Great post online at RWW called “The Genius of Google Fiber” and I agree on many fronts but wanted to elaborate on the advertising angel.
It is clear by now that with everyone who uses the internet, with every minute you use it more, Google wins, and they have the data to prove it. When a big telco asks if you want to have Gbit Internet for $2000 a month, most will say no, but for $50… sure. That is not something that the big telcos want though.
But let’s do a calculation. You are online 24 hours a week, 100 hours a month on average. 21% of that time is spent searching, of which most if not all is Google anyway. This means that you are searching for 20 hours a month. In 2011, Google had a billion unique users a month, so let’s presume they have 2 billion now. They also have 5.6 billion adimpressions per day on search, on average i’d guess 2 ad impressions per search, so 90 billion searches a month. Each user does 45 searches per month. On average 65% of the clicks are paid and I presume that there are three clicks per search on average. Means 135 clicks per month with 90 of those being paid, at $0.35 on average. That’s something around $30 per month. That’s actually close to the $43 per user cited on Motley Fool.
With Google Fiber they have people watch movies online, be faster, be able to do more in the same time, and so on. Can you get that time from an average of 100 hours per month, to 150 hours per month, which is just 5 hours and includes TV. That would mean an extra $20 that Google will make. Remember this is an average, you just get a lot of people from a few minutes a day. And it is a lot more complicated than that.
But, what becomes visible is that Google will possibly make something like $20 per user in Ads without getting anything for the pipe.
This makes it very very interesting for Google and is a revenue stream that the telcos cannot match. And it does not factor in the lockin value, and other things.
The telcos better beware.
(P.S.: and this is just a thought experiment and probably wrong in different points but also probably not too far off )
It was nagging me for some time and now I found back the pages about the wonderful BeIA. Remember the time Apple bought Next? The other company that was in the pitch was Be, Inc. At the time Be, Inc. had BeOS as a Desktop operating system and was getting ready to release the first versions of BeIA, a tablet OS.
Source: Be to be on Web Tablets
Just check out this little bit from the BeIA FAQ:
Why won’t everyone just use a computer to log on to the Internet?
The PC, although it is a wonderfully expandable and open device, has several drawbacks as a dedicated Internet device. First, it takes an inordinate amount of time to get on line. It requires a large amount of knowledge to use it. It is not responsive and stable like a consumer electronic device. The PC forces people to work in ways that may not be right for the task at hand. For instance, you do not have to “boot” your television or “shut down” your CD player. PCs are often in the wrong part of the house to accomplish what you want to do. In order for the web to truly become ubiquitous, new classes of devices, with purpose-built user experiences, will be created. The PC is great for business style applications, but it isn’t the right tool for every use.
You can look at other parts of like the BeIA Datasheet and find more things. I could have pasted more things but I presume you can read it yourself.
It has already been said that Apple did not think about using the iPhone OS on the iPad otherwise they would not have named it iPhone OS. What Jobs might have thought is that Jean-Louis Gassee had a nice idea with BeIA but wanted to wait for a time when hardware is ripe to really allow for this kind of tablet to exist. Be was seriously too soon with it as the device itself would have been too clunky and ugly, but still. See the icons on the screen? The simplicity? Always on? No boot times?
Not bad for an idea of 2001 ey?
I am starting to wonder if people have no clue or if I am just clueless and I seriously do not want to believe that. The thing is that everybody is complaining that Apple’s iPad is not doing multitasking. Fine by me. Most things do not really need multitasking though and if the modal screens for push messages is improved you can stay online in your skype account or do other things. Sure it would be nice to be able to move a video to a small screen and continue browsing the web, but we will survive.
What drives me nuts though is people starting to speculate that Chrome OS will kill the iPad because it has multitasking or doesn’t have flash? What?
First the multitasking. Yes, Android does multitasking, but Chrome OS is a browser and you can do multiple tabs, but that is not multitasking and something the iPad can do just fine. So this is really a non-point. Chrome OS is first still in development and second focussed on all being in a browser and hence not multitasking as such.
As for flash, yes some sites will not run but Youtube is already working as they are making special iPhone versions of videos and many others will try to incorporate HTML5. Just check out the SublimeVideo Player to see what is possible. Amazing stuff.
Oh and one thing for everyone: Not everyone has to or will buy an iPad and it is not the end-all device and not built as such. I actually chose a Mac because I wanted it to work after hacking around in servers and linux and windows boxes for ages. The iPad is just taking it one step further. Talk to people who have an iPhone. Most of them stopped hacking them because it is fine as it is or you move to e.g. Android. And Android is multitasking.
All focus is currently on Google Chrome OS and what it will mean for our beloved NetBooks. I somehow have the feeling people are not thinking far enough because our geeky NetBooks are totally irrelevant.
Google does stuff with very much focus, a lot more focus than often is visible on first sight. You can actually always think back to a) making all content available and b) more people online means more ads to display.
And there are a lot of different implementations of Google Chrome OS that will further those goals. First of all you can obviously tell people to attach their digital cameras and pictures and videos are automatically uploaded to Youtube and Picasa, but that is the braindead move.
Remember that they are building very clear hardware specifications allowing them to say that the system is rock solid if the specs are used. The important part here is x86 or ARM and solid state drives. In summary, that means a good CPU that can also render diverse video streams in high quality as well as a totally silent drive that is cheap in small sizes and only holds the OS. The OS itself will be rock solid as there is really nothing much installed.
This as such is the perfect implementation for TVs! Just imagine having your TV and being able to turn on Chrome OS to read your mail, look at youtube, search the web, automatically upload your photos, and so on. That in a silent system that boots as quickly as your TV turns on, or almost. It doesn’t need to be running at all time then which saves energy and Google is suddenly in all living rooms. Hell the OS is free or even better than free with Google paying the TV company for ads served to the user. The TVs have network interfaces already anyway.
The other thing is that there are LARGE groups of people in developing countries that might not have the money for a full blown PC and Google could potentially make this thing very cheap and possibly even free together with a data provider. They would get millions of new users that are available to their advertisers that are probably really begging for more users to advertise to in these countries.
I am really looking forward to seeing where they are going with this. Because I will keep my Mac, no questions there, but in my TV … sure … in my car … of course. Imaging this being the one laptop per Child system. Things get interesting when thinking further than normal Netbooks.
There is lots of rage currently about Wolfram’s new Venture Wolfram Alpha. A lot about it can be learned from this article on Techcrunch. I wanted to add a few thoughts though.
First of all, how can 100 people working on a knowledge engine go undetected for years??!?!? Then again, it proves again we are in a deep echo chamber and it already points us to the second thing. This is something that fits very well with Wolfram’s previous work. Mathematica is something I still remember from my Physics studies and it is an amazing tool to say the least. It’s something the scientific world has been using for ages and this is Wolfram’s world. The second step in Wolfram’s quest to leave a lasting mark in science was A new Kind of Science, for which he took a bit of time of and which he wrote during the night if I remember correctly. It’s a highly discussed book to say the least.
Now comes Wolfram Alpha (does that guy have a god complex by the way naming all his companies after himself ? ) and he again tries to prove, I feel, to the science world that he is the man. It is very likely that he succeeds I have to say. But what needs to be remembered is that this tool is really a science tool and not something for the guy next door. Depending on the knowledge catalogue they have added to the system you will be able to ask things like “What’s the best time to climb Mount Everest?” or “What is the best age to get married and what are other influencing factors to stay together forever?” or “What molecule structures should I emphasize for curing Aids?” (made the last one up ).
It will be interesting to see where this goes. Looking forward to the launch.
The thinking here again was started by a post by Martin, looking at the question whether the Internet creates or destructs value. I really think that the internet creates value, but the only problem in that statement is that value is not only monetary.
Monetary wise the internet has and will destroy a lot of money in the short and medium term and only then grow up to really create money due to the fact that we need to learn to live with it. One thing that is really important to understand that the Internet, Web 2.0, Blogging, Twitter and the like create an Economy of Truth. What I mean with that is that it is the end of bullshitting, you can’t just give out a product and have an immense marketing campaign saying it is the best thing since sliced bread, when in all honesty it’s total crap. You need to build good things, do good deads, be a good person, in the long run, because all the other crap will get out. This of course means that lots of things need to change in product development and marketing and in the mean time some things will fail.
But more importantly, in relation to RSS and Blogs and the like, it does create a system where it is easy to consume news and share news. My media consumption is so different from my parents and it will become more different as we go along. This in itself does not destroy anything though. The problem is that traditional newspapers have not jumped on that wagon full force yet, and are just trying out things. And with it, advertising has changed.
Google is no white knight here but rather the devil that was bound to appear. Measurability was there before Google but now you want a direct ROI, something you never had or have in TV Advertising or Newspapers, at least not the same as on the all-trackable-internet. And due to the fact that, again, the Newspapers can’t make up their mind (Do I take the performance money or do I remain a CPM only shop?) and are doing it half baked, there is now the problem that it is not fully clear where this will all turn. Lots of people now book standard banners on CPC basis, or high CPM, which makes no sense once you did it through a CPC deal. At the same time the money earned from performance only deals is not enough by far to pay for the very very very expensive writers (who might be crunching out 10-20 articles a day but these articles don’t as such pay their salaries). At the same time sales of hardcopy newspapers are going down and will remain to go that way, all moving into measurable media.
One solution might be to go performance only, meaning that to get a branding campaign you will pay through the nose as you will have to overpay any performance deal on the pages you want to be on. Another option would be to say you only do high CPM deals. But in any case, the easy times from 20 years ago are gone and online properties would never survive alone. One important step in any case is to not give people branding that do not pay for it. That way, people will still feel the need to paying for branding.
And then there is the really big problem of giving an agency the option to spend 500k in a meaningful and profitable way on the internet, in a month, or less, without much work.
So overall we can’t live without the internet, but for newspapers, it is destroyed a lot of value and will remain to do that, so some rethinking has to happen.
Now that is interesting news: BOSS – The Next Step in our Open Search Ecosystem. Techcrunch as a positive note and RWW thinks it’s exciting news and I have to agree. Of course as both also note there are limitations to all of this but it is a good first step.
In short, you will have full API access without rate limits to query the Yahoo! Search Backend, getting back results based on your query as for example JSON, being able to do with it whatever you like. In our case at Ormigo we might want to do searches for related pages within Ormigo, enhancing the results based on internal data we have and adding a few external links based on where they came in in the results.
Check out Me.dium for example to see one company already using the system. Actually a very nice idea to use my and my friends surfing behaviour to give me the right results. Sadly I don’t see all my friends installing the browser bar so it is out for me.
In any case this will drive innovation in the space and I am looking forward to see what comes out of it. In the long run you will be able to pay CPM based or you will have to run their ads next to the search results, which makes it a little bit less altruistic, but that’s ok. For now, all is fair game, so go play.
Location based services, or LPS, is something that all people rave about with the iPhone. A good article comes from Mashable under the title “And, The Really Big Think About The New iPhone Is“. In it they say that I will finally bring to us the wonders of location based services, citing Loopt as one example. There is one comment though that puts it into perspective.
I conducted a large user research project for Vodafone in the UK and Italy [...] The near universal reaction was negative. This was primarily due to privacy concerns [...]
This is not to be argued away really. It is one of the reasons I have a problem with stuff like Plazes. I just don’t want people to necessarily know where I am now. “In London at a Meeting” will tell everyone “Go rob Oliver.” because you know what, my address is easy enough to come by. Even showing it to your friends gives it the risk to getting out. e.g. Polar Rose, which I really like and see lots of potential in, has a Firefox extension that allows you to tag people in images. The problem was that you could do that in Flickr, in pictures ment for you, and Polar Rose would then grab the exact image, which is not under privacy control as only the HTML/PHP files are, not the JPEGs themselves. This is just one example of where it could go wrong. They either already fixed it or are on their way to fix it by seeing if they can see the page that the image was found on for example.
This is just one example though why the privcay concerns are valid. Above that, you will never have one system where everybody is in. I will not find all my friends via it, and with my real life friends probably very few. For the geeks among them a twitter message is enough to get a meeting
So there it goes on the record. I don’t believe in automated LBS that publish my whereabouts. I do believe 100% in e.g. doing a search and factoring in locality, or similar things. I am doing something for the local/services market anyway.
How I love Amazon AWS. In October there were already hints about Static IPs and now they are here. Check out the Amazon Web Services Blog post about all of the new stuff.
First of all, we now have what they call Elastic IP Addresses and the system is very cool. You get up to 5 IPs to start with. You get one via an API call to AllocateAddress, which allocates you one fixed IP that then belongs to you. Without you using it you pay 1 cent per hour. But you can then do an AssociateAddress and it is attached to a Server and becomes free, meaning you no longer pay for its usage. You can then DisassociateAddress and ReleaseAddress if you do not plan to use it at all.
Then couple that with Availability Zones, which are zones in their Network Infrastructure that are insulated from each other so that if one zone goes down, another does not (in theory, there might always be odd cases, chance if you want ).
This really means you can do more for a high availability solution with Amazon AWS and if they now start a NOC in Germany, I will possibly never do my own Server again. But they are not here yet so we are just using it for parts of our system, and I am taking a look at Globalways.
But again, congratulations to the entire Team behind Amazon EC2 for pulling this one of. Thank you. No more DynDNS for our Ad Server
In 2006 we had Project Blackbox from Sun, who have now bought MySQL and are starting to have some really cool servers. Google then patented something like that, a data center in a shipping container. Now we have something new.
Ars Technica posted about a new start-up called International Data Security. They are launching something described in this PDF.
In short: they are buying old container ships and making them into hosting centers. First one goes online in April in San Francisco. They want to deploy 50 ships world-wide. The cool thing is that having so much water around, makes cooling easier, and having an entire ships gasoline tank, makes for 1 month of power outage. Of course the ships are set-up to handle containers, hence blackbox … . Above that there will be offices, food and quarters on the ships.
All sounds to cool indeed. Sadly they can’t move efficiently due to the stupid bandwidth that has to go in there… damn