Jun 20 2008

Google envy is alive and well in Redmond

The weepy countdown to Bill Gates’ last day on the job as a full-timer must be getting to Steve Ballmer. Always full of surprises, the big galoot is at it again.

Eric who?

(Credit: Dan Farber/CNET News.com)

In a revealing interview with The Financial Times, Ballmer distanced Microsoft from any criticism that it’s lost a step over the years. In fact, he added, why not point fingers at some other software behemoth? (Any guesses who that might be?)

I haven’t seen speed out of Google really. I mean, come on. They have one product. It’s been the same for five years–and they have Gmail now, but they have one product that makes all their money, and it hasn’t changed in five years.

Yes, but as his erstwhile comrade in arms is wont to say, doesn’t that speak to the magic of software? Ballmer can try and call out Google for being a one-trick pony. Still that’s one heckuva pony. Truth be told, if Microsoft enjoyed that sort of technology prowess in search, I very much doubt Ballmer would have wasted four months wooing a unenthused Jerry Yang.

But what’s with the nonstop trash talk from the CEO–especially in the countdown to Gates’ upcoming “Going Away Day?” He ought to watch his words. Over the next week, Ballmer is going to be all over the media, reaffirming that Microsoft is finished with its Yahoo crush and as relevant as ever. Inevitably, reporters will pop the “What about Google?” question. And the more Ballmer insists on convincing interlocutors about chinks in Google’s armor, the less people will believe him. In the same FT interview, for instance, Ballmer says the following:

I mean, (Google has) a gestalt, but gestalt is gestalt. Let’s talk about the reality. The reality is one product makes 98 percent of all of their money, search. Oh, they have two products, AdWords and AdSense. They have two products, both search-based, that make all of their money, and it hasn’t changed a lot in five years. I’m not giving them a hard time, but we’ve got to learn–if you say, what have you learned, we try to learn from people’s successes, not from people’s gestalt. The gestalt is yet to be proven.

Gestalt? If I didn’t know better, I’d be tempted to diagnose this as a severe case of Google envy. That envy also happens to be the flip side of Microsoft’s ongoing search for respect.

“We’re trained in Silicon Valley to believe that Microsoft steals other peoples’ innovations,” says Microsoft’s Stephen Elop, who replaced the retiring Jeff Raikes as president of the company’s Business Division. “We just don’t give Microsoft credit. I don’t know whether that’s because of arrogance or hubris.”

I spoke with Elop a few weeks ago. As I reviewed my notes, his comments as a former outsider shed a different light on Ballmer’s ongoing eruptions of “Google-itis.”

“A lot probably has to do with the fact that Microsoft is in a different geography,” said Elop, who did prior stints at Juniper Networks, Adobe Systems, and Macromedia, where he held down senior posts. “We’ve had a generation of leaders who have had to compete head to head with Microsoft over the years. What’s happening now is that we’re moving on. We’ve got 2,500 people in the Valley. Maybe I’m surprised that opinion hasn’t evolved yet in the Valley, but it will. Too many things are going on.”

Maybe so. I can’t predict whether Microsoft will ever be received warmly by Silicon Valley. There’s a long history and memories die hard. (Microsoft’s emissary to the Valley, Dan’l Lewin, keeps plugging away.) Meanwhile, the best way to put the relationship on a more solid footing is to continue to open up and prove Microsoft can build great technology, not just because management is “persistent.” (Note to the inner sanctum at Redmond: You can remain obsessed with Google. But try not to let on so much. It’s just bad form.)

CNET News


Jun 20 2008

Do social networking and affiliate marketing mash?

After I and Inquisitr’s Duncan Riley yesterday both expressed a bit of apprehension that the sometimes unscrupulous world of affiliate and MLM marketing might be making its way to the Twittersphere, John Reese (founder of traffic funnelling pyramid scheme BlogRush) decided to “set the record straight” on his personal blog.

Unfortunately for John, much like in his marketing verbiage, he was unable to stay very far away from hyperbole and the ridiculous allegation that I didn’t research my position before I promoted it.

Of the many things that John took issue with, the first thing he mentioned was that both Duncan and I didn’t do our research. As evidence of this, he bragged that he’d “never sold an ebook since I’ve been marketing online for over 15 years.” I stand corrected on this point. He gave away ebooks to sell “digital home study materials.” Essentially, books on CD. Not ebooks, per se, but pretty close.

Most of the rest of his post, in retort, reads like the marketing verbiage you probably remember from BlogRush and from the excerpts of his Twitter letter Duncan and I quoted. “I’m the best,” and “I’ve made high traffic sites,” and “I made all this money, and it was only my side project.” I’m sure that impresses a lot of folks, otherwise how else would he have have sold all his “not-ebooks.” His defenses of his actions seem to amount to “I’m rich, so I’m right.” Bank robbers can be rich, too. That doesn’t make them right either.

His thrust of his retorts seem to be that I’m some sort of anti-marketing hippie, and that my “lack of research” is a thorough indication that something is rotten in the state of Mashable (or perhaps even blogging entirely?). Anyone that has followed my opinion pieces in general, or who actually knows me, knows this is laughable, as I’ve many times defended marketing from undue government regulation and attack. What I (and most human beings, for that matter) hate with a passion are hucksters trying to pawn off on me something I don’t need or have any use or interest in. This is something in which, unfortunately, the affiliate marketing world excels in. That isn’t an indictment of everyone who might be an affiliate marketer, but it is an indictment of a lot of the more visible members of this demographic.

I know of what I speak, on this. Many years ago, I was a CTO at a credit assistance agency that employed affiliate marketing techniques for a time to grow the business. As such, I learned more than I ever wanted to know about the MLM world, but was afraid to ask. I could describe my experiences there in detail, but the best analogy I can provide to you as to how the MLM and affiliate marketing world works is to liken it to a spyware infection.

When you’re infected by one piece of spyware, it often opens the floodgates for a host of other virus, malware and spyware infections. Similarly, you talk to one affiliate marketer, who may be a decent guy and wants to sell you something you need or sell something for you. Unfortunately, just by talking to that one fellow, it seems you soon have (no exaggeration) have hundreds of marketers beating down your door and flooding your inbox with ridiculous offers, pie-in-the-sky schemes, get-rich-quick scams and often outlandish conspiracy theories.

(Imagine that for a moment, and amplify it through the megaphone of Twitter-mania. Twitter could get really unbearable while affiliate marketers infiltrate, amass hordes of followers, and start trying to sell their ebooks on ways to infiltrate twitter, amass hordes of followers and sell ebooks on …. )

John notes my extreme dissatisfaction with BlogRush in his response to me, and promises me a full refund for my investment (a clever distraction of a promise, since the widget and “service” was free). He then goes on to boast that the BlogRush service garners more traffic than Mashable. His defense is to intimate that there was no harm done by hoodwinking thousands of bloggers into installing a useless widget. It’s true that no actual money was lost, but it doesn’t make it right, valuable to anyone (other than John and his team), or even honest.

At the end of the day, I’m still a fan of marketing (contrary to the laughable claims of John Reese’s groupies of me being a socialist), but that doesn’t have to make me a fan of John Reese. While his moves may have made him rich, nothing I’ve seen in his past shows me that he’s done much to separate himself from the shadier marketers in the very same space as him. Despite his claims to the contrary, nothing on the public record (read: researchable) shows that he’s a trustworthy member of the social media community at large (particularly since his defense of himself was full of truth-twisting and hyperbole). In the end, it is that which make me doubt his intentions aren’t to make Twitter part of some affiliate marketing scheme - something I nor anyone else is going to enjoy.

Mashable


Jun 19 2008

Facebook crashes … again

For the second time in a week, Facebook has crashed.Facebook Error

As of 12:34am PDT, 6/18/2008, Facebook.com returns with the error pictured above.


Jun 19 2008

Amazon to Launch PayPal Killer?

Amazon and PayPal have long not been partners in commerce. Of course, the reason for this most oft stated is basic competition. As you might know, Amazon introduced last year its Amazon Payments system for use at Amazon.com and partner sites.

Still, the idea of broadening the Amazon Payments business greatly piques the interest of analysts. One more party to voice enthusiasm for a larger payment network to span a vast supply of Internet commerce Web sites is Derek Brown of financial services firm Cantor Fitzgerald. As quoted by Eric Savitz of Barrons, Brown seemed this week to increase the potency of that lingering flame, saying that an “Amazon Payments” system a la PayPal in its potentially extensive reach, is perhaps a very worthwhile avenue to venture down, due to its intimate and very refined knowledge of online retail in all its limits and possibilities. Brown argues Amazon had “long ago demonstrated that it understands (perhaps better than any company) the needs/wants of online retailers.”

PayPal is no doubt the reigning leader of payment transfer services born on the Web. Its reach is quite extraordinary, and it continues to reap the financial benefits in kind. So much so that its success drew Google into the fold in 2006 with its own competitor, dubbed Checkout, beginning with the US market. amazonpayBut while Google Checkout has made a name for itself, it has not achieved ubiquity as eBay’s property managed to do. This naturally leaves open a fairly great opportunity for Amazon. With its lasting mark made on the online retail market, Amazon is most certainly positioned to offer PayPal a significant challenge.

My sense is that exercising its heft is in Amazon’s interest at this point in time. The company’s place atop the heap in online retail is definitely advantageous for the pursuit of an extension to its business, and, as with its Associates program, the world of third-party Web sites are the group best able to help Amazon make the most of its core assets - all while offering consumers another way to pay, as it were. The company doesn’t absolutely need to invest in the payment space to such a degree as is being speculated. But there’s little chance that it will encounter much difficulty in the way of user adoption if it so chooses to make the jump, discounting the fact that one marketplace will be a no-go for an ambitious Amazon Payments push. It’s name: eBay.

Mashable

Jacob: “All I have to say is, ‘goodridence, PayPal!’”


Jun 18 2008

Ask.com caves to Google’s privacy pressures

Ever the publicity hound nipping at Google’s heels, Ask.com has issued an open letter to the public about adding a privacy policy link to its home page.

The letter highlights the fact that, weeks ago, several privacy groups asked Google to play up the privacy policy on its start page. The search giant didn’t immediately add the link.

So Ask, the No. 4 search company, said Wednesday that it will take the step first.

“As of today, Ask.com has added a direct link to our privacy policy via a ‘Privacy’ link prominently placed right on our homepage…We’ve also made sure that the ‘Privacy’ link appears on the landing pages across most of Ask’s verticals as well, which cover almost all of Ask’s search traffic,” according to its letter.

The company put a fine point on the act, too: “We strongly encourage others in the search marketplace and online industry to do the same.”

CNET News


Jun 18 2008

Ask.com caves to Google’s privacy pressures

Ever the publicity hound nipping at Google’s heels, Ask.com has issued an open letter to the public about adding a privacy policy link to its home page.

The letter highlights the fact that, weeks ago, several privacy groups asked Google to play up the privacy policy on its start page. The search giant didn’t immediately add the link.

So Ask, the No. 4 search company, said Wednesday that it will take the step first.

“As of today, Ask.com has added a direct link to our privacy policy via a ‘Privacy’ link prominently placed right on our homepage…We’ve also made sure that the ‘Privacy’ link appears on the landing pages across most of Ask’s verticals as well, which cover almost all of Ask’s search traffic,” according to its letter.

The company put a fine point on the act, too: “We strongly encourage others in the search marketplace and online industry to do the same.”

CNET News


Jun 18 2008

Yang talks up Google partnership in DC

Yahoo’s CEO Jerry Yang made the rounds on Capital Hill on Wednesday, in an effort to dispel antitrust concerns surrounding its search advertising deal with Google.

During his one-day visit, Yang met with Sen. Herb Kohl, D-Wisc., who chairs the Senate Antitrust Subcommittee.

Kohl has previously expressed concerns that the deal between two technology search rivals could affect competition and have ramifications for advertisers and consumers. He noted the antitrust subcommittee plans to investigate the competitive and privacy implications of the deal.

Sen. Joe Barton of the U.S. House Energy & Commerce Committee also weighed in on the issue Wednesday, issuing a statement (PDF) that expressed concern about the deal’s effect on competition in search advertising.

While Barton was not available to meet with Yang on this trip, the senator indicated he would be available next week. And also on the meet-and-greet trip was Rep. Edward Markey, chair of the Telecommunications and the Internet subcommittee for the House Committee on Energy & Commerce.

Google’s slice of the U.S. search market reached 68.29 percent in May, according to Hitwise. Yahoo’s share of the market declined to 19.95 percent from 20.28 percent in the at same time.

Yahoo, however, has previously said its arrangement is non-exclusive and does not require Yahoo to use any certain number of Google ads on Yahoo’s search results page, nor does it require to give Google’s ads preferential treatment on where they appear on the right-side column of Yahoo’s search results page, where the sponsored links appear.

Yahoo is hoping to benefit from serving up advertisements on its search results pages where there are few advertising links that appear on the right-side column with relevant ads. For example, conduct a search for Fresno and spa and eight advertisements show up on Yahoo, but only two are actually for spas in Fresno. Yahoo gets its advertising dollars only if a user clicks on an actual ad, so the more relevant ads it can post on its search results page, the better its revenues.

Yahoo is hoping to use Google’s ads to populate those search results where it tends to have fewer ads. Should Yahoo have a competing ad or ads on the same search page, may the most relevant ad that can entice a user to click on it win.

Whereas Yahoo is looking to bolster its advertising inventory by allowing Google to post its ads on its search page, Google is going in the opposite direction by scaling back on the number of irrelevant ads it has on its search results page–adopting the view that less is more. The search giant on Wednesday also said it is rewarding advertisers with fast-loading advertisements.

Yahoo is giving the U.S. Department of Justice three-and-half months to review its Google partnership, before it implements the search advertising partnership. Regulators, however, may find it more useful to evaluate the partnership after it’s been implemented when they can assess the before and after effect.

Yahoo, meanwhile, also addressed privacy concerns raised by the legislators.

“Yahoo is deeply committed to building on our established trust with users by continuing to provide clear, comprehensive privacy policies. We structured the agreement with Google so that Yahoo will not transfer any personally identifiable information to Google without user consent,” Yahoo said in a statement. “We have also designed this agreement so that both companies have stayed within each of their existing privacy and data policies, such as Yahoo’s policy regarding logs anonymization after 13 months.”

CNET News


Jun 18 2008

Will Selling Goods be the Answer for Social Networks?

If you take a look at social networks in Asia, they are all monetizing their sites primarily through social goods. For instance, 51.com, which recently raised a $50 million round, earns 70 percent of their revenue through virtual goods according to VentureBeat. Compare that to domestic social networks in which only a small fraction of revenue is generated through virtual goods. Honestly, Facebook is the only site that comes to mind domestically when it comes to the sale of virtual goods.

Next month at Facebook’s F8 event, Facebook is expected to launch their much anticipated payment system which will include micro-payments as well as traditional payments. While a fair amount of revenue has been generated through third-party ad networks in the Facebook platform’s first year of operations, Facebook may be betting heavily on substantial revenue generation through their new payment platform.

Tie in the new Facebook Connect service with the payment system and you are looking at a potential monster that could take on competing payment services such as PayPal. With Facebook’s payment system at the center of their platform, they don’t even need to focus on developing top tier applications. Instead, Facebook can simply rely on third-parties who will now have a substantially greater incentive to develop for the platform.

While Facebook has a long way to go with expanding their SocialAds offering, there is a ton of unrealized potential in a payment platform and the expansion of Facebook Connect. Competing platforms including MySpace and Bebo will most likely begin offering similar services but my guess is that Facebook will remain the dominant player in the space.

Right now all we have is speculation but I’m going to put my foot out and say Facebook’s new payment platform in combination with their Facebook Connect service is going to yet again transform the social web space. The industry will soon have substantial revenues to back the hype. I’m not the only person that thinks so though. Do you think selling goods on social networks will help move this industry forward?

Social Times


Jun 18 2008

LinkedIn Gets Its Billion Dollar Valuation

LinkedIn has raised $53 million from Bain Capital Ventures giving the company a $1 billion valuation. The company has experienced massive growth over the past year. 319 percent to be exact according to statistics released in April. While the company is a fraction of the size of Facebook, the company has an extremely targeted user base with high average household incomes and a higher median age then most of the large social networks.

A good analogy would be that LinkedIn is the Wall Street Journal of social networks. There’s no clear path for LinkedIn from here but there is a lot of buzz surrounding their soon to be released platform which is expected to attract the attention of premium brands. LinkedIn has now raised a total of $80 million. Don’t expect them to start selling virtual goods anytime soon though.

LinkedIn appears to be focused on building out their rapidly expanding user base. There had been substantial speculation that the company would get acquired by News Corp to integrate into the Wall Street Journal. Based on the recent round of financing any partnership between the two companies will most likely be delayed.

The social networking space continues to heat up with new rounds of financing by the industry leaders. It will be interesting to see how this all transforms over the next 6 to 12 months as the focus shifts to cross-platform communication and integration. Oh and lets not forget monetization.

Social Times


Jun 18 2008

AP Puts Up Ridiculous Blogger Toll Booth

Yesterday the AP wrote about the new LinkedIn valuation:

It’s one of the richest appraisals for a Silicon Valley startup since Microsoft Corp. paid $240 million for 1.6 percent of Facebook Inc. late last year. That deal valued Palo Alto-based Facebook and its online hangout at $15 billion.

The Facebook financing in turn helped several other startups that promote online socializing to promote themselves.

Ning Inc. and Slide Inc. wrangled implied valuations ranging between $500 million and $560 million when investors poured more money into them earlier this year, while RockYou was valued between $200 million and $300 million in a deal completed last week.

That quote should have cost $25. Hope you enjoyed it! The new policy set forth by the Associated Press is that bloggers should pay to quote their articles. If I had a $15 for every time I was quoted I’d be doing pretty well. Unfortunately nobody would quote me at that point. That’s the same thing that will happen to the Associated Press who will be meeting with the head of the Media Bloggers Association on Thursday according to Tim Conneally of the BetaNews.

While policing for continuous misuse of content is a similar strategy used by leaders in the music industry, attacking individual bloggers one at a time will fail miserably. Then again, paraphrasing articles is just as easy and makes linking back to paraphrased articles unnecessary. Do you think the new strategy being used by the Associated press will work?

AP Toll Booth Screenshot
Screenshot of the AP Toll Both

Social Times