We Know Where You Are

Tracking IP Address With Geolocation Software Presents Many Benefits But Also Many Unique Issues for Organic Search...

With new software, Web sites can tell what city a visitor is coming from. That can be useful information.

The freewheeling, borderless Internet has long allowed businesses to think globally. Now a growing number of companies are using Web technology to help them act locally.

Companies increasingly want to know where visitors to their Web sites are located so they can better serve them -- by, for example, ushering them to pages in their native language or offering them information, promotions or products pertinent to the local area. Other firms need to comply with laws or contracts that require they steer clear of customers in certain states or countries, while still others are seeking to thwart online criminals trying to impersonate clients.

To accomplish these goals, companies are erecting virtual borders with geolocation software, which analyzes a visiting computer's numerical Internet Protocol address to get a read on that Web user's city location. Armed with this information, businesses can usher people to appropriate Web pages or stop them from accessing an account or service.

Privacy-rights advocates consider IP addresses personally identifiable information, and they are concerned about systems that retain this data because of the potential for unwelcome scrutiny of people's Web-use habits. But the major geolocation companies say they don't track Web usage by IP address; rather, they simply maintain databases of IP addresses and their associated geographic locations.

Creating Connections

The technology isn't perfect -- some companies and Internet-service providers, including Time Warner Inc.'s AOL, use IP addresses that correspond to their headquarters' locations, not those of their end users. And some people mask their IP addresses for privacy reasons. But with accuracy rates in the low-to-high-90% range, geolocation technology is bringing a new level of maturity to the Internet -- delivering more sophistication and function to Web sites, enabling new businesses to operate online and enhancing Internet security.

With 1.2 billion people around the globe now connected, "the Internet is starting to reflect the world," with its many languages, competing interests and rules and regulations, says John Yunker, president and chief analyst at San Diego consulting firm Byte Level Research LLC. "Those boundaries are coming back," he says, and geolocation is the "air-traffic control" that lets companies route travelers.

Consider Ace Hardware, a cooperative of more than 4,600 dealer-owned hardware stores that overhauled its Web site in February 2007. Using geolocation software from Digital Element, a unit of Norcross, Va.-based Digital Envoy Inc., Ace now gives Web-site visitors a list of stores within a 30-mile radius of their location. A click takes visitors to a page showing the stores plotted on a Google map, and from there, they can drill down to the various stores' Web sites for information such as hours of operation and driving directions.

Dana Kevish, Ace's e-commerce marketing manager, says geolocation is important to Ace because some 75% of online sales go through local stores -- where Ace will ship products free -- and 30% of customers who pick up an online order make an additional purchase in the store. Having geolocation capabilities "helped us create a connection between the consumers and the local store," she says.

Ace plans to expand its use of the technology this winter by directing Web visitors to one of five or six different home pages, depending on their location. People in cold climates will see a home page featuring snowblowers, for example, while Floridians might see patio furniture.

Denver-based news site Examiner.com, meanwhile, uses software from Quova Inc., of Mountain View, Calif., to display geographically targeted news and advertising to more than two million monthly visitors from 57 local U.S. markets. A Web user's IP address determines the edition that is displayed, and advertisers can pick the editions in which they want their ads to appear.

Other companies are using geolocation to gauge the impact of ad campaigns, even offline ones. For instance, a spike in Web-site visits from New Yorkers following a series of ads in New York newspapers would suggest a successful campaign.

Still, geolocation technology won't pinpoint Web visitors' locations beyond the city level, which won't satisfy advertisers seeking to target potential customers by neighborhood or street. "That might be the next forefront people might try to push toward," says Dane Walther, director of custom engineering at Cambridge, Mass.-based Akamai Technologies Inc., which has a geolocation product. "There's certainly interest from marketers, who always want to get as detailed, as local as they can."

For Some, a Lifeline

Geolocation technology allows companies to use the Internet as a distribution channel when contracts or laws restrict them from doing business in certain geographic locations.

Major League Baseball's Internet arm, MLB Advanced Media LP, has used software from Quova to build a $160 million paid-subscription business streaming live baseball games to fans.

Because each team has sold the broadcast rights to games in its local markets, MLB.com is permitted to stream games only to people living outside of the local markets of the teams playing. To confirm customers' locations, MLB.com uses Quova software in addition to information such as shipping addresses from past product purchases and addresses tied to credit cards.

MLB.com says it errs on the side of caution, denying about 15% of streaming requests it gets. While that means it sometimes blocks legitimate users, the error rate is perhaps 1% or 2%, and those people can call to request access, says MLB Advanced Media's chief executive, Bob Bowman.

"Fortunately for us, there are lots of fans that don't live in the town of the club they cheer," says Mr. Bowman, who estimates they amount to about half of each team's fans.

Ultimate Blackjack Tour LLC of Las Vegas is another company that uses geolocation software from Quova to help weed out certain would-be customers. The company runs a subscription-based business in which people compete for prizes by playing blackjack and poker online. It can sell the service only to people in the 38 states that allow sweepstakes; visitors from the other 12 states must get a version of the product without prizes.

The accuracy of the information is vital to Ultimate Blackjack Tour because mistakes could mean fines by state governments and black eyes for business partners. Although looking at IP addresses is "not the end-all solution," it is an automated and cost-effective first line of defense, says Brett Calapp, Ultimate Blackjack Tour's president. To improve accuracy, the company also examines the type of Internet connections its customers are using and whether they have been routed through a proxy server that might be masking their location.

Thwarting Fraud

For financial-services and e-commerce companies, geolocation has proved to be a valuable tool in their 24-hour battle against fraud. The technology allows them to flag activity if someone in, say, Russia tries to access an account or use a credit card of a customer who lives in Ohio. They can block the transaction or ask a security question to give the Ohioan access in case he is visiting Moscow.

For e-commerce sites, the goal is threefold: to reduce fraud, reject as few legitimate orders as possible and minimize costly manual reviews of transactions.

Marie Alexander, Quova's chief executive, says one manufacturer told her that it has found a transaction to be fraudulent in 73% of cases where the state in the credit-card billing address doesn't match the state associated with the IP address. "It's a huge savings to pull those [transactions] out," she says.

By: Riva Richmond
Wall Street Journal; September 29, 2008

Ballmer's quest to compete with Google

Microsoft's CEO discusses search strategy



At a Churchill Club event in Santa Clara, Calif., Microsoft CEO Steve Ballmer talks to Ann Winblad, a partner at Hummer Winblad Venture Partners, on its long-term strategy to battle Google in the search market. Ballmer says that to succeed, the company will have to find a way to change the experience and the economics of search, redefining the category.

Radio Executives Singing The Blues

Radio Losing Audience, Advertisers, and Relevance.

Can Anyone Explain Why Google Wanted to Break Into The Radio Market by Rolling Out Google Radio ?

Here's The Latest on The Media Dinosaur: Radio !


Radio Execs: Advertisers Just Don’t Get It

Radio company execs whined about advertisers and their perception of radio at an Advertising Week event yesterday.

The seemingly widespread belief that radio is dated or has “lost its fastball” means radio doesn’t have much leverage, said John Hogan, president-CEO of Clear Channel. Jeff Smulyan, pres-CEO of Emmis Communications, agreed, saying (via MediaPost), “We have a perception problem, not a consumption problem.”

Farid Suleman, CEO of Citadel, said that advertisers don’t appreciate radio’s potential beyond retail spots.

So, with radio revenue in August, what do executives plan to do about the sorry state of affairs? The industry needs to offer advertisers more unusual marketing opportunities, they believe. These could include streaming on the internet and mobile devices. The radio industry is also running a Radio Heard Here image campaign that it hopes will address the perception problem.
Arbitron’s Radar 98 radio listening estimates found that 93 percent of all adults age 18-34 tune in to radio.

Icahn Agenda in Focus As Yahoo Board Meets

Yahoo Inc.'s revamped board will meet for the first time next week, giving investor Carl Icahn his first chance to push his agenda for the Internet company from the inside.

The new board, which includes Mr. Icahn and two new directors Yahoo chose and Mr. Icahn supported, Frank Biondi and John Chapple, will hold a board dinner Monday night followed by a meeting Tuesday, according to people familiar with the matter.

It isn't clear whether Mr. Icahn will show up, according to someone close to the situation. What changes he intends to push for -- and how vigorously -- also remains unclear. He couldn't be reached for comment.

Mr. Icahn, Mr. Biondi and Mr. Chapple joined Yahoo's board this summer as part of the activist investor's agreement to drop his campaign to oust Yahoo's directors. Mr. Icahn attacked the Yahoo board for rebuffing multiple offers from Microsoft Corp. to buy all or parts of Yahoo.

Mr. Biondi is former chief executive of Viacom Inc. and former chairman and CEO of Universal Studios. Mr. Chapple is former CEO of Nextel Partners, a small wireless company that Sprint Nextel Corp. bought.

During Tuesday's board meeting, Yahoo executives will offer an update about ongoing talks with Time Warner Inc., said one knowledgeable person. The two sides continue to discuss a possible combination of Yahoo with AOL, according to people familiar with the matter, although talks haven't progressed significantly in recent weeks.

Another likely topic at that meeting: potential regulatory opposition to Yahoo's search-advertising partnership with Google Inc. Any unraveling of that agreement would be a big blow for Yahoo and could accelerate the board's consideration of other options. The board struck the search-ad pact in June as an alternative to selling its search business to Microsoft.

Some Yahoo investors are impatient. Shareholders withheld more than 30% of their votes cast for four of nine Yahoo directors at the company's Aug. 1 shareholder meeting. Yahoo's stock price fell to a five-year low of $17.58 earlier this month but has since made a small rebound. As of Aug. 1, Mr. Icahn controlled 68.8 million shares, roughly 5% of Yahoo.

By: Jessica E. Vascellaro and Joann S. Lublin
Wall Street Journal; September 20, 2008

Adobe Systems to Unveil Design Software for Evolving Web Sites

Adobe Systems Inc. plans to unveil the latest version of its flagship Web-publishing software Tuesday.

The new software, called Creative Suite 4, is intended to make it easier to design Web sites that combine different types of media, such as animation and live video. These features are becoming increasingly important as Web sites evolve from the text-filled pages and static images that dominated the Internet's early days.

Adobe Systems is set to unveil a new version of its flagship Web-publishing software.

"It used to be that video on the Web was enough to make you say 'Wow,' " says Johnny Loiacono, senior vice president of the Adobe business unit responsible for the software. "But now it takes richer and richer experiences to keep our attention."

Creative Suite 4 is made up of 13 individual software products, including the San Jose, Calif., company's Photoshop for photo editing, Dreamweaver for Web-site design, and InDesign for desktop publishing. The new software runs 20% to 50% faster than its predecessor, says Mr. Loiacono. The different products are also more integrated with one another so a designer can now work with a video made with Adobe's Flash technology while using InDesign, a task that previously required separate software.

The new software will cost $1,699 to $2,499.

Businesses are increasingly buying or developing visually compelling software that employees or customers can access over the Web, says Jeffrey Hammond, an analyst at Forrester Research. As the line between Web design and software development blurs, Adobe faces increased competition from technology giants like Microsoft Corp., whose Silverlight video software competes with Flash.

Adobe last week reported profit of $191.6 million on revenue of $887.3 million for its third quarter ended Aug. 29. The creative solutions group, which includes Creative Suite, accounted for $493.6 million, or 56% of the quarterly revenue.

By: Ben Worthen
Wall Street Journal; September 23, 2008

Overuse of the Term 'Cloud Computing' Clouds Meaning of the Tech Buzz Phrase

'Cloud computing" is the latest buzz term sweeping through the information-technology industry, but it's losing whatever meaning it once had as an increasing number of companies apply the label to their wares.

The word "cloud" has been a go-to metaphor for the Internet for almost as long as the network has existed. It never made much sense -- clouds are billowing masses of condensed water vapor while the Internet is a host of connected computers -- but the Power Point set needed a graphic for their slides and clouds conveyed the sense that the Internet was intangible and bigger than the sum of its parts.

The term "cloud computing" surfaced earlier this decade, but didn't really catch on until August 2006 when Amazon.com Inc. introduced a service called Elastic Compute Cloud, or EC2, which allows people to run Web sites and online applications on servers that Amazon operates.

Cutting-edge technology is notoriously difficult to explain, but the term "cloud computing" has a whimsy about it that makes it instantly accessible. More importantly, the term makes one feel that it's OK not to fully understand the details: The computer processing takes place in this thing called the cloud, and as long as it works, no one really needs to know any more about what goes on there.

Soon, International Business Machines Corp., Google Inc. and others started to use the term to describe their efforts to turn vast farms of personal computers into supercomputers that academics could use to process data-intensive calculations. While slightly different from what Amazon.com offers, these services also use the Internet to access processing power on someone else's computer.

The term could have been helpful if it stayed in that niche of the IT world. But in late 2007, Salesforce.com Inc. Chief Executive Marc Benioff read a BusinessWeek article about cloud computing. Not wanting to miss out, he says he put two slides that called Salesforce.com's online sales-automation software "cloud computing" into his next presentation. When Google and Salesforce.com announced in April that it was possible to share information between online software from the two companies, the press release mentioned cloud computing nine times.

With the term's meaning broadening, no one in the tech industry wanted to be left behind. These days it's hard to find a tech company that isn't pushing its own brand of cloud computing. Online software? That's cloud computing, as are services that let people store data on the Internet. Virtualization software that lets multiple applications run on a single server? That's cloud computing, too, because it makes leasing server space possible. Oracle Corp. on Monday announced a version of its database software for cloud computing. Dell Inc. recently tried to trademark the term because, the company argued, none of this would be possible without the servers it makes.

So the term has become almost meaningless, though companies continue to use it. "We're in that nutty stage," says Billy Marshall, CEO of rPath Inc., which says it makes technology that enables, you guessed it, cloud computing. "It's absolutely too broad right now."

What Employees Really Do Online

Businesses are increasingly turning to the Internet to run software. Workers are increasingly using the Internet to do, well, whatever they want.

Those are the two key findings in a study of traffic on corporate networks by Palo Alto Networks Inc. Caveat Emptor: The company's technology helps businesses identify what Internet-based applications are running on their networks, so it has a vested interest in making the Internet seem like the Wild West. The study is based on an analysis of network traffic at 60 large businesses.

Palo Alto discovered 424 different applications in use by these companies. About half of these are applications that are accessed through a Web browser but communicate with servers that a company operates, such as Microsoft Corp.'s SharePoint collaboration tool or some email and instant-messaging programs. The rest are either Web-based applications or Web sites, including searching for new vendors and using Google for B2B Discovery and B2B SEO.

The most common was online video. In fact, about 10% of all network bandwidth at the businesses Palo Alto studied came from sites like YouTube, Hulu, and even Slingbox, a program that lets people watch television from their computers.

"Employees are staying entertained," says Steve Mullaney, Palo Alto's vice president of marketing. And often they're doing it without the IT department's knowledge. For example, most businesses say they have a policy against using peer-to-peer networks, which allow people to exchange files directly with one another. But the study showed that peer-to-peer software was used by employees at almost all of the companies.

IBM May Quit Technology Standards Bodies

International Business Machines Corp. will review its membership in the bodies that set common standards for the technology industry and may withdraw from some, potentially undermining the system that makes electronic equipment and software interoperable world-wide.

The Armonk, N.Y.-based computer maker is expected to announce the review Tuesday, according to company officials. IBM has become frustrated by what it considers opaque processes and poor decision-making at some of the hundreds of bodies that set technical standards for everything from data-storage systems to programming languages, those officials said.

A recent battle over the selection as an international standard of the file format used in Microsoft Corp.'s Office software suite appears to have influenced IBM's decision. Microsoft, of Redmond, Wash., won that contest in April when its Open XML format was approved by the Geneva-based International Organization for Standardization, or ISO.

Standards are key to the tech industry, where they provide a common foundation for products from different manufacturers. Internet standards and SEO best practices allow millions of computers to display a Web page the same way. IBM controls a vast cache of intellectual property in the high-tech field. As a result, its contributions and agreement are often critical to forming a standard.

IBM and open-source groups that support collaborative software development said Microsoft had stacked the national committees that make up the ISO with employees and sympathetic voters. They also said Open XML is so complicated and obscure that only Microsoft could fully exploit it, cementing the software company's already-considerable lead in office-document software. IBM backed a rival format called Open Document that was already certified as an ISO standard.

A Microsoft spokesman said standards bodies are "invaluable" because they provide "an even and predictable playing field" to the industry. Their decisions reflect the views of a preponderance of members, "not the interests of any single party," he said.

"There are lots of issues" with standards groups beyond the office-documents arena, said Bob Sutor, an IBM vice president who is the company's top standards official. He cited high membership fees that deter small players, complicated intellectual-property policies and opaque procedures.

In an interview, Mr. Sutor singled out for particular criticism Ecma International, a Geneva-based group of which IBM was a founding member more than 45 years ago. Ecma certified the Open XML standard over IBM's objection and submitted it to ISO for broader approval.

Getting a company-backed product approved as a standard can be a boon: In Microsoft's case, Open XML's certification eased hesitations by some government purchasing agents, who were reluctant to buy nonstandard software.

Istvan Sebestyen, Ecma's secretary-general, said he was "really amazed" at Mr. Sutor's contention that Ecma certification can be bought, and added he hadn't heard formally from IBM about any intention to withdraw. "Ecma didn't get one single dime more" from the Open XML approval, he said.

By: Charles Forelle

Google Phone to Cost $179, Go on Sale Oct. 22

Internet giant Google took a step toward transforming the way people receive information with the long-awaited debut Tuesday of the first phone based on its mobile phone software known as Android.

The phone, which will go on sale at T-Mobile on Oct. 22 for $179 — $20 less than the iPhone — closely resembles a T-Mobile's Sidekick, with a big-screen and a keyboard that slides out from underneath and contains an extra key dedicated to Internet search. The device also has WiFi capability and GPS built in.

But what is special about the device is that it is designed to function as a full-fledged personal computer running any kind of application a developer can dream up.

The G1 comes with maps, e-mail and instant messaging, a music player and a camera. Users can also download applications that measure their carbon footprint or scan barcodes in a store so they can comparison shop on the Internet.

IBM calls standards bodies system flawed: International Business Machines, the world's biggest computer-services company, may stop participating in worldwide groups that set standards for the technology industry, saying the system is flawed.

The bodies that set the standards for everything from software to wireless-Internet equipment can be exploited by individual companies, Ari Fishkind, a spokesman for Armonk, New York-based IBM, said in a phone interview Tuesday. The groups also lack input from emerging economies, he said.

IBM may be seeking to reform current standards processes or come up with a competing regime, said Andy Updegrove, a Boston- based attorney who works with standards groups. In April, IBM criticized a decision by the Geneva-based International Organization for Standardization that made Microsoft's Office Open XML file format a worldwide standard. IBM in April said the XML approval will stifle innovation and hinder interoperability.

Netflix reaches pact on CBS, Disney TV shows: Netflix, the largest U.S. mail-order movie service, reached agreements with CBS and Walt Disney to add current episodes of television series including "CSI" and "Hannah Montana" to its library of shows that can be seen instantly.

"CSI: Miami" and "CSI: NY" episodes that can be watched on computers and televisions will be available this week, the Los Gatos company said Tuesday in a statement. Streaming video of "Hannah Montana," staring Miley Cyrus, will be available in November.

The agreements mean Netflix is able to show instantly about 12,000 of the more than 100,000 titles it has available. Blockbuster, Apple and Amazon.com offer competing services as the companies seek to attract customers who want the convenience of watching movies on demand.

Netflix charges monthly subscription fees for its service, many of which offer unlimited video streaming.
Genentech's cancer drug linked to risks, deaths: Genentech's cancer drug Tarceva was linked to liver failure and deaths in patients who already have damaged livers, U.S. regulators said.

Genentech and partner OSI Pharmaceuticals warned doctors to monitor patients with liver trouble in a notice posted today on the Food and Drug Administration's Web site. Tarceva's prescribing information has also been updated to include new information about liver risk.

Mercurynews.com; September 23, 2008

Yahoo Adopts Tougher Email Guidelines to Block More Spam

The New Yahoo Blocklists Powered by Spamhaus

We have just confirmed that blocklists used by Spamhaus, one of the most stringent anti-spam organizations active today, have recently been adopted by Yahoo.

What it Means

ISPs are free to filter email as they see fit and they've traditionally relied on their internal lists and tools to do so. By using Spamhaus, Yahoo has now added an "outsourced" filtering solution in addition to their internal mechanisms. Compliance guidelines at Spamhaus are very strict and they may require emailers to follow certain procedures, such as implementation of double opt-in registration.

Are You Affected?

As you may know, a "spam trap" is an email address specifically set up to attract and identify unsolicited commercial email. Any emailer who has a spam trap address in their database may trigger the Spamhaus blocklist, which will now affect delivery to Yahoo.com and Yahoo.biz addresses.

What To Do?

Request a BlueHornet Demo.

Maintaining good list hygiene can help ensure that spam traps do not contaminate your house list. BlueHornet has led the industry in double opt-in email programs that keep your lists clean. And, only BlueHornet offers the SureSend(TM) deliverability enhancement platform, which includes integrated tools that can tell you whether you are experiencing delivery issues at Yahoo and 19 other top ISPs. SureSend also includes services that include identification of any known spam traps or bad addresses. For more information, request a BlueHornet demo today.

Search for Tomorrow

There are more than 170 million Web sites today, but in 1994 there were fewer than 4,000. Thus mere human beings could power the first generation of Internet search engines: Enter the query "hotdog" and the results spit back at you were those compiled by an editor who had at some point assembled a list of hotdog-possible sites.

By 1998, the Web was getting big enough that it was hard for human editors to keep up. That's when Larry Page and Sergey Brin founded Google and built a search engine that, by using a computer algorithm, could in theory scale to include an infinite number of Web sites. Google sent a spider into the Web that would index every page it crawled past. The massive index was then ranked and stored on Google's servers. When a user submitted a query, the algorithm generated results from ranked and indexed pages.

It proved to be an elegant and efficient system. But Messrs. Page and Brin, when they launched Google, had no idea how to make money from it. Two years into their venture, they developed a service that delivered small text ads based on the search terms that a user submitted. As Randall Stross notes in "Planet Google," his even-handed and highly readable history of the company, the service proved to be a turning point in the history of advertising, offering ads tailored for "an audience of one at the one best moment, when a relevant topic was on the user's mind." It also proved to be a goldmine for Google. The company started serving up ads in 2000. In 2002, it had revenues of $400 million; in 2005, $6.1 billion; in 2007, $16.5 billion. Roughly 99% of its income stills springs from those modest text ads that appear at the top of Google's results page.

Google may have built a better mousetrap, but it was also lucky. At the time of Google's birth, Mr. Stross reminds us, Yahoo was the Web's pre- eminent search engine. It relied primarily on human editors, but in 2000 Yahoo hired Google to provide search results for queries that its human editors hadn't tackled. When users went to Yahoo, they were often given Google results. This arrangement provided Google with cash and, more important, gave the company brand recognition and time to refine its page index and algorithm. Yahoo nurtured Google instead of recognizing it as an existential threat.

Since then, Yahoo has declined while Google has become a leviathan, using its deep reserves of cash to enter an increasing number of arenas. The Google Books project is attempting to digitize all of the world's books, for instance. YouTube, which Google acquired in 2006 for $1.65 billion, is the Web's leading repository for video. GMail is Google's foray into the email business.

Is Google an unstoppable juggernaut fated not only to "organize all information" -- as the company has itself put its goal -- but to control it as well? Mr. Stross poses the question but does not answer it. He notes that one of Google's ambitions is to usher in an age of "cloud computing," in which all the work we do on our personal computers would actually take place on servers that Google owns. The servers would hold the programs we use and store our data. That image -- Google as Skynet from the "Terminator" movies -- is a mite unsettling.

Yet the evidence in "Planet Google" suggests that this eventuality is less likely than Googlers might hope. Outside its core search and advertising business, Google has had few successes. Its home-grown products, such as Orkut, Knols and Google Checkout (knockoffs of Facebook, Wikipedia and PayPal, respectively), have largely been failures. Google's biggest successes have come from acquisitions. Google bought YouTube only after its own attempt at video on the Web, Google Video, crashed and burned. And even the "successful" acquisitions that Google has made -- Google Earth, Google Maps, Google Docs and Blogger were all purchases, too -- have taken up resources without creating significant revenue.

To make matters worse, two strategic challenges to Google's core business have already emerged. Wikipedia, a community-created knowledge base, threatens the algorithm with an army of unpaid editors -- offering a new version of the original search-engine process, the one run by human editors, only this time using volunteers. And since Wikipedia is a nonprofit, it can't be bought. Facebook presents a different problem -- the creation of a closed Web ecosystem that excludes Google's spiders. The more Internet life moves into social networking's gated communities, the less relevant Google's search will be.

Remember, people thought that Microsoft was fated to rule the world, too. Today, the once-feared operating-system giant is fighting to stay relevant. And the evolutionary parallels between Google and Microsoft are strikingly similar: Both hit upon a Big Idea at the perfect moment; both parlayed it into a mountain of cash; and both used the money to embark on a string of expansions that paid few dividends. The years have brought Microsoft back to Earth. They'll probably do the same to Planet Google.

By: Randall Stross: staff writer at the Weekly Standard and columnist for the Philadelphia Inquirer
Wall Street Journal; September 17, 2008

Google Privacy Move Is Welcomed by EU

The European Union's top justice official welcomed a recent move by Google Inc. to cut the time it keeps users' search detais, but it said it should be trimmed even more. Jacques Barrot, the EU's justice and home affairs commissioner, said Google's decision this week to shorten its retention of data logs to nine months from 18 months was "a good step in the right direction." He added, however, that the time period should be trimmed further to six months. Peter Fleischer, Google's global privacy adviser, said the company would work closely with EU data and privacy supervisors "to set the standar on respecting privacy."

Wall Street Journal; September 12, 2008

Yahoo Details Plans To Open Up Web Sites

Home Page, Email To Include Content From Third Parties

At Yahoo, it's all about monetizing pages, increasing profit per page, per email log in; Yahoo wants to serve profit driven pages

Yahoo Inc. executives provided an update on the company's plans to open its online services -- including its home page and email service -- to contributions from third-party Internet and software companies.

The efforts, described in a briefing at the company's headquarters in Sunnyvale, Calif., range from allowing users to search other content -- such as classified-ad sites -- from within Yahoo Mail to allowing them to access online music download services like that of Amazon.com Inc. from within Yahoo Music. Yahoo also said it will be redesigning its home page to make it easier for users to tap these third-party services, demonstrating how users might add a link to the movie site Netflix Inc. in the right corner of their screens.

Yahoo said it will be redesigning its home page to make it easier to tap third-party services.

Opening up Yahoo's sites and technology has been an important pillar of Yahoo Chief Executive Officer Jerry Yang's strategy to turn around the company since he took over as CEO last year. While Yahoo has described some of these initiatives before, it has showed off only a few new products so far.

Now parts of the vision are becoming clearer. On Friday, Yahoo is hosting a "Hack Day" for developers to start building versions of their service that integrate with its home page or that can be used by Yahoo Mail's 275 million monthly users.

Ash Patel, head of Yahoo's audience products group, said the company is working with developers to roll out the new mail applications -- designed to help users perform functions like sending online invitations or photo albums right from their in-boxes -- in coming months.

Yahoo is one of a number of Web companies seeking to prove how open they are to drawing in users spreading their time across a broader range of sites. Time Warner Inc.'s AOL this week launched a home page that allows users to pull in more content from rival email services like Google Inc.'s Gmail.

Scott Moore, head of Yahoo's media group, said Yahoo's media sites, which include heavily trafficked staples like Yahoo Finance and Yahoo News, have strong track records of drawing on outside content but see opportunities to expand. "We are not just doing this open thing because it is the flavor of the month," he said. "This open approach is really in our DNA."

On the advertising front, Hilary Schneider, executive vice president of Yahoo U.S., discussed the company's efforts to open up its advertising technologies to other publishers, like newspapers. She also referenced the company's planned search-advertising partnership with Google as an example of a deal that allows Yahoo to benefit from integrating with outside partners and services.

The deal, which is being reviewed by the Department of Justice as well as some state attorney generals, would allow Yahoo to display some advertisements sold by Google to boost revenues. While a number of advertisers have raised concerns that the deal could lead to higher prices for online advertisers, Ms. Schneider said the agreement would enable Yahoo to sell search ads for queries where it currently doesn't have enough demand from advertisers, using a search for a local flower shop as an example.

Yahoo Taps New Chief for Ad Post

Yahoo Inc. hired former Microsoft Corp. executive Joanne Bradford to lead its U.S. advertising sales force, helping to rebuild its executive ranks after a string of high-profile departures.

The Sunnyvale, Calif., company announced the move Tuesday, along with the departure of David Karnstedt, a longtime Yahoo executive and senior vice president of U.S. sales. Mr. Karnstedt is joining venture-capital firm Redpoint Ventures.

Ms. Bradford, who will carry the title of senior vice president of U.S. revenue and market development, inherits a challenging role. Yahoo is struggling to retain its prime position in selling display advertising during tough economic times while pushing out new products. Meanwhile, a number of senior advertising and product executives have left the company in recent months, dampening morale.

In an interview, Ms. Bradford said she was excited by the competitive challenge of helping Yahoo keep up. "It's a time when they can use leadership and different perspective," she said. Her initial plans include spending time with Yahoo's full range of advertisers and working with Yahoo's media group on new premium packages, she said.

Ms. Bradford recently worked as executive vice president of national advertising services for Spot Runner Inc., a closely held Los Angeles firm that uses the Internet to help companies create ads for television. Before that she was a top executive at Microsoft's MSN Internet business -- earning a reputation as a good motivator of her employees who helped Microsoft build strong ties to large advertisers and ad agencies.

Ms. Bradford joined Microsoft in 2001 and was part of a team of executives that helped top management realize that the software company needed to invest more in online advertising. At times she clashed with other executives who fought against the advertising expansion.

For Ms. Bradford, the Yahoo position is a return to a job that she is perhaps most comfortable with: motivating teams of salespeople.

Her appointment comes two weeks before Yahoo plans to step up its attempts to woo advertisers through a series of events and announcements at a major advertising industry conference in New York. Hoping to cast off some of the shadow of negotiations over a sale to Microsoft and investors' frustrations with the board, company executives will be trying to generate interest in its existing offerings and a new advertising technology platform scheduled to roll out later this year.

Ms. Bradford will report to Hilary Schneider, executive vice president of Yahoo U.S. In an interview, Ms. Schneider cited Ms. Bradford's "raw strategic insight" and experience working with customers as evidence she is a good fit for the job. "She's a relationship person," she said.

By: Jessica Vascellary & Robert Guth
Wall Street Journal; September 10, 2008

Big Marketers Challenge Google-Yahoo deal

Some of the country's biggest marketers are rallying to oppose an advertising deal between Google Inc. and Yahoo Inc., as the Justice Department considers whether to go to court to block the agreement.

The Association of National Advertisers, a trade group that represents major companies like Procter & Gamble Co. and General Motors Corp., sent a letter to the Justice Department Thursday calling the deal bad for advertisers and recommending that it be blocked. The group announced the letter on its Web site on Sunday.

The agreement, announced in June, gives Web-search giant Google the right to sell search and other text ads on Yahoo sites, sharing the revenue with Yahoo.

Whether the letter will influence federal antitrust regulators remains unclear, but it is considered a blow to Yahoo and Google because of the trade group's high profile. Until now, big marketers have been reluctant to come out against the deal publicly because of Google's growing power in the ad business.

Some large advertising agencies and midsize advertisers have endorsed the deal, however, saying they think it will make advertising on Yahoo more effective.

But in an interview, Bob Liodice, chief executive of the ANA, said the group believes the ""deal is, on balance, a negative"" for advertisers. The trade group has been studying the proposed arrangement for more than a month. Mr. Liodice said the group is concerned that the deal could raise the price of search advertising. It also is worried about the ""concentration of power"" that the alliance represents, he said. Google and Yahoo agreed not to implement their deal for as long as 3½ months after its announcement to give the Justice Department a chance to review it. But the companies have said they plan to push forward in about a month.

Yahoo said in a statement that the company was ""disappointed"" with the ANA's move but ""remains steadfast in its belief that this deal -- in which prices are determined by demand-driven auctions, and not by collaboration between Yahoo and Google -- will strengthen Yahoo's competitive position in online advertising.""

Google spokesman Adam Kovacevich said ""numerous advertisers"" have supported the agreement, which will help advertisers show more targeted ads across more inventory. ""Advertisers care far more about getting a good return on their advertising dollar than they do about buying cheap ads that don't bring in customers, and this deal will clearly help advertisers reach Yahoo users more efficiently,"" he said.

Yahoo executives are banking on the deal -- struck as Yahoo was seeking alternatives to selling its search business to Microsoft Corp. -- to help dig it out of a multiyear slump and restore investor confidence. Yahoo shares closed Friday at $18.08, down from around $30 after Microsoft's failed $31-a-share bid for the company in January.

Yahoo executives have estimated that the deal, which isn't exclusive and allows Yahoo to select when to use Google ads, could generate $800 million in annual revenue for Yahoo.

Since the partnership was announced in June, many online advertising executives have expressed concerns that it could diminish competition and boost prices in the market for ads that appear alongside search results.

Google and Yahoo dispute that, arguing that since search ads are sold through an auction process, neither company can set prices. U.S., European and Canadian regulators are examining the agreement.

Google and Yahoo combined sell more than 80% of U.S. search ads, which account for the largest part of the online-advertising business. Google alone has more than 70% of that business. The Justice Department has been reviewing the deal for months, questioning some ad executives and advertisers about what it would mean for the advertising business.

The department, which doesn't comment on pending reviews, is gathering depositions and evidence that could be used to block the deal if a decision were made to do so, people close to the matter say. But taking testimony in the course of a review isn't unusual, and does not necessarily indicate antitrust regulators will challenge the agreement.

As they weigh comments from outsiders, regulators often discount the views of competitors who complain about a deal, as Microsoft has done. They are likely, however, to listen closely to customers, in this case major advertisers, so the association's letter could be a significant hurdle.

Microsoft and Michael Kassan, a longtime advertising and media executive who is now consulting for the company, have been lobbying Madison Avenue's advertising and media-buying executives, as well as marketers, to oppose the Yahoo-Google alliance, according to ad executives. In testimony during House and Senate hearings about the deal, Microsoft general counsel Brad Smith argued that it would lead to fewer choices and higher prices for advertisers.

Mr. Liodice says that while Microsoft raised its concerns about the deal, that wasn't the reason ANA chose to scrutinize the agreement. ""We don't want to have anyone think that Microsoft was the instigator or influencer"" of this action, he said.

The ANA said it began discussions with its members shortly after the accord was announced. It says it talked several times to both Yahoo and Google.

ANA's board, made up of well-known marketing executives including Brian Perkins, Johnson & Johnson's vice president of corporate affairs; Stephen Quinn, chief marketing officer at Wal-Mart Stores Inc; and Betsy Lazar, executive director of media and advertising for General Motors Corp., approved the group's move.

The ANA has a powerful lobbying arm in Washington, D.C. It has taken an active role in advertising issues, such as defending food companies from growing public pressure to curtail advertising as a way to address rising childhood obesity rates. The trade group has also been heavily involved in defending direct-to-consumer advertising of prescription drugs.

Last year, the group raised questions about Google's acquisition of display-advertising company DoubleClick, petitioning the Federal Trade Commission to review the merger. But the FTC approved the deal.

By: Suzanne Vranica & Jessica Vascellaro
Wall Street Journal; September 8, 2008

Gap Widens in Online Advertising

Rivals Struggle to Catch Up to Google As Buyers Favor Search Ads Over Display


Spending on Internet advertising is climbing at a healthy clip -- rising 20% in the U.S. in the second quarter -- and growth forecasts are strong despite the weak economy. But that growth isn't being enjoyed by everyone.

The gap is widening between spending on simple search ads, Google Inc.'s core turf, and spending on flashier display ads, which companies such as Yahoo Inc. and Microsoft Corp. had hoped to use to gain ground on Google.

Faced with a slowing economy, advertisers are sticking to what they view as the safest way to reach online customers directly: the plain text ads that appear on search-result pages. Search-ad spending is on track to reach $10.4 billion this year, double what will be spent on display ads, according to research firm eMarketer.

That divergence of fortunes may be bad news for companies counting on a comeback for display ads, which ruled the Web in its early days. Though Yahoo and others say they have seen demand for these ads as they introduce technologies that better target the ads, they have been slow to regain favor.

CreditCards.com is typical. Jody Farmer, vice president of strategic marketing for the credit-card portal, says he has experimented with buying display ads. But as the economy tightens, the site, which spent $30 million on online marketing last year, is focusing on search ads. "We have to be a little more thoughtful about how we spend our money," he says.

The trend comes as Google rivals Yahoo, Microsoft and Time Warner Inc.'s AOL have invested billions of dollars in building and buying new display-ad technology to deliver more relevant and engaging ads to users on their sites and on the sites of other Web publishers. They hope to win back advertisers who have poured money into search ads.

Mark Scholz, global search manager for Hewlett-Packard Co.'s printer division, says that while his budget is relatively flat, he is spending more on search ads by pooling together funds from product groups eager for the extra lift they are accustomed to from search campaigns. "In the event there are budget cuts, I am one of the last ones they go after," he says.

Google, with more than 70% of the U.S. search-ad market, has much to gain from the trend. But the Mountain View, Calif., company also has made some big bets on the display business. Google is trying to tap brand advertisers to buy display ads on Google-owned properties such as YouTube and on other sites. Tighter display-ad budgets could hamper that expansion, which it fueled with its acquisition of DoubleClick last year for more than $3 billion.

The gap between Google and its rivals could widen as search grows faster than display. Search ads are forecast to represent 42% of overall U.S. online ad spending in 2008, according to eMarketer, up from 40% in 2007. Display is expected to stay flat, at about 21% of overall spending.

Google's rivals caution that there is a wide mix of display-advertising types and that some are performing well in the current environment. Spending on display ads is forecast to reach $5.2 billion this year, up from $4.5 billion in 2007.

Brad Goldberg, Microsoft's general manager of search, said the company has a number of advertising products for which the tough economic environment is a boon, including a new cash-back shopping search service.

Lynda Clarizio, executive vice president of AOL, says the company has the mix of ads that marketers are looking for in a downturn, even though it doesn't have a traditional search business.

A Yahoo spokesman says investments in new display technologies helped the company meet its financial goals in its most recent quarter, despite the tough economic environment. And he notes that Yahoo's U.S. search businesses is growing briskly as well.

There are signs that search may eventually take a hit too. John Aiken, managing director of research firm Majestic Research, says some smaller businesses have begun cutting back the number of keywords they are buying in recent months, although large marketers continue to spend freely. He says Google is "potentially stretching for dollars," noting that it has begun displaying more ads for some keywords.

Nick Fox, director of business product management at Google, says more ads may be showing up for some keywords because, as advertisers spend more on search, Google has more relevant ads to show. "We are not making any short-term trade-offs," Mr. Fox says.

By: Jessica Vascellaro
Wall Street Journal; September 4, 2008

Yahoo's 5-Year Low Draws Rebound Bets

Shares of Yahoo Inc. slid to a five-year low Thursday, and options traders appeared eager to bet on a rebound.

Trading in Yahoo options leapt to four times the normal level as investors picked up 168,000 calls that allow them to buy the company's stock and 19,000 puts that allow them to sell it, according to Track Data.

Traders convened around October calls for most of the session, showing particular interest in October $25 calls and October $30 calls. The former are priced at about 15 cents and make money if Yahoo shares pull above $25.15 before Oct. 17. Yahoo closed at $17.75 a share, falling 5.4% in 4 p.m. Nasdaq Stock Market composite trading.

Looking further ahead, one trader pursued a "call spread" in January contracts -- buying January $22.50 calls and selling twice as many January $27.50 calls. Priced at about 50 cents, the positions make money if Yahoo climbs above $23.

In many cases, options traders appeared to be getting in position for a noteworthy event that could boost Yahoo's share price, experts said.

With the stock trading well below the $33 price that Microsoft Corp. offered for Yahoo, the company's board -- now staffed with activist investor Carl Icahn and two of his allies -- might feel compelled to oust Chief Executive Jerry Yang, they said.

Other experts said that Microsoft CEO Steve Ballmer could make another attempt to acquire Yahoo before year's end, which would also prompt an upward move in the company's stock.

"Ballmer might come back when the price gets low enough because he knows he needs the platform," said Paul Foster, a strategist with TheFlyOnTheWall.com.

Several Plays Made in Intel Options

Traders pounced on Intel Corp. amid a broad-based selloff in semiconductor stocks. Intel shares have fallen 10% since last Friday's close, and closed the Thursday session at $20.52, down 4.7%, in 4 p.m. Nasdaq Stock Market trading.

Trading in Intel jumped to three times the normal level Thursday, as investors picked up 168,000 calls as well as 50,000 puts.

While the calls outnumbered puts more than 3 to 1, which suggests bullish activity, most traders appeared to be selling the calls.

They unloaded large numbers of September $21 calls, in particular.

Analysts said the activity suggests that traders think the stock will start to stabilize or that the shares are unlikely to climb above $21 apiece before Sept. 19.

By: Tennille Tracy
Wall Street Journal; September 5, 2008

Mossberg Does Chrome Walk Through

Chrome Offers New Way To Surf Net, as Microsoft Beefs Up Internet Explorer

Google has introduced a new Web browser, called Chrome, aimed at wresting dominance of the browser market from Microsoft's Internet Explorer. The move takes the Google-Microsoft rivalry to a whole new level. If Google succeeds, it will be a big deal, with major ramifications for the future of the Web.

But just how good is Chrome? How does it differ from IE and from less popular, but still important, browsers like Mozilla's Firefox and Apple's Safari?

I've been testing Chrome for about a week, trying out all its features and using it side by side with Microsoft's latest iteration of IE, which came out just last week.

Google's new Chrome Web browser challenges Microsoft's dominance of the browser market, says Walt Mossberg. The Chrome is innovative and smart, but still has some rough edges, he says.

My verdict: Chrome is a smart, innovative browser that, in many common scenarios, will make using the Web faster, easier and less frustrating. But this first version -- which is just a beta, or test, release -- is rough around the edges and lacks some common browser features Google plans to add later. These omissions include a way to manage bookmarks, a command for emailing links and pages directly from the browser, and even a progress bar to show how much of a Web page has loaded.

Chrome's interface has some bold changes from the standard browser design. These new features enhance the Web experience, but they will require some adjustment on the part of users. For instance, Chrome does away with most menus and toolbar icons to give maximum screen space for the Web pages themselves. Also, Google has merged the address bar, where you type in Web addresses, with the search box, where you type in search terms. This unified feature is called the Omnibox.

One striking difference in Chrome is how it handles tabs, which display a single Web page. In Chrome, each tab behaves as a separate browser. The bookmarks bar, Omnibox, menus and toolbar icons are located inside the tab, rather than atop the entire browser. The tabs appear at the top of the computer screen. Chrome also groups related tabs. If you open a new tab from a link in a page that's already open, that new tab appears next to the originating page, rather than at the end of the row of tabs.

Despite Google's claims that Chrome is fast, it was notably slower in my tests at the common task of launching Web pages than either Firefox or Safari. However, it proved faster than the latest version of IE -- also a beta version -- called IE8.

Meanwhile, Microsoft hasn't been sitting still. The second beta version of IE8 is the best edition of Internet Explorer in years. It is packed with new features of its own, some of which are similar to those in Chrome, and some of which, in my view, top Chrome's features.

For example, while IE8 also groups related tabs, it assigns a different color to each such tab group and allows you to close them all with one click. It has a "smart" address box of its own, that drops down a list of suggestions as you type, though it retains a separate search box.

IE8 also has breakthrough privacy features that exceed Chrome's, and includes a new technology called Accelerators, which allows you to take rapid action on any selected word or phrase on a Web page, such as generating a map for a place name, without switching to a new page.

As they develop, each of these browsers has a good chance of besting Firefox 3.0, which I have regarded as the best Web browser for Windows, the only operating system on which Chrome currently runs. But they will have to get faster at loading pages. And, to best Firefox on the Macintosh, Google will have to make good on its promise to produce a Mac version of Chrome, something it says it will do in the coming months. Microsoft has no plans to produce a Mac version of IE8.

Chrome and IE8 are far more advanced than Apple's Safari. Safari is speedy on both Mac and Windows platforms, but lacks many of the key intelligent features of its newer Google and Microsoft rivals.

Why is Google igniting a new browser war? There are two main reasons, and both involve competing with Microsoft. First, the search giant fears that because its search engine and other major products depend on the browser, Microsoft -- with its rival online products -- might be able to gain an advantage by altering the design of IE, which has roughly a 75% market share.

Second, and more important, Google sees the Web as a platform for the software programs, or applications, that currently run directly on computer operating systems, notably Microsoft's Windows. It says current browsers lack the underlying architecture to enable future, more powerful Web applications that will rely more heavily on a common Web programming language called JavaScript. Chrome was designed to be the world's speediest browser at handling JavaScript.

That move might one day make Chrome a sort of online operating system that competes with Windows. "Think of Chrome as more than a simple Web browser," Google declares. "It's a platform for running Web applications."

I tested Chrome, and IE8, on a plain-vanilla Lenovo ThinkPad laptop running Windows XP, and equipped with a modest processor and one gigabyte of memory.

To gauge Chrome's speed at loading Web pages, I launched two large groups of typical Web pages simultaneously, each site opening in its own tab. One group included 15 sports sites, the second 19 news sites. In both tests, Chrome's speed fell in the middle, at 35 and 44 seconds, respectively. IE8 was slower, taking 49 and 75 seconds to open the two groups of sites. But Firefox and Safari were much faster, notching identical speeds of 19 seconds for the 15 sites and 28 seconds for the 19 sites.

Google claims that future, more sophisticated Web applications relying more heavily on JavaScript than today's sites do would run faster on Chrome. Of course, I couldn't test any claim about future scenarios, but I did run Chrome on several JavaScript test sites, used by developers. It handily beat the other browsers. However, Google doesn't claim users would see much difference on current Web application sites.

I also tested Chrome's compatibility with scores of common Web sites. In general, it did well, rendering the sites properly. But I ran into problems with video. Some video sites refused to recognize Chrome, because its development has been a secret. On others, like Major League Baseball's site, videos mostly played properly, but sometimes didn't.

IE8 also has some compatibility issues, for different reasons. It's the first version of Internet Explorer to hew closely to Web standards. Earlier versions used some nonstandard ways of rendering Web sites, prompting some site designers to adopt techniques that made their pages work in IE, but look odd in Firefox and Safari. Now, ironically, these pages also look strange in IE8. So Microsoft was forced to build in a special Compatibility View button that users must click to see the sites properly.

Chrome is built on three core design principles. The first is its spare user interface: just two menus and a handful of toolbar icons. IE introduced a similar approach in its version 7, but with a difference. Microsoft allows users to restore a traditional menu bar; Google doesn't. The only toolbar icon you can add in Chrome is a Home button.

The second principle is that a user can type anything into a single place, the Omnibox, and instantly get suggestions on where to go, gleaned from the user's own browsing history and Google's rankings of popular sites. Whether you type in a Web address or a search term, the Omnibox is very smart. In my tests, it sometimes came up with the right destination after I typed only one or two letters of the name of a site I often visited.

The Omnibox has another cool feature: Tab-to-Search. If you type in the name of another site that includes its own search feature, like Amazon.com, the Omnibox lets you just press the tab key to search within that site, without opening it first. Chrome, through its Options settings, also lets you change the default search engine used by the Omnibox. Instead of Google's own search service, you can use Microsoft's Live search, Yahoo search, or others.

The third big principle behind Chrome is that each tab runs, under the hood, as a separate browser. Tabs can be dragged off the main browser and turned into separate windows. If one tab crashes, the rest of the browser keeps running. But this doesn't work perfectly. In my tests, all of Chrome died on me when I tried watching an Olympics video on the NBC site.

You can even make a tab a standalone application that runs from the Start Menu, or the desktop, as if it was a separate program.

Chrome has a few other key features. When you open a new tab, you don't get a blank page, but a set of thumbnails for your most-visited pages, plus lists of recent search engines you've used, recently used bookmarks and recently closed tabs.

Like other browsers, Chrome puts up a warning when you try to visit a malicious or phony Web site, and it has a private browsing mode, called Incognito, which allows you to browse without leaving any history on your computer -- a feature popularized in Safari.

Chrome also has a pop-up blocker, but it's annoying because it flashes a notice that a pop-up has been blocked. IE also does this, but unlike in Chrome, the warnings are much less intrusive.

Internet Explorer 8 has some new features Chrome lacks. Its private browsing mode, called InPrivate, is the first I've seen that not only leaves no traces on your own computer, but also bars Web sites from collecting some types of information on where you've previously been surfing.

While IE8's address box and search box remain separate, each also offers rapid suggestions; and both are organized better than Chrome's. For instance, the suggestions that drop down from its address bar are divided neatly into categories drawn from the browser's own guess, your history and your favorites. One downside: For this to work in Windows XP, you must first install Microsoft's desktop search product.

Like Chrome, IE8 lets you switch your default search provider, but it also allows you to switch search engines on the fly. When you type in a search term, icons for alternate search engines appear at the bottom of the suggestion list, and you need only click on these to see search results from, say, Google, instead of Microsoft's own Live search engine.

IE8's Accelerators feature presents a blue-arrow icon above any text on a Web page that you have selected. Clicking on the icon brings up a list of actions you can take using the selected text, such as posting it to a blog, emailing it, mapping it or searching it. While these actions are set by default to use Microsoft's own Web services, you can change them to use Google's, Yahoo's, or those from other companies.

Microsoft also has built in a feature called Web Slices. These are portions of a Web site that a site developer can designate to appear in the IE8 Favorites bar and to constantly update themselves. An example might be bidding on eBay.

Like Chrome, IE8 also displays useful information whenever you create a new tab, including a list of recently closed tabs and a list of Accelerators.

With the emergence of Chrome, consumers have a new and innovative browser choice, and with IE8, the new browser war is sure to be a worthy contest.

By: Walter S. Mossberg
Wall Street Journal; September 2, 2008

New Microsoft TV Campaign

Lots of Jerry Seinfeld Dry Comedy Babble but Not Much About Computers

We Thought Bill Gates Retired?

Crispin Porter + Bogusky, which won Microsoft's $300 million creative account in February, has released its debut ad in an anticipated campaign featuring Jerry Seinfeld.

The minute-and-a-half-long spot went live yesterday and depicts Bill Gates and Jerry Seinfeld meeting at a fictional discount store called Shoe Circus. Quirky small-talk is exchanged.

Computers are not mentioned for over a minute, at which point Seinfeld asks whether Microsoft ever intends to launch "moist, chewy" and edible PCs. Gates wiggles his trousers in response, then the ad cuts to a tagline: "The future. Delicious," followed by the brief appearance of a Microsoft logo.



Seinfeld's participation in this campaign cost $10 million alone, according to MacRumors. High anticipation for the campaign, coupled with the ad's failure to establish the merits of Microsoft products, drew scrutiny from technology and ad bloggers.

The spot was also compared to a years-old American Express effort featuring Seinfeld: "It's kinda like Seinfeld's really long, really rambling Superman ad for Amex he did a few years back. We hope the rest of the campaign is better," Gizmodo wrote.

Other blogs painted it as a direct rip off AmEx's work. "Seems eerily similar to the work done for American Express with Jerry Seinfeld," wrote blogger Adam Kmiec with a note of sarcasm, posting the ads together so readers could compare them.

In a letter to Microsoft employees, SVP Bill Veghte said the campaign's intention is to "engage consumers and spark a new conversation about Windows.

"Think of these ads as an icebreaker to reintroduce Microsoft to viewers in a consumer context," Veghte opined. "[As] the campaign moves into its next phase, we'll go much deeper in telling the Windows story and celebrating what it can do for consumers at work, at play and on-the-go."

TechCrunch has a complete copy of Veghte's letter.

Whatever their stance, most bloggers can agree the ad succeeded in sparking a new conversation. The campaign's "next phase" is expected to appear in a month's time.

Agency Crispin Porter + Bogusky is typified by its offbeat work. One of its major successes includes the ongoing Burger King campaign featuring The King, a silent mascot in a large plastic mask.

But not all its oddball efforts strike happy chords. Last year Crispin lost the ConAgra Foods account after trying to reanimate the late Orville Redenbacher in a popcorn ad — a campaign that was also panned by bloggers.

Google's Online Video Quandary

Last summer there was a bit of a kerfuffle when one analyst's misdirected math led to wildly swinging estimates for a new advertising model for YouTube, the online video-sharing site owned by Google.

Morgan Stanley analyst Mary Meeker's original forecast suggested the model--small overlay ads that run on the bottom of online videos--would contribute $720 million in net revenue. Silicon Alley Insider analyst Henry Blodget kindly pointed out that Meeker had made a small error, meaning the actual estimate was a mere $720,000. Meeker dug back into the calculations and provided ranges from $76 million to $189 million. Blodget's own analysis suggested year-five revenues ranging from $200 million to $13 billion.

One year later, the only thing that's clear is that YouTube's financial performance is not meeting the expectations that led Google to pay $1.7 billion for YouTube in 2006. The problem isn't traffic, with YouTube now reaching close to 60 million consumers a month. Rather, YouTube hasn't found a way to have revenue grow at the same pace as traffic.

Why have YouTube's revenues grown more slowly than projected? One key challenge is that Google's core business model--matching search terms to ads--hasn't naturally fit with YouTube's model.

When Google purchased YouTube, some analysts expected it could port that model to video, turning YouTube's traffic into a gold mine. Unfortunately, it's not that simple. The keywords that describe a video don't always provide sufficient information to guarantee a successful match with an advertiser's target customer or message.

For example, imagine that a pet food company wanted an ad tied to the search term "dog food." While that search highlights vintage dog-food commercials, it also brings up a video spoofing disgraced NFL player Michael Vick, who is in jail for charges related to dog fighting, and a video titled "Alert! Rat poison in pet food boycott China K9 Killers!" Pet food companies are not likely to be excited to be paired to these kinds of videos.

All in all, Google sells ads against only about the 3% of YouTube's videos that are provided by or cleared by media companies. The other 97% is off limits.

Also, Google faces a classic quandary. The most "proven" money-making model for video advertising is to run short ads before or after a video plays (in industry lingo a "pre-roll" or "post-roll"). Extensive pre-rolls might cause angst among YouTube users who appreciate the ability to flip from video to video.

So YouTube is left with a huge audience but an uncertain business model. In some ways, this challenge should feel familiar to Google--it debuted in the late 1990s as one of close to 20 different search engines. While superior technology helped Google succeed, what really allowed it to break free from the pack was its disruptive business model that allowed companies to bid to place text-based ads tied to specific search terms.

While Overture (acquired by Yahoo! in 2003) pioneered the model of auctioning off search terms, Google put together an end-to-end model that made it simple and effective for Google search engine optimization and for companies of any size to advertise online, creating a juggernaut.

Google doesn't appear to be innovating to the same degree in the online video space. Rather, it appears to be trying to force-fit models that work on traditional television or on the Internet onto video advertising. This approach--cramming old models into new spaces--rarely produces breakthrough results.

Google needs an innovative business model to realize the potential of online video. Meanwhile, contenders are emerging online. One, start-up company VideoEgg, has introduced a series of online advertising models meant to deepen user engagement.

One such model places "widgets" at the bottom of an ad that allow users to see different versions of the ad or get more information. VideoEgg only charges advertisers if a consumer actually engages with an ad in some way.

VideoEgg's model might not be the answer, but overlays and pre-rolls are not likely the answer either. If Google tries to force-fit old models onto online video, it will create space for a competitor to do to it what it did to Yahoo! and Overture.

By: Scott D. Anthony
Forbes.com; August 25, 2008

Microsoft's Sneak Attack On Google

Forget about that $44 billion takeover bid for Yahoo. Microsoft's latest assault on Google is slier.

Since May Microsoft has been reimbursing people up to half of the value of items they buy using its search technology. The gimmick isn't working. In July Google's share of all searches jumped to 60% from 53% a year ago, while Microsoft's share slumped to 12% from 13.6%, according to Nielsen Online.

Now comes Chief Executive Steve Ballmer's latest would-be Google-toppling tactic (after his failed bid to take over Yahoo: a sneak attack using the newly launched version of Microsoft's dominant Web browser, Internet Explorer. Ballmer isn't portraying the updated browser as a Google destroyer, but many of its features turn out to be a crafty way for people to get around using the most popular search service.

"We didn't design this with Google in mind," insists Internet Explorer head Dean Hachamovitch. He adds: "It's not clear what the consequences might be."

The engineers in Redmond deserve a little more credit than Hachamovitch wants to give. The new browser comes with a search box in the upper right-hand corner and, just below that, a row of tiny logos for various search destinations, such as Yahoo, Ebay and MySpace. You can select which destinations you want to include here.

If your search will likely end up in Wikipedia, for instance, with a single click over a little "W" you can search only that encyclopedia. Amazon.com displays items for sale. The New York Times shows snippets of stories. So far 27 Web sites have joined the drop-down column, including Facebook and Digg.

Microsoft is, uncharacteristically, keeping its hands off, giving Web sites the option to serve up results and customize how they appear. It also magnanimously lets those sites take all the revenue from ads alongside the results. That's a sly stab at Google's business, though this kind of searching--where users already know where they want to go--doesn't yield especially lucrative ads for Google.

Another Google-dodging feature in the new browser: Highlighting a street address on a Web page launches a map, with the default set to Microsoft's Live Maps (though you can change this default to Google Maps).

Internet Explorer is the most widely used browser. This gives Microsoft a nice advantage over Google. Just as Microsoft used its dominance in operating systems to get its browser onto millions of computers, it now can rely on that browser to offer Web software. Microsoft needs that weapon as Google encroaches on its turf with freebie Web versions of word processors and spreadsheets.

Best do this while the dominance lasts. Firefox's market share jumped by a third in the last year to 19%, while Internet Explorer lost 6 percentage points to 73%. Still, even that rival gives it a little credit for the new browser. "They're playing catch-up, but I'm glad they're playing," says John Lilly, chief executive of Firefox publisher Mozilla.

Victoria Barret
Forbes.com; August 27, 2008

Google Hits Double Digits

Google turns 10 on Sunday. In the corporate world, it's still just a baby--but the Internet king's meteoric rise makes this birthday a milestone.

The Mountain View, Calif.-based company created the booming online advertising industry, turning Internet searches into cash to the tune of $16.5 billion in annual revenues. Google's stock price has a life of its own. It shot past $700 last year and has since fallen back to $450; its market cap is now at $142 billion, which puts it in league with the likes of Bank of America and Hewlett-Packard. Those companies, however, have annual revenues of more than $100 billion.

Since going public, the company has used its Googlebucks to acquire a slew of innovative startups--ranging from photo-sharing service Picasa, video site YouTube and even the core of its Google Earth mapping service. It also has raised a bunch of homegrown consumer favorites, including e-mail service Gmail and social networking site, Orkut.

The number of searches it handles has grown astronomically. In 1998, Google reported that it handled 10,000 searches a day. That number leaped to 500,000 a day in 1999. Google doesn't share those numbers widely now, but research group comScore estimates that Google hosted 235 million searches a day in July of this year.

There's another way to gauge Google's growth. The first Google index in 1998 had 26 million Web pages. In July, a Google search engineer tallied up how many unique URLs the company searches to find content: the number was 1 trillion. At this rate, a "googol" worth of pages (or 1 followed by 100 zeros) can only be a few years away.

Now the Internet king is going after much more: It wants to be a worldwide data center that stores every piece of personal and corporate information. Google is pushing cloud computing to accomplish this--and challenging tech's old top dog Microsoft to pick up the pace or go home. This week, Google unveiled Chrome, a Web browser aimed at toppling Microsoft's Internet Explorer.

Google's maverick corporate culture and slogans have also made headlines. Employees work inside a compound that mimics a college campus, get free organic meals and are allowed to work on a pet project one day a week. The company has said repeatedly that it wants to make the world a better place. Its defining slogan was "Don't be evil," but it has been officially modified to "You can make money without doing evil."

Indeed, Google has become one of those companies that epitomizes an era, introducing literally transformative technology on the global stage.

But Google's meteoric rise wasn't part of a calculated plan--initially. Back in 1998, Stanford grad students Larry Page and Sergey Brin just happened to take an interest in organizing information on the Web, and in true Silicon Valley fashion, they founded Google in a friend's Menlo Park, Calif., garage.

Soon after, Google stumbled upon a way to make money from advertisements placed alongside online searches results and hired Eric Schmidt, who had headed Novell and served as chief technology officer at Sun Microsystems, for adult supervision. The trio of Schmidt, Page and Brin have turned Google into a money machine and innovation powerhouse.

But what goes up must come down, right? Probably. Wall Street used to count on Google for hitting or surpassing analysts' earnings targets, but the company had a few misses the past year due to hiring sprees and technical changes to its search algorithms.

And there's the perennial question of whether Google needs to diversify its revenue stream in case businesses find better and cheaper ways to advertise. So far, the company hasn't found another way to make money--and it's not very concerned about it either. Google believes that if superior technology finds users, users will help it find a business plan.

Oh, let's not worry about all that boring stuff now. It's time to celebrate 10 years in business. But don't expect music, dancing and laughter at the Googleplex Sunday. Even though Google was incorporated on Sept. 7, the company says it has never partied on this day and doesn't plan to start now.

By: Wendy Tanaka
Forbes.com; September 5, 2008

Yahoo Vote-Counting Error Overstated Support for Yang

Yahoo Inc. said a greater number of shareholder votes were cast opposing the re-election of Jerry Yang and other directors than reported, after a company responsible for processing multiple shareholder votes said it made a mistake in handling those of one large investor.

Acknowledging the tabulation error, Yahoo said 66% of votes were cast in support of Mr. Yang, who also is Yahoo's chief executive, down from the 85% it had announced. Yahoo Chairman Roy Bostock received a 60% favorable vote, down from 80%. Yahoo director Ron Burkle's share of supportive votes fell to 62% of votes cast from 81%.

The disclosure didn't affect the outcome of Friday's shareholder election, in which all directors were re-elected. It weakens the endorsement Mr. Yang and other directors involved in negotiations with Microsoft Corp. received during Yahoo's shareholder vote last Friday and could serve as possible ammunition for critics who continue to seek strategic changes at the Sunnyvale, Calif., Internet company.

Broadridge Financial Solutions, which was responsible for sending Capital Research Global Investors' voting preference to be tallied, was behind the glitch. Capital Research, which owns at least 6% of Yahoo, has been a steady critic of the Yahoo board's decision to reject a number of offers from Microsoft.

Chuck Callan, senior vice president of regulatory affairs at Broadridge, said a printout the Lake Success, N.Y., company sent to the voting tabulator mistakenly cut off the first digit of the number of shares the investor wanted to withhold for certain directors. The incident was isolated and triggered by a unique combination of factors, including the fact that at least 100 million shares were being withheld. Broadridge -- which processes votes for 14,000 meetings a year -- determined that no other meetings within the past 18 months were affected, and it has fixed the problem.

Broadridge investigated Monday at the request of Capital Research Global Investors, which suspected that the number of withheld votes ought to have been higher. A few investors Tuesday drew attention to another issue -- the fact that significantly fewer votes were cast this year than in previous years. Some have suggested that investor confusion around Carl Icahn's proxy contest, which he ended with a settlement that allows him and two others out of a group he recommends to join the board, could have resulted in more ballots being invalidated than in previous years.

Shareholder voting glitches aren't uncommon given the number of companies involved in the process, says Claudia Allen, chairwoman of the corporate-governance-practice group at Neal Gerber & Eisenberg LLP, a law firm in Chicago. "Most of the time these things happen you don't hear about them," she said, describing this as a case of a shareholder "sending a message."


By: Jessica Vascellaro
Wall Street Journal; August 6, 2008

Google Tackles Microsoft In Launch of Browser

Google Inc. plans to introduce its own Web browser, the latest twist in its battle with Microsoft Corp. over key Internet technologies.

In a posting on a company site Monday, Google indicated that a version of the software, called Chrome, would be available for download on Tuesday. It said the software is designed to make it faster to browse the Web and easier to run applications without downloading software to a computer. The product will be offered on an open-source basis, meaning others can modify the software code.

Google's new Internet browser, Chrome, is a strategic weapon in the company's battle with Microsoft. But prompting consumers to actively choose a browser is no easy task, MarketWatch's John Letzing reports.

The Google browser takes direct aim at Microsoft Corp.'s Internet Explorer, which is by far the most widely used program for viewing Internet sites. The two companies already compete in Internet search engines, where Google holds a wide lead. Google has also developed Web-based alternatives to Microsoft's popular Word, Excel and PowerPoint programs.

While many people pay little attention to which browser they use, the choice makes a big difference to software companies. They can use the precious screen real estate to promote their own Web services. Moreover, they can tailor their browsers to ensure compatibility with their other products.

Google executives have expressed concern that existing browsers might fail to support the sort of new Web-based applications they want to develop as they seek to expand the company's influence beyond search. By building its own Web-browsing software, Google is ensuring that it will have a platform for its Internet services that needn't conform to other companies' standards.

News of the Google project spread after an unconventional leak by the company itself. Google Blogoscoped, a blog that follows the company, reported Monday that Google had sent it a comic book outlining the specifications of the browser.

"We realized that the web had evolved from mainly simple text pages to rich, interactive applications and that we needed to completely rethink the browser," wrote Sundar Pichai, a Google vice president of product management, on the company site. "What we really needed was not just a browser, but also a modern platform for web pages and applications, and that's what we set out to build."

Danny Sullivan, editor in chief of Internet news and analysis site Search Engine Land, said Google's decision shows how the browser is competing with the traditional operating system as an important platform for software development. He predicted that Google will encourage people to adopt Chrome by releasing some products and updates for Chrome users first, while continuing to support other browsers.

Persuading Consumers

Google may nonetheless have trouble persuading consumers to download its browser. Many people find it easier to use the browser that comes loaded on their computer, which is typically Microsoft's Internet Explorer on computers that run the Windows operating system.

Dean Hachamovitch, a Microsoft executive who oversees Explorer, expressed confidence that consumers would continue to use the browser. He said Explorer "puts the services [users] want right at their fingertips, respects their personal choices about how they want to browse and, more than any other browsing technology, puts them in control of their personal data online."

Mr. Sullivan said Google hasn't had much success getting people to download its software, with the exception of mapping software Google Earth. "Just because Google has a browser out there, it doesn't mean everyone is going to use it," he said.

The browser has been viewed as a strategic weapon in high-tech circles since the mid-1990s, after Netscape Communications turned its browser into a fixture on many personal computers. Microsoft viewed that product as a threat that could set a new standard for software development, setting in motion a series of tactics that triggered the Justice Department's high-profile antitrust investigation of Microsoft.

In recent years, the Mozilla Foundation's Firefox browser -- a descendent of Netscape's Communicator product -- has gained popularity as an alternative to Internet Explorer. Firefox holds nearly 20% of the market, compared with about 72% for Explorer, according to Net Applications, a company that tracks the sector.

More recently, the browser has been seen as a lever in the battle over Internet search. Browsers include windows, or toolbars, that can be used to directly access a search engine, a program for finding information or sites on the Internet. Microsoft's Internet Explorer browser comes preset with a toolbar for Microsoft's search engine, though it can be reset to link to Google, Yahoo or other search engines.

That default setting, and how to change it, has been a contentious issue between Google and Microsoft in recent years. Google has claimed to regulators that Microsoft's domination of the browser market could give it an undue influence over search-engine use. Microsoft, meanwhile, has reworked its browser to make it easier for people to reset to competing search engines.

Google has been working on the product for about two years, according to one person familiar with the matter. The introduction of Internet Explorer 7 in October 2006 added more urgency to the effort, as Google grew concerned that the new version would make it easier for Microsoft to route users to Microsoft's own search service, this person said.

If people use the Google browser, the company could glean more information about what consumers are doing online, analysts say. Google could find that information useful, they say, in better targeting ads to individual users and conceiving new products. Google already knows a lot about online habits thanks to its domination of the search-engine market and Internet advertising.

Problems for Mozilla

Chrome could create problems for the Mozilla Foundation, the nonprofit organization that builds Firefox. Google has been a key partner for Mozilla, at times providing engineering expertise and paying for a spot as the default search service embedded in Firefox. Google and Mozilla last week renewed their agreement, which was set to expire in November, extending it until 2011.

John Lilly, Mozilla's chief executive, conceded that Chrome will increase competition in browsers, which also include Apple Inc.'s Safari software and a program called Opera from Opera Software ASA. But he added it remains unclear just how big an impact Google can have. "We have long years of testing and years of learning about how to make browsers," Mr. Lilly said. "Chrome is new."

By: Jessica Vascellaro and Robert Guth
Wall Street Journal; September 2, 2008