GOOG's strong third quarter may be setting an unattainably high standard in the minds of investors and armchair critics. How would you like to be an Internet startup right now, generating losses, being judged based on some freakishly profitable model that one company stumbled into half by accident?
Google's own early balance sheets probably didn't look all that pretty, either. But what they did for the first four years of the company's life (and oh what a first four years they were) was to focus on building a company that mattered to people. Google's search market share appears to be over 50% in every market in the world. Without that, none of this would have happened.
Right now, there are tens of thousands of startups working away, innovating, trying to build companies and products that matter to people. It would be a shame if investors and observers tried to rush them to maturity or profitability.
Wednesday, October 20, 2004
It's official: click fraud is now a "scourge". Of course it exists, but the extent of the problem is being blown out of proportion. It's easy to see why. When you're busy building campaigns, you don't have time to fixate on issues like this. You take care of a lot of annoying problems and roadblocks in the process of building something that works. When it's your job to write about business, on the other hand, you can skim the surface and refer generally to trends, unwittingly magnifying their importance to the casual observer.
The level of outrage that companies are spending "tens of millions of dollars on customers that don't exist" is something to behold, especially given the long history of advertising methods which are completely unverifiable. What about those piles of free newspapers you see in lobbies? Might those be added to "circulation" figures? Are people really watching TV ads nowadays? How can we be sure?
I'm going to start a new service (let's call it AdNazi) designed to put a stop to all this "attention fraud." When one of my AdNazi(TM) spies catches a motorist not eyeing a certain billboard with interest, we'll force them off the road and scream: "Look!!!!!"
We at AdNazi(TM) feel your pain. Attention fraud is costing America's corporations billions of dollars. It must be stopped.
Malicious and fake clicks are indeed fraudulent, and their perpetrators ought to be jailed. But let's not be too amazed by the notion that advertisers are flushing a lot of money down the toilet on methodologies that might not be 100% bulletproof. Next to "shooter girls" offering test tubes of colored liquid to already-inebriated males in dimly-lit clubs, paid search advertising is the most trackable, targeted form of marketing ever invented.
Tuesday, October 19, 2004
Google AdWords, which is already partnered with AOL for sponsored listings in North America, will displace Overture on AOL Europe. The deal is for "more than one year."
Ask Jeeves' reorganized sales unit, AJ Interactive, will begin selling ads in a number of formats and attempt to grow its current advertiser base of 1,000 (relationships formed earlier by Jeeves' recent acquisition, ISH Holdings).
In reviewing the available ad exposure, the first thing I did was check out their PDF on 'premium search listings.' It appears that these will be keyword-triggered ads featured at the top of the search listings. A single "premier" listing will appear above the sponsored Google AdWords results, which in turn appear above web results.
Jeeves management expressed what we were already thinking... in the form of a denial that there is any competition with or change in the relationship with Google. According to the DMNews story, the new head of the division, Jim Diaz, had this to say:
"I'd like to see us grow as a percentage of revenue of Ask Jeeves over time. Does that mean we have to take money away from Google on the search pages? We don't have to do that at all."
Since the top listing gets clicked a high percentage of the time, and carries the highest cost per click, of course this move will "take money away from Google on the search pages."
The impact on advertisers is slightly annoying in that it adds another vendor to deal with. But larger advertisers may like it because they can lock down top spot.
It's tough to speculate what this says about the relationship between Google and Ask Jeeves. But what it does suggest is that Jeeves management is trying to make the best use of personnel they picked up in the recent acquisition. Ad salespeople had to be tasked with increasing Jeeves' revenues by working directly with more advertisers.
Monday, October 18, 2004
Some observers would still like to believe that Google people are burning the midnight oil working on a browser.
Sunday, October 17, 2004
It's like open-sourcing market research. Like psychographics for the masses. It's Amazon's new "What's Selling, Where" lists.
Not only can you get bestseller lists for certain locales by geography (states, cities), but also (if enough data are generated) specific organizations, businesses, and university campuses.
A quick peek at what the kids at UT Austin or the University of Wisconsin are buying indicates that they're interested in politics, weight loss, and popular page-turners... not necessarily in that order.
A bit more research reveals... that's pretty much what everyone else is interested in, too. (Check out Dallas, for example.)
To get additional insight, one can click on "uniquely popular" as opposed to top-selling, which presumably highlights books that are considerably more popular in a certain subgroup than they are everywhere else.
A peek inside the federal judicial branch's buying habits suggests that while they're as happy to guffaw along with Al Franken as anyone, and do enjoy a good page-turner, they're feeling the middle-class pinch, being uniquely interested in a book called The Two-Income Trap by a Harvard law professor and bankruptcy expert and her daughter, a former McKinsey consultant.
Overconsumption is not blamed for the current squeeze on middle class and upper-middle class cash flow. Rather, it's the "ferocious bidding wars for housing and education" that are causing a cash crunch in America's suburbs. While lower income earners might run up the credit card for nice-looking "stuff," and get into trouble that way, the two-income "achievers" find themselves underwater because of their insistence on living in status neighborhoods so that they can send their children to better schools. Probably a book that takes on magnified significance in a credit-boom time where an unprecedented number of gainfully-employed middle-income earners have had no trouble finding a bank to help them buy "too much house," and then find themselves facing bankruptcy when unexpected costs or job loss crop up.
But that's neither here nor there. I think I'm supposed to be making a point about what might be significant about Amazon's initiative. In keeping with the way Amazon has always worked, the micro-bestseller-lists release us from the shackles of the Big Bestseller List or the Anointed Book Reviewer, allowing one to browse what people are buying in different circles, and being offered peripheral recommendations to related books as always. Reading real people's reviews, and possibly reading other reviews by those reviewers, allows one to probe a topic deeply in the space of a couple of minutes. And you can, of course, search inside the book. In a word, the buyer is empowered.
By comparison, most of the bookstores I visit seem almost embarrassed by books. I mean they carry so few of them. Unlike most people, I don't find the process of visiting today's bookstore soothing or retro or quaint. It's just a lousy user experience. Most recently I had time to kill before a party, so browsed the business area of a Chapters. I couldn't find any of the titles I'd been considering buying, and, of course, there was no *context* in the form of reviews, rankings, and other information. But I did buy some chocolates to bring to my hosts.
Amazon's practice of displaying these various consumer tastes to the world in such a "micro" way might raise privacy concerns for some, especially those whose purchases are clearly identified with their place of work. It will be interesting to hear that debate.
All in all, a tour around what's selling on Amazon.com is heartening in its diversity and richness... until you realize that the sample is restricted to people who actually buy and read books.