• $10 bn revenue / quartal ==> more than $100 mio. / day!!!
• 90 Mio Google+ users
• over 60% of plus users engage daily with it and over 80% weekly!
• 350 Mio active Gmail users
• Youtube makes $5 bn revenue
• 700’000 android devices installed daily
• 250 Mio. Android devices in total!
• 11 bn downloads from the android market
• chrome is growing (sadly no numbers) But in an interesting (on its own) blog post of reddit you can see 42% of reddit users use chrome (which might not be representative)
• Google apps has 5000 new businesses signing up per day (among them: harvard, berkley, states (like wyoming), and a major bank bbva >100’000 employees) ,…)
• 1 mio. Google+ pages have been created by brands (it is mentioned that there exists a sales team (I knew it all the time (-: )

Larry points out again:
Like I always said: “Emerging highest quality products can generate huge new businesses for Google on the long term. Just like search. And we have a ton of experience monetizing those products over time!”
But have a look for yourself and listen to the annual report!

The Facts From an FTC Point of view

• Google is the leading search engine on the net.
• Companies and the FTC seem to believe that there is a bias. Google seem to display their own products in the search results more frequently than similar content from competitors (e.g. Maps vs. Yelp or Youtube vs. Vimeo).
• The combination is considered to an abuse of Google’s market share in search.

Google’s Reaction

You can read the official answer to these accusations on the Google blog. They don’t start a discussion about it but basically state their noble goals and achievements:

• Google supports open standards and open source
• Google does not try to lock the users in. Instead, contrary to most companies on the web, they have the data liberation front to give users the chance to escape from Google products and take their data with them.
• Competition on the web is hard and the alternatives are only one click away
• They believe in “user first” and create search in a way that satisfies the user
• Using Google is a choice. If they don’t put their users first, they will lose them.

You can find more detailed information on Google’s perspective here.

My Opinion.

1. First of all, Google products like Youtube belong to the most relevant products on the web. I am pretty sure an algorithm without any bias would rank resources from Youtube first and videos from other websites second.
2. Additionally, since search for rich media content like videos is much harder than text retrievel, it makes sense to use all the information you have for solving issues regarding information retrieval. So it is obvious that finding the relevant videos from Youtube is much easier for Google than finding the most relevant videos from other websites.
3. Google is a service offering a direction to their customers. These directions come fast and in outstanding quality. That is why Google became a world wide market leader in search. If their search results were biased and they would put their own products to the user, they would take a huge risk. If the user didn’t like the search result, they would quickly lose him as a customer.
4. Assume the accusation is true. It is still Google’s good right to do that. Web search is a very hard problem. Google is a normal enterprise. There is no law that web search has to be the most objective search that is possible. Especially since there is no universal truth or ranking to compare with anyway.

The internet is one of the hardest markets to compete in. If you change your product for the worse, the alternative is indeed only one click away. Therefor, antitrust investigations on the internet make almost no sense. By creating an extraordinary product, focusing on users needs and having high ideals, Google was able not only to remain successful over a decade, but also to continue growing. This would be impossible with a dishonest product on the web. So dear FTC, before chasing Google with antitrust investigations, I suggest to chase some other companies.
Yahoo: Look at their portal. Yahoo was the leading search engine before Google was launched. After a while, they started pushing a lot of additional products on their users. Many of them are still out there and produce good revenue streams for Yahoo. (Editorial News, Mail, …)
Facebook: They mislead everyone who has a fan page by not communicating clearly that having a thousand fans does not really offer the opportunity to communicate with all of them or their friends. Also, look a the Open Graph API. This API is everything but open. This name is one of the most misleading marketing devices I have seen in my life.
Microsoft: Internet explorer is still one of the most widely used browsers in the world. Talk to any technically savvy person and you will realize that this is not about a good product but rather because Microsoft abused their reach. By the way, in Google Chrome’s search box, you can choose right away which search engine should be your default. They don’t force you to use Google.
Facebook / Microsoft + Bing: If you find a person by searching for them on Bing and that person happens to be on Facebook, Bing offers you the option to send them a message directly without opening Facebook. Look at this video and decide for yourself. Remember Microsoft invested 240 $ to buy 1.6% of Facebook shares.

Apple: The popularity of the iPod allowed them to create the iPhone, a product locking in people. You cannot use certain standard products and software on it because Apple doesn’t want to pay the licence fee. You get locked in iTunes. There is almost no way to export your music out of iTunes to other systems or devices.
Ebay / Paypal: Well yes, Paypal solved problems. But was it neccesary to market it this aggressively on ebay?
Disclaimer: For all the companies and products I mentioned – except Facebook – I still think it is their right to do what I stated here. To quote a famous man: “It’s ok. Let the market decide. It is called competition.” (Eric Schmidt)
offtopic: I talked about how Google is not locking in users. Ther is a funny video from the onion network about this topic which I want to share with you:

1. Data Trading
   • Google
   • Facebook
   • …
2. Problem Solving
   • Metaweb
   • Google
   • Twitter
   • …
3. The open source model
   • loads of Software companies
   • Google
   • …
4. Content creation
   • Newspaper
   • Mags
   • Blogs
   • message boards
   • …
5. E Commerce
   • C2C Ebay
   • B2C
   • Amazon
   • smaller stores
   • …
6. Premium / freemium Content / Services
   • linkedIN
   • music
   • Porn
   • …
7. Communication Services
   • Email
   • Skype
   • Social Networking
   • Chat
   • …
8. Filesharing Services
   • Youtube
   • Flickr
   • 1click hosting
   • p2p networks
   • Dropbox
   • …
9. Collaboration Services
   • dropbox
   • Google Docs
   • …
10. Technical Infrastructure Software
    • Webserver
    • Database
    • Webbrowser
    • CMS
    • …
11. Technical Infrastructure Hardware
    • Hosting
    • Cloud computing
    • Internet Service Provider
    • …
12. Knowledge distribution
    • Wikipedia
    • e learning
    • …
13. Advertising
    • Affiliate
    • Lead generation
    • per Click
    • per Impression
    • retargeting
14. Web design
    • Usability
    • Software engeneering
    • Graphic Designer
    • …
15. Information distribution
    • wikipedia
    • googlemaps
    • directories
    • google scholar
    • …
16. Web search
    • universal search
    • specialized search
    • semantic search
    • …
17. (Micro) payment
    • paypall
    • google checkout
    • Facebook
    • …
18. Consulting
    • Online Marketing
    • Web Design
    • Technical

Maybe it would be better to create a matrix with ways to monetarize these models as a dimension and business sectors and product ideas on the other dimension.
If you have any suggestions or know of ideas missing I am happy if you post about those in the comments!

The problem metaweb was solving

We are lucky. modern and great companies have very informative videos about their product.

I also love the open approach they took. Freebase the database created by metaweb is not protected from others. No it is creative common licence. Everyone in the community knows that the semantic database they run is nice to have but the key point is really the technology they built to run queries against the data base and handel data reconciling. Making it creative common helps others to improve it like wikipedia. it also created trust and built a community around freebase.

Summary of the business model

• openess
• focussing on a real problem
• learn with the market

I know it sounds as if I was 5 years old but I am fully convinced that there is an abstract concept behind the success of metaweb and I call it their business model. Of course I can think of many other ways than selling to google how to monetarize this technoligy. But in the case of metaweb this was just not neccessary.

What  obvious facts does facebook know about you?

• first of all the interests from your  profile
• who your friends are
• The interests of your friends.

This is already very strong and combined with artificial intelligence will lead to amazing service like friend recommender and highly personalized advertising systems

What not so obvious facts does Facebook know about you?

It is akward that almost no one is aware of the fact that you don’t have to fill out your social networking profile or have friendships to tell facebook your interests (I don’t have friends on facebook and the friend recommender works) . Facebook knows:

• Who you communicate with and how frequently.
• What you are really interested in (you constantly tell facebook by clicking on things and visiting profiles and pages!)
• which people your really know (being tagged together in a lot of fotos is a strong indicator!)
• What websites you surf on (there are like buttons everywhere! and most the time you are still logged in with facebook) it is like criterio
• In which geographical regions you login to facebook
• How many people are interested in you and if you are an oppinion leader

The boldest part is how facebook uses all the knowledge about useres and brands to earn money by just enabling people to communicate

Summeray of the Data trading business model

You run a website that people love and you collect user behavoir and other data they tell you implicitly. This data just needs to define them and their interests. You don’t cara about a name! You make it anonymous just like google serach was for a long time. Now you use this data to create an ad system or anything similar. You can even go out and start selling products your own!

Jumping back in time

I still remember the first days of the internet. You registered on some site and they asked you to fill out an old fashioned survey => very annoying and it was not even helping to earn good money.

• age
• sex
• income
• children
• education
• choose 3 interests
• what papers do you read
• what tv do you watch

In comparison to the Data facebook and Google collect about you that was really innocent. Comparing those modern companies with their sophisticated approaches and compare it to the pioneers in the online user data business it is incredible to see how the .com bubble could really rise up.

Eric Schmidt: “What else could we do besides just informing people. ”
Walter Mossberg: “You could curate. ”
Eric Schmidt: “But we made the decission to not curate. We stay focused on open platforms. The apple model is the inverse of the Google model. And I think the competition is very healthy. The fact of the matter is that the apple model produces beautiful products of a specific market size and share with an awful lot of clever stuff going on that are entirely controlled by apple. The Google model ist just the inverse. It’s ok. Let the market decide. It’s called competition.”

Let’s try to understand what is really going on here!
Realize that google within a very short time just became market leader in the app market and take into mind that apple had several advantages in this market:

• first mover in the phone / app market
• superior hardware
• fashion brand. To have an iPod iPhone was just “hip”
• iTunes and the combination with music

We conclude:
It is all about being open and setting open standards. Just like the whole internet is!
If you are interested in more please compare for my article Why open source wins and then Jonathan Rosenberg’s post about this topic.

What is the idea?

Recently I was searching for a book a friend recommended to me. I wasn’t sure weather I wanted to buy or not. So I did what anyone would probably do. I left the store keeping in mind that I could later decide weather I want to spend the money. Today – about one week later – I was searching for something completely different browsing on a website and realized the advertising of the exact same book by a store I visited before. Interestingly the web shop was a German one and the ad was displayed on an English speaking American website. That was kind of scary. So what happened here? I was looking at the source code and figured out that Criteo (not Google!) is running the Ad server behind it. A quick scan on their homepage lead to the following video:

I think the idea is very clear. The problem with this issue as usual is privacy so let’s dig into it.

privacy concerns of Criteo

As we saw on the video the whole system works – as we could have guessed – by setting a cookie.

“A cookie, also known as a web cookie, browser cookie, and HTTP cookie, is a piece of text stored on a user’s computer by their web browser. A cookie can be used for authentication, storing site preferences, shopping cart contents, the identifier for a server-based session, or anything else that can be accomplished through storing text data. A cookie consists of one or more name-value pairs containing bits of information, which may be encrypted for information privacy and data security purposes. The cookie is sent as a field in the header of the HTTP response by a web server to a web browser and then sent back unchanged by the browser each time it accesses that server. As text, cookies are not executable. Because they are not executed, they cannot replicate themselves and are not viruses. However, due to the browser mechanism to set and read cookies, they can be used as spyware (see zombie cookie and evercookie for more details). Anti-spyware products may warn users about some cookies because cookies can be used to track computer activity—a privacy concern, later causing possible malware.”
from http://en.wikipedia.org/wiki/HTTP_cookie

So the whole discussion can be reduced to the cookie discussion. Well any website uses cookies to enhance the websites usability. This does not mean that I think there is no problem. but please be realistic. If you browse a web shop the shop – at least if it is a professional one – will save information about your browsing behavior. Even though you can be recognized by the cookie the whole process is still very anonymous. Once you delete the cookie (and Criteo gives you the explicit possibility on their website) retargeted ad’s cannot reach you because you won’t be recognized. The only thing Criteo will probably still save about you is your browsing behavior on that very shop you visited in the first place. This data is not linked to your name or anything that could identify you.
The privacy of this service is much higher or better than Facebook. So if you are using Facebook without fear you shouldn’t be afraid of Criteo’s retargeting advertising system.

How will this change the online ad market?

Google could easily install a similar ad system. There are probably several good reasons not to do it.

• Adsense is running very good and Google has the competitive advantage of being market leader.
• Customers have to be on your web shop first before you can retarget the product.
• Due to the more efficient advertising conversion rates will probably rise. If the cost for the advertisement stays constant the publisher (Google and their publishers network) would loose on its profit margin.

The last one is exactly where I see a competitive threat to the Googleconomy. The advertising is more efficient. If I was an advertiser. i would most certainly give it a try. The problem with this system is that it is hard to use with new products.
The whole discussion leads to the question why doesn’t Amazon install a similar system? They have a huge knowledge about customers interest and a wide network of publishers in their partner program. It would be easy to deliver highly targeted ads and improve the user experience and conversion rates of their affiliate program. I guess Amazon is concerned about privacy. Also Amazon is the market leader. So obviously they are not doing to many mistakes.
What is your oppinion about this startup and their product?