Like many at the bustling Google campus here, Keval Desai has a degree in computer science and tends to view things through the lens of mathematics. Even the topsy-turvy world of TV advertising. “TV, for the most part, has been unmeasurable,” said Desai, program manager for Google’s TV ad efforts. “We’re making TV as accountable as the Internet is.”
The Russian mathematician was 24 years old when he first saw a personal computer, one of only a dozen in the whole Soviet Union. That was in 1984. A little over two decades later, Arkady Volozh is the chief executive and one of the founders of Yandex, Russia’s most popular internet search engine, a company now valued at £2.5 billion. Widely described as Russia’s answer to Google, Yandex was launched only eight years ago but is now visited by 8 million people a day. More impressive still, Yandex and Volozh are credited with humbling Google, by denting its global domination.
Ten years ago next month, in an innocuous suburban garage, Larry Page and Sergey Brin, two geeky students at Stanford University, founded a company called Google. They would go on to create what is regularly voted the world’s top brand, earn accolades as the world’s best employers and become billionaires many times over. They would also, say their critics, cut a swath through the laws of copyright, threaten to devour media like a “digital Murdoch” and harvest more of our secrets than any totalitarian government …
The devil’s best trick is to persuade us that he doesn’t exist, but Google only has to convince us that it’s not evil. Nearing an agreement with Yahoo to grab the ailing company’s search business, Google scripted a series of dramatic public events apparently designed to distract from the pending deal. These events emphasize network neutrality, an ever-changing regulatory ideal that Google thrust into the political spotlight two years ago. As entertaining as this spectacle is, regulators should not be fooled. They should apply traditional anti-monopoly standards, blocking the Google-Yahoo deal.
The long-awaited Google Health site made its beta debut Monday as the search sovereign’s answer to bringing personal medical records out of the Dark Ages, and like all of Google’s projects, its value is directly linked to your level of trust.
Eric Schmidt was doing his level best late last week not to gloat. With Microsoft dropping its attempted takeover of Yahoo, the Google chief executive had just seen his arch-rival abandon its most direct attack yet on Google’s growing dominance of online search and advertising.
Microsoft was smart to walk away (for now) from its $44 billion bid for Yahoo. It’s never good to overpay. But the software giant–whose stock has flat-lined for eight years–was on to the right strategy in looking to the Web for growth. Can’t Microsoft build something on its own? Why the rush to pay billions for Yahoo? The simple (and wrong) answer was that adding Yahoo’s 20% Web search market share to Microsoft’s 10% meant that it could compete against Google’s 60% share. Technology changes too fast for that to make sense except on paper.
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Yahoo’s search partnership with Google played a major role in allowing the company to fight off Microsoft. By offering the hope of immediately higher cash flow, it should also stop Yahoo’s stock price from falling back to the teens.
In his sayonara letter, Steve Ballmer urged Yahoo to kill the partnership, arguing that the engineers behind Panama were one of the main reasons Microsoft wanted to buy Yahoo and that, if Yahoo did the deal with Google, they would leave.
And he’s right: They will (or at least they’ll move on to other projects). That’s part of the reason the outsourcing deal makes sense: It allows Yahoo to focus on businesses it can win, instead of throwing money at a war it has already lost.
Search is dead. Or at least that’s the opinion of one tuned-in venture capitalist I’ve been getting to know this year. We were recently discussing the drawn-out Microsoft-Yahoo-Google showdown and its larger implications when my fellow futurist issued his bold statement as a sort of summary dismissal of the whole multibillion-dollar battle. In his opinion, Silicon Valley’s Big Three are fighting over the scraps of the last decade of innovation while there’s a sea change taking place in the way people use the Internet–one that may leave the Web’s biggest players holding all the cards to a game nobody wants to buy into anymore.
As the role of the Internet has grown, there have been persistent fears that the less wealthy in society would be left out, due to lack of access to hardware, the Internet or broadband. Although these concerns have lessened as dropping prices and public access programs have increased Internet use across the socioeconomic spectrum, a study in the Journal of Applied Developmental Psychology suggests that a new divide is becoming apparent: The wealthier and better-educated are better equipped to find and evaluate material on the Internet.
Google finalized its $3.1 billion purchase of ad-delivery giant DoubleClick Tuesday after European Union regulators ruled that the purchase does not violate anti-monopoly rules in Europe, which removed the last legal hurdle for the hotly contested acquisition. … DoubleClick is an ad serving and management company that Web publishers use to display and target visual and rich-media advertising. The technology uses a DoubleClick cookie that reports back every time a user visits a site using the system, letting DoubleClick know that user 453689 likes to read motocross stories and GQ magazine and spends a lot of time playing online Flash games. Google can merge that database with its deep knowledge of users’ search histories, along with its growing database of URLs visited by Google users who don’t realize that Google opts-in users to its “Web History” program, which continually tracks their every step on the Internet.
So what does the purchase mean for citizens on the Web?
Google will have 90% search market share in the U.S. one year from now. That’s an insane prediction, I was told, after I made it in front of a half dozen of the most important public market investors in the tech world at a conference recently. It was midnight and folks were on their second or third Macallan 25, but folks immediately sobered up. How on earth would Google raise its U.S. market share 20 points in one year–that’s impossible, one person replied. The perfect storm recently arrived and, after all, Google jumped 10% over the last year. Frankly, I don’t see why the Google market-share train wouldn’t accelerate, given the following factors …
One of the most obvious takeaways from Microsoft’s pending multibillion-dollar bid for Yahoo is that the always-connected world is a lot more complicated place for the boys from Redmond to navigate than the quaint old world of desktop office applications. Inherent in the bid is an admission that Microsoft has failed, despite billions of dollars of investment, to gain significant traction in online search and advertising. So now it’s trying to buy its way in, targeting the only company that’s had any substantial success competing with Google in search.
Google has always had a love-hate relationship with advertising. Its power and wealth come from the $16 billion a year of advertising that it sells. Yet on its most important pages, the results from its Web search engine, it has limited ads to nothing more garish than a dozen words of text. That is about to change. On Thursday, Google started testing video ads on some pages of search results. And it is developing ad formats with images, interactive maps and other more elaborate features.
Google on Wednesday said it had seen 50 times more searches on Apple‘s iPhone than any other mobile handset, adding weight to the group’s confidence at being able to generate significant revenues from the mobile Internet. If the trend continues and other handset manufacturers follow Apple’s lead in making Web access easy, the number of mobile searches will overtake fixed Internet searches within the next several years.
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