Phil Sim

Web, media, PR and… footy

Online/offline the way of the future

My post on the likelihood of Google eyeing an online/offline model generated a heap of correspondence and really got my thinking. This has to be the way of the future!

Let me point you to a company called Sharpcast. I’ve written before that I’ve been frustrated that Picasa doesn’t have both online and offline capabilities so as I can manage my photos either on my desktop or on the web. Well Sharpcast Photos does exactly that plus extends the model to mobile.

So you have three clients. One that runs on your desktop, a web client and a mobile client., all of which stay in synch, enabling you to access your photos absolutely anywhere but also in the client that delivers the best performance.

Sharpcast tout the following benefits

  • Organize Once, Access Anywhere — see your whole catalog on your phone
  • Complete Mobile Integration — stop using that browser on your tiny screen
  • Instant Backup — mobile phone pictures sent to your desktop and the web automatically
  • Rich, Integrated Applications — a familiar look and feel wherever you are
  • Speedy Recovery — recreate your collection just as you left it

The company just raised $13.5 million in Series B funding from Sigma Partners. A lot of money for a photo sharing app? No, photos is just the first service that the Sharpcast technology will drive.

Sharpcast is developing a suite of consumer services that dramatically simplifies the way people manage, access, back up and share digital media and information. With Sharpcast services, a person’s PC and mobile phone work together automatically to keep all of their media and information in sync, backed up on the web and instantly accessible wherever they are. The company’s first service, Sharpcast photos, will launch in beta later this spring.

The Sharpcast folk have promised me a look at what they’ve got to date so more on that when I get the opportunity but this is one VC funding exercise I’m not going to spurn.

Whoever solves the online/offline puzzle is sitting on a bonanza because this stuff is tough. Anyone who has ever used anything with online/offline capabilities such as Lotus Notes, knows the potential for things like replication conflicts and so forth.

This is where you so-called ‘Web 2.0′ starts to get serious. I remember way back when I was a cub reporter on Computerworld, George Colony was predicting the death of the web. He claimed desktop apps would interact with the Internet to collect information and update with central data stores, but that the client would be feature and graphic rich traditional applications.

What that ignores is that a web client is fabulous for getting access to your data regardless of where you are. It’s a teriffic lowest common denominator. But we’re a long, long way off being able to do everything in a browser that we can achieve on the desktop. Multiple clients accessing synchronised multiple sets and subsets of data, depending on use and practicality is where this industry is heading. And fast.

Filed under: Online Advertising, Online Photo Libraries

Google ‘Lighthouse?’ centre of the online universe

One of things that came out of the Google Analyst briefing presentation was a project Google is working on called Lighthouse.

This is what we were able to glean:

With infinite storage, we can house all user files, including: emails, web history, pictures, bookmarks, etc and make it accessible from anywhere (any device, any platform, etc).
We already have efforts in this direction in terms of GDrive, GDS, Lighthouse, but all of them face bandwidth and storage constraints today.

And:

Another important implication of this theme is that storing 100% of a user’s data makes each piece of data more valuable because it can be access across applications. For example: a user’s Orkut profile has more value when it’s accessible from Gmail (as addressbook), Lighthouse (as access list), etc.

Richard McManus speculated that it might be a ” a next-generation file search solution that ‘shines a light’ inside documents on your desktop”. Shii asked: “Could Lighthouse be a privacy-enabled bookmarks system, like Yahoo My Web 2?”

Having thought about this for a couple of days, I think it’s highly likely that Lighthouse is Google’s Online File Management system.

Every file system needs a file management system to organise and set up a file retrieval system and GDrive will be no different. In fact, the challenges that Google faces in building a file management system for an online drive are enormous.

It’s also critical. I’ve mentioned before that I have been favouring Writely over Zoho Writer simply because I felt it had a superior file management system (Zoho has improved their system lately but I still prefer Writely). We’re talking about a couple of dozen word processing files here, imagine how much complex and challenging it gets when you’re talking about storing ALL of your files on an online drive and what’s more making that your “Golden Copy”.

Problems have already been noted with Google Desktop Search (GDS) which breaks when you move files around on your local drive. Google has an enormous amount of work to do in trying to replicate files with a user’s local machine and that’s even without tackling the issue of file sharing. A key advantage of an online file system is the ease of being able to share documents for collaboration and what not, but that opens up a can full of worms in terms of replication issues, copyright issues, privacy issues. (This is likely what Google is talking about in terms of Orkut profiles being used as access control lists in Lighthouse).

While the challenges are enormous, the rewards for making this all work are enormous. If you control the online file management system, surely you also control what online application is used to manipulate a file when online. If you click on an a Word file in your GDrive, ‘Lighthouse’ if this is what it is, will surely launch Writely, if you click on an email GMail will open it up, launch an image and the online version of Picasa kicks into action, etc, etc. Kent Newsome asked why Google would bother with Writely. If you consider Writely in conjunction with my Lighthouse theory then you start to see how Google might successfully lock you into their ecosystem and therefore it’s important that they can provide the whole picture. This is looking even more monopolistic than Microsoft has ever been!

Google Lighthouse (again, assuming I’m right about it) just might be the most important Google application of all.

(If you haven’t read my Google/Writely Online/Offline post, it might be worth reading as background as to where Google’s general strategy could be heading) 

Filed under: Online Advertising

How a Yahoo/eBay merger could rock Google

While I’m on the online advertising beat, a post to Site-Point claims that Amazon is planning to get into the contextual advertising game and has a beta program already running.

It makes sense for Amazon, and even more so for eBay, to track down this path. I think the gap between online advertising and the actual closing of the sale has to shrink as we move forward.

The first step towards this happening is that advertisers need to get a lot more granular with their advertisements because AdSense is not good at generating income for a very substantial proportion of Internet sites (see my previous post).

So to use the example I used previously: You do a search on President Bush. Under AdSense you get nothing. However, if you’re running an eBay contextual advertising block, suddenly your sites starts feeding up a whole host of ads for related items being sold on its auctions or at any of the thousands of individual eBay stores.

Now, that’s contextual advertising. It’s all very well to microchunk you’re content, but it doesn’t really work across the breadth of the Internet until you microchunk you’re advertising as well.

Yet neither Yahoo or MSN are coming at their advertising programs at a way which solves this problem and therefore addressing the grievances of all those content providers for whom AdSense isn’t working.
Companies like Amazon and eBay, on the other hand, who actually own catalogues of products can make an immediate impact in this space. For me, Amazon, as primarily a retailer isn’t nearly as well positioned as eBay, who exists solely as a selling platform.

Both Yahoo and Microsoft are going to struggle to compete with Google because they don’t have the advertiser critical mass. And without advertiser critical mass, pushing up rates and therefore increasing content provider’s income, the game is really difficult to turn around.

However, eBay is potentially, if it isn’t already, the biggest contextual advertiser on the Internet so it will have pretty reasonable critical mass right up front. If there isn’t an external provider to take inventory, it simply serves up one of its auctions (for which it doesn’t even need to charge for because it’s taking a cut of the sales revenue anyway)

Certainly, eBay will also realise that Google is edging onto their turf with GoogleBase so a counterattack makes even more sense. They also own Skype, so they can bring the buyer and seller even closer together via VoIP. I’ll be very, very surprised if eBay hasn’t launched its own advertising network within the next six months.

(By the way, the GoogleBase reference is worth thinking about. Google really needs to get sellers to get their product catalogues into GoogleBase and then tie that to AdSense so that they too can begin to sell at a more granular level. Arguably, this is a better approach  in the long run as its a distributed model so you don’t need to be tied to a particular selling platform like eBay. However, Google would appear to be a long, long way from making that happen, so eBay would definitely have an advantage in the short term)

Oh and one more thing. And it’s kind of a big thing. Could this issue finally be what brings a couple of the titans together. Think about a mega-merger between either Yahoo/Microsoft and eBay. In particular, I’d be bullish about a Yahoo/eBay combination. You get supply side and demand side critical mass all in one shot so that you’ve actually got something comparable to Google’s network. You get a far better suite of tools for connecting buyers and sellers – Overture/Yahoo’s SMB services/website builder/IM+Skype vs GoogleTalk. And finally you get an ability to profile your community which would leave Google for dead; ie eBay vs Froogle/Google’s Pagerank analysis vs Yahoo’s social networking profiles.

You tell me that doesn’t make a whole heap of (ad) sense?

Filed under: Google, Online Advertising

Why Google’s no longer Froogle with personalisation

You may have noticed late last week Google integrated Froogle with its personalised search (If only Google called its personalised search Poogle then I could have said Google had put the Poogle into Froogle).

It didn’t get a lot of attention but I think it’s a big deal. A really big deal. Here’s why.

A great big slice of web traffic is really difficult for Google to monetise. When a webpage’s subject matter isn’t very product-oriented, it doesn’t drive a lot of adsense dollars. So for example, do a web search on President Bush. If your results mirror mine, you get one solitary eBay ad.

There’s a lot of political content on the Internet but Google makes SFA from it. A lot of other big categories are the same. Sport, entertainment, general news are all responsible for massive amounts of page impressions but all offer Google or content producers relying on Google limited AdSense opportunities.

Which is not how traditional media works. It’s the eyeballs that matter, not the content’s relation to high revenue-generating advertising topics. The Superbowl after all is the highest sought after advertising space in the world. For some categories, contextual advertising is just a bad model.

But that’s Google’s model, right. No. Google is about targetted, relevent advertising and that’s why personalised search is so important.

What Google needs to know is what advertising is most relevent to you right now. Making that decision based on the page you’re looking at is a very, primitive way of doing that. Google needs to be able to profile you based on as much of your web activity as it can gather intelligence on and then use whatever available inventory of advertising repository it has to best match your needs with those of the advertising community.

Froogle’s a very important part of that. If you go into Froogle and do a search on a digital camera then it really makes sense for Google to pound you with digital camera advertisements – that’s what’s on top of your shopping list at the moment so they’re the ads you’re most interested in and therefore are the one’s your most likely to click on, thereby generating content for Google and its content partners.

I’m sure if Google was suddenly able to use the profiling it does on you, to decide on more relevent, profitable advertising then it could make a massive difference to its bottom line overnight.

Let’s take Google News. Everybody seems to assume that Google has made no attempt to monetise Google News because it’s worried about the legal implications. I reckon its got more to do with the fact that Google News for the most part, just isn’t a good advertising vehicle for Google. The technology pages excepted, none of its categories are great for contextual advertising. How much AdSense dollars do you think Concerns about Iran reach the tipping point - the top Google News story at the moment, is going to bring in?

Now, if Google could use every click you make on Google News to serve ads related to your most recent Froogle searches, then that’s a different matter altogether. Google’s available inventory would explode and its click-through ratio would increase dramatically to. There is no other single strategy that could increase Google’s profitability as quickly as personalised ad serving, rather than contextual ad serving (of course, it would likely be a combination of both personalised and contextual).

Now, I’m sure a strategy like this is going to raise the ire of privacy junkies. And there will be a big hoo-ha just as there was when GMail launched and people got terrifed of Google’s big ugly computers reading your mail. But there are no losers with personalised ad serving. Google makes lots more money, bloggers and content providers, especially those that currently write about subjects that aren’t so hot for AdSense can massively increase their earnings and consumers get better, more relevent advertising.

If this isn’t the way of the future, and if this isn’t what Google has in mind with it’s sudden interest in personalisation, then I’ll run naked around my bathroom three times singing the Best of Britney.

Oh and btw, Google Toolbar has to be central to this. Google Toolbar means that Google can do profiling over and beyond its own sites. Google Toolbar means that you might click Agree to those long list of terms and conditions, which at some point is going to say (if it doesn’t already) that you allow the information collected to be used when serving you advertisements on the Google AdSense network.

Filed under: Google, Online Advertising

Google on my car stereo?

In Sydney, a new tollway has opened up out my way and it’s been free for the first month or so of operation. Today, I decided to check it out, however, I wasn’t quite sure if the free period had ended and I was going to get slapped with a bill for travelling down a couple of kilometres strech of toll-road without an e-tag.

Anyway, no sooner had the question of, when does that free period expire, then an ad comes on the radio for the new freeway, saying the free trail period ends in four days so make sure you try it out.

To me, that’s exactly why Google’s star should keep rising. This whole, targetted ad trend has a looooong way to go and the technology required to keep advancing it, is going to become increasingly complicated.

Sending you a targetted ad based on what your reading on the web is a breeze, sending you a targetted television ad based on viewing habits is quite a bit more difficult. And then delivering a radio advertisement, based on exactly where you’re listening from, is a whole different story altogether. This is absolutely the way of the future – noise eradication – and Google has the best position and resources to take advantage of.

If I was a Google shareholder, I’d be mightily annoyed at announcements like Google Pack, because those type of things are just distractions from what is its main game. And that game just happens to be the biggest thing in town. I don’t go for this diversified business model bullshit. If I was Google I’d be sticking every cent into making sure I continued to own the targetted ad market.

Filed under: Online Advertising

Click fraud an early warning

Remember when Bob Metcalfe predicted that the dot com bubble would pop, largely because banner ads sucked. He got the date wrong but for the most part he was on the money. Since then, of course, pay-per-click targetted online advertising has come along on its proud, white stallion and saved the dot com damsel from distress.

However, that knight in shining armour, might have a few chinks in its plates. ‘Click Fraud’ is finally getting some attention, via this Wired article and this Paul Kedrosky blog post. Wired reckons up to 40 per cent of ad revenue is click fraud generated. Are we at all surprised?

The Web 2.0 community has every right to be shit-scared about this. It’s not quite in the Metcalfe prediction league yet, but it’s an early warning. Slice 40 per cent out of Google’s revenues and suddenly it’s numbers aren’t looking nearly as pretty. Factor in the impending competition from Microsot and Yahoo, which is sure to drive click prices down and the situation looks even bleaker. Consider the fact that just about every Web 2.0 startup is banking on being acquired by one of the companies that will be affected by this, or else are looking to ad revenues themselves and you’ve got an entire ecosystem balanced on something that, Squash reckons, is going to look increasingly precarious.

What these article show is that pay-per-click is a fundamentall flawed concept – eventually Squash reckons it has to be replaced by, if not pay-per-sale, then certainly pay-per-qualified lead. How many Web 2.0 businesses are looking at delivering those kind of outcomes?

Filed under: Online Advertising

Why Google shouldn’t crush Microsoft in search

Squash reckons the worst possible thing that Google can do is rub Microsoft out of the search/online advertising game.

Right now, Microsoft is a distant third behind Google and Yahoo and, let’s face it, it’s giving up a monster start. And ultimatey, Google’s defensive AOL play may well succeed in being the move that cruels Microsoft’s chances of making big bucks out of being an online advertising intermediary.

However, if Microsoft does give up on the market as a cashcow, it has a very appealing backup option. It can simply rip the guts out of the market and in doing so cut the legs out from underneath Google.

‘Startup boy’ Naval Ravikant writes similiarly on his blog. In a post titled How Microsoft can Obliterate Google, he opines “All Microsoft has to do is to give the revenues from any potential search to the site carrying it”.

Of course, first Microsoft must be “willing to forego the Google ad revenue stream in exchange for severely crippling Google”.

When you think about this, it wouldn’t be a purely defensive play, either. Sure, if MS came in and undercut the margins that Google is taking out with AdSense, it would make a big hole in Google’s bottom line and almost certainly slow down the companies momentum. But such a play would benefit Microsoft in other ways as well.

Microsoft will need AdCenter to gain critical mass. It has already conceded, that advertising-driven, on-demand applications is a space it will need to play in. The last thing it will want is to give a cut of iis ts online advertising revenues to Google or Yahoo as it starts to roll out next generation online mail and productivity applications. But if AdCenter fails to gain critical mass and AdSense and Overture control the market it won’t have a lot of choice.

If it takes a no-margin approach to AdCenter, it would have content producers converting in droves. That would make AdCenter so much more effective, driving up AdCenter rates and thereby increasing the revenue MS can derive from hotmail, msn, live.com, online versions of office, etc. Let’s remember that if Microsoft fully embraces this model, it could almost instantly become the biggest content producer on the net. After all, compare how much time you spend working in Word, say compared to the number of times you use search.

And then who’s the Internet do-gooder? Microsoft becomes the champion of the net, with its benevolent act of turning over all online advertising revenue to the people who produce the content. Hooray, hoorah for Steve and Bill. Suddenly Google at $430 a pop doesn’t look like such a great investment.

Filed under: Google, Microsoft, Online Advertising

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