Google second quarter profit quadruples
Google's Second-Quarter Profit Quadruples
Google Inc.'s streak of stellar growth has spoiled investors so thoroughly that the online search engine leader may be punished because its second-quarter profit didn't surpass analyst expectations by a wide enough margin.
The Mountain View-based company set the stage for the harsh treatment Thursday with the release of a report that normally would be a cause for celebration. Google's earnings more than quadrupled during the three months ended in June, climbing to $342.8 million, or $1.19 per share, from $79.1 million, or 30 cents per share, at the same time last year.
If not for a slight charge to account for employee stock options issued before Google went public 11 months ago, the earnings would have ranged between $1.29 and $1.35 per share. That topped the mean estimate of $1.21 per share among analysts surveyed by Thomson Financial.
Revenue for the period totaled $1.38 billion, nearly doubling from $700.2 million last year. After subtracting the commissions that Google paid to other Web sites in its advertising network, the revenue stood at $890 million, beating the Wall Street estimate of $842 million, according to Thomson Financial.
Reflecting investor anticipation of a big quarter, Google's shares reached a new high of $317.80 on Nasdaq Stock Market Thursday before retreating slightly to finish at $313.94, up $1.94 for the day.
But then the shares dropped $17.95, or 5.7 percent, in extended trading. The negative reaction harkened back to a few years ago when companies routinely expected to deliver quarterly earnings aimed at a "whisper number" circulated among money managers and other elite investors. The whisper number invariably was above the estimates published by securities analysts.
Google's stock also had become overheated in anticipation of a blowout quarter, acording to many analysts. In an interview, Google's chief executive said he remained optimistic about the company's prospects. "Business is going quite well," CEO Eric Schmidt said. "Things aren't falling off a cliff."
In another development that may have troubled investors, Google's second-quarter revenue rose by 10 percent from the previous quarter. The sequential revenue growth had ranged between 15 percent and 28 percent in the previous three quarters that Google had reported as a publicly held company.
But the second quarter typically marks a financial slowdown for many Internet companies that rely on heavy traffic like Google, because more people are spending time away from their computers as the weather becomes warmer and the days grow longer. The same dynamic seemed to affect Google's second quarter results last year, when revenue increased just 7 percent from the preceding quarter.
Industry analysts believe the seasonal shift is one of the reasons that another Internet bellwether, Yahoo Inc., merely matched analysts' expectations in its second quarter, a performance that caused its stock to plummet earlier this week.
In a Thursday conference call with analysts, Google Chief Financial Officer George Reyes told analysts he expected it be even more difficult for the company to maintain its growth pace in the third quarter, and not just because people won't be in front of computers as much during the summer.
Google believes its results during last year's third quarter were boosted by the intense media coverage that surrounded its initial public offering of stock last August. The publicity drew more traffic to Google's Web site, helping the company make more money from the advertising links that it serves up with its search results.
That warning makes it unlikely analysts will raise their third quarter estimates for Google, creating another drag on the stock, Edwards said.
Estimates are that GOOG will move up to $350 a share in coming weeks.
Google is under immense pressure to produce extraordinary earnings growth because of how high its stock has climbed since the company's IPO at $85 per share. Although Google co-founders Larry Page and Sergey Brin have stressed they aren't interested in meeting short-term expectations, the company still has surpassed analysts' estimates in each quarter since the IPO.
The stellar showing has propelled Google's market value to nearly $90 billion in less than seven years in business, turning hundreds of the company's 4,183 employees into millionaires.
Remember this broker and investment community only one yer ago were negative and bullish on Google's stock. Is Wall Street finally beginning to realize that Keyword Search quite possibly saved the Internet ?
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Friday, July 22, 2005
Google seeks to stop Microsoft from suing new hire
Google asked a California judge to invalidate a non-compete agreement central to Microsoft Corp.'s lawsuit against a former vice president hired to head Google's new research center in China.
In a filing to the California Superior Court in Santa Clara County, Google (GOOG) claims that the non-compete emloyment provision signed by Kai-Fu Lee while he worked for Microsoft (MSFT) was "overreaching and unlawful".
Microsoft sued Lee earlier this week in its home state of Washington, alleging he violated his confidentiality and non-compete agreements by agreeing to take the job with Google.
Google, the No. 1 Web search provider, is a growing competitor to Microsoft, the world's biggest software maker.
At the same time, Microsoft is attacking Google in the Internet search arena.
Microsoft tapped Lee in 1998 to establish a research and development center in Beijing. He later moved to Microsoft's headquarters in Redmond, Washington, to become the company's vice president responsible for developing speech recognition and other interactive technologies for computers.
"It's about intimidation pure and simple. Their actions in trying to prevent Dr. Lee from joining Google is clearly an illegal restraint of trade," Nicole Wong, Google's associate general counsel told Reuters in a telephone interview.
The state of California, where Google has its headquarters, has a policy against non-compete contracts that seek to restrain employees from choosing where they want to work in California.
The Google vs. Microsoft War is Heating Up Early.
Can you imagine the legal rift awaiting two Direct Competitors when Google release the GBrowser!
Google asked a California judge to invalidate a non-compete agreement central to Microsoft Corp.'s lawsuit against a former vice president hired to head Google's new research center in China.
In a filing to the California Superior Court in Santa Clara County, Google (GOOG) claims that the non-compete emloyment provision signed by Kai-Fu Lee while he worked for Microsoft (MSFT) was "overreaching and unlawful".
Microsoft sued Lee earlier this week in its home state of Washington, alleging he violated his confidentiality and non-compete agreements by agreeing to take the job with Google.
Google, the No. 1 Web search provider, is a growing competitor to Microsoft, the world's biggest software maker.
At the same time, Microsoft is attacking Google in the Internet search arena.
Microsoft tapped Lee in 1998 to establish a research and development center in Beijing. He later moved to Microsoft's headquarters in Redmond, Washington, to become the company's vice president responsible for developing speech recognition and other interactive technologies for computers.
"It's about intimidation pure and simple. Their actions in trying to prevent Dr. Lee from joining Google is clearly an illegal restraint of trade," Nicole Wong, Google's associate general counsel told Reuters in a telephone interview.
The state of California, where Google has its headquarters, has a policy against non-compete contracts that seek to restrain employees from choosing where they want to work in California.
The Google vs. Microsoft War is Heating Up Early.
Can you imagine the legal rift awaiting two Direct Competitors when Google release the GBrowser!
Wednesday, July 20, 2005
Microsoft sues Google
Micorsoft sues Google as former MSN employee Kai-Fu Lee is hired away to lead Google's research and development drive in China.
Microsoft increased its war with Google earlier this month, when Bill Gates and Steve Ballmer filed a huge lawsuit of their own (does it pay to know the legal system?) against the world's most popular keyword search engine: Google.
Google has hired yet another key Microsoft employee and further infuriated Gates and Ballmer.
Microsoft in a legal complaint filed in Washington, Microsoft claims that Kai-Fu Lee (is not a free man), who hooked up with Goog a couple weeks back to lead an agressive research and development campaign in China. Micorsoft attorneys, looking tired and overworked, say the hiring of Kai-Fu Lee violates a strict noncompete agreement that Lee gleefully signed when he was first hired with an excessive compensation and salary package at Microsoft.
Lee was corporate vice president of Natural Interactive Services at Microsoft.
Microsoft attorneys urged the federal court in he ste of Washington with this request "We ask the Court to require Dr. Lee and Google to honor the confidentiality and non-competition agreements he signed when he began working for Microsoft," the Redmond, Washington-based company said in another litigation fueled press conference.
"Creating intellectual property is the essence of what we do at Microsoft, and we have a responsibility to our employees and our shareholders to protect our intellectual property. As a senior executive, Dr. Lee has direct knowledge of Microsoft’s trade secrets concerning search technologies and China business strategies. He has accepted a position focused on the same set of technologies and strategies for a direct competitor in egregious violation of his explicit contractual obligations."
In other words Dr. Lee packed his briefcase with internal documents and laid them on the conference table n Montain View and requested immediate stock option compensation from Google. The 10 shares of Goog stock transfered to Mr. Lee are projected to represent the value of five years of his former MSN salary.
Microsoft requested that the court prevent Lee and Google from undertaking any actions that are in violation of Lee's non-compete employment agreement with Microsoft. The lawsuit went onto request, as well as prevent Mr. Lee from "disclosing or misappropriating" any of Microsoft's established trade secrets or proprietary information, according to the legal complaint.
Microsoft also requested that the court prohibit Lee or any employee at Google from potentially luring other key Microsoft employees away from MSN, as well as from destroying key documents, in written or electronic format, that relate in any way to Microsoft's or Google's employment of Lee.
In a statement, Google executives said Microsoft's claims are "completely without merit" and that Google plans to fight the Microsoft Lawsuit. A google spokesperson made this comment:
"We're thrilled to have Dr. Lee on board at Google," and also went onto to add "Google will defend vigorously against these meritless claims from Microsoft and will fully support our new Google employee Dr. Lee."
Google and Microsoft have recently entered into a heated rivalry that involves advancements being implementd by Google that involve appilcations and areas long dominated by Microsoft.
Google and Microsoft are lining and drawing battle lines in the sand concerning email, desktop search, and most importantly control of the Browser. Microsoft Chief Executive Officer Steve Ballmer (a Michigan native and University of Michigan graduate) has repeatedly expressed his intentions to dethrone Google as the king of keyword search. Google co-founder Larry Page (also a Michigan native and University of Michigan graduate) to date has basically ignored Ballmer's Battle crys.
However in Jnue of 2005 at the Microsoft Research Faculty Summit, Microsoft Chairman and Chief Software Architect Bill Gates inferred that Google is this year's flash in the pan technology vendor.
Microsoft and Google both refuse to acknowledge that any party could create a free operating system (similar to Linux) or a free search engine (similar to Google). Heck weren't both Microsoft and Google simply stolen technology that had been acquired and enhanced to meet Google and Microsoft's needs.
Ask any of these most influential technology leaders over the last (20) years and they will inform the world "that the best things in life are free" and possibly stolen.
Paul Allen (Microsoft cofounder)
Mark Andreessen (Mosaic developer/Netscape founder)
Tim Berners-Lee (founder and creator of the World Wide Web)
Jeff Bezos (CEO of Amazon.com)
Steve Case (founder and CEO of AOL)
Vint Cert (coauthor of TCP/IP protocol and current chairman of ICANN
John Chambers (CEO of Cisco Systems)
Michael Dell (Dell Computer CEO and Founder)
Don Estridge (PC pioneeer)
Sean Fannings (Napster creator)
Bill Gross (Idealab founder)
Andrew Grove (CEO of Intel)
Jeff Hawkins (Handspring CEO, Palm Pilot Inventor)
Andrew Hejlsberg (Turbo Pascal - Delphi creator)
Steve Jobs (Apple Computer CEO and founder)
Philippe Kahn (Borland founder)
Gordon Moore (Intel cofounder)
Ray Ozzie (Lotus Notes creator and Groove guru)
John Scully (former Apple CEO)
Linus Torvalds (inventor and trademark holder of Linux)
Steve Wozniak (Apple cofounder).
It is apparent that technology companies that require employees to sign noncompete agreements and prevent them from working at any competing company or try to keep them from luring other key employees away from their previous employers are usually not able to get legal backing from the court system.
This is not the first time Microsoft has taken legal action with former Microsoft employees based on non such agreements. One highly publicized case in 2000 involved Microsoft suing former employees for violating non-compete agreements as they left to start CrossGain a new software company.
Microsoft's non-compete lawsuits have in many caes caused former Microsoft employees to stop working at their new companies for a short period of time until the non-compete agrements expired. Several senior technology managers ad developers at Microsoft have left in recent months to join Google.
The Google press release only states that Google views the acquistion of Mr. Lee critical o their artificial intelligence software developments and their agressive research and development causes in rapidly expanding China.
Google is on pace to open their China facility before the close of 2005.
Look for the war between Microsoft and Google to heat up much further in the coming months.
The GBrowser is about to change everything.
Micorsoft sues Google as former MSN employee Kai-Fu Lee is hired away to lead Google's research and development drive in China.
Microsoft increased its war with Google earlier this month, when Bill Gates and Steve Ballmer filed a huge lawsuit of their own (does it pay to know the legal system?) against the world's most popular keyword search engine: Google.
Google has hired yet another key Microsoft employee and further infuriated Gates and Ballmer.
Microsoft in a legal complaint filed in Washington, Microsoft claims that Kai-Fu Lee (is not a free man), who hooked up with Goog a couple weeks back to lead an agressive research and development campaign in China. Micorsoft attorneys, looking tired and overworked, say the hiring of Kai-Fu Lee violates a strict noncompete agreement that Lee gleefully signed when he was first hired with an excessive compensation and salary package at Microsoft.
Lee was corporate vice president of Natural Interactive Services at Microsoft.
Microsoft attorneys urged the federal court in he ste of Washington with this request "We ask the Court to require Dr. Lee and Google to honor the confidentiality and non-competition agreements he signed when he began working for Microsoft," the Redmond, Washington-based company said in another litigation fueled press conference.
"Creating intellectual property is the essence of what we do at Microsoft, and we have a responsibility to our employees and our shareholders to protect our intellectual property. As a senior executive, Dr. Lee has direct knowledge of Microsoft’s trade secrets concerning search technologies and China business strategies. He has accepted a position focused on the same set of technologies and strategies for a direct competitor in egregious violation of his explicit contractual obligations."
In other words Dr. Lee packed his briefcase with internal documents and laid them on the conference table n Montain View and requested immediate stock option compensation from Google. The 10 shares of Goog stock transfered to Mr. Lee are projected to represent the value of five years of his former MSN salary.
Microsoft requested that the court prevent Lee and Google from undertaking any actions that are in violation of Lee's non-compete employment agreement with Microsoft. The lawsuit went onto request, as well as prevent Mr. Lee from "disclosing or misappropriating" any of Microsoft's established trade secrets or proprietary information, according to the legal complaint.
Microsoft also requested that the court prohibit Lee or any employee at Google from potentially luring other key Microsoft employees away from MSN, as well as from destroying key documents, in written or electronic format, that relate in any way to Microsoft's or Google's employment of Lee.
In a statement, Google executives said Microsoft's claims are "completely without merit" and that Google plans to fight the Microsoft Lawsuit. A google spokesperson made this comment:
"We're thrilled to have Dr. Lee on board at Google," and also went onto to add "Google will defend vigorously against these meritless claims from Microsoft and will fully support our new Google employee Dr. Lee."
Google and Microsoft have recently entered into a heated rivalry that involves advancements being implementd by Google that involve appilcations and areas long dominated by Microsoft.
Google and Microsoft are lining and drawing battle lines in the sand concerning email, desktop search, and most importantly control of the Browser. Microsoft Chief Executive Officer Steve Ballmer (a Michigan native and University of Michigan graduate) has repeatedly expressed his intentions to dethrone Google as the king of keyword search. Google co-founder Larry Page (also a Michigan native and University of Michigan graduate) to date has basically ignored Ballmer's Battle crys.
However in Jnue of 2005 at the Microsoft Research Faculty Summit, Microsoft Chairman and Chief Software Architect Bill Gates inferred that Google is this year's flash in the pan technology vendor.
Microsoft and Google both refuse to acknowledge that any party could create a free operating system (similar to Linux) or a free search engine (similar to Google). Heck weren't both Microsoft and Google simply stolen technology that had been acquired and enhanced to meet Google and Microsoft's needs.
Ask any of these most influential technology leaders over the last (20) years and they will inform the world "that the best things in life are free" and possibly stolen.
Paul Allen (Microsoft cofounder)
Mark Andreessen (Mosaic developer/Netscape founder)
Tim Berners-Lee (founder and creator of the World Wide Web)
Jeff Bezos (CEO of Amazon.com)
Steve Case (founder and CEO of AOL)
Vint Cert (coauthor of TCP/IP protocol and current chairman of ICANN
John Chambers (CEO of Cisco Systems)
Michael Dell (Dell Computer CEO and Founder)
Don Estridge (PC pioneeer)
Sean Fannings (Napster creator)
Bill Gross (Idealab founder)
Andrew Grove (CEO of Intel)
Jeff Hawkins (Handspring CEO, Palm Pilot Inventor)
Andrew Hejlsberg (Turbo Pascal - Delphi creator)
Steve Jobs (Apple Computer CEO and founder)
Philippe Kahn (Borland founder)
Gordon Moore (Intel cofounder)
Ray Ozzie (Lotus Notes creator and Groove guru)
John Scully (former Apple CEO)
Linus Torvalds (inventor and trademark holder of Linux)
Steve Wozniak (Apple cofounder).
It is apparent that technology companies that require employees to sign noncompete agreements and prevent them from working at any competing company or try to keep them from luring other key employees away from their previous employers are usually not able to get legal backing from the court system.
This is not the first time Microsoft has taken legal action with former Microsoft employees based on non such agreements. One highly publicized case in 2000 involved Microsoft suing former employees for violating non-compete agreements as they left to start CrossGain a new software company.
Microsoft's non-compete lawsuits have in many caes caused former Microsoft employees to stop working at their new companies for a short period of time until the non-compete agrements expired. Several senior technology managers ad developers at Microsoft have left in recent months to join Google.
The Google press release only states that Google views the acquistion of Mr. Lee critical o their artificial intelligence software developments and their agressive research and development causes in rapidly expanding China.
Google is on pace to open their China facility before the close of 2005.
Look for the war between Microsoft and Google to heat up much further in the coming months.
The GBrowser is about to change everything.
Monday, July 18, 2005
AOL Announces New Advertising Campaign
America Online reeling with market share losses has announced a new online advertising campaign set to launch in August of 2005.
AOL will pour another $50 million into advertising in the hopes of stemming the tide that has been on the decline for months.
AOL.com offering free content and features that were previously available only to subscribers.
The campaign includes paid search advertising, optimizing AOL properties for search engine crawlers (URGENT NEWS FLASH AOL THINKS ABOUT A SPIDER ???? what a concept ????? aol actually thinking about a crawler ?????). Google becomes one of the world's richest companies, AOL loses the most amount of money in corporate history, and 48 months is the first time AOL considers the impact of a crawler.
AOL will spend most of their new advertising budget online as it should as that is where the target lies. ...aol's executive vice president of the AOL Media Networks Kevin Conrol says : "We're really leaning into online because we believe in this medium to ... reach the audience we want to reach," he went onto say that "TV is really the smallest element of this and we'll be very selective about television." (finally)
Paid search will represent the single biggest chunk of media spend, followed by online branding efforts. We find this most interesting as keyword searchers prefer organic results 7 to 1 versus paid but if capturing less than 20% of a given keywor's search traffic is the goal aol looks to be successful with Pay Per Click.
Online impressions are expected to run on more than 200 news, entertainment, sports, and lifestyle sites, such as E! Online, CNN.com, Maxim, Oprah, and WebMD. Again these subscribers also actually use these sites for content and only click on labeled sponsered advertising links 15% of the time.
AOL's branding campaign urges users to experience AOL in real time, Conroy said.
--
Prediction AOL continues to struggle
America Online reeling with market share losses has announced a new online advertising campaign set to launch in August of 2005.
AOL will pour another $50 million into advertising in the hopes of stemming the tide that has been on the decline for months.
AOL.com offering free content and features that were previously available only to subscribers.
The campaign includes paid search advertising, optimizing AOL properties for search engine crawlers (URGENT NEWS FLASH AOL THINKS ABOUT A SPIDER ???? what a concept ????? aol actually thinking about a crawler ?????). Google becomes one of the world's richest companies, AOL loses the most amount of money in corporate history, and 48 months is the first time AOL considers the impact of a crawler.
AOL will spend most of their new advertising budget online as it should as that is where the target lies. ...aol's executive vice president of the AOL Media Networks Kevin Conrol says : "We're really leaning into online because we believe in this medium to ... reach the audience we want to reach," he went onto say that "TV is really the smallest element of this and we'll be very selective about television." (finally)
Paid search will represent the single biggest chunk of media spend, followed by online branding efforts. We find this most interesting as keyword searchers prefer organic results 7 to 1 versus paid but if capturing less than 20% of a given keywor's search traffic is the goal aol looks to be successful with Pay Per Click.
Online impressions are expected to run on more than 200 news, entertainment, sports, and lifestyle sites, such as E! Online, CNN.com, Maxim, Oprah, and WebMD. Again these subscribers also actually use these sites for content and only click on labeled sponsered advertising links 15% of the time.
AOL's branding campaign urges users to experience AOL in real time, Conroy said.
--
Prediction AOL continues to struggle
Friday, July 15, 2005
Cookies Are Spyware
Friday, July 15, 2005
Cookies Are Spyware, According to The Wall Street Journal
This piece was first published by M Naples
A Recent Article By the Wall Street Journal States Cookies Are Spyware
So, be sure to disable your cookies, all you WSJ subscribers. That's clearly what the Wall Street Journal would have all of us do. Seriously? Well, maybe.
Walter Mossberg's essay - which ran on Thursday - contains so many inaccuracies that it reminds me of a ruse from a different industry a couple of decades ago. But, perhaps he has an agenda.
Remember the Bottle Bill? The Bottle Bill was created by urban environmentalists and nurtured by the plastics industry because it necessitated returning beverage containers to retailers. In states that passed Bottle Bills, everyone knew that glass and aluminum containers were going to be replaced by unbreakable, larger, easier to handle plastic ones and that more comprehensive recycling programs would suffer. The nine states that have bottle bills today don't have more comprehensive statewide programs since the whole packaging mix was subverted by the 2-liter plastic container.
Enough detail on that. Here's the connection: Almost every major paper in the United States supported Bottle Bills. Most major publishers lobbied hard for them state by state. Of course, this is because newspapers comprise maybe 30 percent of the waste stream while beverage containers comprise maybe 3 percent. Newspapers just wanted to take the spotlight off their own bad litter and waste story. In nine states, they succeeded. Do you know how much post-consumer content is in that copy of the WSJ you read this morning? Not a lot, especially when compared to those beverage containers.
Well, if you read the WSJ online, recycled content is obviously not a concern. But, subscriber dilution is a concern to its publishers. Newspapers as a whole are terribly worried about online, even those newspapers like The Wall Street Journal that have done great things to make money and protect their brand digitally. Talk to enough newspaper publishers about the relationship between their print and online assets and the word you will hear is "cannibalize," because they feel that online readership's erosion.
That's the first thing I thought of when I read Mossberg's piece. Obviously, The Wall Street Journal depends on the cookies it places on its subscribers' hard drives, just as every reputable media company does. Unfortunately, spyware companies can use cookies and IP targeting to locate and target users' hard drives too; so can companies that track users across multiple sites. While tracking users across sites (with full disclosure and without sharing their PII) is okay with me, these same users deserve to know that they're being tracked across media, just as they do in the non-digital world. The fact that they're afraid of it, is our fault as an industry, not theirs as consumers.
The point here is that what companies do with cookies is what we should be talking about, not the cookies themselves. Mossberg seems woefully misinformed - but it's not his fault. His is not the first anti-cookie piece I've seen in a major newspaper, although it's the worst-informed, and it appeared in the most influential outlet. What may be happening here is that newspapers are perhaps posturing toward a role that is somewhat similar to their role in the Bottle Bill debacle 20-some years ago.
Tired of bleeding money online, newspapers are buying marketing companies and many publishers are doing deals with Google, of all companies, to generate more page views and text links. Do you think that newspapers wouldn't rather be the ones managing their own optimization instead of farming it out to the new monolith, and subordinating their brands both nationally and locally?
Well, of course they would - only they haven't figured out how to do so yet. Mossberg wants cookies to be banned because if cookies are gone, all meaningful online measurement is thrown in the air and newspapers are at less of a disadvantage. Or, maybe he thinks - like many others in the print world - that fomenting fears of online media might bring newspapers readers back to traditional newspapers.
Understand that I'm ascribing to this subversive notion because I'm giving him credit for knowing his business. If this agenda were not his intention, then he's just plain wrong and the Journal's publishers should be embarrassed for editorially shooting themselves (and their advertisers) in the foot. Honestly, if this is not his agenda, then it's akin to a major sports league skipping a full season, essentially telling its consumers and sponsors to stick it. I mean, who would be so...so...dense?
What the Debate Should Properly Be About The Network Advertising Initiative (NAI) will be hosting a major industry retreat near its headquarters in York Harbor, Maine next week. From their invitation: "Since the debate over spyware has created such an urgent need for those of us in the online industry to identify and support best practices for adware and online advertising..." the best and brightest among our privacy officers and some c-level executives will gather for a two-day workshop to hammer out definitions of what is and is not spyware and adware.
As with any properly drafted restrictive regulation, please note that the NAI workshop will focus on best practices. Cookies aren't the villain here any more than the ads that support our salaries (including yours, Mossberg) or the text links in the galleys of our pages. However, what companies do with cookies, with what's lurking behind those text links can be villainous.
Remember, what users give up to cookies online - in terms of information on them or their behavior - is a small fraction of what they give up to credit card companies they do business with or when they subscribe to The Wall Street Journal newspaper.
What matters here is not the technology, but the behavior. It's no more or less true in online media than it is in traditional media. Next time the Journal's parent, Dow Jones, sells a subscriber db-segment to one of its direct mail partners, that behavior must be above-board. It will be enabled by technology not unlike cookies. Traditional media companies sell these records every day. What matters is how they sell them and to whom - the behavior, not the technology.
Let's face the fact that, as an industry, we've failed to make it clear to consumers that cookies are not the problem. Now - it seems - we can add newspapers themselves to our list of opponents, joining marketers of spyware removal products, who started this mess in the first place by identifying all cookies as spyware. I hope I'm wrong. But, as much as I trust the beleaguered cookies on my hard drive, these days I always suspect an agenda from anyone turning cookies into the villain.
The best chance this industry has for combating the sort of uniformed fears that Mossberg's piece will nurture gathers in York Harbor, Maine next week. If you're not familiar with what the NAI is up to, ask the top companies in our industry who participate. More importantly, ask the Congressional committees writing the laws we're all going to be following soon. When it comes to these matters, they look to the NAI too.
Cookies choke search engine spiders !
Friday, July 15, 2005
Cookies Are Spyware, According to The Wall Street Journal
This piece was first published by M Naples
A Recent Article By the Wall Street Journal States Cookies Are Spyware
So, be sure to disable your cookies, all you WSJ subscribers. That's clearly what the Wall Street Journal would have all of us do. Seriously? Well, maybe.
Walter Mossberg's essay - which ran on Thursday - contains so many inaccuracies that it reminds me of a ruse from a different industry a couple of decades ago. But, perhaps he has an agenda.
Remember the Bottle Bill? The Bottle Bill was created by urban environmentalists and nurtured by the plastics industry because it necessitated returning beverage containers to retailers. In states that passed Bottle Bills, everyone knew that glass and aluminum containers were going to be replaced by unbreakable, larger, easier to handle plastic ones and that more comprehensive recycling programs would suffer. The nine states that have bottle bills today don't have more comprehensive statewide programs since the whole packaging mix was subverted by the 2-liter plastic container.
Enough detail on that. Here's the connection: Almost every major paper in the United States supported Bottle Bills. Most major publishers lobbied hard for them state by state. Of course, this is because newspapers comprise maybe 30 percent of the waste stream while beverage containers comprise maybe 3 percent. Newspapers just wanted to take the spotlight off their own bad litter and waste story. In nine states, they succeeded. Do you know how much post-consumer content is in that copy of the WSJ you read this morning? Not a lot, especially when compared to those beverage containers.
Well, if you read the WSJ online, recycled content is obviously not a concern. But, subscriber dilution is a concern to its publishers. Newspapers as a whole are terribly worried about online, even those newspapers like The Wall Street Journal that have done great things to make money and protect their brand digitally. Talk to enough newspaper publishers about the relationship between their print and online assets and the word you will hear is "cannibalize," because they feel that online readership's erosion.
That's the first thing I thought of when I read Mossberg's piece. Obviously, The Wall Street Journal depends on the cookies it places on its subscribers' hard drives, just as every reputable media company does. Unfortunately, spyware companies can use cookies and IP targeting to locate and target users' hard drives too; so can companies that track users across multiple sites. While tracking users across sites (with full disclosure and without sharing their PII) is okay with me, these same users deserve to know that they're being tracked across media, just as they do in the non-digital world. The fact that they're afraid of it, is our fault as an industry, not theirs as consumers.
The point here is that what companies do with cookies is what we should be talking about, not the cookies themselves. Mossberg seems woefully misinformed - but it's not his fault. His is not the first anti-cookie piece I've seen in a major newspaper, although it's the worst-informed, and it appeared in the most influential outlet. What may be happening here is that newspapers are perhaps posturing toward a role that is somewhat similar to their role in the Bottle Bill debacle 20-some years ago.
Tired of bleeding money online, newspapers are buying marketing companies and many publishers are doing deals with Google, of all companies, to generate more page views and text links. Do you think that newspapers wouldn't rather be the ones managing their own optimization instead of farming it out to the new monolith, and subordinating their brands both nationally and locally?
Well, of course they would - only they haven't figured out how to do so yet. Mossberg wants cookies to be banned because if cookies are gone, all meaningful online measurement is thrown in the air and newspapers are at less of a disadvantage. Or, maybe he thinks - like many others in the print world - that fomenting fears of online media might bring newspapers readers back to traditional newspapers.
Understand that I'm ascribing to this subversive notion because I'm giving him credit for knowing his business. If this agenda were not his intention, then he's just plain wrong and the Journal's publishers should be embarrassed for editorially shooting themselves (and their advertisers) in the foot. Honestly, if this is not his agenda, then it's akin to a major sports league skipping a full season, essentially telling its consumers and sponsors to stick it. I mean, who would be so...so...dense?
What the Debate Should Properly Be About The Network Advertising Initiative (NAI) will be hosting a major industry retreat near its headquarters in York Harbor, Maine next week. From their invitation: "Since the debate over spyware has created such an urgent need for those of us in the online industry to identify and support best practices for adware and online advertising..." the best and brightest among our privacy officers and some c-level executives will gather for a two-day workshop to hammer out definitions of what is and is not spyware and adware.
As with any properly drafted restrictive regulation, please note that the NAI workshop will focus on best practices. Cookies aren't the villain here any more than the ads that support our salaries (including yours, Mossberg) or the text links in the galleys of our pages. However, what companies do with cookies, with what's lurking behind those text links can be villainous.
Remember, what users give up to cookies online - in terms of information on them or their behavior - is a small fraction of what they give up to credit card companies they do business with or when they subscribe to The Wall Street Journal newspaper.
What matters here is not the technology, but the behavior. It's no more or less true in online media than it is in traditional media. Next time the Journal's parent, Dow Jones, sells a subscriber db-segment to one of its direct mail partners, that behavior must be above-board. It will be enabled by technology not unlike cookies. Traditional media companies sell these records every day. What matters is how they sell them and to whom - the behavior, not the technology.
Let's face the fact that, as an industry, we've failed to make it clear to consumers that cookies are not the problem. Now - it seems - we can add newspapers themselves to our list of opponents, joining marketers of spyware removal products, who started this mess in the first place by identifying all cookies as spyware. I hope I'm wrong. But, as much as I trust the beleaguered cookies on my hard drive, these days I always suspect an agenda from anyone turning cookies into the villain.
The best chance this industry has for combating the sort of uniformed fears that Mossberg's piece will nurture gathers in York Harbor, Maine next week. If you're not familiar with what the NAI is up to, ask the top companies in our industry who participate. More importantly, ask the Congressional committees writing the laws we're all going to be following soon. When it comes to these matters, they look to the NAI too.
Cookies choke search engine spiders !
Cookies Are Spyware
Friday, July 15, 2005
Cookies Are Spyware, According to The Wall Street Journal
This piece was first published by M Naples
A Recent Article By the Wall Street Journal States Cookies Are Spyware
So, be sure to disable your cookies, all you WSJ subscribers. That's clearly what the Wall Street Journal would have all of us do. Seriously? Well, maybe.
Walter Mossberg's essay - which ran on Thursday - contains so many inaccuracies that it reminds me of a ruse from a different industry a couple of decades ago. But, perhaps he has an agenda.
Remember the Bottle Bill? The Bottle Bill was created by urban environmentalists and nurtured by the plastics industry because it necessitated returning beverage containers to retailers. In states that passed Bottle Bills, everyone knew that glass and aluminum containers were going to be replaced by unbreakable, larger, easier to handle plastic ones and that more comprehensive recycling programs would suffer. The nine states that have bottle bills today don't have more comprehensive statewide programs since the whole packaging mix was subverted by the 2-liter plastic container.
Enough detail on that. Here's the connection: Almost every major paper in the United States supported Bottle Bills. Most major publishers lobbied hard for them state by state. Of course, this is because newspapers comprise maybe 30 percent of the waste stream while beverage containers comprise maybe 3 percent. Newspapers just wanted to take the spotlight off their own bad litter and waste story. In nine states, they succeeded. Do you know how much post-consumer content is in that copy of the WSJ you read this morning? Not a lot, especially when compared to those beverage containers.
Well, if you read the WSJ online, recycled content is obviously not a concern. But, subscriber dilution is a concern to its publishers. Newspapers as a whole are terribly worried about online, even those newspapers like The Wall Street Journal that have done great things to make money and protect their brand digitally. Talk to enough newspaper publishers about the relationship between their print and online assets and the word you will hear is "cannibalize," because they feel that online readership's erosion of their traditional subscriptions is cannibalizing their share of the advertising market.
That's the first thing I thought of when I read Mossberg's piece. Obviously, The Wall Street Journal depends on the cookies it places on its subscribers' hard drives, just as every reputable media company does. Unfortunately, spyware companies can use cookies and IP targeting to locate and target users' hard drives too; so can companies that track users across multiple sites.
While tracking users across sites (with full disclosure and without sharing their PII) is okay with me, these same users deserve to know that they're being tracked across media, just as they do in the non-digital world. The fact that they're afraid of it, is our fault as an industry, not theirs as consumers.
The point here is that what companies do with cookies is what we should be talking about, not the cookies themselves. Mossberg seems woefully misinformed - but it's not his fault. His is not the first anti-cookie piece I've seen in a major newspaper, although it's the worst-informed, and it appeared in the most influential outlet. What may be happening here is that newspapers are perhaps posturing toward a role that is somewhat similar to their role in the Bottle Bill debacle 20-some years ago.
Tired of bleeding money online, newspapers are buying marketing companies and many publishers are doing deals with Google, of all companies, to generate more page views and text links. Do you think that newspapers wouldn't rather be the ones managing their own optimization instead of farming it out to the new monolith, and subordinating their brands both nationally and locally?
Well, of course they would - only they haven't figured out how to do so yet. Mossberg wants cookies to be banned because if cookies are gone, all meaningful online measurement is thrown in the air and newspapers are at less of a disadvantage. Or, maybe he thinks - like many others in the print world - that fomenting fears of online media might bring newspapers readers back to traditional newspapers.
Understand that I'm ascribing to this subversive notion because I'm giving him credit for knowing his business. If this agenda were not his intention, then he's just plain wrong and the Journal's publishers should be embarrassed for editorially shooting themselves (and their advertisers) in the foot. Honestly, if this is not his agenda, then it's akin to a major sports league skipping a full season, essentially telling its consumers and sponsors to stick it. I mean, who would be so...so...dense?
What the Debate Should Properly Be About The Network Advertising Initiative (NAI) will be hosting a major industry retreat near its headquarters in York Harbor, Maine next week. From their invitation: "Since the debate over spyware has created such an urgent need for those of us in the online industry to identify and support best practices for adware and online advertising..." the best and brightest among our privacy officers and some c-level executives will gather for a two-day workshop to hammer out definitions of what is and is not spyware and adware.
As with any properly drafted restrictive regulation, please note that the NAI workshop will focus on best practices. Cookies aren't the villain here any more than the ads that support our salaries (including yours, Mossberg) or the text links in the galleys of our pages. However, what companies do with cookies, with what's lurking behind those text links can be villainous.
Remember, what users give up to cookies online - in terms of information on them or their behavior - is a small fraction of what they give up to credit card companies they do business with or when they subscribe to The Wall Street Journal newspaper.
What matters here is not the technology, but the behavior. It's no more or less true in online media than it is in traditional media. Next time the Journal's parent, Dow Jones, sells a subscriber db-segment to one of its direct mail partners, that behavior must be above-board. It will be enabled by technology not unlike cookies. Traditional media companies sell these records every day. What matters is how they sell them and to whom - the behavior, not the technology.
Let's face the fact that, as an industry, we've failed to make it clear to consumers that cookies are not the problem. Now - it seems - we can add newspapers themselves to our list of opponents, joining marketers of spyware removal products, who started this mess in the first place by identifying all cookies as spyware. I hope I'm wrong. But, as much as I trust the beleaguered cookies on my hard drive, these days I always suspect an agenda from anyone turning cookies into the villain.
The best chance the
Friday, July 15, 2005
Cookies Are Spyware, According to The Wall Street Journal
This piece was first published by M Naples
A Recent Article By the Wall Street Journal States Cookies Are Spyware
So, be sure to disable your cookies, all you WSJ subscribers. That's clearly what the Wall Street Journal would have all of us do. Seriously? Well, maybe.
Walter Mossberg's essay - which ran on Thursday - contains so many inaccuracies that it reminds me of a ruse from a different industry a couple of decades ago. But, perhaps he has an agenda.
Remember the Bottle Bill? The Bottle Bill was created by urban environmentalists and nurtured by the plastics industry because it necessitated returning beverage containers to retailers. In states that passed Bottle Bills, everyone knew that glass and aluminum containers were going to be replaced by unbreakable, larger, easier to handle plastic ones and that more comprehensive recycling programs would suffer. The nine states that have bottle bills today don't have more comprehensive statewide programs since the whole packaging mix was subverted by the 2-liter plastic container.
Enough detail on that. Here's the connection: Almost every major paper in the United States supported Bottle Bills. Most major publishers lobbied hard for them state by state. Of course, this is because newspapers comprise maybe 30 percent of the waste stream while beverage containers comprise maybe 3 percent. Newspapers just wanted to take the spotlight off their own bad litter and waste story. In nine states, they succeeded. Do you know how much post-consumer content is in that copy of the WSJ you read this morning? Not a lot, especially when compared to those beverage containers.
Well, if you read the WSJ online, recycled content is obviously not a concern. But, subscriber dilution is a concern to its publishers. Newspapers as a whole are terribly worried about online, even those newspapers like The Wall Street Journal that have done great things to make money and protect their brand digitally. Talk to enough newspaper publishers about the relationship between their print and online assets and the word you will hear is "cannibalize," because they feel that online readership's erosion of their traditional subscriptions is cannibalizing their share of the advertising market.
That's the first thing I thought of when I read Mossberg's piece. Obviously, The Wall Street Journal depends on the cookies it places on its subscribers' hard drives, just as every reputable media company does. Unfortunately, spyware companies can use cookies and IP targeting to locate and target users' hard drives too; so can companies that track users across multiple sites.
While tracking users across sites (with full disclosure and without sharing their PII) is okay with me, these same users deserve to know that they're being tracked across media, just as they do in the non-digital world. The fact that they're afraid of it, is our fault as an industry, not theirs as consumers.
The point here is that what companies do with cookies is what we should be talking about, not the cookies themselves. Mossberg seems woefully misinformed - but it's not his fault. His is not the first anti-cookie piece I've seen in a major newspaper, although it's the worst-informed, and it appeared in the most influential outlet. What may be happening here is that newspapers are perhaps posturing toward a role that is somewhat similar to their role in the Bottle Bill debacle 20-some years ago.
Tired of bleeding money online, newspapers are buying marketing companies and many publishers are doing deals with Google, of all companies, to generate more page views and text links. Do you think that newspapers wouldn't rather be the ones managing their own optimization instead of farming it out to the new monolith, and subordinating their brands both nationally and locally?
Well, of course they would - only they haven't figured out how to do so yet. Mossberg wants cookies to be banned because if cookies are gone, all meaningful online measurement is thrown in the air and newspapers are at less of a disadvantage. Or, maybe he thinks - like many others in the print world - that fomenting fears of online media might bring newspapers readers back to traditional newspapers.
Understand that I'm ascribing to this subversive notion because I'm giving him credit for knowing his business. If this agenda were not his intention, then he's just plain wrong and the Journal's publishers should be embarrassed for editorially shooting themselves (and their advertisers) in the foot. Honestly, if this is not his agenda, then it's akin to a major sports league skipping a full season, essentially telling its consumers and sponsors to stick it. I mean, who would be so...so...dense?
What the Debate Should Properly Be About The Network Advertising Initiative (NAI) will be hosting a major industry retreat near its headquarters in York Harbor, Maine next week. From their invitation: "Since the debate over spyware has created such an urgent need for those of us in the online industry to identify and support best practices for adware and online advertising..." the best and brightest among our privacy officers and some c-level executives will gather for a two-day workshop to hammer out definitions of what is and is not spyware and adware.
As with any properly drafted restrictive regulation, please note that the NAI workshop will focus on best practices. Cookies aren't the villain here any more than the ads that support our salaries (including yours, Mossberg) or the text links in the galleys of our pages. However, what companies do with cookies, with what's lurking behind those text links can be villainous.
Remember, what users give up to cookies online - in terms of information on them or their behavior - is a small fraction of what they give up to credit card companies they do business with or when they subscribe to The Wall Street Journal newspaper.
What matters here is not the technology, but the behavior. It's no more or less true in online media than it is in traditional media. Next time the Journal's parent, Dow Jones, sells a subscriber db-segment to one of its direct mail partners, that behavior must be above-board. It will be enabled by technology not unlike cookies. Traditional media companies sell these records every day. What matters is how they sell them and to whom - the behavior, not the technology.
Let's face the fact that, as an industry, we've failed to make it clear to consumers that cookies are not the problem. Now - it seems - we can add newspapers themselves to our list of opponents, joining marketers of spyware removal products, who started this mess in the first place by identifying all cookies as spyware. I hope I'm wrong. But, as much as I trust the beleaguered cookies on my hard drive, these days I always suspect an agenda from anyone turning cookies into the villain.
The best chance the
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