Insider Chatter by Donna Bogatin

“‘Y” is Steve Souders, Chief Performance Yahoo, ”jumping” to Google as of January 7? Henry Blodget wants to know! Despite dubbing himself a ”Silicon Alley Insider (SAI),” the Wall Street outsider marks the end of 2007 with a public plea for “insights” for 2008, from the public:

“From the outside, hard to see this as anything other than yet another long-term exec fleeing a sinking ship. Any insights appreciated.”

No problem, Henry (only hard for you, perhaps): Here goes. Unfortunately for your signature “Yahoo to Zero” style sensationalist headlines though, and contrary to the “outrageous conculsions” your SAI traffics in, the Souders move from Yahoo to competitor Google is undoubtedly outrageously non-dramatic.

Steve Souders, a seven year Yahoo veteran, conculdes a banner year: YSlow performance tool, “High Performance Web Sites” book, conference mainstay…most significantly, success in making performance a “prioity” at Yahoo.

What next? High performance engineers continually seek more challenging challenges. Rather than “fleeing a sinking ship,” as Blodget brandishes, Souder is seeking new waters for professional navigation. 

Souder is far from abandonning Yahoo, he leaves the company with his performance mission accomplished and a Yahoo performance team ready and able to carry on the performance roadmap Souder set underway for Yahoo in 2008.

Why NOT move to Google now? Souder changed the Yahoo developer culture to one that is perfomance-centric. For his own personal development, however, Souder will grow more by being at Google now, a company which has long differentiated itself by performance.

Souders is curious, in particular, about how Google achieves proprietary competitive performance advantage, especially via its “hardware topology.”

Why does Google want Souders? It is unlikely that Souders will unveil anything not allready in the public domain that can speed up Google.com even more.

Google is keen on Souders accomplishing his next performance objectives under the Google banner, especially given that Souders’ next big performance challenges complement the Google development roadmap.

If Souders had remained a Yahoo!, he would be tackling two big speed challenges in 2008: ad serving and mobile. What good timing for Google, given its DoubleClick and Android investments!

Souders has already made a comittment to “improve the performance of ads” because he deems ad serving to be “the slowest part” of a users’ Web experience. Souders wants to make sure “people don’t hate ads.”

How about mobile? How about “YSlow for mobile”? Souders believes the performance field is but at “the tip of the iceberg” and is keen on evangelizing faster mobile performance.

In 2008, Souders will have ample opportunity to make the world better for ad serving and mobile surfing, thank’s to Google’s (soon to be?) DoubleClick and Android.

Google, itself, however, has some some big challenges of its own coming up. SEE: Why Google Worship is a BAD Call in 2008

Google Knol: The End of Google.com, NOT Wikipedia and
2008 Social Media Warning: Beware Google AND Facebook and
Browser Flack: Will Google Ever Escape Microsoft Rule? and
There Is NO Google Apps Love in the Enterprise and
Lost On Google Maps! What Merry Christmas? and
Google Warning: How GOOG 411 Tricks Consumers and
Google Zeitgeist: $200 University Payola AdWords Scam and
How Google AdSense FAILS Better Business Bureau and
Google AdWords Plus Box: Local CPC Bidding War Unleashed! 

CONTACT DONNA BOGATIN

Who said Microsoft doesn’t know how to play big league ad ball? Microsoft was ridiculed for supposedly being “outbid” by Google in the $3.1 billion DoubleClick buy out; Redmond plunked down a cool $6 billion for aQuantive though!

Lo and behold, Microsoft is now good to go with aQuantive, officially closing the transaction, while Google is mired in regulatory oversight from all angles, bracing for a defensive Washington DC Fall season.

Congressman Bobby Rush, Chairman, Subcommittee on Commerce, Trade and Consumer Protection, has opened an official investigation into the “alarming” implications of the impending Google DoubleClick merger.

Rush seeks to collaborate with the Federal Trade Commission in its ongoing review of the proposed deal, and is launching an investigation of its own:

There is widespread concern about the proposed merger between Google and DoubleClick that the Federal Trade Commission currently is reviewing.  Concerns have focused not only on the implications for competition – in online advertising and other possibly affected markets – but also on the potentially enormous impact on consumer privacy.  Consumer groups in the United States and Europe as well as the European Commission’s Article 29 Data Protection Working Party have expressed growing alarm over the implications for consumer privacy from the practices of these companies, especially if they combine.  I share these concerns and am writing to notify you that the Subcommittee is considering holding a hearing when an appropriate date becomes available after the August District Work Period.

While Google still lusts for DoubleClick, Microsoft is lusting for the $600 billion worldwide ad pie that Mountain View believes IT is rightly entitled to!

Kevin Johnson, president of Microsoft’s Platforms & Services Division:

Today we take a significant step forward in our ability to capture share of the $40 billion online ad opportunity and the larger $600 billion ad market, which is rapidly shifting to the world of online and IP-served platforms, including TV and gaming. The addition of aQuantive’s technologies and people to the Microsoft portfolio is a core, strategic investment and step forward in our plans to become one of the top two online advertising platforms in the industry.

At the end of the multi-billion dollar ad game day, who will be number one, though? The Google DoubleClick deal is not a certainty.

The Microsoft “elevator pitch” is “Founded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.” Johnson nevertheless underscored Microsoft’s intention to ad Google style ads to the mix, big time.

The other “one of the top two online advertising platforms in the industry” also aims to change its mantra: “Search, Ads and Apps,” to be more like Microsoft!

And they’re off!

One time monopolist Microsoft is out of the aQuantive acquisition gate with flying colors. Google, though, NOT a “convicted monopolist,” is struggling to keep its $3.1 billion DoubleClick wager intact.

ALSO: Why Google Will NEVER Pay For a Local Ad Sales Force and Google Gears NOT Powering Google Office: Sun AND Microsoft Win

PLUS: Google vs. Wal-Mart in Electronic Health Record Battle for Consumers

CONTACT DONNA BOGATIN

“The online media industry’s hottest party of the year,” was last night AND I was there! “It’s party time,” MediaWhiz announced in inviting Silicon Alley faithful for the online marketing firm’s “annual blowout deck bash.”

CEO Jonathan Shapiro and team delivered: “Hors D’oeuvres, top shelf open bar, and live DJ.”

Shapiro is a newcomer to MediaWhiz, arriving barely four months ago, straight from DoubleClick, where he was responsible for not only setting strategy but overseeing M & A.

I chatted with Shapiro last evening; He is bullish on the “broadest platform of online marketing solutions available” that MediaWhiz aims to offer:

MediaWhiz leverages its comprehensive suite of marketing services to achieve superior results for advertisers and publishers. Services include affiliate marketing, lead generation, email marketing, list management, display advertising, text link advertising and search marketing. MediaWhiz delivers more than 3 million monthly leads to over 3,000 advertisers through its database of more than 100 million consumer email addresses and relationships with over 25,000 publishers.

MediaWhiz is understandably sales driven. A “Glengarry Glen Ross” style whiteboard is a key part of the “sales pit,” spurring reps to close bigger and better marketing deals. I got in the party spirit last evening, by adding a “$1 billion” sale to the board!

Silicon Valley’s Michael Arrington was invited to the Silicon Alley shindig. He didn’t make it; but TechCrunch is spurring along some MediaWhiz festivities as well: “MediaWhiz latest ad network for sale?”:

The company may be shopping itself to private equity firms. We are hearing that they are looking for $400- $450 million, which is 2.5 - 3 times estimated 2007 revenues.

Is the MediaWhiz party just beginning?

ALSO: Silicon Valley ‘Sucks’? Welcome to Silicon Alley!

CONTACT DONNA BOGATIN

Three Microsoft strikes and Google is OUT?

Soon to be Microsoft owned aQuantive’s Atlas has been chosen by IAC Advertising Solutions to provide media ad serving technology for IAC businesses, such as Match.com, Citysearch, Evite, Atlas and IAC announced today. Atlas replaces (perhaps) soon to be Google owned DoubleClick in a multi-year deal.

aQuantive over DoubleClick marks the third recent IAC embrace of Microsoft over Google.

In Will Ask.com Go All the Way with Microsoft? last week, I underscored the new found Microsoft-Ask.com working friendship, developed at the expense of Google. 

July 22, 2007: “Microsoft and Ask.com Call on Industry to Join Together to Evolve Privacy Protections for Consumers”

July 17, 2007: “Microsoft Office Live Adds Ask Sponsored Listings to Its Small Business Search Advertising Service”

IAC is now more firmly in the Microsoft (not Google) partnership camp with its Atlas deal. What about the Ask.com Google “Sponsored Links” deal up for renewal though?

With three new Microsoft wins, it would indeed be consistent for Ask.com to go all the way with Microsoft and replace the Google Ask.com deal with a Microsoft one. HOWEVER, Google need only up the Ask rev share ante to preserve some IAC face!

Atlas president Karl Siebrecht gleefully declared today: “This win further validates that leading publishers are switching away from other solutions.”

Will Microsoft soon be gleefully adding Ask.com to its Facebook and Digg “who needs Google” conquests?

MORE NEWS IAC CEO Defends Ask.com $100 million Marketing Spend and Google’s $10 Local Search Pipe Dream: Slave Wages to Squeeze Yellow Pages

ALSO: Facebook Fans Trash Talk LinkedIn: Will Reid Hoffman Fight Back?

CONTACT DONNA BOGATIN

“Google wary of behavioral targeting,” is the latest Google PR pitch backed up by mainstream media (Reuters) and dutifully echoed by the blogosphere.

Google employee “number 18,” VP Susan Wojcicki spun a Googley good tale for “reporters” yesterday at the Googleplex:

“Google is shying away from the industry race to deliver tools for advertisers that stitch together a user’s various online actions into one profile.”

Could it really be true? Why is Google fighting tooth and nail then for the right to fork over $3.1 billion in cash for DoubleClick behavioral targeter extraordinaire?

Google CEO Eric Schmidt is fond of lavishing inordinate praise on Wojcicki. it is inconceivable that she is unaware of the behaviorial targeting business DoubleClick is in and of Google’s determination to acquire the DoubleClick business.

Nonetheless, to refresh the Google VP’s memory, a primer on DoubleClick Booomerang, heralded by DoubleClick as delivering “true behavior driven advertising” designed to “leverage the power of behavioral targeting”:

1) User visits client Website looking for a product and browses, but does not make a decision. The user is “now tagged” as an interested prospect in a Boomerang List.

2) User continues Web browsing, visiting a site where the client has an ad campaign already running. Dart for Advertisers recognizes the visitor (thanks to the Dart cookie ID), and serves a targeted ad offering free shipping.

3) Qualified prospect clicks on Boomerang-targeted ad and is taken back to client Website to take advantage of free shipping offer.

Google has famously not accepted third party ad tags under the guise that “we don’t do anything to compromise the user experience on Google properties or across our AdSense network.” 

In its Google Speak FAQ on its DoubleClick transaction, however, Google says:

We did not accept third party tags because we could not guarantee the quality of the ad or that it would comply with our format policies. (BUT) working with DoubleClick we will increase the relevance of ads online so that we maintain a positive user experience while providing targeted ad opportunities for advertisers and increased monetization for publishers.

Wojcicki’s media op comes as the Google DoubleClick proposed merger is stymied due to FTC and Congressional privacy and competition concerns. The top Google exec’s “briefing” for reporters yesterday appears self-serving and disingenuous: 

While expanding beyond one-for-one correspondence between a consumer’s Web search and the ads displayed, Google says its ad targeting remains rooted in search activity rather than trying to deduce relationships from other sorts of user information.

The Google official stressed that this effort to improve ad relevancy does not involve personal information databases. “What we are very careful about is traditional behavioral targeting,” Wojcicki said. “Nothing is stored, nothing is remembered. It all happens within that session.”

Wojcicki’s fear no Google behavioral targeting cry is also in stark contradiction with the Google CEO Eric Schmidt’s frequent talk of an all knowing Google.

One year ago, I heard Schmidt share his vision for in-car, targeted, personalized radio advertisements that would literally speak directly to the driver about his/her personal needs.

Last May, I heard Schmidt wax poetic of Google as Big Brother:

With the personal version of Google, iGoogle, the computer will get to know you so well, it will say good morning, you are late this morning, but you are always late; It will almost understand how you think and mimic behavior.

Schmidt vs. Wojcicki then? Or is Wojcicki the chosen Google “spoksesperson” for DoubleClick storytelling?

Google can not unspin itself from the incredulous and incongruous “Google wary of behavioral targeting in online ads” line fed to Reuters. 

Google DoubleClick is a behavioral targeter and Eric Schmidt wants all of Google to know its users better than they know themselves.

The New York State Consumer Protection Board is not duped; It issued a oonsumer alert urging New Yorkers to “take action to protect your privacy”:

Goggle, Inc. plans to buy DoubleClick Inc. This merger presents significant privacy implications. The combination of DoubleClick’s Internet surfing history generated through consumers’ pattern of clicking on specific advertisements, coupled with Google’s database of consumers’ past Internet searches, will result in the creation of “super-profiles,” which will make up the world’s single largest electronic repository of personally and non-personally identifiable information. Without appropriate safeguards, this database could, for example, be made available without consumers’ knowledge or consent to secondary users, including vendors of personal data, as well as made public as evidence in litigation or through data breaches.

THE REAL GOOGLE HEADLINE? BE WARY OF GOOGLE BEHAVIORAL TARGETING IN ONLINE ADS!

ALSO: Google Analytics Down YAY! Declare Webmaster Independence, from Google and Eric Schmidt: Google Cures What Ails the World

PLUS:Google: $4.6 billion Google Phone Wireless Cheapskate

CONTACT DONNA BOGATIN

When I met with William Urschel, AdECN founder & CEO, in NYC about one year ago, he told me his nascent online display advertising auction platform aimed to merge New York Stock Exchange style trading liquidity with “Las Vegas” style action.

Today, Urschel hit the jackpot himself; Microsoft has agreed to acquire AdECN as part of its “commitment” to provide advertiisers and publishers with a comprehensive search and display advetising platform.

Urschel told me the AdECN exchange serves as a neutral, central marketplace for the buying and selling of online display advertising.

Kevin Johnson, president, Platforms and Services Division at Microsoft, today on the “fit”:

Both Microsoft and AdECN have a deep commitment to creating the technologies and platforms that enable advertisers and publishers to maximize their ROI in the digital marketplace. We believe the addition of AdECN to the Microsoft portfolio is a perfect fit and will create more efficiency for the industry by forming a more robust marketplace between advertisers and publishers, aggregating more supply and demand.

Urschel on what the deal means for the company he founded:

Joining forces with Microsoft will provide the capital and resources to enable AdECN to scale the exchange at a much faster pace, making it more attractive to the advertising networks and other traffic aggregators looking to better serve their advertisers and publishers.

Urschel explained the AdECN Exchange modus operandi to me as serving its members, or “seat-holders”, who in turn serve their advertisers and publishers. The seat-holder is the advertising network or advertising broker that holds a seat on the exchange and acts on behalf of the advertiser or publisher in executing transactions.

The Exchange transaction flow (see diagram below)–Publishers place their ad spot inventory in the exchange and advertisers specify in advance the targeting they want and how much they are willing to pay. A viewer lands on a Website page owned by a publisher represented by a seat-holder, triggering a single-pass auction among all of the interested advertisers. The real-time auction is completed in under 100 milliseconds and the advertiser who placed the winning bid, represented by a seat-holder, purchases the ad spot offered by the publisher.

Microsoft had evaluated developing its own ad exchange; The AdECN purchase is apparently the result of a build vs. buy decision. Nevertheless, the ad exchange game is still early and many players are competing.

Yahoo owns Right Media, Google’s soon to be DoubleClick is creating an ad exchange of its own, and now Microsoft can do its own exchanging as well.

NEXT STOP, VEGAS!

ALSO: Twitter This: Google AdSense is NOT a Business Model! and Yahoo Travel Shortcut? Try Undercut: Search Marketers Squeezed

CONTACT DONNA BOGATIN