Photo Credit: clydeorama
Farhad Manjoo of The New York Times published this thought-provoking article: Google’s Time At The Top May Be Nearing Its End. Manjoo discusses how Google’s current and past domination in desktop search advertising is leading to the source of its undoing as a technology leader. (more…)
I just finished reading this great article: Bloomberg Businessweek, The Rise and Fall of BlackBerry: An Oral History.
The article recounts how a once-dominant technology company of the past decade is no longer a relevant player. Blackberry's 1997 IPO to its 2008 stock market peak are highlighted.
After 2008, the iPhone, iPad, and Android OS systematically put Blackberry out of business. A series of anecdotes from former executives, journalists, and others recounts Blackberry's demise due to management missteps, hubris, and self-denial.
Microsoft, Are YOU Paying Attention? What's scary is how Blackberry's key mistakes closely parallel the same ones made by Microsoft and Steve Ballmer (which eventually cost him his job).
Here are key quotes from the Bloomberg Businessweek article compared to other quotes (from other sources) paralleling the ongoing Microsoft saga:
(Blackberry) In June 2007, the first iPhone hits the stores. Far from recognizing the potential threat to BlackBerry’s dominance, Lazaridis and Balsillie (e.g., RIM's Senior Leaders) publicly belittle Apple’s device, criticizing its short battery life and weaker security.
(Blackberry) Chris Key (global account manager and carrier sales and relationship manager, 2001-09): "I remember being at a [customer] meeting and the CIO was carrying an iPhone. I found out that a lot of senior executives … were carrying iPhones. That was a big red flag for me. The attitude for most of the people in the senior leadership at BlackBerry was, “The BlackBerry solution is secure. It’ll lock down company data. It’ll allow the organization to maintain complete control over the business use of the device. IPhone is a music player and a consumer toy.”
(Microsoft and Steve Ballmer) “There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item.”
(Blackberry) Kevin Michaluk (founder of CrackBerry.com, a news site): BlackBerry was a darling of enterprise. If you had a BlackBerry you were an important person, as at that time a lot of people didn’t have a smartphone. It was almost a status symbol within the company. It was the most intuitive communication device. With that blinking red light, it had that addictive quality.
(Blackberry) Gillenwater: If BlackBerry was going to be serious about consumers, they needed to make a fundamental shift in the way products were thought about, created, iterated, marketed, and sold. This was done but never to the extent necessary. It was always a partial effort. There was a period of time when this could have been corrected, but when it became apparent that HQ and senior leadership were not addressing systemic issues, people like myself left.
(Microsoft and Steve Ballmer) “$500, fully subsidized, with a plan! That is the most expensive phone in the world and it doesn’t appeal to business customers, because it doesn’t have a keyboard, which makes it not a very good email machine.”
Don't get me started on how both Blackberry and Microsoft / Steve Ballmer missed the tablet market and underestimated Apple's and Google Android's dominance. Remember, the Blackberry Playbook? It's a distant memory because nobody wanted it.
Remember the vaunted Microsoft Surface Tablet? That's latin for $900 million write-down.
Microsoft says it's active CEO search continues. Too bad, this former Googler accepted Yahoo's CEO job a year ago. Because, Marissa Mayer's kickin' ass …
Tony Faustino is a marketing and corporate strategist. He writes about how The Internet reinvents marketing strategy for organizations and individuals in his marketing strategy blog, Social Media ReInvention. Follow his tweets @tonyfaustino or circle him on Google+.
This post represents installment number four (4) of a blog series on real-time capabilities and its impact in online media. In case you're interested, the other related posts are:
Microsoft Positions the Skype Acquisition
Microsoft recently acquired Skype for $8.5 billion. This announcement generated significant news coverage. A Google News Search for "microsoft skype acquisition" yields 2,800+ results.
Official Microsoft Press Release. The May 10th Microsoft Press Release, Microsoft to Acquire Skype, mentions the term "real-time" four (4) times.
Here are the direct quotes:
"The acquisition will increase the accessibility of real-time video and voice communications, bringing benefits to both consumers and enterprise users and generating significant new business and revenue opportunities."
"The combination will extend Skype's world-class brand and the the reach of its networked platform, while enhancing Microsoft's existing portfolio of real-time communications products and services."
"Microsoft has a long-standing focus and investment in real-time communications across its various platforms, including Lync (which saw 30 percent revenue growth in Q3), Outlook, Messenger, Hotmail and Xbox LIVE."
"Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world."
Conclusion
Real-Time Speed as a Competitive Advantage. Speed and immediacy are competitive differentiators. Microsoft views real-time capabilities as a competitive advantage driving future revenue growth.
Therefore, I'm looking forward to seeing how the Microsoft-Skype deal influences future Microsoft desktop and mobile offerings. The implications for the overall telecommunications and media landscape will be fun to watch.
President Obama dined this past week with several power players from the technology world. As expected, this private event held at the home of John Doerr, a partner with Kleiner, Perkins, Caufield, & Byers generated significant public relations buzz for the business leaders in attendance.
The picture above is from Mashable's article: Obama Toasts Tech with Industry Luminaries [PICS]. Here are articles from The New York Times Technology Section and additional sources describing the exclusive guest list:
Here's my question:
I'm not the only one who noticed.
Search Engine Land and ZDNet provide more "read-between-the-lines" analysis of the alleged, univited technology CEOs. Via Larry Dignan's post, Obama's Big Tech Powwow Invite List: A Few Stunning Omissions:
Microsoft's absence is glaring. And, a picture speaks a thousand words …
Microsoft Says Google Acts Raise Antitrust Issues. When I read this Reuters News headline, I honestly thought it was a prank of some kind. But guess what, it's no joke.
Isn't this incredibly ironic? Remember when it was Netscape and Sun Microsystems who made their case to federal regulators about Microsoft's anti-competitive practices?
Apparently, Dave Heiner (Microsoft's Deputy General Counsel) published a blog post on the company website titled, Competition Authorities and Search. Heiner's post says (among many other things) if you're concerned with antitrust concerns with Google, "we suggest firms talk to the competition law agencies (complaining to Microsoft won't do much good)."
Not surprisingly, a significant portion of the blog post talks about Google's market leadership position in search. Microsoft's Bing recently combined forces with Yahoo, and they want their combined search offering to gain greater market share.
The following text (in italics) is from the "Competition Authorities and Search" blog post:
Both search and online advertising are increasingly controlled by a single firm, Google. That can be a problem because Google’s business is helped along by significant network effects (just like the PC operating system business). Search engine algorithms learn by observing how users interact with search results. Google’s algorithms learn less common search terms better than others because many more people are conducting searches on these terms on Google.
These and other network effects make it hard for competing search engines to catch up. Microsoft’s well-received Bing search engine is addressing this challenge by offering innovations in areas that are less dependent on volume. But Bing needs to gain volume too, in order to increase the relevance of search results for less common search terms. That is why Microsoft and Yahoo! are combining their search volumes. And that is why we are concerned about Google business practices that tend to lock in publishers and advertisers and make it harder for Microsoft to gain search volume.
Can you actually believe that big and powerful Microsoft is trying to make a case that poor little Bing needs a more level playing field? Who would have thunk it?
I'm looking forward to seeing how Microsoft and Google battle it out in the next 10 years in not only search but also other services (i.e., packaged software vs. cloud computing, Internet Explorer vs. Google Chrome, and the mobile wars). Why? This fiercely growing rivalry will tremendously benefit the global consumer with better technology choices that will continue to reshape and impact our professional and personal lives.
I've been reading Googled by Ken Auletta and it's a fascinating history about the company.
The book highlights Google's engineering-driven or fact-based decision making culture. Auletta points out how former executives say that Google's founders don't value marketing. In fact, he writes: "Larry Page is aggressively disdainful of marketing and public relations."
This is why I'm surprised by Google placing a television ad during the February 7th Super Bowl. In case you didn't watch the game or haven't seen the ad online, here's a video clip from YouTube:
According to various sources, this television spot cost Google approximately $5 million to $6 million to air. Here are some good blog posts and articles you might want to check out:
* John Battelle's Searchblog: The Monday Signal – Monday Morn. Advertising Quarterback
* John Battelle's Searchblog: Updated – Google to Air "Search Stories" Ad During Super Bowl …
* MOU Blog: Did Google's Super Bowl Ad Score a Touchdown?
* eWeek Google Watch by Clint Boulton: Google Super Bowl Ad Spreads Parisian Love, Bing Misses Out
My favorite take on why Google aired the ad is from Venture Beat: Parisian love? Google's Super Bowl ad was really about Bing. Looks like there are several "logical and fact-based business reasons" why Google created this ad:
1. Google sees Bing's search engine market share climbing and is carefully monitoring its progress against Google's core business
2. Microsoft's investment in Bing's advertising budget is sizable (~$80 million to $100 million)
3. Microsoft has taken a sound tactical approach in securing Bing partnerships (i.e., Bing is the default search engine in all HP PCs worldwide; exclusive rights to the online video coverage of the 2010 Winter Olympics being featured on the MSN homepage)
4. The Microsoft advertising warchest is sizable (i.e., ~$1.2 billion spent in 2008)
It will be interesting to see if Google will execute future "traditional" advertising campaigns. I'm looking forward to seeing their next moves and how marketing and branding may fit as part of their overall business strategies.
Last week, Google announced real time search and additional innovations to it core search offering. These announcements received significant media coverage, and I find the various viewpoints highly interesting. After reviewing a variety of publicly available sources, I've summarized my observations and opinions on the strategic implications for Google and the battlefield for search dominance.
Observation #1 - Real Time Search is a First Step in Addressing the Threat of Vertical Search Via Social Networks
I recently wrote a blog post about this challenge in Charlie Rose's Conversation with Ken Auletta: Innovation, Efficiency, and Future Challenges at Google. The partnerships with Twitter, Facebook, and MySpace enable Google to include updates from the Big 3 social networking sites into its search index. Previously, it took a few minutes for updates from social networks and blogs to filter into Google's search results (not the case anymore). By offering real-time social networking updates in a Google Search, they're decreasing the threat of users using these sites to conduct searches (particularly Twitter Search). Which leads us to search relevancy …
Sources: New York Times – Google Add Live Updates to Results
Observation #2 – A Killer Combination: Real Time Search with Google's Search Relevancy
According to the New York Times article, Biz Stone (one of Twitter's co-founders) think Google is better at providing relevancy to a search user's questions. In addition, TechCrunch hammers home how relevancy is a major strength of Google searches. MG Siegler, the author of the TechCrunch article made some great points:
* "Relevancy is perhaps the key to making real-time search a pillar of the web."
*How Google Fellow Amit Singhal positioned Google's relevancy advantage: "It's Google relevancy technology meeting the realtime web."
In Adam Ostrow's Mashable article, the partnerships with Twitter and Facebook are a concession by these companies that they can't outbuild (or outspend) Google when it comes to search. Just ask Carol Bartz, the CEO of Yahoo …
Sources: Mashable – Google Launches Real-Time Search, New York Times – Google Add Live Updates to Results, Tech Crunch – Google Aims to Push the Speed of Light with Realtime Results. Seriously., New York Times – Out of the Search Business, Yahoo Shifts Its Focus
Observation #3 – Google Continues Expanding Search to the Mobile Space
Christina Warren (another of my favorite Mashable writers) made some intresting observations about the implications for Google's competitors:
* Microsoft's Bing: They're now going after a moving target because Google will continue to innovate in search.
* Yahoo: Even though it's has more market share than Bing, Yahoo is conceding real-time search to Google and Bing. Search isn't a focus for them. Their niche is as a service provider.
In addition, The Wall Street Journal points out that Bing has gained market share and credibility in search. Naturally, Google is going to protect its core business. These announcements show Google is still on the cutting edge of innovation and will continue to introduce new advancements.
Therefore, it's not surprising that these advancements focus on the mobile space:
* Google Goggles: Allows users to pull up information about a landmark or product by taking a picture from their cellphones. This service is currently only available on cellphones running Google' Android OS. According to Vic Gundotra, a Google VP of Engineering, the end goal is to "visually identify any image over time, merely by pointing a mobile device to it."
* Google Voice Search | Google Translation: Allows users to conduct search based queries by speaking into your phone (supports Mandarin, Japanese, and English). When you speak into your phone in English, your query can be auto translated into another lanaguage (i.e., Spanish) and the query can can be spoken back to you out loud — your phone becomes a Universal Translator.
* Google Local Search / Location-Based Search: Allows users to get information about locations and user ratings of nearby restaurants and shops. It will also provide "contextualized" suggestions relevant to the current location you're in.
Sources: Fast Company – Google Unveils Real Time Search, Translation, Image Searching, Goggles…Awkwardly, Forbes – Google Conquers Time, Mashable – What Real-Time Means for Google's Competitors, The Wall Street Journal – Google Rolls Out New Tools as it Battles Rival
Observation #4 – Personalizing Search is Going to be a Major Factor in Establishing Search Dominance
Silicon Alley Insider highlighted what Google considers The Four (4) Biggest Challenges in the Future of Search:
* Challenge 1: Modes – how and where people type in a search query
* Challenge 2: Media – how people manage and consume content
* Challenge 3: Language – how to help people conduct searches without communication barriers
* Challenge 4: Personalization – enable customized searches re: tastes, preferences, and locations
ComputerWorld emphasized the importance of Challenge 4 in the search rivalry between Google and Microsoft. Search is becoming more indvidualized and that includes finding relevant and applicable content from images, video, tweets, and blog posts. According to Dan Olds, an analyst with The Gabriel Consulting Group, search is "looking more like the dynamic lives of its users" because:
* Search is becoming more personal and granular
* Search results are now drilling down to include a single people's observations or opinions (whether you're famous or not)
Sources: ComputerWorld – Google, Microsoft's 'War of Innovation' Changing Face of Search, Silicon Alley Insider – Google Shows Off New Search Features to Top Bing
Observation #5 – These Innovations Bolster Google's Competitive Advantages in Advertising and Cloud Computing
Real-time search and the mobile innovations naturally support Google's vision towards cloud computing. Google wants users to spend more time on the Internet searching for information (specifically with their search engine and subsequently looking at more of their ads). By performing more Google searches, we'll provide more information on our online behaviors. This data gives Google the advantage in delivering more appropriate advertisements (and that increases the value of the ads it auctions).
Sources: Forbes – Google Conquers Time
I've started reading Googled: The End of the World As We Know It by Ken Auletta. There's no question Google is reinventing and transforming the world of traditional media. If you're an online strategy nut or corporate strategy geek like me, you'll love this book.
I discovered this book from a Charlie Rose interview conducted on November 5, 2009. After watching the original broadcast and studying the online archive, I had to write a blog post about the key takeaways from their conversation. I also purchased Mr. Auletta's book from Amazon because I love learning how Google:
* Approaches and dissects problems
* Views business opportunities
* Drives and sustains innovation throughout its organization
Furthermore, Charlie Rose is the television industry's best broadcaster and interviewer. Check out this Fortune Magazine article: Why Business Loves Charlie Rose. The outstanding content and insights shared on Mr. Rose's nightly show make it required viewing. I also learn from Mr. Rose's preparation, questioning, and listening. He possesses that rare ability to comfortably engage guests and non-threateningly ask difficult questions.
Without further adieu, here are the seven (7) insights I learned by studying the conversation between Mr. Auletta and Mr. Rose. If there are additional viewpoints or lessons you think should be included from the November 5th interview, please share them in the comments section.
Insight 1: Ask Why Does It Have to Be This Way?
Google asks this fundamental question whenever confronting a problem or business opportunity. Their engineers challenge the status quo by starting with a basic assumption — the traditional analog world is inefficient.
Advertising. Wouldn't you want to know if people are reading your ads? Wouldn't you want to know if the people who buy your product(s) do so because of your advertising?
Packaged Computer Software. Why does computer software have to run from our hard drives or a computer desktop? Why can't it run off a computer "cloud" accessible through our web browsers?
Newspaper Publishing. Isn't there a more efficient way to publish and distribute newspapers?
Bottom Line: Google finds a way to drive out inefficiencies. This "engineer's mindset" is the core capability Google brings to solving all traditional problems.
Insight 2: Google and Microsoft are Different – and Alike
Cold Engineers Versus Cold Businessmen. Google isn't out to destroy the competition. Their engineering goal is to drive out inefficiencies. Contrast this mentality with Microsoft in 1998 (when it was investigated for antitrust concerns). Here, the US government questioned the company's intent to compete fairly with Netscape and Sun Microsystems.
Both Share an Inability to Anticipate Other People's Fears. Both Google and Microsoft are brilliant in solving problems. However, both firms don't understand why the US government and public would question their business motives. In Google's case, people now fear them the way people feared Microsoft in 1998. The recent legal proceedings between Google and the publishing industry regarding the digitizing of books is a prime example. Here's a recent article about how Google is attempting to smooth over relations with the publishing industry from The Washington Post titled, Google Allows Publishers to Strengthen Pay Walls.
Insight 3: No One Saw Google Coming (Not Even Bill Gates)
You Can't Anticipate What You Don't Know. In 1998, Mr. Auletta interviewed Bill Gates during Microsoft's antitrust trial period and asked what worried him the most. Gates replied: "I worry about someone in a garage inventing something that will displace Microsoft." Ironically, Larry Page and Sergey Brin are now Microsoft's most significant competitor particularly with their push to establish cloud computing and Google Chrome OS.
2006 was a Tipping Point: The $1.65 Billion YouTube Acquisition. Before this acquisition, it was unclear if Google was making money. With the YouTube acquisition, traditional media finally realized Google's broad ambitions and imminent threat as a future media company. Mr. Auletta said it best during the interview (paraphrasing): "Wow, they're coming after me (e.g., traditional media)."
Insight 4: Google Views Itself as a Media Company Not a Search Company
Become the First $100 Billion Media Company. Eric Schmidt says this is the ultimate goal. Currently, Google hasn't significantly monetized their product portfolio beyond search. However, you can't bet against them because of their involvement in a vast number of areas:
* Advertising: Google AdWords, Google AdSense
* Telecommunications: Android OS
* Television: YouTube
* Books & Publishing: Digitized Books
* Software: Cloud Computing, Google Docs
Make Money But Not at the Expense of Violating User Trust. Mr. Auletta finds this insight or clarity of thought extremely telling. At a young age, Brin and Page recognized the value of building user trust because they've received plenty of opportunities to make "easy money." For example, they declined Visa's $3 million offer to place a banner ad on the Google Home Page. Brin and Page declined becaus they thought the ad would be intrusive and disruptive to the user experience.
Insight 5: Google's Simplistic Home Page is a Nod to Steve Jobs and Apple
Google's founders admire Jobs' passion and his vision to simplify with "elegant design." The simplicity and clean look of the Google home page reflects Jobs' and Apple's influence.
Insight 6: How Will Google Handle Current and Future Challenges
Challenge 1: Expanding Revenues Beyond Search (aka The One-Trick Pony). Mr. Auletta points out how Steve Ballmer, Microsoft's CEO, criticizes Google's reliance on search-related revenues. But, I liked Mr. Auletta's anecdote that Eric Schmidt, Google's CEO, replied: "Yeah, but it's a pretty good trick." Still, Ballmer has a point. AdWords and AdSense accounts for $21 billion in revenues (out of $22 billion total). Mr. Auletta puts this number in context and explained that $21 billion is roughly equivalent to the advertising revenues for all U.S. consumer-related magazines. Also, Google's revenue is also equivalent to two-third's of U.S. newspaper advertising revenues.
Not too shabby for a one-trick pony …
Here's a video clip from the CNBC Original: Inside the Mind of Google. It talks about how Google is looking to expand its influence into the mobile market with its Android Operating System:
Challenge 2: Google is Concerned About Vertical Search Via Social Networks. I can personally confirm the power and appeal of search via social networks like Facebook or Twitter. I've commented on other blogs that the reason I find Twitter so powerful is because the people I follow on Twitter are often a better source of content than my own Google search. The authority of your Facebook Friends or who you follow on Twitter is why Google wanted to acquire Twitter.
In many ways, real-time search or conducting a search through Twitter is what Google would ask or propose to threaten their own offering. Google is asking themselves: "Why should you conduct a search through Google when you can solicit the trusted opinion of friends or people who share your common interests?" This idea is captured in one of the best articles I've ever read on Facebook as a potential threat to Google: Wired Article – Great Wall of Facebook: The Social Network's Plan to Dominate the Internet — and Keep Google Out.
Challenge 3: Convincing Top Talent to Remain at Google. Mr. Rose and Mr. Auletta discussed the challenge of employee retention especially when your top engineering talent (1) has no shot at attaining the top spot because you have young founders and (2) the opportunity for a big pay day has already passed. A prime example is Marissa Mayer, Google's VP of Search and User Experience. Even though she's achieved significant wealth as one of the original team members, she may want to forge her own path by leading her own company. Here's an article about Marissa Mayer from the New York Times titled, Putting a Bolder Face on Google.
Challenge 4: Trappings of Your Own, Phenomenal Success: Arrogance and Hubris. Right now, Google is not concerned about Microsoft Bing. They respect what Microsoft has accomplished with Bing and are aware of the Microsoft-Yahoo combination. However, Mr. Auletta thinks Google looks at Microsoft as "an old company" that won't move as quickly as Google.
Furthermore, when you're young and you've become successful so quickly, you begin to question why would anyone question your business motives (e.g., why's the U.S. government giving our company grief for wanting to digitize all books)? In 1998 and 1999, Bill Gates had the same attitude when the U.S. government investigated Microsoft for anti-trust concerns. Christine Varney, Head of the U.S. Justice Department's Anti-Trust Division, is investigating all concentrations of power and the tendency of Democratic-led administrations is to introduce more government regulation. As a result, Google has been beefing up its Washington office with legal talent. Check out this June 2009 New York Times article titled, Google Makes a Case It Isn't So Big. The story profiles Dana Wagner and his significant role in Google public relations on Capitol Hill.
Challenge 5: What Happens to Privacy? Will Google Continue to Not Be Evil? With every Google search we conduct, we leave a digital fingerprint or footprint (i.e., our individual IP address). Everyday, Google collects millions of data points about our online habits and tendencies. This is the reason why advertisers partner with Google. Advertisers want access to that information. What happens if advertisers make significant financial offers to Google to access to that information? This concentration of personal information on Google's servers is the biggest reason people fear it is becoming too powerful.
Here's another video clip from the CNBC Original: Inside the Mind of Google. It talks about how this very subject and includes Marissa Mayer's opinion on this issue: