Tuesday, December 08, 2009
Google's announcement of an increased emphasis on real-time results streams supported by a host of partners, most notably Facebook and Twitter, launches Google more solidly and credibly into the social media world, but not as a primary source; rather, as a clearinghouse for relevant data; a meta-update engine, if you will.
There are a few potential analyses of Google's role and how it stacks up against these other providers:
1. The increasingly common position that said "Google and 'search' are losing ground to social media and social search, particularly through Facebook and Twitter." This has been a reasonably convincing argument insofar as Google's attempts to launch their own original services have not gained top-of-mind status. Orkut is not Facebook. Etc.
2. Position 1 loses some of its steam with the recognition, spurred on by this announcement and deals with the providers, that Google can act as an arbiter of intent, a layer that keeps a variety of information providers vying for prominence in Google's "arbiter" interface. While there are many data providers, there is only one Google. Google continues to roll on! And doesn't that remind you of how Yahoo built their empire as a "portal"? No need to place all your chips on any one direction in user behavior or content emphasis; shift as needed, swap providers in and out of the mix, as needed.
3. Someone might suggest, though, that "portalization" is death. Yahoo took advantage of their status as "data kingmaker" and "first choice Internet information brand" for a time, but then seemed to fumble it badly. If Google becomes an elder statesman of information, do they lose the focus and vision that allowed them to cut such a dashing figure in the first place? Well no, not really. Google has long been an information aggregator and not directly in the content creation business. The differences between Yahoo's history and Google's are vast. Despite Yahoo and Google actually being in exactly the same businesses much of the time -- search proper and information aggregation and product development around that -- Yahoo's implementations of this core business were often weaker than Google's, almost as if that were not their core business. Yahoo didn't even focus on their core. Google does.
Moves like the present announcement seem to head off any suggestion that particular social media properties will trump Google as the organizing force in our digital lives. As always, the battle is about which company will dominate the space for creating the primary interface or primary logic for organizing our digital lives. Google's working on many fronts to accomplish that end.
Either that, or I am completely wrong, and Tweetdeck is about to take over the world.
Labels: portals, real time search
Thursday, March 19, 2009
This is the type of subject matter we set out to write about nearly ten years ago when we launched Traffick. And I'm a little surprised that we're still writing about it.
The upshot is Google is a massive funnel today. So not all of its individual lines of business need to make near-term profit. But the whole enterprise, right now, is geared towards dominating core streams of user attention and user functionality, with enough of that attention being monetized through advertising to pay for everything. That's the kind of scale the major players in the same race are all seeking. And it colors the prospects of standalone services looking to be acquired (or pretending to want to go it alone).
When we launched this site, our subhead/tagline was "The Guide to Portals" or "The Portal Portal". At the time, the "portal wars" raged. They don't call them that anymore, but the principle is still the same. In this emerging space of core online standards or starting points, or diversified digital lifestyle brands, or however you want to describe them, there's room for only a few major players. Since AOL took the lead in the area with Yahoo following on as the savvier version of same, the leading digital lifestyle monopolists have knitted together their various services in such a way that they keep you in their garden, or at least coming back. They had various grand visions of how they would accomplish that; few predicted that one feature -- search -- would be at the heart of the grand takeover of first place by Google, which hasn't looked back in years. Many of those schemes revolved around the idea that the ISP would be the lock-in point. Some thought nice features (better email) would do it. Microsoft hoped the browser or the OS would return them to universal dominance. Just buying up a big enough percentage of the important online stuff was another theory. IAC Interactive pursued that path, but never far enough to get anywhere close to scale. The others have played the "buy not build" game enthusiastically at times. They have to! User loyalty can't always be produced out of thin air. Orkut, Knol, and a good list of other Google inventions may never dominate their verticals.
Every so often a standalone service would emerge that would be so popular on its own it would be eagerly snapped up by one of the leading players. Sometimes it helped them build a nice feature (Rocketmail became Yahoo Mail) or add something viral and even more cool than many realized at first (ICQ by AOL). Yahoo made many great bets, though paying staggering sums for some of them: eGroups and Geocities beefed up community. They made some subtle bets (Flickr) and some awful ones (Broadcast.com). Their aggressiveness has left them where they are today: in second place (not bad). History buffs know that many wannabes (Excite, AltaVista, Go2Net) died unceremoniously, failing to reach top of mind.
Yep, this is all about scale - sustainable scale, but scale to be sure. Few of the standalone services would be household names today without those mega-acquisitions. They'd be popular, and bankrupt.
Google has made some subtle acquisitions (Applied Semantics, Blogger, Dejanews, Keyhole) and some stunning ones (YouTube), while developing far more great products and functionality in-house than any of their competitors. Without both the subtle and stunning acquisitions, they most certainly wouldn't be in the position they're in today.
In any case, this post is supposed to be about Twitter. Nielsen's recent report shows the service growing a stunning 1,328 percent year over year.
How to interpret this? One one hand you have the camp that understands what such a rapid growth rate means in this space. It's a rush of user attention - a locus of operations for the savviest of users that is now crossing the chasm to become a mainstream attention - that the big guys just cannot ignore. The month-over-month growth numbers are hugely important to anyone watching.
On the other hand you have the chicken littles who say that companies like Twitter have no business model.
Both are right. It's much harder for a get-big-fast online service to build a business model on their own than it is to sell. On the other hand, if they dominate a category, they can be pretty scary to the big guys.
The best precedent would be with YouTube. YouTube could have made a lot of noise about wanting to stick around for the long term, but where would they be today had they not sold to Google or someone else? It takes a long time to continue growing and investing in a platform before monetizing in a way that doesn't kill your user base. On the other hand, Google Video had largely failed. YouTube was already the People's Platform for online video. In the end, Google got great value for money. They talked the price down by referring to the copyright threats that were in the air.
The "poor man's email service" that is Twitter is both growing so fast that it cannot be ignored, and it has no credible way of handling all of the coming hyper-growth *and* monetizing in time to keep itself afloat financially, despite raising large sums of money. (Facebook's in a similar position but that's a separate topic.) Like YouTube, it is hurdling headlong towards an acquisition, in a game of chicken with the leading potential acquirers to see who can hold out the longest.
Which brings us to the question of which gigantic company can afford to underwrite such high-volume expansion that will eventually funnel into a bigger monetization picture, as Google did with YouTube.
It's an uncomfortable scenario in that Yahoo has been forced into a frugal state, and simply cannot afford to acquire Twitter. That's most uncomfortable for Twitter, as it leaves them looking at Microsoft -- who took an expensive stake in Facebook -- and Google as the only two logical acquirers. Oddball acquisitions can happen -- see eBay & Skype -- but they aren't ideal in the sense that the oddball could get spun out again in a couple of years, and who's to say the oddball acquirer would be the proper environment for growth.
In a weird sense, Twitter is most like ICQ, in the sense that it's gone viral and offers a certain kind of immediacy at a certain moment in digital communication history. AOL isn't the kind of company that acquires a Twitter today, though.
For companies like Twitter, the messy and as-yet-unconsolidated patchwork left by the also-rans (Microsoft, Yahoo, AOL) in the digital space may be bad news valuation-wise, as it creates too many distractions for these lesser candidates, and points so heavily towards a single acquirer.
Make no mistake about it, if Twitter can't find themselves an acquirer with deep pockets, and soon, they are in deep trouble. They are actually growing too fast.
Eric Schmidt's comments about Twitter being a "poor man's email service" may have been even more telling than we realize. Twitter under Google could go anywhere, but the literal interpretation of its value is typically how Google would look at the value at first. Could you slap targeted contextual text ads next to people's Twitter streams -- that look much like a thread in GMail? Why yes. And how much money do those ads make for Google? A healthy sum, but nothing stupendous. So in looking at Twitter as analogous to GMail, Schmidt is actually trying to put a real-world value on the company. And he's trying to knock that value down a peg from the hyped values that refer to untried monetization methods.
A similar game of chicken happened before -- with YouTube. And the valuation was a bargain for Google and didn't exactly make paupers out of the company founders and their investors. If I had to lay down a chip, I'd expect Google to acquire Twitter by the middle of May. We'll see.
Labels: google, portals, twitter, youtube
Sunday, October 07, 2007
Bless you, Steve Rubel. Interesting point that the big guys probably still win even if they can't build a competing social network. I get Facebook notifications through GMail, for example.
Labels: portals, social networking
Monday, May 28, 2007
I love this iGoogle. It reminds me of Go2Net, circa 2000.
Friday, February 09, 2007
Google's confirming publicly that they believe the current Internet may become choked by online video. This is related to a barrier to Google's growth -- one of the only serious ones -- that has been nagging at me for some time: globally, they don't own the pipes. Big utility monopolies still hold a lot of cards around the world. The smart money would likely partner with them. (We've noted in the past that this has been one of Microsoft's strategies globally -- taking stakes in utility companies.)
G's massive investment in infrastructure in the US is no doubt partly going to address this. It'll be fascinating to see how it unfolds. Net neutrality is at least a debate in the U.S. today. In some nations and economic zones, there are very different terms for the debate.
Meanwhile, Yahoo has released a mashup service extraordinaire, called Pipes. It's going to be worth a lot more study, but basically it provides an easy way for the layperson to pull disparate data sources into a web page -- like a smarter more agile feed reader? Kinda makes my head hurt: does it compete with Google Reader or supersede it? Some commenters are saying it's really nothing too new, and other products like RSS Bus would be better for those who are technically inclined. Stay tuned. (If you really know what you're doing: Jeremy Zawodny points to something called GData.)
And meanwhile meanwhile, over at Techcrunch, Arrington does something we apparently no longer make time to do: reviews and compares new Hotmail, new Yahoo Mail, and Gmail. All of these web 2.0 apps get the thumbs-up, but Google comes in at #1. That's about what I'd say. I actually use both old Yahoo Mail and Gmail, and don't particularly enjoy new Yahoo Mail. I'll likely consolidate everything in GMail, a decision I think you eventually have to make (one way or another, with Y or G) so you're using the same calendar and IM app and not confusing the hell out of yourself.
Mail, at least, we already use. Both Google's Co-Op and Yahoo's Pipes probably deserve weeks of our time, and here we are blogging about engagement rings and Ted Stevens. Time to tackle the to-do list. Also, posting will be light for the next week due to SES London.
Other random thoughts to wind up the week:
And Technorati's edgecraft: is it just me, or is calling a "buzz description" a "WTF" (as in "write a WTF for this query") pretty edgy? Edgy, I think. As I've told a few of you, my office building is owned by a commercial real estate company called WTF Group. Seeing that logo on the wall has gotten me through many a day.
Labels: feed reader, google, internet, net neutrality, online video, pipes, portals, readers, technorati, ted stevens, tubes
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