Luckily, there seems to be a few open slots left. So I've decided to write on Thesis 59: "However subliminally at the moment, millions of people now online perceive companies as little more than quaint legal fictions that are actively preventing ... conversations from intersecting."
The two conversations in question are "One inside the company. One with the market."
Today we might add, "one with the network".
Two responses to this.
(1) Although an eternal amateur when it comes to contemporary philosophy, I remain fascinated by the grand distinction pioneered by Jurgen Habermas: "system" vs. "lifeworld." To me it feels like the tug of these forces plays out all the time, in every workday, in every decision we make. Those who work for companies today are more conscious than ever that their human connections are quite separate from their role in a company. That insight was somewhat novel to corporate America ten years ago -- it had to be brought by some Boomer cultural translators who had an unhealthy obsession with the shortcomings of "intranets," whatever they are. Today this is a conversation most of us have every day. And the dystopian vision put forward by Max Weber (and his heir, Habermas) that we would all sink into a "steel-hard cage of bureaucracy" seems a looming threat yet somehow at bay, as we see daily evidence in blog posts and Twitter streams and supposedly "inappropriate" Facebook oversharing, that the "people" (lifeworld) want to connect directly, in spite of what their "companies" (system) might think. This is sometimes posed as a generational divide (youth overshares, age doesn't "get it"), but in fact, it's an overarching impulse that affects us all.
Connecting humanly outside the corporate box doesn't have to mean indiscretions being displayed for all to see, however. It could simply mean showing your human side while interacting on behalf of your company, and seeing no conflict or contradiction. Lifeworld beside system, neither devouring the other. I had a conversation about this with a prominent Microsofter and blogger recently. Some of his fans regularly chide him about his mindset which they assume must be 100% dictated by the borg. But I praise him for being consistently human, and consistently distinct from his "corporate overlords." Might that eventually be a threat to his company because he might eventually leave? Maybe, but if that ever happens, they'll have got a good 10-12 years of service of someone who understood that both conversations are taking place, and took a completely natural approach to both. Suppressing the human voice is still possible, and is still going on at many companies. But it takes a lot less courage to be yourself at many big companies nowadays than it did in 1999.
(2) Someone asked me recently "what companies" seem to really get e-marketing in Canada. Sometimes I feel like I can answer that question. Other times, I say that I know a lot of the people who get it. While they may be in "companies," I am quite certain that their savvy is what connects us. It's a rare company (there are a few) I connect with as both a company and to the people inside. Many times, I think about the people who are there. And know that we'll remain connected when they're at a different company (or their own) in a couple years' time. That's a scary threat to companies. Hey, I run a company. It should scare me. How do companies retain great people who support company objectives, while giving them the latitude to have the conversations they crave, with the market (which benefits the company) and with the network (which benefits them personally, maybe the company, and maybe humanity as a whole)? That's a long conversation brewing. But remember Thesis 1: Markets Are Conversations. Let's keep it going.
I love posts like this. Spurred by the closing of once-mighty Geocities, Harry McCracken looks back at the other top web properties in April 1999, and does a sort of "where are they now." Surprisingly, many of them -- AOL, Yahoo, Microsoft -- are still going strong. Most of the others are at least recognizable and memorable. It was all of that activity that motivated us to launch this site (in late August, 1999). As McCracken notes, Google wasn't "within a country mile of the top 50" back then. It was a startup. Those were the days.
By June, 2001, Google was on the map, but amazingly it was still able to fly well under the radar at #19 on the list, despite extensive press coverage. Revenues were still a pittance and the smart version of AdWords wouldn't launch until March, 2002. Stunning proof of the lack of good sense in the sector at the time was the inclusion of popup and popunder traffic in the overall traffic figures. That got X10, the makers of a stupid little spy camera, up to a stunning #4 on the list. Why would anyone be so forgiving of eBay and X10 popups? Well evidently, most of the investor money was already sucked out of the sector, advertising was crashing, and we needed to make nice with anyone willing to pay for inventory.
It's comforting to say "well, that was a long time ago"... but given the current recessionary state, it'll be all too easy to forget basic user experience principles and hand out webby's and pats on the back to players willing to violate them for a buck.
McCracken notes some current leaders that weren't on the list back then: Apple (thanks to iTunes), Wikimedia, Fox Interactive (thanks to MySpace), Facebook. For the most part, we can probably expect some of these guys to still be around, even leaders, in ten years' time. But within five years, we can also expect the top 15 list to be home to several companies that have just been founded, or have yet to be founded. Exciting times? It's always exciting out here.
Twitter and Facebook are the biggest wild cards, now that MySpace's decline is being accelerated by shuffling management. Still-young Facebook has reached #9 overall, not easy in a world dominated by big media players. Twitter has been the top gainer for several months in a row, doubling its traffic last month. Either they grow in their own right or solidify the position of one of the top ten current players. Growing independently is not as easy as it looks. Just ask Excite, Lycos, Snap, Go, Xoom, and some of the other top names of 1999.
If you're planning to attend SES Toronto this year (or planning to send employees), take it from me. I've been going to multiple search conferences annually for about seven years and I can tell you these tips are 100% guaranteed to help you get the most bang for your buck, and reduce headaches.
1. Use Hotwire to save on your hotel. For many, it's preferable to stay at the conference venue, to be sure, but that can be pricey and they do run out of the better rooms. Most of the hotels Hotwire uses are close to where you want to be and they're dirt cheap! Why not save 50-70% off this item if you can? Here's a fun challenge. Try to book something at the conference venue itself using Hotwire! Now that would be a coup.
If you find something super cheap, in the 70% off range, wouldn't it be mighty tempting to stay an extra couple of days, take in a ballgame or play, sightsee on Toronto Island...?
2. Networking, schmetworking. Make your first priority to attend a lot of sessions. Yeah I said it! And when planning which sessions to attend, try to add some that are in your areas of weakness, as opposed to hearing a rehash of areas you already know about. Now once you've gotten your butt out of bed and attended keynotes and sessions, do you think that is going to hurt your networking? No, it can only help, as you'll now have something intelligent to discuss. You can sleep later, after the event is over.
3. If you hate paying half a dinner bill for 15 people, or simply hate awkward scenes where 15 people dither over the bill or throw 15 different credit cards into the middle of the table, avoid those 15-person "crowd" dinners. Toronto has a million great restaurants so why are you just following the pack down the street to Shoeless Joe's or Crocodile Rock? Get a plan together and take 4-5 interesting folks with you... not 15. You networked over lunch, at the reception, and in between sessions, and you're still planning to go to the party, right?
To put it in perspective, if you weighed their Q1 2008 revenues against Google's Q1 2009 revenues, Google would have been three times as big. (That Yahoo sports more employees per revenue dollar by far is, of course, part of the problem -- and now the source of Carol Bartz f-bombs.) But year over year Yahoo declined again ($1.5 billion in revenues as against Google's $5.5), so proportionally it becomes even smaller as measured against its main rival.
Carol Bartz ranting in a conference call? Imagine what might have been accomplished if this type of common sense had arrived on the scene eight or nine years ago. Or at least a couple of years ago, when we urged Jerry Yang to "get rid of the clutter, and geek up." It's becoming clear now that Bartz doesn't do this for ego's sake; it comes from a focus on results.
Past coddling of redundant employees on mysterious missions is only part of the problem, of course. Yahoo's no startup, and austerity won't be the answer either. Yahoo faces similar fundamental problems to any digital media business. Few have definitively solved the business model problem because eCPM's on digital content -- other than search and classifieds -- are too low and there is no proof they're going to trend rapidly upward. As targeting improves and as buyer-seller efficiency issues finally get solved, there is still some upside around the corner.
And what about monetizable "inventory" -- or the degree of open-to-some-monetization user attention to the various online channels? Trending upward, to be sure. But not as rapidly as it once was.
The only sure answer is that the trend is up and that clutter and fragmentation need to give way to continued consolidation. Despite hopes to the contrary, there won't be a huge number of profitable digital media companies simply because inventory and ad rates are finite. The few left standing will have made good consolidation and acquisition moves. Bartz, for one, seems to understand all of this.
I guess it all depends on what you call "getting your act together". To me, it looks like Twitter is doing just that. As for TOS p's and q's, it's a lot to expect of such a young company to have all of its ducks in a row. Twitter is significantly younger and has a far lower headcount (and burn rate) than Facebook.
Reading Google's financial summary for Q1, it may be worth looking slightly more closely at what is still driving the company's growth, and what is finally accounting for a hint of weakness in the GOOG's overall profit picture. One thing that seems clear right off the top is that improved profitability has come as a direct result of responsible cost-cutting activities and decreased headcount, after a long run of breakneck growth.
All comparisons here are year-over-year for Q1 of 2009 vs. Q1 of 2008.
The growing areas are as follows.
International revenues. They make up 52% of Google's total revenues now, as compared with 50% in Q1 of 2008.
Total paid clicks. Up 17% year-over-year. This doesn't break out search vs. network.
Google sites revenues overall. This is extremely tricky because it doesn't prove that Google Search revenues are up significantly. Other properties, including the money-losing YouTube, contribute to this year-over-year growth number. And more recently there is weakness here. There is growth year over year but a sequential decline from Q4 to Q1.
Click prices in the U.S. No specifics given, but doing the math, there is weakness in the auction and prices are no longer rising on many keywords.
Network revenues. Partner revenues aren't growing even though total clicks may be growing slightly. This is down 3% year over year and sequentially from Q4 to Q1. There seems to be both a lack of growth in the network and weakness in click prices; more so the latter, perhaps. Given that there is more room for growth in the network than on the relatively finite Google-owned properties front, this is disappointing news for Google. It may be too early to start pointing to flaws in Google's network technology and its approach to partnerships here, especially given the potential for their integrated DoubleClick division to launch new initiatives. If we're still seeing no growth by Q1 of 2010 then it may be panic time, and Google's ad serving competitors may be emboldened to take further share from them.
UK revenues. These are down year-over-year. It appears that Google has broken out this particular item because it's their second-strongest national market behind the U.S. It would be interesting to see financial numbers for other markets, but it's unlikely we'll see these anytime soon.
Despite massive continued profitability, Google's Q1 profits are proof, at least, that the company lives in a finite world. Until investments in new lines of business lead to growing standalone businesses, its financial fate rises and falls with the ups and downs of click prices and search behavior on Google-owned properties and network partners. The fast growth phase is drawing to a close, but certainly there is lots of room for continued innovation in the space. What's possibly most impressive is that Google has managed to grow search advertising to this point without alienating finicky users.
Let the other crazy kids brag about all the parties they went to while in NYC for SES. Frankly those are private events so you have to come out in person! (We will say the Internet Marketers Charity Party was a ball, though.)
No, the main thing PZ did while in New York was storm the hallways of the Hilton, doing our professional duty to spread the latest word about search ROI.
A couple of interesting interventions over the past week from the Wall Street analyst community, no doubt weighing heavily on decisions forthcoming from the major search engine companies.
Today's talk is of number-crunching by Jefferies analyst Youssef Squali that points to a potential $1 billion saving that could be realized if Yahoo outsourced search to Microsoft. Any partnership scenario would have significant and positive financial outcomes for the two companies, it seems.
It's been fashionable to say Wall Street doesn't dictate how the search engines are run. But certainly, by bringing these numbers to light and forcing them onto the agenda -- without prompting from the companies being analyzed, and no doubt out of step with those companies' wishes to soft-pedal their current inefficiencies -- the investor community is setting itself up as an influencer.
And rightly so. These are public companies. Is it OK for them to waste gobs of banked profits because decisions aren't being made crisply enough? Is it OK for them to expect to gloss over the specific P&L's of specific parts of these companies, as long as they can put a nice sheen on the aggregate results each quarter and year end? It's obvious Wall Street doesn't believe so.
Reading recent Twitter-will-crush-Google musings, it looks like the reasoning goes something like this: Google cannot do real-time search as well as Twitter. Ergo, Twitter will take over as a search engine people turn to for this type of information.
There is a chance that a growing Twitter could make significant inroads on that front. But it wouldn't be because Google lacks the capability. They can develop or add this relatively quickly on a variety of fronts, and the results could often be more useful. Over the weekend I typed "Kenny Perry" into Google and saw a custom result at the top of the page that actually noted his position on the current Masters leaderboard (at the time: T3). Adding more real-time capability isn't something that Google just thought of yesterday. What people are really saying when they say "Google can't do real time" is "Google isn't Twitter." Twitter is the current Lovemark in the space. If you're not them, then you're something else. No feature build will fix that, because it's all about who's there at what time. It's not like Google can index your direct messages inside Twitter or organize all the information in the same way Twitter and Twitter apps do.
The fact that Google can do the immediacy thing, and could add more of it to the mix, might not make any difference to users, then. If people want to use Twitter as a starting point for their social and informational lives, then increasingly they will.
And of course, given Twitter's major shortcomings, it's very possible that it's a placeholder for a sentiment of community and immediacy that is happening at a certain place in time. As I wrote here on a perfect April day eight years ago, online communities endure as platforms come and go. (Remember kids, online community is like Christine, the haunted 1958 Plymouth.) As sure as day turns to night, in a few years, everyone will migrate somewhere else, and you'll have to migrate with them to stay connected.
As community and peer based thought have risen to the forefront, we may finally - after a ten-year run - be seeing the all-powerful concept of "search" losing ground to a new dominant metaphor: "share". By "losing ground", I mean this could be merely as a concept, or it could be in the sense of "what's the first place people think of to go online to solve a problem or get information?" By and large, it's been Google in this decade. Many have said that will give way to Facebook, as if one is somehow mutually exclusive to the other. Still, the fact that Google "isn't sticky" -- a threat many analysts used to level at the search giant, and one that increasingly looked laughable as repeat visits and profits piledu up -- could indeed be its Achilles heel in the coming years.
This shift didn't just happen yesterday, but it seems to be gelling.
Of all their many strengths, Google's key weakness is that they really own none of the top-of-mind brands in collaboration, community, and sharing (not counting GMail and GTalk of course, which are formidable but also private, and not counting YouTube): Facebook, Skype, Twitter, all major brands that somehow Google couldn't surpass with in-house offerings.
Not only does this weakness threaten to paint Google in a light it's never been comfortable with -- big, impersonal corporation -- an acquisition of any of these properties wouldn't do much to change that situation because the user bases would lament the loss of an "independent" community. Yahoo began facing up to that difficult paradox more than a decade ago, and arguably hasn't done much to solve it. Independent digital brands engender a lot of loyalty and enthusiasm for their pioneering spirit, but they have trouble scaling, so they sell out to the big brands. And that allows the cycle to begin anew.
Good news for business owners wanting to manage their reputations openly and transparently in conversation with reviewers on Yelp. They'll be allowing businesses to respond publicly to reviewers.
Yelp, we're glad you're doing this. Over at HomeStars, that feature has been built into our platform pretty much since Day One. Many savvy business owners can turn a negative review into a positive dialogue, if they play their online-savvy cards right.
First mail goggles, now this. So... the developer had a fight with his girlfriend, got her email after somebody went across a few time zones, forgot the time zones, called up to apologize, she was groggy, and that made it worse. So they invented a GMail feature to combat the problem.
Welcome to another installment of "how engineers think".
Thanks, guys, for solving - or attempting to solve - a really specific problem. But: sleeping on the couch is sleeping on the couch. Ain't no GMail feature gonna fix that. :)
If true, it leads one to wonder: what will a Twitter universe look like under Google? Clearly, it will allow the leading search engine company to more accurately graph the social web, and the reputation that follows information. It will also require a close eye on various techniques used to mimic hotness.
We've already recently weighed in here, not only predicting that an acquisition would happen (by mid-May was the conservative take). And in terms of the valuation and trajectory, and the ultimate outcome (no doubt, ubiquity and resources for stability and growth), we're sticking to the story that the pattern resembles YouTube's.