ISM Signpost #23
*** Social Butterflies*** The Next Frontier
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+++ Growing Pains +++
Can Google guard its principles as it grows?
Google’s well-known internal motto, ‘Don’t be evil’, is being placed under increased strain as the search engine rapidly expands and moves into new markets. Its acquisition of online advertising outfit, DoubleClick has alerted consumer groups, antitrust regulators and competitors of the search engine’s newfound power and influence. Microsoft is feeling rattled and has reportedly hired PR firm Burson-Marsteller to drum up opposition to the deal.
Does the increasingly complex and broad nature of Google’s business force it to adapt and compromise its founding principles? Whispered complaints are getting louder that Google has, on one hand abused its users by invading their data privacy as well as adulterating search results with increased advertising, and on the other trampled over the interests of potential business partners.
Google’s founders are adamant their ideals will make a difference in the long term. They point out that in the past, big companies never proclaimed similar ethics, and that they can be a positive force.
However, its critics point out that Google’s ‘Don’t be Evil’ credo is oversimplistic in increasingly complex and difficult business situations. Google’s $1.65bn acquisition of YouTube has enraged copyright owners, while the DoubleClick acquisition has triggered a row over cookies. As Google grows by acquisition, the challenges multiply.
Google’s founder, Larry Page recently wrote a letter outlining how Google could interpret its ‘Don’t be Evil’ motto, originally enshrined in the Founders’ letter he wrote on Google’s stock market debut. Although it was only circulated around senior Google executives, he has spoken publicly around two examples that he believes show the search engine can stick to its principles.
First, is Google’s wholehearted support of open-source software. “We believe in openness, “he said. Second, Page insists that Google, “encourages staff to give a high revenue share to our partners,” when negotiating advertising deals. However, this claim is disputed by some of Google’s partners.
Interestingly, there are rumours that Google had first considered acquiring DoubleClick in 2005, but decided against it because DoubleClick’s practices did not fit in with its business principles. This time around, Google has said it is investigating new ways of using cookies that might lessen concerns about privacy.
Whatever happens, Google is undoubtedly struggling to marry the entrepreneurial ethics of an idealistic young start-up with the tangled, complex realities of running a large, global business.
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+++ Social Butterflies +++
The rise and rise of people search
Never was personal information so readily available. As Microsoft considers taking a 5% stake in Facebook that could value the social networking site at $10bn, Yahoo announces an advertising collaboration with Bebo, the British teen social networking site and a flock of people search engines has emerged. Earlier, Facebook opened up its social networking site by allowing its profile pages to be found by search engines.
While the buzz surrounding Facebook is reminiscent of the excitement surrounding Google before its 2004 IPO, the social network site needs to squeeze its advertising potential before it reaches the dizzy heights of Google and its lucrative AdWords.
Facebook’s existing revenue stream of sponsorships and banner ads do not take full advantage of the connections between the site’s users. Facebook’s founder Mark Zuckerberg has confirmed that his business is grappling with a new system that will allow advertisers to target ads based on information that users reveal about themselves on the site. It will probably be launched within the next six months. If successful, such a system could amount to the holy grail of social network advertising. But it would also raise concerns about privacy.
Zuckerberg is well aware that any new advertising system on Facebook, like Google’s AdWords, would need to work without alienating users. It’s a million dollar question. Facebook may have captured the world’s attention, but can it turn social connections into cash?
Meanwhile, a flock of people search engines are emerging to tap into the social network phenomenon. These include spock, wink, ziki, peekyou, zoominfo, pipl, rapleaf, naymz and wikiyou. Zoominfo is currently the leader in terms of traffic with around 1.3 million unique visitors a month and profiles on over 36 million people.
Rapleaf and naymz position themselves a little differently, as the places to maximise business and job opportunities by promoting your good name and reputation. They use a reputation index – rapleaf’s application is a twist on eBay’s seller ratings. WikiYou is a collection of unauthorised biographies but also allows discussions and comments on someone’s profile. People search engines are still very much in their infancy. And the question remains: can social connections be turned into cash?—————————————————–
+++ The Next Frontier +++
The race is on to capture the mobile space
The race to seize the most lucrative piece of property in the world – your mobile phone screen - is set to intensify. As the British regulator Ofcom proposes grabbing back over one third of the mobile phone spectrum to auction for new entrants, a number of different companies are preparing for battle.Google is already planning to bid around £2.3bn for the US equivalent next year and is rumoured to be working on a mobile phone called the Gphone and a mobile payments service called GPay. Could Google launch its own mobile phone service in the UK or an open standards wireless broadband network, similar to the one it has proposed in the US?Apple has thrown its hat in the ring with the iPhone. Meanwhile, Yahoo and Microsoft are determined to prevent Google from using its dominance in search in order to gain pole position in the valuable mobile market.
Google’s offerings, which include Gmail, YouTube, news, documents, search, maps and significantly location-based services through Google Earth are well-suited to the mobile space. Soon Google Earth will link up with the satellite positioning chips starting to be included in mobile phones.
However, the British mobile phone networks will not be happy if new entrants enter their dominion as they battle to protect their own walled gardens of revenue.
It’s easy to see why the internet search engines are keen to tap into the mass market of mobile. It’s an advertiser’s dream come true. While Google makes around £5.4bn in advertising from computers, of which there are only 260m shipped a year, more than one billion mobiles will be sold this year.
SIGNPOST is published monthly by Internet Search Management Ltd.
The opinions expressed are those of the Editor and not necessarily those of Internet Search Management Ltd.
All material Copyright 2007 Internet Search Management Ltd. All rights reserved.
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