Insider Chatter by Donna Bogatin

Nick Carr is apparently feeling very confident that he got his forthcoming “The Big Switch” right.

In the last four days alone, as he pitches preorders of his soon to be follow-up best seller to “IT Doesn’t Matter,” Carr shares with the world at his blog that he knows “precisely what the future of personal computing looks like,” i.e. the Apple-Google product roadmap, and he offers up a Wal-Mart IT fueled ”I told you so,” plus a New York Times pay wall spurred “so there” to counter would be critics and non-believers.

1) The Carr ‘Jobs-Schmidt’ crystal ball: So how long before the first Google-Apple Cloud computer appears? I would say it’s months, not years. Robert X. Cringley rebutted Carr’s “simple” fortune telling and I refute Google’s world wide advertiisng domination “fantasy.” SEE: Radio Ads Stall: Google Pins Offline Advertising Hopes On TV

2) Carr riffs off of reporting done by the Financial Times regarding an esoteric academic study of how newspapers’ online editions may cannibalize flagship print publications to counter “whoops and  hollers from the members of the Web’s hallelujah chorus” which cheered the demise of the New York Times’ pay wall last month; For his part, Carr declares “setting prices should be a rational act, not an ideological or sentimental one.” I postulated same upon the NYT’s announcement of no more Times Select last month. SEE: NY Times $10 million Free News Bet NOT a Sure Thing

3) “For Wal-Mart, too, IT is a commodity” Carr now declares in defense of his old book:

After I wrote “IT Doesn’t Matter” back in 2003, critics would routinely present Wal-Mart as the killer counter example to my argument that information technology rarely provides a competitive advantage anymore…

Now, with commodity software greatly advanced, Wal-Marts’ custom systems have turned from advantage to disadvantage, and the IT analysts have changed their tune.

Carr deems Wal-Mart to be scrambling to buy packaged software so it is not left in the legacy IT dust:

The company has recently purchased off-the-shelf pricing and business-intelligence software form Oracle and HP, and on Thursday it announced it would install an SAP system for financial management and reporting.

BUT, do (big) buy versus build decisions really signify Wal-Mart has admitted defeat in its strategic deployment of information systems? NO!

SAP is claiming its products help companies “achieve their goals for leadership and growth, resulting in competitive advantage.”

Moreover, by being IT source neutral, Wal-Mart’s technology investment decisions become even more strategic for an even greater ability to create competitive advantage.

Google employs a similar strategic buy-versus-build rationale in its engineering acquisition strategy:

dMarc Broadcasting, YouTube, Writely, JotSpot, GrandCentral, Zenter, Postiini, Zingku, Jaiku…

Google is IT source neutral, big time, buying lots of companies and/or software and/or engineers, as well as recruiting its own in-house rocket-scientists, lots of them.

If Google is cheered for its strategic scoffing at the “not invented here syndrome,” Wal-Mart ought to be as well. 

Google even touts how supposedly commodity IT becomes a competitive advantage, when it becomes Googley:

From the beginning, Google’s developers recognized that providing the fastest, most accurate results required a new kind of server setup. Whereas most search engines ran off a handful of large servers tha often slowed under peak loads, Goolge employed linked PCs to quickly finds each query’s answer. The inovation paid off in faster response times, greater scalability and lower costs. It’s an idea that others have since copied, while Google has continued to refine its back-end technology to make it even more efficient.

Bottom line: information technology does matter, and it matters what companies do with it, just ask Google.

BTW: When Google was a Stanford research project, it was nicknamed BackRub because the technology checks backlinks to determine a site’s importance.

ALSO: Powerset vs. Google? NO! Amazon EC2 vs. the Googleplex and Facebook, the Web’s State Fair vs. LinkedIn, the Chamber of Commerce

PLUS: Startups: Who Needs Business Plans? Draper Fisher Jurvetson, Mayfield, Sequoia… and CED Tech 2007: 30 Cool Startups, But NO Facebook Apps

CONTACT DONNA BOGATIN 

The Google coopetition juggernaut continues: On the heels of IBM announcing its intention to take its rightful seat at the Office Productivity table with the new and improved Lotus Symphony, Big Blue is teaming with Mountain View to finance cloud computing data centers for research use by universities.

Strange strategic bedfellows? Stranger still, the IBM disclaimer by Samuel Palmisano, CEO, noting Google is mainly a consumer company, while IBM concentrates on the corporate market:

We’re more complementary than anything else, we don’t really collide in the marketplace.

REALLY? Google is NOT an enterprise threat to IBM, or anyone else?

That will be news to Google CEO Eric Schmidt’s Enterprise Search team and to GOOG shareholders promised a Google now powered by “Search, Ads & APPS”!

Did Palmisano not hear just last week that his new partner, Schmidt, has upped the Google Apps enterprise ante, thanks to $625 million Postini? Of course he did, IBM just doesn’t take Google seriously as an enterprise level threat.

RIGHTLY SO, as I myself underscored last week as well in Google Chokes With Postini: Billion Dollar Office Apps Giveaway.

Palisamo is also apparently underwhelmed by the less than shock and awe Cap Gemini resale deal with Google Apps, and so am I. SEE: Office 2.0: Zoho and Google Apps FAIL to Dazzle

AND , I UNDERSCORE HOW GOOGLE IS NOT MAKING HAY IN ENTERPRISE SEARCH IN
Autonomy vs. Google Search Appliance? NO CONTEST: Google Search Appliance Gets Defensive

Microsoft Office Thunder to Blast Google Apps Cloud

EXCLUSIVE CEO INTERVIEW: HOW COMMTOUCH WINS IN GOOGLE POSTINI ENTERPRISE BATTLE

ALSO: The Future of Technology VC is Now in Research Triangle

CONTACT DONNA BOGATIN

Why does Facebook make grown (and young) men swoon, I noted bemusedly last weekend, debunking, once again, the LinkedIn death wish ardent Facebook fans are keen to perpetuate.

This weekend, it seems that Facebook faithful may now believe Mark Zuckerberg has put a target on the back of another heavy hitter, Apple. Rafat Ali debunks THAT Facebook “killer” strategy this go around: “Facebook working on a music platform for bands, NOT iTunes Killer, But MySpace and Apple tie-up.”

IS Facebook taking music lessons? Zuckerberg and company are not snging, yet. paidContent is nevertheless confident that its “multiple sources” trump what is deemed to be a “slightly off the mark rumor,” said itself, nevertheless, to also emmanate from ”an extremely reliable anonymous source informant.”

In other (also not so groundbreaking) Facebook news, Tim O’Reilly announces the availability of his self-published $149 report on “The Facebook Application Platform” to coincide with the upcoming O’Reilly Media “partnered” $900 “Graphing Social Patterns” conference.

After acknowledging that “the good news has already been widely disseminated” about F8, O’Reilly teases that the “bad” long tail ”news” is “alas, in our report.” The not so newsy Tim ‘Web 2.0′ O’Reilly conculsion, though: “A throwaway Facebook app is not the ticket to quick riches and embracing the Facebook opportunity requires more than just optimism.”

The O’Reilly beware Facebook platform advice comes after his team at O’Reilly Research “crunched the numbers.” 

My first beware F8 advice to developers coincided with Zuckerberg’s announcement of “the platform” in May and has continued here at Insider Chatter, despite continued Facebook hype ($149 not required). SEE:

With Facebook Platform as a Developer Friend, Who Needs Enemies?

Startups: Why Facebook Platform is a Wolf in Sheep’s Clothing 

Why Facebook Platform is Risky Business

Facebook: The Web’s Golden Handcuffs 

I underscored, way back in June, that just as Google Webmaster love is free, but scarce, so is F8 developer affection. In other Facebook words, the real world lesson of iLike’s “off the charts” success was OBSCURITY CAN KILL, not ”success kills.”

The biggest Facebook cold shower of all though is the not quite killer penetration of Facebook itself on the world wide Web.

Scott Heifferman, founder MeetUp, dampened Facebook–THE social network–hype at his NY Tech Meetup this week. When the presenter of a new, perhaps ”long tail,” Facebook app queried the audience, “who is NOT on Facebook,” Heiffer retorted “who is NOT on the Internet, THE REAL social network.” TOUCHE!

The bottom line Facebook not so killer numbers? Zuckerberg is attracting less than a 2% share of the world’s Internet users:

Internet usage: 1,244,449,601 users (Internet World Stats)

Facebook penetratation: 22,000,000 estimated actual Facebookers (Compete)

The REAL not so killer Facebook bottom line: $30 million annual earnings.

PLUS READ MY EXCLUSIVE INTERVIEW: Reid Hoffman On How LinkedIn Beats Facebook for Business

ALSO: Social Fireworks Alert: LinkedIn vs. ‘Loud Mouth McClure’? and Hey Paul and Fred: Hackers, NOT Startups, Are the Commodity

CONTACT DONNA BOGATIN

Is Paul Graham sending the right message to our young men? How about the NBA?

Just as every LeBron James wannabe hoopster should NOT be hyped into believing who needs college, every Sergey Brin wannabe hacker should not be spun a Google billionaire fairytale.

LeBron is a moneymaking star machine, Kwame Brown is not. Brin is a high-flying cash machine, the Zenter (now Googler) developers are not.

Quinnipiac University student newspaper on why “NBA’s age restriction adds maturity and talent to rosters”:

The age restriction forces inexperienced players to take a year to develop rather than sit on NBA benches. Such development would almost certainly have helped Brown more than sitting on the bench in Washington. Clearly, James needed no additional development. Yet, wouldn’t his already phenomenal resume look even better if he had played in a Final Four in the 2003-04 season?

And wouldn’t basketball fans have benefited from witnessing James possibly go for a national title that year, rather than play for a developing Cavs team?

YCombinator’s Graham on why “leaving” college, rather than graduating with a degree, is potentially a very  good thing:

If you’re starting your own company, why do you need a degree?

Right, and if you are going to be the next Michael Jordan, why do you need to even pretend to care about college?

BUT, how many Michael Jordans might there ever be AND how many Brin billionaires might the world sustain?

Just as the Internet’s “court jester,” Esther Dyson  led would be startups astray in June when she cajoled to hackers “throw out your development, go use Facebook,” YCombinator is NOT serving the nations future hackers well by validating that it “matters less whether students get degrees.”

Who needs college? Who needs business plans? are NOT the right questions for startup hackers: WHO NEEDS GOOGLE is what truly savvy entrepreneurial coders will say to themselves, just as paper billionaire Mark Zuckerberg apparently says to himself every day!

While Graham hails Google for “standardizing” startup acquisitions so “they’re little more work than hiring someone,” I lament that brilliant deveoplers of proprietary software IP are selling themseleves short by selling out on the cheap to Google.

The latest prime example: Sami Shalabi, of not quite Zingku fame.

Read my Insider Chatter exclusives: Zingku Backstory: Founder Sami Shalabi Newest Google Engineer? and Zingku Flips to Google: NO Dodgeball Hacker Lessons Learned!

Also, before signing on the low-ball Googley dotted line, read the Googleplex-centric startup advice of Google’s star biz dev guy, Chris Sacca, who proudly calls himself a “corporate sellout interloper.”

In Sacca’s actual words, “STAY CHEAP”:

I see too many entrepreneurs these days feeling the need to build an entire company to support what is essentially a feature of a larger search engine. It depresses me to see creative people wasting productive cycles on the mundane aspects of building full companies. Y Combinator gets this.

But Mr. Sacca, HOW can emulation of a rule the world for bilions strategy as followed by your chief, Sergey Brin, ever be deemed “mundane”? Was Brin “wasting” his creativity by building out his global vision to pocket billions for himself?

Why DO Sacca and Graham evangelize startup sellouts the faster the better? So they can get THEIR big money returns the faster the better.

Graham disses the “stigma of inadequacy” in quick startup flips. If he was really looking out for hackers’ long-term best interests, though, he would push his stable of ramen noodle funded coders into trying to BE the next Google, rather than hoping to be the next hackers to sell themselves to Google, on the cheap.

MORE: Got a Tech Startup? Google is NO Angel and Zenter: Google Product Development on Spec

ALSO: The Real Madison Ave: Before (and after) Google and Social Fireworks Alert: LinkedIn vs. ‘Loud Mouth McClure’?

CONTACT DONNA BOGATIN

Google Engineering powers on.

Rich Skrenta hails “Kosmix releases Google GFS workalike ‘KFS’ as open source.”

At the same time, Google is taking over the technology of Zingku. 

More and more it seems that Mark Zuckerberg really is unique in having started as a hacker and wanting to build a company, rather than merely flip software to one of the big guys. Where IS the engineering glory in being absorbed by the Googleplex, hook, line and hacker, for pennies on the future dollar?

After all, Google is NO angel!

Contrary to popular perception, Google’s ”acquisiition” of Zenter was not the epitomy of the American entrepreneurial dream come true, it was the culmination of the efforts of two detmermined hackers to woo Mountain View via Google Apps product development on spec.

How valuable was the Y Combinator backed Zenter to Google? Chris Sacca, Google biz dev guy:

Y combinator comes down to two kids in a room with two computers and ramen noodles for a summer.

Google may be making billions by enticing advertisers to blindly bid up their own rate cards, but it is highly unlikely that Google itself would bid up the value of a few thousand man hours of ”ramen noodle” sponsored coding.

The Zenter duo invested a few months of their lives in non-stop hacking with the goal of winning over Google, and they did. Grand prize? Engineering jobs at Google!

Mountain View directly wooed the founding hackers of Dodgeball to the Google engineering team in 2005, with promises of even greater mobile social networking glory. Today, Dodgeball remains an unwanted stepchild of Google while the hackers behind it have long declared their emancipation from the world of Google “rocket scientists.”

What about Zingku? Still in “private beta,” Google is acquiring “certain assets and technology” of the mobile social networking service, undoubtedly on the cheap, and most likely with the founding engineer(s), hook, line and hacker!

EXCLUSIVE: READ MORE in Zingku Backstory: Founder Sami Shalabi Newest Google Engineer?

ALSO: Adobe Buzzword Buzz Kill: NO Virtual Ubiquity

CONTACT DONNA BOGATIN

Is Facebook really the model way to take product to platform in order to “give back to the Internet”?   

The more Facebook’s Dave Morin acts like Matt Cutts, the more Mark Zuckerberg’s F8 acts life a Facebook page view pusher, not the ecumenical Web platform it was hyped to be.

Just as Webmasters shutter before Cutts as he bestows–or doesn’t–Google PageRank love, Facebook Developers brace for when Morin ”shifts” how applications are ranked in the application directory.

Morin’s latest “engagement” spiel tells applications what they must do if they are to gain any Facebook love: Drive Facebook’s numbers, such as:

Canvas page views,
Link clicks in FBML,
Mock-ajax form submision,
Clock-to-play Flash.

In Facebook speak, F8 is only looking for a win-win: “user engagement and utitlity.”

The Facebook-centric “engagment” measure of “utility,” however, penalizes Applications that may actually provide the most user utility of all, but nevertheless yield little for Facebook in terms of daily measureable user activity.

Lending Club, case in point. A Facebooker getting a $1000 loan at below market rates is of extremely hgh utiiity, but, once obtained, does not necessarily result in daily “engagement” with the Lending Club app.

Contrary to LinkedIn, which measures user utility by how fast members accomplish their professional goals at the site, Facebook is interested in two things: 1) Retaining users within its closed Intranet for as long as humanly possible and 2) Spurring users to transact at Facebook as much as humanly possible, i.e., poke, click, share…non-stop.

F8 may look like a free-ride, but it is not risk-free and is designed to support the long-term business plan of Mark Zuckerberg alone.

Just as millions upon millions of Web pages vie to obtain the one single avaible “free” number one slot for given Google SERPs, thousands of developers may strive to hit the “free’ F8 jackpot.

Google AdWords makes billions because free Google love is generally not forthcoming. The free F8 lottery is also an elusive game.

READ MORE in EXCLUSIVE INSIDER CHATTER INTERVIEWS:

Reid Hoffman On How LinkedIn Beats Facebook for Business

Lending Club $108 billion Market Opp ex Facebook: Goodbye Banks!

Multiply.com Raises Consumer Media Stakes AND $16.6 million VC

PLUS: Startups: Why Facebook Platform is a Wolf in Sheep’s Clothing and Ning Hardcore Porn Platform: What is Andreessen Doing Wrong?

CONTACT DONNA BOGATIN