THE HOUSE THAT HELPED BUILD GOOGLE

Original Story: usatoday.com

MOUNTAIN VIEW, Calif. — Susan Wojcicki is reminiscing about her old home in Menlo Park, Calif. "It's a very humble house, less than 2,000 square feet," she recalls fondly. A cozy, four-bedroom home — and incredibly historic.

After earning her MBA in 1998, Wojcicki bought 232 Santa Margarita Ave. for about $600,000. She rented the garage to two Stanford students for $1,700 a month to help with the mortgage. The renters: no ordinary slackers, but the Google Guys, Larry Page and Sergey Brin, who incubated Google (GOOG) right there.

"It's a good reminder for the company that we did come from a small house, not a fancy house," says Wojcicki.

Her life-changing decision to open her home to Brin and Page did more than just help start the world's most-popular search engine. It also:

• Landed Wojcicki a key early job at Google less than a year after purchasing the home. Today, she's one of its top-ranked executives, overseeing the crucial online advertising business as vice president of product management.

• Introduced a future husband to Wojcicki's younger sister Anne, who recently married Brin on an island in the Bahamas. Google has invested $3.9 million in Anne Wojcicki's biotech start-up, 23andMe.                                           

• Created a cottage industry for the Wojcicki family. Susan Wojcicki's husband, Dennis Troper, is an operations executive at Google. Brother-in-law Gregor (married to middle sister Janet) is a former Googler who worked in the finance department. Mom Esther Wojcicki, a teacher, has consulted for Google on educational issues.

If you've ever clicked a text ad on MySpace, About.com or any thousands of blogs with "Ads by Google," you've got Susan Wojcicki to thank. Expanding ads beyond Google's own search pages was her idea. Now, Google has asked her to further grow the empire by bringing its advertiser base to old media such as newspapers, magazines, radio and television.

"There are no sets of words that can be used to describe Susan's contribution to the company," says Google CEO Eric Schmidt. "She's historic, in terms of our company's founding. She's also one of those people who thinks very broadly and quickly, and (it's) deceiving because she's so pleasant."

Wojcicki is Google employee No. 18. Her early duties included refining the original Google logo designed by Brin and the overall spare look of the Google home page. She came up with the first of Google's "doodles," the remaking of the logo for holidays and other special events. Her first artistic doodle: an alien lands on Google.

In Google's fledgling days, Wojcicki, a former junior staffer for chipmaker Intel, was in charge of marketing efforts. Brin and Page charged her with spreading the word about Google on a shoestring. Her big idea: stir word-of-mouth by putting Google's search engine all over the Web. She reached out to companies to license Google search for their websites and offered it free to universities.

In 2003, she came up with her multimillion-dollar brainstorm: AdSense.

'A really novel idea'

AdSense is an extension of a program Google had successfully launched in 2002, called AdWords. AdWords offers advertisers sponsored search ads, those little text ads that appear near search results. Advertisers have to pay only if the ads get clicked.

Wojcicki's suggestion: Why not offer these same ads all over the Web, on blogs and websites? Entice Web "publishers" to participate by giving them a portion of the ad revenue. In other words, every time someone clicks on an ad on your site, you get a check.

Here's how the ads are targeted: Let's say you're reading about computers at tech site Engadget. An ad might appear offering special deals at Dell.com. Or, if you're reading an article at a news site about Attorney General Alberto Gonzales, you might see an ad for a local criminal-defense law firm.

That's AdSense.

"It was a really novel idea at the time to serve ads that were targeted dynamically" to a specific Web page, says Wojcicki, sitting in a conference room at the "Googleplex" company headquarters.

"People were saying, 'This is a sports site, so we'll serve a sports ad.' And we were saying, 'No. We can actually look at the page in real time and figure out what this page is about.' "

Wojcicki's idea turned into a runaway smash. Google doesn't break out revenues from AdSense and AdWords. But the company recently reported quarterly profit of $1 billion, virtually all derived from both ad programs.

Thousands of tiny entrepreneurs make substantial livings by hosting Ads by Google links at their websites. "More people make money from AdSense than any other vehicle on the Web," says Jennifer Slegg, who runs JenSense, a blog devoted to AdSense. "There are many, many AdSense millionaires."

AdSense "basically turned the Web into a giant Google billboard," says Danny Sullivan, editor of Search Engine Land website. "It effectively meant that Google could turn everyone's content into a place for Google ads."

For her efforts, Wojcicki earned a Google Founders' Award, a financial incentive provided to employees to create new ideas. Spokesman David Krane says it's designed to keep employees and give them the same kind of economic award they would receive if they had formed their own companies.

Krane won't disclose how much current Founders' Awards are worth, but the first two awarded to Googlers (not to Wojcicki) were $12 million each.

Venturing into offline ads

Creating things has kept Wojcicki at Google over the years. "I love taking an idea … to a prototype and then to a product that millions of people use," she says.

"People write in from all over the world giving you feedback, telling us how a product (AdSense) changed their lives, how they were able to start a business with it, and that's just incredibly rewarding."

Her next big challenge: translating Google's simple, measurable advertising network to radio, TV and print.

Ever wanted to run an ad on the radio but didn't know how to set it up? Google has an Audio Ads section on its website with links to radio producers who will create an ad for $75 to $100. Select stations and time slots, and you're on the air.

The radio venture recently left test mode and is open to the general public. Google is testing the concept in print and on TV; that test is available only to a small percentage of advertisers.

Sullivan and other Google analysts are skeptical about the nascent program's chances. With radio ads, Sullivan says, Google "will give information on when the ad played, with more data than before, but that still doesn't prove that anyone heard the ad. They haven't done anything innovative or different to show if the ad really worked."

'A real challenge' ahead

Bringing the Google ad network to old media "will be a real challenge," says Greg Sterling, an independent analyst at Sterling Market Intelligence. "The ability to serve a relevant ad against someone's query is one of the great innovations of the Internet, and it's not transferable to other media, where people are more passive."

Wojcicki concedes that ads on TV and radio won't be as measurable. But she says such ads placed through Google will have more data to mine than old media currently provide, thanks to Google's obsessive tracking of numbers via its network of computers. "For example, in TV we can provide second-by-second data on what's being watched on the ad," she says.

She cautions that it's still very early for Google Radio: "The first things we're doing are really just providing online ways for people to purchase the inventory easier."

Raised in Silicon Valley

Wojcicki has plenty of experience at being eyewitness to a forming business. Brin and Page originally met her and landed at the Menlo Park house via a friend of Wojcicki's who was dating Brin.

The house that gave birth to Google was always filled with mutual friends, Wojcicki says. Most of them techies themselves, their No. 1 question for Brin and Page back then: Who needs yet another search engine?

The answer: " 'Not another but a better search engine,' " Wojcicki recalls. "From the beginning, they had a very clear vision that they could build something much better than what existed at the time."

Wojcicki grew up in Palo Alto on the campus of Stanford University. Dad Stanley Wojcicki chairs Stanford's physics department.

Mom Esther, a journalism teacher at Palo Alto High School, says she expected Susan to become an English professor. Instead, after a post-college job at educational software firm MagicQuest, she was bitten by the tech bug.

Now, Google is "such a presence" in their lives that the Wojcickis try to limit family-time chatter about the company, Esther says, though not always successfully. "It's so innovative and exciting. They're doing all sorts of interesting things, and it's fun to hear about it."

That so many of her relatives were drawn to Google isn't unusual, says Susan Wojcicki. "There are lots of people in the Silicon Valley who are interested in working at a fast-moving, dynamic company like Google," she says. "Not just my family members."

Meanwhile, the humble house where Google was incubated was purchased by Google in September. Google won't disclose how much it paid, but homes in the neighborhood sell for more than $1 million. "I haven't had time to think about what we'll do with it," says CEO Schmidt. "But I figured we should buy it sooner rather than later."

GOOGLING ON MOBILE DEVICES SURPASSES PCS IN US FOR 1ST TIME

Original Story: nytimes.com

SAN FRANCISCO — Google's influential search engine has hit a tipping point in technology's shift to smartphones. More search requests are now being made on mobile devices than on personal computers in the U.S. and many other parts of the world.

The milestone announced at a digital advertising conference Tuesday serves as another reminder of how dramatically online behavior has changed since 2007. That's when Apple released the first iPhone, leading to a wave of similar devices that have made it easier for people to stay connected to the Internet wherever they go. Mobile optimization allows users to stay connected on the go.

The upheaval has rocked PC makers and other tech companies such as Microsoft with businesses tied to sales of desktop and laptop computers. Google has been able to adapt better than most companies, partly because its search engine and other services are embedded in the popular Android mobile operating system, but it hasn't been totally unscathed.

Google's average ad prices have been declining for the past three-and-half years, partly because marketers so far have been unwilling to pay as much for the commercial message displayed on the smaller screens of smartphones. The company, though, says mobile ad prices have been steadily climbing and will continue to do so as marketers recognize the value of being able to connect with prospective customers at the precise moment that they are looking for someplace to eat, or comparing products on a smartphone while standing in a store.

"The future of mobile is now," says Jerry Dischler, a Google Inc. vice president in charge of the company's "AdWords" service for creating online marketing campaigns.

Besides in the U.S., Google's mobile search requests are outstripping requests in nine other countries. Japan is the only other country that Google is identifying.

The Mountain View, California, company isn't specifying just how many mobile search requests it is getting. Google processes more than 100 billion search requests worldwide each month, including queries on PCs.

As part of the mobile transition, Google last month overhauled its search-recommendation system to favor websites that are easier to read and load on smartphones. That change, known as "Mobilegeddon," prodded millions of websites to make changes to ensure they work well on smartphones to avoid being demoted in Google's search results. Mobile friendly websites provide added value to users.

Google also has been introducing advertising formats that tend to work better on mobile devices. For instance, rooms can now be booked within hotel ads, and car ads can now be swiped across a screen to make it easier to comparison shop.

In addition to announcing the milestone in mobile search, Google also introduced on Tuesday a service for comparing mortgage rates in the U.S. The mortgage product expands upon a similar service for auto insurance policies that Google unveiled in California in March. Google is adding three more states — Texas, Illinois and Pennsylvania — to the auto insurance service.

TOO BIG TO TRUST? GOOGLE'S GROWING CREDIBILITY GAP

Original story: InfoWorld.com

Remember when we all loved Google? Its search engine was both simple to use and an unbiased portal to anything you wanted to know. It was founded by two college students at a time when Silicon Valley was a shining beacon of what was right in the world, during sunny economic and political times.

We don't love Google so much any more, mainly because we trust it less and less. More and more people have realized that the Google search engine is hugely biased in favor of advertisers, and the results are increasingly manipulated by Google for inscrutable purposes. Google seems to track anything and everything we do -- it peruses our emails, our files stored on its servers, our locations, and our chats. Americans are getting nervous.

When Google bought smart thermostat maker Nest earlier this year, the public recoiled -- Nest owners didn't want their thermometers to be the latest spying portal in their homes for Google to use. That negative reaction drove home the growing Google trust problem. Likewise, no one really believed that Google wasn't participating in the NSA's spying on users; it seemed a clear case of the lady doth protest too much. Plus, we saw how much Google is spying on us, whether or not in support of the NSA. If anything, Google's response seemed to be indignation that the NSA was piggybacking on Google's own privacy-mining efforts.

For most people, Google is still a shining star. It ranks as the second-most valuable brand in the world, after Apple and before Coca-Cola, a ranking that has grown in recent years. It's also at the top of the rankings for best places to work. It's not as if Google has yet become Facebook, whose abuse of personal information is assumed. But the cracks in Google's reputation are growing.

Consider Google's recent policy update for the Google Play Store, which is where you get Android and Chrome OS apps. The latest policies forbid apps that mislead users into buying add-ins, releasing their personal data, or going to websites -- common techniques for dubious advertisers and vendors, as well as cyber criminals.

But will Google enforce these policies? Google didn't respond to InfoWorld's query on the matter, but its past actions suggest it will not, other than occasionally as a sort of spring cleaning. Google has long had a hands-off approach to apps, doing little to weed out malware and other abusive apps. It trusted app makers to do the right thing.

Ironically, Google's own search engine would fail some of those new Play Store policies -- you can't always tell what search-result links you click are sponsored versus neutral, and many of the advertised links lead to scam sites that surreptitiously steal user information. Google also plays games with the unsponsored search results, favoring content from people and organizations with active Google+ accounts, for example. Google Search and the Play Store are becoming more and more like Craigslist, the pioneering, once-virtuous online classified-ads system that now is a seedy venue favored by scammers for finding new victims.

The reality is that Google's business is and has always been about mining as much data as possible to be able to present information to users. After all, it can't display what it doesn't know. Google Search has always been an ad-supported service, so it needs a way to sell those users to advertisers -- that's how the industry works. Its Google Now voice-based service is simply a form of Google Search, so it too serves advertisers' needs.

In the digital world, advertisers want to know more than the 100,000 people who might be interested in buying a new car. They now want to know who those people are, so they can reach out to them with custom messages that are more likely to be effective. They may not know you personally, but they know your digital persona -- basically, you. Google needs to know about you to satisfy its advertisers' demands.

Once you understand that, you understand why Google does what it does. That's simply its business. Nothing is free, so if you won't pay cash, you'll have to pay with personal information. That business model has been around for decades; Google didn't invent that business model, but Google did figure out how to make it work globally, pervasively, appealingly, and nearly instantaneously.

I don't blame Google for doing that, but I blame it for being nontransparent. Putting unmarked sponsored ads in the "regular" search results section is misleading, because people have been trained by Google to see that section of the search results as neutral. They are in fact not. Once you know that, you never quite trust Google search results again. (Yes, Bing's results are similarly tainted. But Microsoft never promised to do no evil, and most people use Google.)

The issue gets trickier when you move away from search and into apps, whether Chrome OS or Android. Free apps are what people want, so app makers end up doing the same data-mining that sustains Google Search, using a shadowy network of companies to do the work for them. The result is that many mobile apps have the same kind of scams you see on the Web. Sometimes Google is in that mix (innocently, or at least not looking too hard), sometimes it is not. That's why opt-in permissions and clear disclosure are necessary -- so you don't feel fooled.

But many paid apps use these same services to increase their income -- you may think by paying for the app or an in-app extension, your data and behavior are not being mined. But they often are, typically without your knowledge. That's extra income for the app maker, as well as the data miners they work with. Or it supports an artificially low price that drew your interest in the first place. If a deal seems too good to be true ...

Google is hardly alone in plying this murky data-mining trade. But it's the largest visible company in that business, so it's an easy, obvious target for distrust -- and user wrath. Many of us have given up on Facebook ever being honest, so we're looking at Google as the next line to hold.

Also, Google was a very optimistic, idealistic company in its youth. It really did want to change the world for the better, and it believed in freeing information for all as a way to empower individuals. It believed its early "do no evil" motto. It really did see Android as a way to democratize smartphones, which until then were the province of the well-to-do who could afford BlackBerrys or iPhones. Yes, making Android freely available also created a large footprint for Google's services, so its moves were hardly selfless -- but they were oriented toward doing greater good while making money, a virtuous business approach.

Google employees still believe that's how their company works: a force for good that harmlessly uses personal data to both help individuals and make money that supports its many activities and innovations.

But as time goes on, the mercantile needs are coloring the do-gooder impulses. Google is a public company, and it has to satisfy shareholders' desire for profits every quarter. That creates a tension between its reputation and its economic reality. By sweeping that tension under the rug, Google only creates a place for distrust to grow. We can all see that the old Google is not the current Google, and the pretense that it is only heightens our suspicions.

It's time for Google to admit what it does and to act consistently on its policies (or withdraw policies it doesn't intend to enforce). That honesty will help stem the loss of trust. People know that companies exist to make money, but they need to know the true relationship they're entering and don't end up feeling misled. We all know the promises that the banks, airlines, insurance companies, cellular providers, and cable companies make aren't real, and they routinely mislead us on pricing and services -- so we don't trust them. Does Google really want to be like those industries?

Trust comes from honesty, and the key to honesty is to be forthright. Google doesn't seem to understand that yet.

European Court Rules Google's Ad Mode is Legal

Reuters

Europe's highest court ruled Google Inc did not infringe trademark law by selling keywords to trigger ads after Louis Vuitton and others said the practice undermined their brands.

The European Court of Justice (ECJ) said on Tuesday advertisers were free to buy keywords identical to trademarks of rivals as long as consumers were not confused on the provenance of goods and services by the way ads were displayed online.

The court said that in cases where ads could confuse consumers, brand owners should invoke their rights against the advertisers concerned, not against Google -- unless Google failed to act on a complaint or actively manipulated keywords.

The ruling validates the AdWords paid-search business at the core of Google's $23 billion online advertising operations, as well as of competitors such as Yahoo! Inc, and gives brand owners a way to prevent wrongful use of their trademarks.

"It's a good decision in large parts," said Fabian Ziegenaus, an intellectual property lawyer at Linklaters.

"It does not forbid Google per se to sell trademark keywords, so the business model is not at stake, and brand owners are also protected through the decision."

Advertisers often buy brand names of their competitors as keywords to trigger their own ads. Google says the practice is in the interests of consumers, who do not want their search results to be limited to a single brand.

Brand owners can also bid for their own brand names as keywords and the order in which sponsored links are displayed online is determined mainly through this auction process.

Google used to block advertisers from buying others' brand names as keywords but changed its policy in North America in 2004 and four years later extended that to Britain and Ireland.

It says it will honor valid complaints from brand owners and prevent their rivals from using a trademarked keyword in their ad text.

VICTORY CLAIMS

Both Google and LVMH, the world's biggest luxury-goods group, claimed the court's decision as a victory for themselves and their attorneys.

"Trademarks ... are key for companies to market and advertise their products and services. But trademark rights are not absolute," wrote Google's senior litigation counsel for Europe, Harjinder S. Obhi (googlepolicyeurope.blogspot.com).

"We believe that user interest is best served by maximizing the choice of keywords, ensuring relevant and informative advertising for a wide variety of different contexts."

LVMH Vice Chairman Pierre Gode told Reuters: "We are very happy with the decision. We consider the decision is very important as the liability of advertisers is well established."

LVHM shares rose 1.1 percent to 87.74 euros by 1131 GMT (7:31 a.m. EDT).

The summary of the court judgment did not explicitly address the issue of counterfeit goods, but it did offer more clarity than expected on the misuse of trademarks in search results displayed to consumers.

"If the trademarks are actually used in the results that are shown to users and the advertiser does not own the trademark, that is likely to be deemed infringement," said Thomas Vinje, a partner at Clifford Chance specializing in EU and IP law.

"That would seem to defeat counterfeiters ... that would be to the advantage of the trademark owners," he said.

The European Brands Association, which represents 1,800 brand companies in 22 countries, said: "By confirming trademark rights online and holding sellers of keywords liable for illicit material, such as counterfeits, this ruling seems positive."

The ECJ said the matter of whether consumers were likely to be confused by the way search results were displayed was a matter for national European courts to decide case by case.

LVMH scored a victory last month when a Paris tribunal found eBay Inc guilty of misleading consumers by using misspelt versions of its brand as search engine keywords to redirect users to eBay website links.

Several cases brought by brand owners are pending against advertisers at the ECJ, the first of which will be ruled on this week. Google also faces eight cases in the United States over the sale of trademarked keywords and Google keyword search technology.

AdWords Suggests Additional Keywords To Marketers
Story from Biz Report

A new addition to the AdWords platform could help search marketers get more from their campaigns. Although similar to the old "Optimization" tab, Goggle has added an "Opportunities" tab.

The new tab is very much like the old optimization features in that it offers additional keyword suggestions to marketers beginning or tweaking their paid search campaigns. The main difference is that the old optimization tab gave marketers advice on changes to the text or display options within in ad; the new opportunities tab simply offers more keyword options.

Although this is a good idea, the key for AdWords, and all search really, is to keep the message short and to the point. Google offers this advice on the AdWords blog:

• Focus on low prices and savings
• Target ad groups and ensure the ad is relevant
• Make it simple for consumers to make a purchase
• Use value-related keywords

Search marketing has not been immune to the volatile economy, and many marketers have pulled portions of their search marketing budgets. Marketers pulled about 14% of their search budgets in January 2009. However, the medium is still proven to be a force for marketers because consumers continue to rely on search engines to find product information, store websites and manufacturer information.