, providing its services in some kind of useful way to each and every one of the Big Five.

2011 has already set the table for how this year is going to play out. In short, Microsoft and Apple embraced Twitter, Google and Facebook rejected it, and Amazon stayed on the sidelines, for the most part.

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The Internet Big Five

As I work on the book, I’ve come to use a shorthand for five companies that I’ve determined are critical drivers of what kind of society we’ll be living in one generation from now. At the moment I’m focused on just Internet companies, though I also plan on looking at other categories, such as energy, food, and health.

My terminology has evolved in the past week from “the Five Horsemen” to simply “The Big Five.” I’ve got a few reasons for this. First, the Horsemen analogy is a bit negative (given it evokes the Four Horsemen of Apocalypse). Second, there’s a rather fun reference for the “big five” that has to do with personality traits (see this research, or this, for example). One goal of my book, which I should probably explain at a later date, is to tease out the essential character and philosophy – perhaps you could call it the personality – of each of these key Internet players. If corporations are people (in the US, anyway), I wonder what kind of people these companies might be?

I don’t think you’ll be surprised by my choice of the Big Five, but I do hope you’ll find my reasoning for their selection worthy. As you can see from the chart, the five are: Apple, Microsoft, Google, Amazon and Facebook.

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The Internet Big Five: Up $272 Billion in Six Months

Predictions 2012 #7: Shooting From The Hip