Insider Chatter by Donna Bogatin

June 29, 2007

Facebook: The Web’s Golden Handcuffs

62907hc.jpgAre the Web’s luminaries wrong about Facebook after all? Is Mark Zuckerberg ruling an open, benevolent F8 as promised, or does the Facebook lure lead to but golden Web handcuffs?

Is it really prudent for the Web to capitulate to Facebook, as the Internet’s “court jester,” aka Esther Dyson, advised at the Web 2.0 NY conference earlier this month. Dyson has seen the Web’s future and it is a big “F,” so just develop for Facebook, Dyson declared:

“Throw out your development, go use Facebook.” WHY, though? It doesn’t matter if you are “better,” what matters is that you are “standard,” Dyson asserted.

A Facebook-only “standard,” that is, as the Web world is now beginning to realize: The vaunted “open” Facebook is not so open after all. What’s more, what’s good for Facebook, is not necessarily good for third-party F8 developers.

Is Facebook the new AOL then? F8 IS dangling a large, registered, “proprietary” user base before developers AND requiring developer acquiescence to the Facebook.

Nevertheless Marc Andreessen lambasts against what is actually an overdue real-world analyisis of what F8 is, and what it isn’t.

Andreessen says “Let’s take a look at the points made by our friends”:

“Unimpressive apps” — “for users, the novelty has worn off” the first set of Facebook apps. My response: five f______ weeks! We haven’t even begun to see the interesting apps on Facebook yet.

“Illusory popularity” — “it’s not clear” that “users” will “stick” with apps. My response: five f______ weeks! We don’t have the slightest idea yet how Facebook users six months from now, a year from now, two years from now are going to react to, adopt, stick with, and/or abandon apps. How can we — we don’t even know what those apps will be yet!

“Disappointing numbers” — “most of the attention is hogged by the most popular apps, and those tend to be the ones present at launch”. My response: five f______ weeks! Any new app on Facebook that wasn’t present at launch by definition can have only been in market for a max of about five weeks — that isn’t enough time to draw any conclusions about numbers.

Andreessen’s core thesis is that at just five weeks out of the F8 gate, it is folly to suggest that F8 may not be all it is cracked up to be.

WHY then did Andreessen HIMSELF confirm to the world just THREE weeks out of the F8 gate that Facebook has already achieved “one of the most sigificant milestones in the technology industry in this decade.”

Andreessen cries “backlash” of the present real world analysis of F8 in all its NOT so glory, even though he is well aware that Facebook’s “openness” is highly qualified, by Facebook. He wrote of Facebook’s demands that “applications must conform to Facebook guidelines for appearance and content or they are disallowed”:

Facebook retains much tighter control of the overall user experience.

Facebook itself is not reprogrammable — Facebook’s own code and functionality remains closed and proprietary. You can layer new code and functionality on top of what Facebook’s own programmers have built.

While the Facebook Platform gives developers a lot of capabilities that they never had before, and access to a huge base of enthusiastic users, as a Facebook developer you’re very much living in Facebook’s world — you’re not creating your own world.

Facebook proprietary control and undue influence is even obvious at Andreessen’s own blog! In typical command and control Facebook PR fashion, Facebook management advised Andreessen on THEIR reality of the Facebook world, the Facebook version of it, that is.

YES, despite his glowing (but unproven) endorsement of F8 as the Web’s best and brightest future, Andreessen was deemed by Facebook to be in need of correcting. Why? Because not only in F8, but within the entire Facebook company, it is Facebook rules. PERIOD.

Andreessen dutifully acquiesced to “the folks at Facebook” and ammended his “analysis” of the F8 to correspond to how Facebook wants F8 to be perceived:

In conversations with the folks at Facebook, there are a few clarifications and expansions I’d like to note:

First, my statement that “applications must conform to Facebook guidelines for appearance and content or they are disallowed” is partially but not entirely true. Boxes that contain content from an application on a user’s Facebook profile page must be rendered via FBML and have tight controls over what can be included, particularly the no-Javascript limitation. On the other hand, so-called “canvas” pages — the pages dedicated completely to a specific application, and accessible via the left-hand-side app navigation area, can be rendered either via FBML (which is restrictive), an iframe that can include arbitrary content, or a combination of the two. From an iframe you do pretty much whatever you want, but you don’t get the FBML features.

Note that you are incented to use FBML because that’s the easiest way to achieve integration between your application and Facebook — e.g. to let your app have access to information about the user and her friends. FBML is clearly a good thing; it’s just that when you’re using it, you can’t do certain other things that you’re used to. And, as noted, you are required to use it for content that shows up on users’ profile pages.

Welcome to the real Facebook world of command, control AND golden Web handcuffs.

ALSO: How Facebook IS the Next Google and Craigslist Q & A: Classifieds Community NO ‘Walled Garden’

CONTACT DONNA BOGATIN

Filed under: Facebook, Social Media, Social Networks, Developers, Culture, Web 2.0, Software, Entrepreneurs
Written by: Donna Bogatin @ 9:27 am

 

MySpace TV: A Place for Google

Who says Google is mad at News Corp. for creating MySpace TV? Heralded as a would be YouTube killer by the blogosphere, MySpace TV is nevertheless good for Google.

MySpace is said to be seeking to out gun Facebook as well, hoping to “bring in more developers” to plug their Web services directly into the social networking site, a la F8.

For now, MySpaceTV has launched AND Google is (almost) front and center:

1) MySpace TV Video search is powered by Google,

2) MySpace TV “Sponsored Links” contextual advertising is served by Google.

The News Corp. - powered by Google Web ad revenue sharing deal is good for Google, at MySpace.com as well as at MySpace TV.

Google rules the Web, n’est-ce pas?

SEE: Video Valuations: YouTube Billions Rule!

CONTACT DONNA BOGATIN

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Filed under: Video, Advertising, Online Advertising, Google, YouTube, AdSense, AdWords, MySpace, Ad Networks
Written by: Donna Bogatin @ 7:16 am

 

June 28, 2007

Google Global Land Grab: Do Server Farms Matter?

62907gg.jpgNick Carr says at his Rough Type blog that it is “too hot” to blog. It is apparently NOT too hot for editorializing at The Guardian, though; The hot topic is Google’s data center “building boom,” an issue near and dear to me as well.

Contrary to Carr, though, I do not view what I call a Google server farm manifest destiny to be an innocent effort on the part of Google to “keep up with the booming demand for its search engine and other Web services.”

Carr believes Google’s massive build out of infrastructure worldwide is simply part of  “a change in the nature of the software business”:

In the past, software companies only had to concern themselves with writing code, copying their programs on to discs and selling them. It was up to the buyers of the software to maintain the computers, storage drives and all the other hardware needed to run the programs.

But the spread of the broadband internet, with its enormous capacity for transmitting data, is changing the way we think about and use software. We’re not installing as many programs on our own computers as we used to. Instead, we’re tapping into programs that are delivered through our web browsers. Facebook, YouTube, Wikipedia, World of Warcraft, Yahoo! Mail, Google Spreadsheets - those are just a few examples of the popular software programs that run mainly in distant data centres, on computers owned or leased by software companies.

SO, Google is merely investing to make sure it can deliver high quality services to its vast, worldwide (mostly non-paying) user base? Would that it were Googley true.

Is the Google corporate mission really to “organize all the world’s information and make it universally accesible and useful” as it touts? NO.

The Google $160 billion plus market cap business plan is to CONTROL all the world’s information AND all the personal data of ALL the world’s citizens with the goals of:

1) selling high-priced advertisements against the content owned by others, and
2) data mining the personal information of others for its own corporate advantage.

Google server farms matter because Google needs a massively scalable infrastructure in order to be able to archive for perpetuity the entire “record” of the entire world and all the data belonging to the entire citizenry of the world.

BUT Google is NOT big brother as CEO Eric Schmidt’s recent iGoogle presonalization reveries provoked many to say AND Google is NOT God, as Jeff Jarvis proclaims.

NO, the Googleplex is a uniquely Googley phenomenon; Google has set in motion a plan to become the one and only defacto world wide repository and destination for ALL the world’s business and entertainment:

YouTube: Who needs TV?
Book Search: Who needs libraries?
Universal Search: Who needs anyone else for anything?
Enterprise Search: Google love belongs in the enterprise.
Google Gears: Who needs Microsoft?
Google Base: Who needs Craigslist?
Google Maps: Who needs Yellow Pages?
Google Street View: Who needs privacy….

Not convinced? Read why Google is WRONG On Consumer Privacy AND beware Google!

SEE: Google is NOT Your Friend and Google Masters Art of Influence Peddling

CONTACT DONNA BOGATIN

Filed under: Google, Google Search, Google Services
Written by: Donna Bogatin @ 2:54 pm

 

Can Google Pass the Coke vs. Pepsi Test?

The preference for Coke versus Pepsi is not only a matter for the taste buds to decide: Brand perception rules, neurological researcher Samuel McClure determined years ago.

In other words, “It’s all in the head.”

NOW, researchers in Penn State’s College of Information Sciences and Technology assert that Web searchers who evaluated identical search-engine results overwhelmingly favored Yahoo and Google, providing evidence that branding matters as much on the Internet as off.

FLASH: Google already knows that its Googley brand can trump the reality of search results AND exploits such Google love to its Google Enterprise sales advantage.

I heard Google Enterprise point man Kevin Gough make a “Google logo” belongs in the Enterprise pitch last month at the Enterprise Search Summit in New York City. A Google consumerization of enterprise technology is the way to both employee happiness and better decision making, was the Google Enterprise message conveyed.

Gough believes enterprises ought to give their users the “interface they are familiar with and using on a daily basis”; Search in business can have the same impact as search on the Web, if Google is invited into the enterprise.

Google’s success on the Web has created new user expectations within the enterprise as well, Gough asserted. “Experience the joy of offering your team the products they already know and love!,” is the familiar Google Enterprise refrain.

Gough’s presentation was headlined “Search as a Decision Making Tool.” Among the many qualities touted for Google enterprise search was a consumer/employee “perception” that if the Google logo is on the result set, then the information must be good.

Gough even “joked” that perhaps Google should develop a new revenue stream by simply licensing its Googley logo!

Perhaps Gough has read McClure’s neurological analysis of consumers brain scans assessing perceptions which “insinuate themselves into the nervous systems of humans”: Culturally based brand images influence behavioral choice, big time.

Right now, Google is the search cultural king.

ALSO: Google is NOT Your Friend

CONTACT DONNA BOGATIN

Filed under: Google, Google Search, Google Services, Google Apps, Google Enterprise, Enterprise
Written by: Donna Bogatin @ 1:03 pm

 

Video Valuations: YouTube Billions Rule!

Is the (promised) soon to be launched News Corp./NBC Universal online premium video joint venture a good buy at $1 billion is (one of) the blogosphere’s questions du jour.

Dow Jone’s Kara Swisher weighs in, succintly: “NO,” billion dollar case closed. Swisher did not promise a rationale for her “conclusion”; Her “story” is headlined “In a Word.”

Is it really video valuation case closed though? I heard the NBC ad sales point man for the News Corp./NBC Universal JV give his (inherently rosy) take yesterday on prospects for the soon to be launched “high quality” video intitiative.

READ my first-hand report: NBC: Millions in Upfront Video Ad Sales

Regardless, online video beauty is in the eye of the holder. YouTube was a $1.65 billion in GOOG beautiful thing, for search-driven Google. Google itself implicitly acknowledged the “price” was substanially all goodwill during its Wall Street conference call:

QUESTION: Any idea on what you used to value this acquisition? Were you looking at cash flow returns or any kind of help you can give us on that?

GOOGLE, David Drummond, SVP Corporate Development on the “structure” of the deal: We model this on a more or less synergistic kind of a model. You can imagine that it might be difficult to sort of do this on a standalone basis. We feel that we arrived at a purchase price that’s very fair and reflects the great value that’s been created at YouTube.

We structured this as a stock transaction in order to make it tax free for the YouTube shareholders, which we think is a good transaction for them and for us, in the sense that it in some ways made it cheaper for us. There is some very slight dilution, but we think this was a good structure.

Good for Google, direct “cost,” wise yes, BUT not from the perspective of potenitally massive indirect “costs” it assumed when acquiring the DMCA fueled no need to pay for the content of others buisiness model.

Google is currently exposed to billions of dollars worth of copyright infringement lawsuits, literally.

Viacom’s $1 billion copyright slap at Google may end up being mere peanuts.The copyright infringement class action currenlly being prosecuted against YouTube by Proskaeur Rose is opened-ended with no theoretical bounds on the financial liabilites Google may incur.

READ my exclusive interview with Proskaeur Rose: YouTube Copyright Infringement Claims ‘tip of the iceberg’

In the event of such a Google meltdown, a News Corp./NBC Universal copyright friendly online video venture could be worth not just one, but several billions.

CONTACT DONNA BOGATIN

 

Google Gets Rocket Scientists on the Cheap: Junk CPMs

63007gg.gifYAY! Google is putting its billions where its iGoogle mouth is with its new Google Gadget Ventures? NOT Exactly.

Google famously ignores conventional business contractual wisdom in its AdSense dealings, refusing to provide publisher “partners,” or prospective ones, a commission schedule. Trust us, Google insists, literally:

You’ll receive a portion of what the advertiser pays .The best way to find out how much you’ll earn is to sign up and start showing ads on your web pages.

Google IS giving an indication of what Google gadget “developers” will get from Google if the Googleplex deems them pageview worthy, and it is not very Googley good.

Google believes it is incenting developers to spend time working on projects that will help grow Google’s $160 billion market cap corporation:

We’ll invite promising gadget developers to apply for $5,000 grants to fund further development. These are not loans or equity investments; they’re simply grants for gadgets that already have a thriving user base and we think have potential for even more improvement. To be considered for a grant, your gadget needs to have more than 250,000 pageviews per week, and you need to provide a one-page proposal on how you’d like to improve your gadget. This is a no-strings-attached grant; we won’t ask for repayment of any kind. We simply ask that you work on your project in good faith.

What about Google’s good faith towards its gadget “partners”? How good is the Google Gadget Ventures scheme, for Google Gadget Developers?

A minimum of 250,000 page views weekly aggregates into 12,000,000 plus pageviews on an annual basis. The Google “pay” of $5000 yields a CPM of 42 cents, a junk valuation.

BUT, even at $5000, Google is graciously bestowing “no strings attached” Google money upon the developer community is the conventional wisdom. Google even pitches that Google’s new found largesse will enable developers to now have profitable enterprises.

Is it really Christmas for developers, though? Is Google opening up its pockets?

YES, but not Google’s deep pockets. Google ALWAYS manages to pocket the biggest win in all its dealings with the property of others.

The touted economic ecosystem that Google is “bootstrapping” around gadgets portends an economic windfall for Google: As Google Gadget love grows so does the Google multi billion dollar virtuous circle: Google users, Google searches and Google AdWords high-priced clicks.

Ought mega profitable Google really be “bootstrapping” its third-party developer network? How about REAL Google love: Ongoing Google profit sharing would be a genuinely Googley thing!

At “Searchonomics” yesterday, Marissa Mayer shared the “success story” of a high school student Caleb who used ”free” development tools, such as the Google Gadget Wizard to make a gadget which drives 6.5 million views a week.

A Google Gadget Ventures $5000 grant would reward the young Caleb at less than 2 cents CPM for his 312,000,000 annual pageviews generated: NOT a very savvy business lesson for Google to be giving our nation’s future entrepreneurs.

ALSO: Can Google Pass the Coke vs. Pepsi Test?

CONTACT DONNA BOGATIN

 

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