Google Outdeals Microsoft in Japan

Chris Thompson — Thu, 29 Jul 2010 15:56:48 +0000

Here in the United States, Microsoft (MSFT) may have gotten the better of Google (GOOG) with its Yahoo (YHOO) alliance. But it's a different story in Japan, where Yahoo has just entered into a new partnership with Google, to the clear fury of Microsoft executives.

Under the terms of the new alliance, Yahoo will use Google’s search and advertising platform technology to power its site, matching Google’s superior tech with its own, highly popular content portals. In Japan, Google hasn’t quite enjoyed the success it has elsewhere around the world, trailing Yahoo in search dominance. This new deal makes it the cock of the walk; according to the New York Times, Google and Yahoo together comprise 90.5 percent of the Japanese search market. (If you’re wondering why Yahoo would cut against Microsoft like this, the answer is that Yahoo is actually a minority owner in its own Japanese property; the biggest shareholder is the cell phone company SoftBank.)

And that has left Microsoft sputtering with rage. The software giant has put a lot of money down on creating Bing, siding with Yahoo in America, and fighting back against the overwhelming dominance of Google. The Yahoo alliance was particularly crucial, as Bing’s technology suddenly powered more than 20 percent of the American search market, which gave Microsoft at least a fighting chance to compete. Now, Google has essentially done the same thing in Japan, but this deal has left it in control of virtually the entire market.

“This agreement is even more anticompetitive than Google's deal with Yahoo in the United States and Canada that the Department of Justice found to be illegal,” Microsoft general counsel Brad Smith wrote in a statement to eWeek. “It means there will be no search competition in Japan and that Google will end up controlling all personal search information for all Japanese consumers and businesses.”

Obviously, neither Google nor Yahoo Japan feel the same way. Representatives from both companies have rushed to defend the deal, claiming that while Yahoo will use Google technology, its advertising business will remain separate, and the two firms will still compete for the one thing that really matters: ad revenue. And according to the Wall Street Journal, Japan’s lead anti-trust official, Fair Trade Commission Secretary General Takahide Matsuyama, agreed. “Based on those conditions, the partnership wouldn't immediately cause any problems related to antitrust regulations,” he announced at a press conference.

Again according to the Journal, anti-trust experts are as surprised as Microsoft that the Japanese government so blithely allowed this deal to go through; one Japanese law professor went so far as to say the government just doesn’t understand the search business. Nevertheless, it’s clear that Google outmaneuvered Microsoft in one of the most lucrative and sophisticated markets in the world. No wonder they’re pissed.

Making Bank With Android ... and My Little Pony

Chris Thompson — Thu, 29 Jul 2010 15:53:07 +0000

In a recent sit-down with the Wall Street Journal, Google (GOOG) CEO Eric Schmidt predicted that some day, his company will earn $10 billion per year on the Android smartphone operating system. “If we have a billion people using Android, you think we can’t make money from that?” he asked.

We know at least one person who’s working on making money off of Android. According to VentureBeat, someone uploaded a mobile phone app to the Android Market, where between 1 million and 4 million people used it to slap My Little Pony and Star Wars wallpaper on their devices. But the app did one other thing users didn’t expect: It steals personal information such as your SIM card number, your subscriber identification, and your voice-mail password, and sent the data to a Web site owned by someone in Shenzen, China. Not quite what Eric Schmidt had in mind, we suspect.

The Plot To Kill Facebook

Chris Thompson — Wed, 28 Jul 2010 18:28:06 +0000

Thanks to the Wall Street Journal, we've learned a little more about Google's (GOOG) top-secret plans to create a social media site to rival Facebook. Up to now, all we've known is that it's called "Google Me," and that comes from a single tweet by Digg co-founder Kevin Rose.

But yesterday's story has given us one or two more details, particularly in the area of social gaming. Google is talking to at least three of the top social game producers, reporter Amir Efrati writes, to lure their next generation of games over to its new social site. The companies include Playdom, Electronic Arts (ERTS), and Zynga, which produces the incredibly popular FarmVille and Mafia Wars—and just received a $100 million investment from Google itself.

Just what the company plans to do with these new games is far from clear; CEO Eric Schmidt claims that he doesn’t want to simply replicate Facebook, but he’s awfully coy about the rest of the project, and Google frankly hasn’t shown a great deal of creativity when it comes to social media.

Nevertheless, social gaming is a huge and growing industry, and Google’s smart to hop on board in whatever way it can think of. The Journal says that the industry earned at least $700 million in America alone, to say nothing of China and Japan, where the revenue numbers rise into the billions. Bob Iger, the CEO of Disney (DIS), has long had a reputation for seeing new disruptive technologies and positioning his company to take advantage of them. On Tuesday, his company bought Playdom for at least $563 million, with another $200 million down if Playdom accomplishes certain benchmarks.

But it’s Zynga, Google’s latest major investment, that has become the dominant player in this new market. The company was started just three years ago, and it’s already valued at $4.5 billion, with an estimated $500 million in revenue expected to come in this year. In a recent New York Times profile, Zynga founder Mark Pincus even felt cocky enough to zing his own investor when he derided the Internet as nothing more than “a garage sale, a bookstore, a search engine, and a portal.”

And social game developers must be slavering at the prospect of someone other than Facebook to do business with. Up until now, Facebook has been the indispensable host for social games, and you either play by its rules or not at all. Now that Google is entering the fray, those companies will have a chance to play the two off one another and negotiate better deals from both. Facebook currently takes a 30 percent cut of the proceeds from virtual goods purchases. Expect that to come down in the coming years.

Meanwhile, what will Google’s strategy be? Or, perhaps the better question: What should it be? The company’s major challenge seems plain. Google has countless nifty tools that people simply can’t do without: Google News, Gmail, Google Apps, Google Calendar, you name it. But so far, it hasn’t been able to stitch all these tools together in a single, holistic online experience—which is what Facebook, from games to multimedia and e-mail, has done so well.

The fact is that Google has never created a successful way to let people play with all their tools and toys on a single platform. iGoogle is nice, but it’s still too complex, and expecting people to put in the work customizing their own Google home page hasn’t worked out the way the company thought it would. From the beginning, Google’s great strength has been its utility, and one measure of its utility has always been, “how quickly can we get people to get off our site and onto the place they’re trying to get to?” Now, it has to unlearn one of its core principles and get people to stay on its social site as long as possible.

And so we’ve come full circle since the days when Alta Vista was the top dog in the search market. Back then, the goal was to keep people lingering on the search page so you could throw some banner ads in their faces. But then Google revolutionized the search industry by being helpful, even if it meant sacrificing eyeballs and ad revenue in the short term. Now, with the rise of social media, Google’s back to where it started. It needs loiterers. Social gaming will help—in fact, it’s very likely the cornerstone of any new Facebook-killer—but simply buying a few smart companies or products won’t be enough.

If it wants to truly challenge Facebook, Google has to discard the very insight that gave birth to its business. Google is the greatest tool the Web has ever produced, but it has to be more than a tool if it wants to stay relevant in the world of social media. It has to be a home. And that, I’m afraid, it has never quite figured out.

Baidu Dealing With Its Own Chinese Issues

Chris Thompson — Tue, 27 Jul 2010 16:14:03 +0000

How is Baidu (BIDU) planning to beat Google (GOOG) in the Chinese Android mobile search game? With a fat wad of Asian investment capital.

According to the Wall Street Journal, Baidu has been in quiet talks with Android phone manufacturers to have Baidu search be the default on Chinese Android sets. But it needs cash to make this dream a reality. So the company is making a push to be listed on China's mainland stock market. Although Baidu's on the Nasdaq, a Chinese listing would bring in more Asian investors and beef up the company's capital stock at just the time it wants to expand.

But according to China Vortex writer Paul Denlinger, this is easier said than done. ""Most companies which are approved for listing need to have strategic government ties, and mainland listings are not readily handed out," he writes. "In fact, this has become a point of concern for private-sector Chinese companies. ... While Baidu is generally treated as China's native son, an image which the company deliberately fosters in its communications and advertising, it is by no means a certain thing that Baidu will get everything it wants."

As Google struggled with the complexities of doing business in China, Baidu, um, bided its time and eventually filled the vacuum. Now it's about to struggle with some complexities of its own.

Google Has Secure Servers Hidden Somewhere in the Continental United States

Chris Thompson — Tue, 27 Jul 2010 14:20:21 +0000

Just one day after word broke that Google (GOOG) had blown a deadline to implement Google Apps for the Los Angeles city government, the search giant counterpunched with a new rollout designed to ease the very security fears that caused the delay in the first place.

Google Apps for Government is more or less the same as Google's cloud-based enterprise suite, but with enhanced security features. Specifically, the servers that store its public-sector clients are sealed off from servers that handle information on behalf of the rest of us, guaranteeing that sensitive government data will never commingle with other data in an unsecured cloud. Google execs won't even say where the servers are, merely that they're in an undisclosed location "somewhere in the continental United States."

And that, it appears, is good enough for the federal government. Google's apps suite has secured the coveted Federal Information Security Management Act accreditation, which, besides being the key to every girl's heart, is indispensable when trying to secure federal government contracts to handle classified and sensitive information. Google has long been in a bidding war with Microsoft (MSFT) to land the contract to handle data for the General Services Administration, which deals with procurement and technology adoption on behalf of every other federal agency. Snag the GSA gig, and you stand a very good chance of being the go-to guy for the rest of the government, which means a chunk o' change. Now that Google has satisfied the feds that its app suite is secure, it's suddenly a serious contender.

Considering that, a mere 24 hours ago, Google was awkwardly explaining that its app suite wasn't good enough to handle the Los Angeles Police Department's files, this is quite a turnaround.

Bad News for Android

Chris Thompson — Mon, 26 Jul 2010 17:03:50 +0000

Although Android phones are now outselling the iPhone, CNN Money flags a story that can't be the best news Google's (GOOG) heard all week: According to a survey by the Yankee Group, a connectivity research and consulting firm, 77 percent of iPhone buyers would be happy to buy another one down the line. Meanwhile, only 20 percent said the same about their Android phones.

Business Insider's Dan Frommer has an interesting take on this. This may well be a little misleading, he claims, because the respondents may be referring to the early Androids, which didn't quite rise to the standard set by the iPhone; the new Droid, on the other hand, is a pretty crackerjack piece of work. Still, he points out, "This is a platform war we're at the beginning of, and Google needs to work with its handset partners to make sure Android is a good (and as 'sticky') as possible."

UPDATE: It's always fun when the entire gist of a blog post is based on inaccurate information. And so we have CNN, whose story about The Yankee Group misreported the results of the iPhone/Android survey question. Although 77 percent of iPhone users would indeed buy another iPhone, it wasn't 20 percent of Android users who claimed that they would be an Android phone. Rather, it was 20 percent of all smartphone users.

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Mon, 26 Jul 2010 17:03:50 +0000

Government Beginning To Realize Google Can't Solve All Its Problems

Chris Thompson — Mon, 26 Jul 2010 15:41:45 +0000

Google (GOOG) had to own up to embarrassing news over the weekend, and the ramifications could cripple its plans to challenge Microsoft (MSFT) in office applications. The short version: Gmail fell down on the job.

The long version: Google executives had secured a contract to provide Google Apps to all employees of the city of Los Angeles, a major coup that helped establish the cloud as a serious model for word processing, e-mail, and other functions. Under the terms of the deal, the company had a June 30 deadline to complete the transition process; until then, L.A. city workers would continue using Novell. But as ZDnet points out, the Los Angeles Police Department had a few concerns. Since the substance of the department's e-mail and documents is so sensitive, police officials didn't want them commingling with servers containing data used by other agencies or private companies, and that's something of a headache for Google. In addition, the police insisted on background checks for Google employees who would be handling the data.

Well, Google couldn't comply with these requests and meet the deadline, and they had to admit as much over the weekend, eating the costs of running Novell until the system is in place. In addition, the beta Gmail system the company has offered the LAPD is so rife with delays that a department spokesman called it "unacceptable."

This couldn't have come at a worse time; according to the Wall Street Journal, Google and Microsoft are both seriously bidding for one of the most important contracts the federal government is offering. The General Services Administration, which deals with procurement for other government agencies, is trying to decide which company offers the best cloud-based e-mail system. And since the GSA has a huge influence on what technology other government agencies use, this contract would give the winner a huge advantage in the race to win the federal government's heart. With this awkward news coming out of Los Angeles, Google just slipped behind a pace.

Feds Target DNA Company Belonging to Sergey Brin's Wife

Chris Thompson — Fri, 23 Jul 2010 17:08:10 +0000

When Sergey Brin isn't leading Google (GOOG) into the future, he's thinking about Parkinson's Disease. After all, according to 23 & Me, the genetic testing company co-founded by his wife Anne Wojcicki, he's carrying a genetic mutation that has been associated with the malady. But 23 & Me may be associated with another unfortunate state of affairs: consumer fraud.

Yesterday, Government Accountability Office official Gregory Kutz told a congressional committee that they had conducted an undercover investigation of 23 and Me and at least three other firms that claim to evaluate your DNA for genetic diseases. Spit in a jar and mail it back, the companies claim, and we will be able to warn you of inherited maladies you may be at risk for. The GAO did just that, taking saliva samples from five staffers and asking four different companies to evaluate their genetic profile.

The results? All over the map, Kutz claimed, which raises the question of whether these companies offer anything but fear and snake oil. According to the Associated Press, the companies contradicted one another's results 70 percent of the time, disease by disease: "In response to the same patient's DNA, one company claimed he was at above-average risk for prostate cancer, a second said he was below average and two others said his risks were average."

Ashley Gould, the lawyer for 23 & Me, also attended the committee hearing and claimed that while she was "concerned by the percentage of discordance," she was also "confident in the analytical work we do."

Google's been deeply committed to 23 & Me; the company invested almost $4 million in the company, and Brin has used his personal blog to promote his wife's company. Still, at this rate we'd probably be better off Googling "Oh crap, am I gonna get Alzheimer's?" At least that's free.

Baidu To Use Google To Take Down Google

Chris Thompson — Fri, 23 Jul 2010 13:37:31 +0000

You may have heard that as Google (GOOG) and the Chinese government locked horns, China's domestic search engine Baidu (BIDU) made a killing, doubling its profits, boosting sales by 74 percent, and increasing its already dominant share of the search market to 70 percent. Some of this was due to Google's conflict with Beijing, some to the World Cup, and some undoubtedly to smart managers seizing an opportunity.

But to hear Baidu's CEO Robin Li tell it, the company's success was due mostly to "a nationwide marketing program." That's according to Chinese state media organ Xinhua News, which headlined the story "Baidu Shines at Google's Expense." The piece claims that the conflict with the government played a role as well, but stresses the government's long-standing spin on the Google fight: that the American search engine never figured out the Chinese market (true) and invoked censorship and cyberattacks to save face (not exactly false, but certainly less true).

Meanwhile, Baidu is planning to challenge Google on its own turf. According to the Wall Street Journal, Baidu is negotiating with smartphone manufacturers that intend to use Android in its line of Chinese devices. The goal? Cutting a deal to put a Baidu search bar on the Android phone screens as the default engine. Cutting Google out of search on products that use its own operating system? What's Cantonese for chutzpah?

Google Wi-Fi Gate: Richard Blumenthal Is Getting Angrier

Chris Thompson — Thu, 22 Jul 2010 20:01:16 +0000

When Google (GOOG) admitted that its Street View cars collected the personal data of people using unsecured Wi-Fi networks, its executives may not have known the headaches that were going to follow. But a coalition of American state attorneys general are making things very hot for the search giant.

According to the BBC, Connecticut Attorney General Richard Blumenthal, who is leading an investigation on behalf of 37 states, has issued a new set of demands for information relating to the scandal. Blumenthal now wants the names of all the employees who worked on the code that collected the data and any records that indicate whether Google tested out the Street View cars' data collection before it sent the fleet out onto the streets of America. In addition, Blumenthal doesn't appear to be impressed with Google's cooperation so far. "Google’s responses continue to generate more questions than they answer," he declared in a statement, according to the Los Angeles Times.

In response, Google released a statement of its own, in which it claims that it did nothing illegal and that everyone over at the GooglePlex is very, very sorry for the nonillegal things it did. Google representatives are scheduled to meet with Blumenthal's boys tomorrow.

Meanwhile, not everyone is feeling gloomy about Google. Business Insider's Heather Leonard has a nice roundup of all the analysts who maintain that despite last quarter's failure to live up to Wall Street's absurd expectations, the company is remarkably primed for steady, long-term profits. So don't dump that stock just yet.

With Google Gone From China, Baidu Is Making a Killing

Chris Thompson — Thu, 22 Jul 2010 16:41:46 +0000

As Google (GOOG) launched its now-famous confrontation with China last January, everyone and their mothers all had the same thought: "This will be great for Baidu." And it was.

Baidu (BIDU), of course, is China's domestic search engine, the one that most directly competed with Google. And by competed, we mean pretty thoroughly trounced, controlling some 60 percent of the search market. It's the Fox News of search in China; while more people used Baidu, they tended to be less educated and less affluent, while the intellectual class stuck with Google.

Now, as Google has slowly been disengaging with China, Baidu has really stepped in and cleaned up. The company has just released its second quarter numbers, and they're damn impressive. Net income is now at $123.6 million, more than double what it was this time last year. Sales are up 74 percent. The company's stock value is double what it was when Google and China came to blows seven months ago. Baidu's share of the search market has now risen to 70 percent.

Interestingly, there may be more than Google at the root of Baidu's growth. According to IDG News Service, Chinese interest in the World Cup was awfully strong, considering China doesn't have much of a soccer tradition, nor did it have a team in the tournament. World Cup searches spiked during the Cup, giving Baidu a fresh and unexpected source of popularity.

In fact, Baidu's growth is so impressive that Wall Street Journal writer Andrew Peaple wonders if the company will now face the same anti-trust questions Google faces in the United States. "Such market dominance could have a downside for Baidu," he writes. "Few, if any, Chinese companies are so preeminent in their sector, even among state-owned enterprises. On the face of it, the company could face threats under China's anti-monopoly law, in place since mid-2008."

And while we're on the subject, here's one last one Baidu detail. Just a day or two after Google revealed that very sophisticated hackers in China hit their internal systems, Baidu itself was hacked by an outfit calling itself the "Iranian Cyber Army." Now, it appears that Baidu is suing the American domain name service provider Register.com, alleging that the company's negligence and recklessness allowed the hackers to take control of Baidu. Reuters reports that yesterday a Manhattan-based federal judge allowed the lawsuit to continue, suggesting that the plaintiffs have a pretty serious case.

The Kagan Fight Comes to YouTube

Chris Thompson — Wed, 21 Jul 2010 17:58:39 +0000

Of course, just because YouTube is host to Kagan videos doesn't mean it can actually do anything. It's merely a platform where others post videos for a variety of reasons. But now, the Senate Republican leadership has decided to employ it in their last-ditch efforts to scuttle the confirmation of Elena Kagan as the next member of the Supreme Court.

Even as the Senate Judiciary Committee voted to send Kagan's nomination to the floor, GOP leaders have created a new YouTube channel, "RepublicanSCOTUS," in which they have collected all the most virulent criticisms of Kagan they could muster during her confirmation hearings. Front and center, of course, is everything Alabama Senator Jefferson Beauregard Sessions III had to say during the dog-and-pony show. Here's a sample clip.

As you watch it, remember some of the interesting things that came to light during Sessions' own failed bid to become a federal judge during the 1980s. Our favorite bit has to be from former assistant U.S. attorney Thomas Figures, who claimed that Sessions said he used to think the Ku Klux Klan was OK, until he found out they smoked a lot of reefer. The man has his standards, after all.

The Google Commie Plot Continues

Chris Thompson — Tue, 20 Jul 2010 18:54:59 +0000

First it's suppressing the truth about our Kenyan president, now it's wind power. Will Google (GOOG) never stop undermining America?

Today, Google announced that it would begin buying 114 megawatts of electricity from NextEra Energy Resources, the Iowa-based, wind-generated power company that is designed to make our various gizmos run without all that oil and smoke and apocalyptic global warming residue. This, of course, is in keeping with the search company's commitment to green energy, as well as its need to find new supplies of electricity, which its servers gobble up like hotcakes.

The company has noticed that the best way to make these investments is through long-term contracts that give alternative energy producers the stability to work on enhancing their technology. "By contracting to purchase so much energy for so long, we’re giving the developer of the wind farm financial certainty to build additional clean energy projects," writes Urs Hoelzle, Google's veep of operations. "The inability of renewable energy developers to obtain financing has been a significant inhibitor to the expansion of renewable energy."

Yeah, but will it power investigations into Barack Obama's birth certificate? Alex Jones needs to know, after all.

Google's Latest Plot Against America

Chris Thompson — Tue, 20 Jul 2010 17:00:47 +0000

Sure, some communists and squishy Islamohomos call Alex Jones a right-wing Texas tweaker who rants on a radio show syndicated via shortwave and the Web. But real Americans know he's a red-blooded truth-teller, a man who's not afraid to expose Barack Obama's assault on everything we hold dear. That's why Google (GOOG) has hacked into his YouTube account, purged his most explosive documentaries, and done its best to keep him from spreading the word to the rest of the country.

By his own account, Jones is a fearless radio host and film auteur, producing such documentaries as Dark Secrets: Inside Bohemian Grove, America: Wake Up (Or Waco), and—my personal favorite—Comprehensive Annual Financial Reports Exposed. On his radio program, he's interviewed Jesse Ventura, Lou Dobbs, Dennis Kucinich, and Tommy Chong. In 2007, Jones and his followers were busted for trying to disrupt a Geraldo Rivera TV program in order to call attention to the truth about 9/11.

But it's his latest documentary that has put Google in Jones's crosshairs. The Obama Deception, Jones's expose of the Kenyan's darkest secrets, was placed on Jones' YouTube account for all the world to see. But just as it was beginning to take off, he claims, someone hacked into the code and wiped it out of his account. And Jones insists that Google, or at least someone inside Google, is responsible.

Hey, think about it. Google is notorious for its subversive values, from the Fourth of July doodles that don't go up every year to its unconscionable decision to pay the taxes on health benefits for its homosexual employees' partners. With a record like that, can a systematic effort to suppress Jones's message be far behind?

But don't take my word for it—hear Jones in his own words. While you're at it, note how utterly dependent he is on Google for everything from gathering information to researching his own case against Google, to say nothing of learning about the world. Tally up the company's products in the following video: YouTube, Google Trends, Google News. Note how he calls on people to promote other copies of his video on YouTube and Google, thereby admitting that his film is still widely available, and that his claims are just another opportunity promote himself. And sit back and enjoy.

Tragedy for Google Job Seeker

Chris Thompson — Mon, 19 Jul 2010 20:47:41 +0000

According to the San Francisco Chronicle, Jing Hong Kang had flown into town from Virginia in order to report for a job interview at Google (GOOG). As preparation for the interview, he stopped off in Oakland, Calif., where a dental hygienist friend cleaned his teeth to spiff him up. As a former resident and major booster of Oakland, it pains me to have to report this, but, sadly, Kang and his friend walked back to his car when two men walked up to them, demanded all their money, and fatally shot Kang.

The two men escaped, and police have so far not released a description of them. Obviously, Google is on the other side of the bay from Oakland, so this is hardly the typical environment around the GooglePlex. But it's yet more bad news for Oakland, a city that has had enough grief as it is.

Farewell, Oh Nexus One, We Hardly Knew Ye

Chris Thompson — Mon, 19 Jul 2010 20:34:00 +0000

Back in January, you came roaring in like a lion, Nexus One. You were the first smartphone—the first hardware product ever—developed by Google (GOOG). Your developers were among the smartest tech gearheads around, working for a company known for reimagining every aspect of our online lives. All that imagination, all that 20 percent time, went into turning you into the most anticipated rollout of 2010. You were, in short, the "superphone."

Now look at you. Dead in the water, your official obituary just a measly two paragraphs on a Google blog: "This week we received our last shipment of Nexus One phones. Once we sell these devices, the Nexus One will no longer be available online from Google." The blog post isn't even signed.

Were you always going to play with our emotions and just fade away? Or did you make an honest stab at capturing our hearts? We may never truly know. But from the beginning, there was something a little odd about you. When Google rolled you out, you didn't take your place at the local Radio Shack, but confined yourself to an online store, where people were expected to fall in love and buy you without holding you in their hands or giving you a test run. Your creators confidently declared that this would be a revolutionary new way to retail smartphones, but it turns out that yes, customers really do want a few dates before they jump into bed. Eventually, you found yourself on sale at brick and mortar stores, but the magic had mostly dwindled away by then.

And then there's the matter of your carriers. When you first arrived on the scene, we could only buy you with a T-Mobile contract or with an unlocked carrier deal if we wanted to pay an extra $200. Sure, there were promises that you would come with other carrier contracts, but Verizon (VZ) backed out of the Nexus deal, leaving us with just T-Mobile's iffy 3G coverage.

What happened if customers weren't happy with the way you performed? With other phones, disgruntled buyers could at least complain to a customer-service hotline. But not with you; you didn't set one up, offering at best an online service that could take God knows how long. And what if customers were so annoyed with the bugs and the indifference to their complaints that they wanted to return you? Google hit them with a $350 return fee, and T-Mobile followed up with a $200 early termination fee. Eventually, you knocked the fee down to $150, but that still seemed awfully churlish, especially once we learned you did so only after the Federal Trade Commission started investigating the practice.

Honestly, it feels like you didn't pull your weight in this relationship. Yes, you're still for sale in South Korea and Europe, but here in the colonies—well, we saw the writing on the wall a long time ago.

And now you're out the door. So tell us, Nexus: after selling only 135,000 units, were you ever really serious about us?

There are some—we're one of 'em—who suspected that you were always just an advertising and promotional vehicle ginned up as an honest-to-goodness consumer device, a way to demonstrate the power of Android to smartphone manufacturers and apps developers. It explains a lot, especially the half-serious attempts to do any of the heavy lifting it takes to build and maintain customer relations. If that's the case, it certainly seems to have worked; Fortune claims that Android phones are now officially outselling the iPhone 4.

But we have to conclude that from Day One, you were surrounded by people who just didn't know how to put in the hard work of retail sales. It's just not in your progenitors' DNA; they're search guys, and they live online, not here in the real world. And when the Droid and other Android phones started taking off—fulfilling all the promises you made, and delivered by people who know retail—well, you saw your time was up and went quietly into that good night.

Sad as it may be to see you go, Nexus, we understand. You just weren't up to the task. You didn't understand the meaning of commitment. But with Droid, we've found something a little more mature. There comes a time in every girl's life when she has to turn away from the bad boy and settle down. Try to understand. And remember, we'll always have Paris.

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Mon, 19 Jul 2010 20:34:00 +0000

Google Search Getting Smarter, Harder To Explain

Chris Thompson — Mon, 19 Jul 2010 16:05:11 +0000

On Friday, Google (GOOG) made a big push to enhance its search intelligence by buying Metaweb, a new startup whose founders have radically rethought how databases can operate. The company didn't release much in the way of purchase details, such as the price or how much was cash and how much was stock. But director of product management Jack Menzel declared that the company's big brains would migrate to Google and put its new approach to work improving Google's search capacity.

What is this fancy new approach? It's hard to describe, exactly. But it tries to solve the problem with search right now: that it's mostly keyword-based. All too many words have multiple meanings, and when people type in, say, "San Jose," they're likely to be flooded with links to the Northern California city, rather than the capital of Costa Rica. In addition, search engines cope with lengthy search terms like "20^th century writers diagnosed with esophageal cancer" by collecting the words, searching on each of them, and trying to rank the results according to what they "think" you want.

Metaweb tries to solve this problem by treating as many topics as it can as discrete search terms. It collects all the variations on spelling or alternate names, the history of the subject, and related subjects. ("Westminster Abbey," for example, would be connected to the subject "Poet's corner," which in turn would connect to "Alexander Pope.") The interrelated databases give search engines an enhanced ability to figure out what you're really looking for. Here's Metaweb's own explanation:

It's Time for Google To Come Clean About YouTube

Chris Thompson — Fri, 16 Jul 2010 18:39:54 +0000

Google's (GOOG) numbers yesterday were perfectly solid, and the dour reaction from Wall Street is either an example of unrealistic expectations or post-report petulance. After all, the company's revenue and profits grew more productively than just about any company you can think of. Yet investors are still selling off its stock? C'mon.

But there's one area where Google really ought to come clean with its shareholders, and that's YouTube. During yesterday's conference call, Google's Chief Financial Officer Patrick Pichette was asked how much the company spent defending Viacom's $1 billion copyright infringement lawsuit. The answer? $100 million.

So slap that into YouTube's red column, right next to the $1.6 billion it paid to buy the site all those years ago. To say nothing of all the money Google has spent developing the site, researching ways to monetize it, and building content and advertising deals with music and entertainment companies. You add it all up, and that's more than milk money. According to the Associated Press, Pichette tried to put the best possible spin on the Viacom suit and YouTube's futures: "With more clarity from this judgment, it gives us more room for experimentation that we didn't have before. Because, until these rules are clear, you don't know exactly where the bar is. With that clear bar, we now have much more room for experimentation."

So it's clear skies from here on out. Sorry, but we've heard this racket before. Since 2006, Google has been promising that the video site would live up to its potential and start cashing in. But year after year, the company has stonewalled every question about how much YouTube makes, and what it costs.

Sure, Google is making money hand over fist. And it can absorb all sorts of losses with $30 billion in cash on hand. And we should be grateful that a company like Google is willing to take these losses while it experiments with content provision in an Internet where everything is all but free and so many other media outlets are slowly dying. Try to imagine the Chicago Tribune or Fox Studios gambling on YouTube in 2006 and think how long they'd let it go on before pulling the plug. (For that matter, imagine how long Viacom, which actually bid on the site in 2006, could stand these kinds of losses.)

Still, inquiring minds want to know: Just what is YouTube making? Is it now, or will it ever be, a viable concern? Google has dabbled with other nonsearch industries and taken a bath before, but YouTube is one of the world's signature media outlets today. It would be nice to know if it will ever be able to live without Google's constant subsidy.

Wall Street Punishes Google for Doing Well

Chris Thompson — Fri, 16 Jul 2010 15:16:51 +0000

What to make of the rash of doom-and-gloom stories that emanated from Google's (GOOG) second quarter earnings report yesterday? Let's repeat: The company's revenue rose 24 percent over the same period last year, net income rose to $1.84 billion over last year's $1.48 billion, and Google is now sitting on more than $30 billion in cash. But for some in the biz press, that's just not good enough.

The impetus for the rash of gloomy stories appears to be the dip in Google's stock during after-hours trading, when Google dropped close to 4 percent before the market reopened today. What could account for this? Well, Wall Street analysts had expected the company's earnings to amount to $6.52 a share, but the actual earnings came in at $5.71 a share. Wall Street is comprised of an expectations game, and despite the company's continuing success, it apparently just wasn't good enough for investors.

There are a few slightly more concrete reasons for Wall Street's anxiety. Bloggingstocks.com points out that the cost-per-click for advertisers only rose 4 percent in the second quarter. Reuters reports that analysts are worried about the companies—AdMob, ITA Software—Google's been buying lately. BusinessWeek claims that Google's efforts to branch into mobile and other, less traditional revenue streams has led to a lot of investment with no immediate payoff.

To which we say: Thirty billion dollars in cash. Constantly increasing revenue and profit. A long-term strategy to find and own emerging areas of search and advertising. Jesus, guys. Take a pill.

Google Earnings: All Sunny Skies. Again.

Chris Thompson — Thu, 15 Jul 2010 20:37:29 +0000

Google (GOOG) has released its numbers for the second quarter of 2010, and once again, it is the company that can do no wrong. It has shrugged off a China crisis, European antitrust probes, and the Wi-Fi scandal to post new gains in everything from revenue to profits. Here's a quick breakdown of the latest sunny skies:

Google's overall revenue was recorded at $6.82 billion, a rise of 24 percent over the 2009 second-quarter revenue of $5.52 billion. Sixty-six percent of that came from sites that were owned by Google itself.
Google's partner sites—think its AdSense partners, which share advertising revenue—accounted for 30 percent of the cash flow.
Fifty-two percent of Google's income hailed from international search sites, a modest drop from the previous year's 53 percent. Great Britain, which has always been a mainstay in Google's international market, dropped from 13 percent of 2Q 2009 revenues to 11 percent.
The number of paid clicks onto advertising links dropped 3 percent from the previous quarter, although it rose 15 percent relative to the same quarter last year. The cost per click rose 4 percent over the same period last year.
Google's net income rose to $1.84 billion, compared with $1.48 billion over the same period in 2009.
And the amount of cash Google has on hand? Try $30.1 billion.

Jesus, this company can roll out a smartphone that went down like a lead balloon, launch a Facebook-killer that did nothing but anger millions of Gmail users, pick a fight with China, and get caught sneaking a peak at the Internet use of untold numbers of Netizens—and it still posted ever-increasing revenues and profits. No wonder its after-market-hour numbers are booming.

Google Is Crowdsourcing Its Lobbying Campaign

Chris Thompson — Thu, 15 Jul 2010 16:39:54 +0000

Back in February, Google (GOOG) announced an experimental program to build and test-run high-speed broadband in select communities around the country. Once the company lays down the pipe, between 50,000 and 500,000 people will have what Google calls competitively priced access to Internet connections that will deliver information at one gigabit per second. When Google announced that cities would be free to pitch themselves as candidates for the project, hundreds of communities sent videos and promotional packages, applying to be part of the plan.

There's still no word on which cities will make the cut, but Google has set up a new Web site to update the applicants and the public at large on the project's latest phase. Dubbed "Google Fiber for Communities," the site will create an opportunity for Americans to "learn more about fiber networks and keep up-to-date on our project." "We hope this site helps to keep the conversation going," wrote project manager Minnie Ingersoll.

Of course, the new site's real purpose is to get people to pressure politicians to advance Google's broadband agenda. And to its credit, Google makes no bones about this. The most prominent feature on Google's new fiber site is a fat blue widget titled, "take action now," which directs you to a page filled with advice on how to lobby government agencies from Congress to the local zoning board, pushing for new laws requiring the installation of broadband conduits during major road reconstructions.

Google has occasionally stumbled on public relations lately, but this is a real doozy of an idea. Civic leaders who want to find out how their city's doing in the race to be part of the Google fiber project will come here and be directed to a chance to lobby for Google's larger broadband scheme. Clever.

And, as PC World writer Jeff Bertolucci points out, let's face it: Google is right. No one in the private sector is going to lay all that pipe and apply for permits to disrupt the lives of thousands of people unless there's a pretty clear pathway to quick profits, and that's just not going to happen. Only the government can make this sort of long-term investment. "Not only must the feds spearhead a national fiber campaign, but they've also got to take concrete steps to make it happen," Bertolucci writes. "Legislation requiring conduit installation in federal transportation projects is a good start, and U.S. businesses should join Google in supporting it."

Old Spice Figures Out a Way To Make YouTube More Social

Chris Thompson — Wed, 14 Jul 2010 18:12:07 +0000

As Google (GOOG) continues to look for ways to make YouTube more social, Proctor & Gamble (PG) has created its own strategy. Back in February, the company hit the advertising motherload with a cute commercial for its Old Spice body wash, featuring onetime NFL player Isaiah Mustafa. In the last few weeks, the ad guys at Old Spice have stepped up the cleverness, responding to comments about the ad on YouTube and Twitter. Mustafa and his crew slapped dozens of videotaped responses on their YouTube channel, all of which mention the commenter by name.

Here, par exemple, is Mustafa’s answer to television actress—and unexpected fan—Rose McGowan.

Finally a use of social media I can support.

What's This—Could It Be? No! Google Lost Market Share?!

Chris Thompson — Wed, 14 Jul 2010 18:10:58 +0000

This has got to be the most unlikely Google development in the last five years, but here it is: Google got smaller.

That's right, smaller. The new comScore numbers are out, and according to the industry's most trusted metrics firm, Google's share of the American search market actually declined last month, from 63.7 percent of the market in May to 62.6 percent in June. Meanwhile, the company's two rivals both increased their market share. Yahoo jumped from 18.3 percent to 18.9 percent, and Microsoft's (MSFT) various sites rose from 12.1 percent to 12.7 percent.

This is remarkable. For the last 10 years, the story of Google has been one of relentless expansion and growth, slowly gobbling up search until it seemed that no one could ever challenge it. In fact, the company has never really lost market share. According to a comScore rep, the few times that Google's share dipped were utterly negligible, and most chalked up to the the fact that college students were leaving for summer break, while Yahoo and Bing cater to older searchers.

Could this mean that Bing is finally starting to make inroads with Americans? Has Google plateaued, and will there be someone else who's figured out the next generation of search? Google's execs spend their days in a constant state of low-level anxiety, all too aware that users can simply type in a different URL if they want to switch products. Has the day they've dreaded finally arrived?

Eh, probably not. For one thing, the Associated Press reports that comScore has inadvertently rigged the game in favor of Yahoo and Bing. ComScore's numbers include searches that are automatically made if people are viewing slideshows at Yahoo and Microsoft sites, and those are hardly the same as deliberately setting out to search for a specific term. (In fact, comScore is working to tweak its metrics for analyzing search data in order to account for this phenomenon.) For another, even if the numbers held up, Google still accounts for almost two out of every three search made in America. It's got a long way to go before it gets in trouble.

Still, this is a fairly remarkable development. Google's trajectory actually leveled out for once.

It's the Cartographers' Fault: The Google-China Tension Simmers On

Chris Thompson — Tue, 13 Jul 2010 15:05:39 +0000

Via InformationWeek comes this fascinating note by Stefan Geens, the author of the blog Ogle Earth, who notices a new fight potentially brewing between Google (GOOG) and the Chinese government. It's not just in the area of Web search that the two parties have near-irreconcilable differences—it's also in cartography.

If you look at Google Maps via the company's Hong Kong site, you'll see a wide array of user-generated cartographic detail, from "Panoramio, YouTube, Wikipedia and Web cams," Geens writes. But at the mainland Chinese site, no such citizen participation is allowed. Further, the Hong Kong map site notes that the contested territory along the Indian border is, you know, contested—but the mainland map unambiguously lists all the land as exclusively Chinese territory.

This is yet another point of contention between Google, which strives to make all information available everywhere, and China, which has a decided interest in controlling that same information. This fight is impacting Google's bottom line; when a Chinese agency recently released the list of companies approved to more precisely map the country's geography, Google was not among the winners. But come to think of it, neither was any foreign company.

The YouTube Army Unites To Make as Much Fun of Mel Gibson as Possible

Chris Thompson — Mon, 12 Jul 2010 19:46:26 +0000

It's been under 48 hours since Radar Online started releasing tapes of Mel Gibson sharing his charms with the mother of his latest child, and YouTube's denizens have already begun turning his admissions of domestic abuse into performance art. Let's start with, oh, Pocahantas:

Next, a dash of Ray Bradbury:

Top that off with a bit of Tiny Superstar:

And as an after-dinner mint, the inevitable Leave Mel Gibson alone ...

YouTube: If you can't use it to make light of domestic violence, what's it good for?

Archives

Google Outdeals Microsoft in Japan

Making Bank With Android ... and My Little Pony

The Plot To Kill Facebook

Baidu Dealing With Its Own Chinese Issues

Google Has Secure Servers Hidden Somewhere in the Continental United States

Bad News for Android

Presented By:

Government Beginning To Realize Google Can't Solve All Its Problems

Feds Target DNA Company Belonging to Sergey Brin's Wife

Baidu To Use Google To Take Down Google

Google Wi-Fi Gate: Richard Blumenthal Is Getting Angrier

With Google Gone From China, Baidu Is Making a Killing

The Kagan Fight Comes to YouTube

The Google Commie Plot Continues

Google's Latest Plot Against America

Tragedy for Google Job Seeker

Farewell, Oh Nexus One, We Hardly Knew Ye

Presented By:

Google Search Getting Smarter, Harder To Explain

It's Time for Google To Come Clean About YouTube

Wall Street Punishes Google for Doing Well

Google Earnings: All Sunny Skies. Again.

Google Is Crowdsourcing Its Lobbying Campaign

Old Spice Figures Out a Way To Make YouTube More Social

What's This—Could It Be? No! Google Lost Market Share?!

It's the Cartographers' Fault: The Google-China Tension Simmers On

The YouTube Army Unites To Make as Much Fun of Mel Gibson as Possible