To be clear, Google's great Q3 result keeps them on the same track that they've been on since they designed a great search engine that the world wanted to use, and a better ad program that screamed scalability. What they've done is realize the full extent of that earnings potential quickly, meaning, in essence, that the company's performance will allow it to "grow into" its stock price more quickly than expected.
So for now, exceeding expectations is still within the realm of the expected, since we're still talking about advertising revenues.
Nonetheless, many continue to underestimate the company, not even factoring in future projects.
What will Q4 bring? I'm guessing more of the same. Let's hope it's that, and more.
Wednesday, October 19, 2005
I'm at Search Engine Strategies in Stockholm today. One of a number of points I put forward in the Ad Forum session today was jumping off yesterday's Yahoo earnings announcement. The company's flat profit for the quarter surpassed estimates.
A bit of background on that: I tuned into CNBC to hear the comments of an analyst from a firm that owns sizeable stakes in both Yahoo and Google. When the initial question was put to him point blank, "what do you think of these results? are you encouraged or disappointed?"
"I'm encouraged," came the response out of a face that wore a scowl that could only be caused by a four-alarm headache, or perhaps not really feeling encouraged, but needing to stay upbeat for the cameras, but also needing to avoid sounding like he's shilling for the stock, since analysts never shill, right?
Another telling point was in attempting to explain the different P/E revenues of Yahoo and Google. "I think they're appropriately valued relative to each other," was the ultimate conclusion. He really emphasized that last point.
The thing that really amazed me, though, was when the host asked "what do you think is more important to Yahoo, and which do you think is more important... the banners, or the, if you will, companies that pay to be seen in the search results, over to the right hand side of the page, if you will?"
The answer was banners.
Why? Perhaps (indirectly) because top management at Yahoo (not those in the Overture division, clearly) believe the company's future lies in the whole media package. Perhaps so. Perhaps also because the stock market is likely to reward a company with a big fuzzy upside, and Yahoo can't create the perception of big fuzzy upsides solely through search (at least not in North America, where it's harder to induce investors to lap up the Kool-Aid of trends like mobile search).
But search saved the whole company and is funding a lot of the current growth. Where's the love, if you will? Why is search still the ugly cousin? Perhaps it's a simple as this: the long tail of user search behavior, and all that entails, isn't really amenable to a five-second sound bite. In that long tail lurks all the upside anyone could ever need or want.
Tuesday, October 18, 2005
So the personalized home page offering from Google is now in "full product release," which may surprise those of you who have been using other Google products heavily for a long time without them coming out of beta. Actually, if you take the time to try it out, you'll be pleased by some of the innovative, clean functionality. Still, it does make you wonder what the difference is between a "full product release" and a "beta" in Google's world.
Could it be that "beta" is code for "full product release," and vice-versa? That still means they don't unleash alphas on the public. Nor do they tell you whether they consider a product 2.0, 2.1, 3.0, 2.11, etc. And when you sense a 2.5 happening in January, they might tell you it never happened, but then admit to a 3.0 in August...
This gratuitous babbling brought to you by the letter "Beta" and my Yahoo! homepage...
Monday, October 17, 2005
On the one-word query [skol], typed into Google Search, the usual results appear at the top, but then below that, the user is prompted to extend their query to [skol beer] or view the first three results for that longer phrase. That's a nice bonus for the top-ranking pages on the two-word phrase -- they actually get 'upgraded' to the first page of results.
Attempts to replicate this experiment with beer and liquor brands such as Corona (I got a regional listings prompt for Corona, CA), Export, Canadian (at the bottom of the SERP, prompted to view Google Groups threads), and Johnny Walker proved fruitless.
I'm guessing, then, that this is driven by deeper studies of user behavior. 'Skol' happens to be one of those one-word queries where the two-word phrase is often the user's true intent. Increasingly, then, what appears on the page is going to be situational, even if personalization and the user's search history, preferences, etc. are not taken into account.
Prompting users to enter two-word phrases instead of one-word phrases can be a subtle way of training users to be better searchers, too. Beware, though. It sometimes pays off just to use the one-word search. Multiple-word searches in Google Images, for example, could be too restrictive, whereas just entering a person's name or first name or last name might give you a lucky find if that person's name turns up in the filename, for example.
Supposedly the top search scientists feel that search is a problem that is "about 5% solved." It sure is fun to watch them on the way towards solving it. As users, we're part of that quest.
In related news, John Battelle finds something I'm sure you're seeing now too: a promo for the Google toolbar is now often appearing at the bottom of the Google home page or at the end of a page of results. I've also noticed they continue to frequently use a red "new!" notation next to the Google Local link on the home page. If you need to know what's important to them, these little attempts to drive users to their featured properties will give you a clue. (Remember, Google doesn't advertise.) Of note is a recent Hitwise report that shows Yahoo leading Google in local search. These little prompts are no coincidence. Google, believe it or not, is playing catchup in a few areas. Because of their massive traffic flows, a couple of subtle prompts can help them play that game skilfully. As GMail continues to lag its competitors, I expect they'll turn on the jets there in six months or so.