What the Hell is Google Mobile?

On looking at some Google earnings I came across some analysts talking about something called a Google Mobile service. So I delved a little further and came across this.

There is a new Google mobile service that Google doesn’t want you to know about. We’re not sure why they would keep it from you; it’s actually pretty cool. Google mobile "LCB" was uncovered by picking apart a publicly available file containing a list of all pages that crawlers shouldn’t be able to see. Essentially, LCB is an interesting move away from Google’s typical offerings. A "searchless search" in a sense, it allows the user to input a location and then browse through seven predefined categories such as Food / Restaurant and Entertainment to find a business listing. Once a desired result is listed, users can quickly and easily map the address and surrounding area.

This sounds a lot like a "Where should I eat" app that is tied to the GPS in your phone. I can see this as a great way for Google to collect local advertising money as restaurants and such sign up to push themselves higher up in the search results.

I would download this service in a heartbeat because sometimes I am in an area and I want to eat a plate lunch or something. I could just run this thing and it can tell me the closest plate lunch place and maybe pull up some reviews as well. Hell, you could have the thing pop up with the closest McDonalds and have it automatically text you a coupon as well if you check an opt-in box.

I think the idea is to get Google in front of as many eyes as possible and this Google Mobile is a very interesting new way to do it. I can see this service making money right out of the box and tie Googles growth right into the growth of smart-phones.

Googles Numbers Dissapoint; Although They Might Make Money from YouTube

It seems that ad spending is still sluggish even though they had a record quarter but this part seems pretty promising though.

Google also defended its YouTube video service. Critics have pointed out that the company spends an estimated $500 million a year on YouTube, without getting much in return. But company executives said advertising, such as pre-roll ads, were gaining traction and could soon pull the video business out of the red ink and into profits, Google executives said.

I can see those pre-roll ads as quite a lucrative commodity especially when some web videos have millions of hits. It would especially be cool if they can be targeted so that a funny cat running around is preceded by a Friskies ad or something.

I mean Hulu does it and it is not very intrusive at all. The only problem with Hulu is that the ads are exactly the same over and over. Maybe Google can change up the ads so you see a Friskies ad then a PetCo ad then a Purina ad right after it. As long as there is only one ad people won't be too put off by them.

Scary View of Google

I read this article criticising Google and it does sound pretty scary if they really aren't so interested in your privacy as they claim.

First, a little background. Google sits at the confluence of two historic Silicon Valley philosophical streams. One, which comes from Sergey Brinn and Larry Page, the two founders, reaches back all of the way to the early days of computing and continues forward through the world of gamers, hackers, Apple, and the Web 2.0 generation. It is essentially Utopian in its belief that technology – especially the Web – will bring about a better world (hence, Google’s ‘Do No Evil’ motto). It also has absolutist (some would even say totalitarian) tendencies, in that it also believes that the empiricism of science and technology supersedes messy human institutions. It is proudly amoral, which is why it can celebrate hackers – or for that matter, Steve Jobs – as heroes, as long as they remain innovators.

I have heard the idea of technology superseding human institutions a while back in Wired. I remember that one of the futurists featured in their Year 2000 issue addressed this issue. He talked about how ones affiliation and interests will eventually trump ones nationality as a persons identity. The "Tribe" Society or something like that.

So for instance Anime Lovers around the world would form their own "virtual nation" outside of borders, language, and national boundaries. So if Google "controls the information" and people are not closely affiliated with nations as in years past then they could become a defacto world government. They will control the lifeblood of the information age, Information.

That is all well and good if you think Google is a great company that cleaves to the "Do No Evil" moniker (like I do.) The idea of all your information a few mouse clicks away in Googles vaults somewhere makes alot of people (including me) happy. However this is where the article gets scary.

For example, a couple weeks ago, in a barely noticed blog entry, reporter Clint Boulton of Computerworld recounted a conversation he’d had with a Google insider who admitted that whatever the company was saying publicly – and to Congress — about user privacy, it was indeed tracking not just user search trails, but also their identities – so-called “Deep Packet Inspection.” The entry drew few readers, and no comments, but it did attract attention from one source: a senior Google executive called the magazine to get it to back off the story.

If they are doing Deep Packet Inspection for anything other then to check for bandwidth usage and to stop spammers then we do have a problem. If they are actually recording these search trails and linking them to personal information then the problem is massive.
This will be especially bad news because they are going heavy into storage and saying "trust us with all your information."

If they do have access to all online information and are storing it somewhere then Big Brother is here. They have already freaked people out with that Chrome EULA so the cracks are starting to form. Man, I hope that all these allegations are not true because I love Google and have made quite a bit of money over the years trading their stock. I'm hoping that "Do No Evil" is not just corporate boilerplate.

Google Introduces Chrome

Google has just introduced their new web browser called Chrome.

Google also is counting on Chrome to become the linchpin in its effort to distribute widely used computer programs like word processing, spreadsheets and calendars through the Web browser instead of as applications installed on individual machines. If the crusade is successful, it might undercut Microsoft's profits by diminishing sales of its Office suite.

I was reading a bit about it in their Webcomic for Chrome and it seems like a pretty superior browsing experience.  Chrome runs each tab seperately so you won't get a Javascript error that kills all 7 of the tabs that you had open at the same time.  I have been using Firefox recently because it allows you to recover from a browser crash by saving what you had open at the time of the crash.  Chrome just lets you kill the tab without having to restart your browser. I'll download it and playtest it for a few days and see how it goes.

Terms of the Yahoo/Google Deal Released

It seems like it is a 10 year non-exclusive tie up. I hope that $800 million revenue bump figure isn't just wishful thinking. The more I look at it the more it looks like they did this Google deal just so they could avoid being acquired by Microsoft.

The plan: Yahoo will be able to run Google ads on its U.S. and Canadian search results -- where and when it wants to -- and will continue to sell its own ads via Panama. Yahoo estimates the deal could generate $800 million in annual revenue and $250-450 million in incremental operating cash flow -- but little to no cost savings.

This Merrill guy hit what I am thinking right on the head:

Merrill: GOOG has market share leadership. Will advertisers still want to buy YHOO when they can buy GOOG and potentially get on YHOO? Any interest in your part on serving content ads on GOOG pages?

Sue: YHOO monetizes competitively with query ads, but not in the tail, because of GOOG's scale. Flexibility of deal lets us get the best of both worlds. Can optimize every single day. Will keep marketplace alive and vibrant. Components of this deal where we'll be working on other elements of value, and one might be helping Google with display ads.

What keeps a Yahoo advertiser from just switching to Google and having their ads show up in Yahoo's search queries without having to pay for both Yahoo and Google? A company could game the system by buying long-tail type words from Google and benefit from having them show up on both Google and Yahoo. They would essentially pay for Google and get Yahoo for free. It seems to me that this optimization strategy is now the linchpin of Yahoo's entire search business model going forward.

One issue that could come up is that they seem to be losing their top talent little by little. This is a really bad deal because the people with the right talent mix, who may be key to this optimization thing being a success, may take off just when Yahoo needs them the most. This Google deal may save the company from being bought out but I would be willing to bet that they won't see the $33 stock price that Microsoft was willing to pay them for years to come.

But Wait There's More: Google and Yahoo may Reach Deal

Ah so it looks like Microsoft got the shaft yet again. It seems Google is going to strike up an ad deal with Yahoo after all.

Yahoo and Google will make a joint announcement at 1:30 California time this afternoon, we’ve heard from a reliable source close to one of the companies. What is the announcement? The very likely answer is, a search partnership between the two companies that outsources all or part of Yahoo search marketing, and possibly search itself, to Google.

Google Paid Clicks Up 3%

It seems that growth may have slowed at Google but these numbers seem very hard to interpret and seem to be contradicted by other sources.

Web search marketing firm SearchIgnite, which places $300 million in ads on
behalf of large- and mid-sized advertisers and their ad agencies, says its own
data shows Google's year-to-year paid click rate growing 29.0 percent in
February.

So is the February paid click-rate up 3% or 29% in February? Can Comscore be trusted to give decent measures or do we trust an ad placement firm instead? I would be willing to side more with the ad placement firm because they are actually getting money to place the ads on Google. In any case I guess we won't know for sure until Google brings out its numbers on April 17th.

Googles White Space for Wireless Plan

Sounds like a good idea from the good people at Google.

"As Google has pointed out previously, the vast majority of viable
spectrum in this country simply goes unused, or else is grossly
underutilized," Richard Whitt, Google's Washington telecom and media lawyer,
wrote in the letter. "Unlike other natural resources, there is no benefit to
allowing this spectrum to lie fallow."
Google said the white space, located between channels 2 and 51 on
TV sets that aren't hooked up to satellite or cable services, offer a
"once-in-a-lifetime opportunity to provide ubiquitous wireless broadband access
to all Americans."

Yeah most of those channels are just worthless snow and if they can be turned into a viable cheap wireless category it would be great for everyone. I think it will get a lot more people to try wireless broadband if it was easily available.

I wonder if Google is planning to add national wireless carrier to their business ideas? I would switch to a Google branded wireless connection in a heartbeat even if I had to pay like $25 a month for it. The Verizon Wireless plan is an idiotically high $59.99 a month. I mean the Koreans pay only $17.60 a month for their wireless broadband why should we have to pay 5 times more?

GoogleClick a Reality

Well, Google finally closed the deal on DoubleClick so now they can start integrating the two companies at long last. It seems like a great new revenue driver for Google.

Even if an explicit integration doesn’t happen, a Wall Street analyst
estimates that Google will instantly gain a huge share of the graphical ad
market, which will reach an expected $28.6 billion by 2010. “Google will now
have behavioral data from search, e-mail, video, and web usage on network
sites,” JP Morgan analyst Imran Khan wrote in a report. “We believe this will
allow the company to provide much better ad targeting, leading to increased CPMs on DoubleClick sites.”

This idea of getting the total picture when it comes to data is very intriguing as well. They can leverage this information advantage for all sorts of interesting applications. I think this information would have great interest to historians as well. We could see how peoples internet usage could change over time and what people were actually interested in over the years. I think Google may be a great historical record going forward.

Google Execs Talk About Paid Click "Shortfall"

These guys at Google need to come forward quicker to avoid this kind of thing.

But speaking at the Bear Stearns Media Conference in Florida, Tim
Armstrong, Google's president of North America advertising and commerce, said
that the recent slowing in paid clicks "was intentional on our part" and will
result in "a long-term benefit for our business."

That's because recent quality initiatives at the company have
resulted in fewer unintentional clicks and a higher number of "conversions," or
revenue generated by intentional clicks, according to Armstrong.

"Conversions actually go up for advertisers, which is positive, but
there are less clicks overall," he said.

So as many speculated they did this on purpose to provide a better value overall for advertisers. It wasn't some "economy-in-the-toilet and advertisers are running for the exits" type of thing after all. In any case I still think Google is a steal below its 52-week range and I'm going to double up on this thing before too long.

SearchIgnite Says Paid Clicks Actually Up at Google

Hmm no wonder ComScore was backpedaling on its blog earlier. It seems that SearchIgnite who tracks the largest advertisers clicks is telling a vastly different story then ComScore on what Googles clicks are like.

SearchIgnite, a search management technology company employed by agencies
and marketers, reports that in the first month-and-a-half of this year, paid
clicks on Google are up 45.7 percent compared to the year-ago period. Advertiser
spending climbed 40 percent. What's more, ad impressions rose 60 percent.

So spending seems to be climbing by 40% and people are rolling out 60% more ads then this time last year? There doesn't seem to be any ad slowdown by Google's 500 biggest customers according to SearchIgnite.

ComScore Defends Themselves on Google

It seems that ComScore is coming out to say that 8% drop in paid clicks from Dec. to February by Google was in fact due to clean-up efforts associated with their quality initiatives. They wanted to get rid of the bad listings to order to enhance their good listings. ComScore also debunk the softening economy rationale for the paid click drop.

There is no obvious reason why the economy would negatively impact Google’s
users and not those of Yahoo!, MSN, AOL, Ask and others. Furthermore, we don’t
need a weak economy rationale to explain the recent decline -- since a similar
decline occurred earlier in 2007 when a weak economy wasn’t an issue.

This makes a lot of sense because why would an advertiser only cut online ad budgets at the site that provides the most eyeballs? You would figure they would first cut their ad spending in the smaller marketshare 2nd tier search area and then work upwards as conditions at their company worsened. Looking at this info I think that anyone who was able to get long Google below $460 got a pretty nice entry point.

Analysts Rush to Googles Aid

It seems that Google has some quick footed backers trying to keep its price from breaking through 11 month lows.

Steve Weinstein of Pacific Crest told clients Wednesday that the
comScore data is likely an "inaccurate predictor" of Google's results. He said
he spoke to search-engine optimization firms and ad agencies "who indicated that
they are seeing much stronger growth trends in lead volume and spending than
what was implied by comScore" for the month of January.

I'm still not sure why firms would cut back on paid search unless the economy truly starts to implode. You would figure that a company would have even more onus to move to a medium that is cheaper and easier to track like paid search rather than sticking with traditional TV and print. Firms may cut their advertising in local newspapers and Yellow Pages in exchange for ramping up their Net presence. These companies can easily control their clickthroughs and fine-tune their message in order to keep a tighter control of their spending.

I mean companies do slash their Ad budgets when the economy slows but it would probably end up hurting their brand when the economy picks up again. This article has a great breakdown of what the Ad spending market will be like for 2008. I agree that Google will probably not feel the effects of a possible recession as much as a truly retail sensitive business like Amazon will. In any case it looks like a good time to load up on some Google in the mid to high 400s.

Yhoo+MSFT is a no-go

Now this is bad news for all those people running YHOO up today.

There's too much overlap between Microsoft and Yahoo, and to try to merge the company cultures of two large companies like that in general is hard," Hallerman said.

Hallerman said Microsoft would be better off buying an ad network to beef up its own operations, the same way Time Warner Inc.'s AOL has seen its advertising revenue grow following the acquisition of Advertising.com's technology and sales force.
I agree with him 100%. I agree that buying out 24/7 Real Media (TFSM) for $575 million and then trying to compete is a better idea then just plunking down $50 billion to get rid of one of your competitors. You do get YHOOs 27.5% of the advertising pie added to your 11%. You would still be down from Google's 48% though. Now Google buying out Yahoo would be interesting though. Anti-trust stuff would kibosh that deal though.

Google Beat the Street Again

They sure seem to be hitting on all cylinders now. I think this may be one of the more important metrics that you should be looking out for:

Figures released last week by another Internet metrics company,
Hitwise, showed Google gaining search market share and its competitors
declining. According to numbers provided by Hitwise, Google accounted for 64
percent of all U.S. in March 2007, up from 58% in March 2006. Yahoo Search, MSN Search and Ask accounted for 22% (-1 percentage point), 9% (-4 percentage points) and 3% (-0.5 percentage points) respectively.

That gain in market share is huge because it looks like Yahoo stumbled badly missing their numbers and it might be getting worse in the future. One thing I have been noticing is that Yahoo seems to be back to a point when they have to self advertise again. Before they released Panama almost every ad on their site was a Yahoo ad. Then when Panama was first released you started to notice car companies and other stuff taking the place of the Yahoo ads. Now it seems to be back to the pre-Panama days with tons of Yahoo ads again.

Couple this with the fact that you are now paying 38 times earnings for just 7% revenue growth and -11% income growth. Compare this with Google where you are paying 48 times earnings for 66% revenue growth and 69% income growth. There just isn't any comparison in the search space. Google is the winner and with that Doubleclick merger they will be crowned the "Internet Adking."