Entries tagged with google - MIX Online

Party Over for Web Spies

allenjs — Tue, 19 Aug 2008 18:16:00 GMT

Companies like Yahoo!, Microsoft, and (especially) Google depend on being able to track your browsing habits to better target you with advertisements. In the past 2 years, the proportion of ads being served through ad tracking networks has climbed from 5% to more than 30%, so these tracking networks like Doubleclick (Google), BlueLithium (Yahoo!) and aQuantive (Microsoft) are the lifeblood of the top web properties. DoubleClick touches more than 80% of the addressable Internet population.

Tracking people's behavior on the web is incredibly lucrative, so everyone wants a piece of the action:

FireFox, the popular web browser, has announced plans to track your browsing habits directly from the browser, without needing to use tracking cookies.
AT&T has announced that they can track your browsing behavior directly off of the wire, without needing to extend the browser or use tracking cookies. They will sell this information to ad networks, or use it to target their own ads.
Several other ISPs have already embarked on projects to track people's behavior for ad tracking, supported by startups like NebuAd and Phorm.

With all of these companies fighting over you like a piece of meat, you'd think someone would ask you what you think. Historically, the companies profiting from tracking your behavior have pointed out that people often say that they want privacy, but then give it up easily. Google has gone so far as to say that there is "no such thing as complete privacy" and they don't get a lot of credit from the critics for sincerity.

So, must we resign ourselves to this trend? Five years from now, will your web browser, ISP, and everyone else spy on you with impunity?

The answer seems to be "no". The first volley was the class-action suit last week against Facebook for the abortive "Beacon" feature. Facebook's "Beacon" feature wasn't actually intended to invade privacy, and didn't go nearly as far as the examples cited above -- but this case demonstrates that people actually *do* care about privacy, and are willing to take action to protect it. Likewise, people almost immediately raised the privacy red flag when Yahoo! announced Fire Eagle location tracking service.

Far more interesting to me is the news yesterday that Congress will be taking up legislation to protect privacy online. This legislation is aimed directly at web tracking networks and software or network operators who track your behavior.

This is huge. The legislation would require companies to get your permission before spying on you. A stronger proposal would require that those spying on your behavior allow you to opt-out at any time, and establish the equivalent of a "do not call" list. There are many details to be worked out, and some well-funded parties with strong incentive to weaken the legislation, so I'm tempering my optimism. But this is a huge step in the right direction.

What do you think? Do we need legislation, or will the industry self-regulate? And do you think that this proposed legislation stands a prayer of making it through the process with teeth intact?

Ribbit: Global Platform War

allenjs — Tue, 05 Aug 2008 00:42:00 GMT

Reader JenST responds to my recent analysis of "smartphone carnage", saying:

"See BT purchased Ribbit. This could be the first move of the carriers to take control from Google, Microsoft, Apple."

JP Rangaswami, the guy at BT responsible for this acquisition, is one of my favorite bloggers, so I have followed this story with interest. Although he doesn't talk about work on his blog, he is an extremely lucid and enjoyable thinker who understands this new world deeply. And the news stories provide enough additional details to start forming opinions.

In short, I think JenST is right. While it's too early to paint this as a direct assault on Google (or other carriers, for that matter), this is a really strategic acquisition.

The key thing to realize here is that BT is trying to do for carriers (and particularly, voice) what Facebook did for social networks, and what Amazon did for hosting. This was BT's strategy prior to the Ribbit acquisition, and Ribbit was pursuing this strategy independently. The essence of this strategy is to open up your platform, and let your developers evolve the difficult parts and edge cases organically. Rather than trying to design a complex and monolithic platform speculatively before signing up a single developer, you define just the core pieces, and let the platform grow and adapt to real-world needs.

I respectfully disagree with Om, when he speculates that it will be *harder* for Ribbit to attract developers under the BT mantle. When pursuing a Facebook/Amazon strategy, Ribbit had to convince developers that their network had critical mass -- a key value proposition of Facebook development is the millions of people already on the network. With the BT partnership, Ribbit is instantly associated with a massive global network. Now that the backing network is more than a toy (and a carrier with a real business model), Ribbit is a lot more interesting to serious developers.

Sam Dean expresses a slightly different concern, worrying that BT will squash the "openness" of Ribbit. To be honest, I can't make heads or tails of this. What exactly was so "open" about Ribbit in the first place? It certainly wasn't "open source", and if all of the IP were entirely unencumbered, it's hard to imagine what the $105 million acquired. Furthermore, the SDK currently supports only Flash, which is rather proprietary last I checked. I am reminded of the recent controversy on FriendFeed over the promiscuous use of the word "open". Let's just agree that Ribbit has some characteristics of "openness", just like the Facebook API and Amazon EC2/S3; and that this quasi-openness can add a lot of value to BT's walled garden just as Facebook's social graph and Amazon's physical infrastructure derive value from their controlled openness.

So ... will this move be the gasoline that lights a fire in the heretofore controlled world of telco platforms? I don't know. BT is clearly hoping to force the hand of other telcos and VOIP providers, just as Facebook and Amazon forced their larger competitors to follow suit. So long as they nurture their developer community and show some measurable gains, other telcos will certainly need to pay attention.

But it seems that BT wish more to pre-empt a Google, Microsoft, or Apple move as much as disrupt their carrier competitors. The money quote is JP saying:

"What we expect the competition to do – and we think it will much more likely be the Apples and Googles of the world – is to start positioning around a device [such as the iPhone] or an approach to connectivity [such as Google’s ad-based Web model"

Now, that is strategic thinking. I am pleased (or am I?) that JP cannot imagine Microsoft being a player in this space.

Smartphone Carnage Far From Over

allenjs — Mon, 21 Jul 2008 21:56:00 GMT

I can still remember meeting with people from RIMM 10 years ago, as they were a relative upstart compared to Palm, and were feeling out Microsoft’s intentions in the smart phone space. Since then, a lot has happened. Lots of new players and threats have emerged, and many have fizzled out after great hype.

All of the recent hype about iPhone 3G would make you think that the Smartphone market is Apple’s to win (from RIMM). Heck, much of the coverage makes it sound as if the iPhone is the first phone to have a popular developer ecosystem. CNET even went so far as to predict that the iPhone would replace Facebook and MySpace as the preferred social network targeted by widget vendors and advertisers! As in the past, the popular consensus is bound to look myopic in hindsight.

In this industry, there are 4 types of players who compete and cooperate:

· Carriers – companies like AT&T or Orange who sell you communications bandwidth for your phone. They own spectrum, and lease that spectrum to you. They want you to A) pay as much as possible for as long as possible, B) not cost them a lot in customer support. Carriers have the control, since spectrum is a scarce physical resource. This is why everyone else is interested in “network neutrality” legislation.

· Handset makers – these are companies like Nokia who make phones and want to get a profit on the hardware sale.

· Phone OS providers – companies like Microsoft who try to license their software to handset makers.

· Service providers – companies like Google who make profit when people use their service from a mobile phone.

I won’t take the risk of making predictions that could come back to bite me, but it’s safe to predict that the carnage is far from over. For the next 5 years at least, the following 5 companies will all be very relevant with significant share. For each one, I talk a bit about the business model and strategy to help understand how things might play out:

Google

Google Android aims to be an open-source operating system for Smartphones; free to all handset makers. Google like to say that they “do everything out in the open”, so it was fun to see them get caught being secretive. But it’s all a bit unfair, since Google is more open than Apple, Microsoft, or RIMM – and in fact that openness may be their downfall.

You see, Android is basically a strategic hedge by Google, to ensure that nobody can tie up the mobile platform with a closed, proprietary system. Google benefits when everyone develops using web standards and targeting Google services. Google’s business model is to profit on the services (like search) and use that profit to subsidize the phone user experience. This is a really strong strategy; and Google’s absolutely dominant ability to monetize their services will make them relevant on all mobile phones, regardless of how many Android units have shipped in 5 years.

Google’s weakness is that their strategy is fundamentally opposed to the strategy of the carriers. Phone Carriers want you to keep paying your bill, and to use data plans that are more profitable. They don’t want you calling them with an expensive support call about some 3^rd party application that they didn’t even write. Carriers may not mind open source, but they want a controlled developer ecosystem.

Symbian (Nokia)

Symbian is the dominant smartphone platform outside of the USA. The big news recently was that Nokia has purchased Symbian and will open-source the platform.

Unlike Google, who makes money from the services, the handset makers get their profit from selling the hardware. An open-source Symbian means that they don’t see a sustainable business model in licensing the handset OS. While open-source Symbian and Android are a blow to Microsoft’s Windows Mobile strategy (at a minimum, creating some pricing pressure), open-source Symbian is also blow to Google’s Android plans. The handset makers are wary of Google and want to keep their options open.

RIMM

RIMM owns a proprietary handset, operating system, and services. Because they control everything except the carrier, they can offer seamless end-to-end experience. This is why BlackBerries are so strong in the USA. RIMM knows how to work with carriers, too.

Apple

Apple is essentially copying RIMM’s strategy, controlling a proprietary handset, operating system, and services. Just like RIMM, they provide a seamless end-to-end experience. Just like RIMM, they make carriers happy by providing a sexy device that makes it easier for the carrier to sell expensive contracts.

Much has been made about how “innovative” the iPhone SDK and store is, but people apparently forget that Windows Mobile, Palm, and even RIMM have had additional applications available for a long time. The sort of applications, and the download trends, look a lot like other platforms. When people mention that Facebook is the #3 download from the App Store, they forget that Facebook released an app (web-based) for iPhone long before the SDK was released, and it was immensely popular. Windows Mobile recently got two Facebook apps, and installs of the Facebook app for BlackBerry still outnumber iPhone.

What Apple is doing differently is important, though. By centrally controlling the application store, they give an improved user experience. And more importantly, they provide a visible brand where people wanting support can call *instead* of calling the carrier. Apple’s app store will certainly increase expense for the carriers, but less so than the more open strategies of Google or Microsoft.

Apple business model is to profit up-front on the hardware, and break even on the services. They take a 30% cut of app store revenues and charge a subscription for mobile me, but their primary strategy is to profit on hardware. This gives them the free cash flow up front.

Microsoft

Microsoft’s business model historically has been to make money licensing our proprietary operating system. As a platform, we offer C++, .NET, or Silverlight, as well as AJAX.

As the entire company moves toward a software plus services strategy, our mobile strategy combines operating system with services. This is what the Danger acquisition was about, and it is no mistake that the Live Search app is one of the most popular applications for Windows Mobile.

Search is the Lever

Common wisdom says that this is about Apple and RIMM, but I think this is actually about Google and Microsoft. It’s true that Google hasn’t shipped a single unit yet, and Microsoft’s primary revenue stream (licensing the OS) seems threatened by open-source Symbian and Android. And neither company sells a sexy handset to drive cash flow-positive revenue.

But both companies control search engines, and search service is far more monetizable than any of the other services. The end-to-end experience using the WLS app on Windows Mobile is the sort of experience Google would love to have on all mobile handsets, and you can bet that they will. Apple getting $0.30 every time someone installs the “Flash Light” application is cool, but the revenues and margins of app store and iTunes store won’t be able to compete with search. Like iTunes and app store, the Mobile Me service is an attempt by Apple to protect their high hardware margins.

Search will be a critical component of RIMM or Apple experience anyway. Search is a really hard market to enter, and none of the other contenders will be able to afford the infrastructure necessary.

Of course, when anyone makes money, the carriers want to take a cut. So the carriers are the wildcard here. This is a fact that Google and Microsoft have known for a long time, and both companies will need to get better at making carriers’ lives easier to make inroads against Apple and RIMM.

Google Loses, and Net Neutrality Doesn't Win

allenjs — Wed, 26 Mar 2008 14:35:00 GMT

Now that we know Google was a big loser in the 700MHz spectrum auction, many bloggers are acting like they knew it all along. But the truth is, when we predicted that Google wouldn’t win any spectrum, there were only a small handful of people who agreed with us. When I explained that Google's involvement was a PR stunt, most people were still fantasizing about the possibilities of Google-owned spectrum.

But it appears there is still some education to do. The normally sober Ars Technica is now calling the loss a “coup” and claiming that Google is “ecstatic”. As we explained, the PR stunt had rather limited success. And in fact it appears to be worse than that. We are seeing now that the much-vaunted open access requirements are open to serious interpretation. I’m as much in favor of network neutrality as anyone, and I would love to report that Google’s PR stunt moved the needle significantly, but that simply wouldn’t be true.

Now Ars Technica and others are predicting that the latest effort, which includes Microsoft, Google, Intel and others, will have a serious impact on network neutrality. That would be nice, but I’m not holding my breath. And while Ars Technica can be forgiven for wishful thinking, I can’t say the same about others. Once again, we are seeing reporters speculate that Google wants to get into network access business. I already explained why Google doesn’t want to be in that business.