Posts about google

So much for the penny press

January 2, 2012 by Jeff Jarvis
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The New York Times raised its daily price to $2.50 today. I thought back to the penny press at the turn of the last century and wondered what such a paper would cost today, inflation adjusted. Answer: a quarter.

Screen shot 2012-01-02 at 11.09.10 AM

So, in inflation-adjusted current pennies, The New York Times today costs 10 times more than a newspaper in 1890. Granted, Today’s Times is better than a product of the penny press. But is it worth 10x? Should it cost 10x?

In the meantime, labor rates have risen (a Timesman today lives better than a Timesman then) but production technology has become far more automated and efficient (no more typesetters, proofreaders, compositors, engravers, stereographers, mailrooms, or “rubber rooms” filled with unneeded pressmen). And the advertising value of newspapers has increased exponentially.

On the one hand, there’s less competition today. The New York Times is essentially a national newspaper monopoly (the Wall Street Journal and USA Today are different beasts). That should enable it to raise its price to such a premium. On the other hand, what’s really at work, of course, is that there’s much more competition today: the entire web. That would drive the paper to lower its price.

Instead, today it raises its price — by a whopping 25% over its old daily price of $2. That’s because it is trying to support an outmoded economic model. The myth of legacy media — rich while it lasted — was that every reader saw every ad so the paper charged every advertiser for every reader. That’s how scale paid off. Those are the economics that led to the rise of the penny press.

Online, that myth has been punctured: (a) every reader does not see every ad, and (b) advertisers pay only for the ads readers see (or in Google click on), and (c) there’s abundant competition. That’s what confounds legacy media folks: “If I get more audience and have more effective advertising, why am I not being paid more?” Because you’re operating by media laws that are now outmoded. You’re still operating under an industrial economy built on scarcity. That’s what makes you think you still have pricing power.

You need to find opportunity in entirely new models, in the new scale, in abundance. Google finds value in scale by taking on risk for the advertiser (who pays only for clicks) and by increasing relevance by putting ads everywhere. Facebook finds value in relationships and data about them and it doesn’t sell content but does use content as a tool to generate more data about users and their interests.

In their day — a century ago — newspapers found new ways to exploit scale. Today, net companies exploit scale in new ways. Google, Facebook, and Twitter are the penny press of today. Only they cost even less.

BTW, thanks to the very good Times Machine, we can see that The Times started life at a penny, which rose to four cents and then back down to a penny by 1900 — because it wanted scale.

Rat poison

August 15, 2011 by Jeff Jarvis
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The Google/Motorola deal is lawyer repellent. Or rat poison, if you prefer. It is a tragic and wasteful by product of our screwed-up patent system. Just this year, $18 billion is being spent not on innovation and invested not in entrepreneurship and growth but instead in fending off lawsuits. Damn straight, we need patent reform.

Having said that, this is good for Google and Android and its ecosystem. That’s why HTC, LG, and Sony all released statements praising the deal. Google isn’t going into competition with them. Google is buying them protection to defend against Apple, Nokia, and other patent holders and legal thugs.

The net result is that Android can now explode even more than it has already. I imagine — I hope — there were other companies in other fields — cars, appliances, TV, devices of all sorts — that were waiting for some security so they could add connectivity to their devices, using Android.

Google wins because, as I’ve been saying, the real war here is over signal generation: Google, Facebook, and to an extent Apple and telcos and others want us to generate signals about ourselves — who we are, where we are, what we want, who we know, what we’re looking for, where we’re going — so they can better target their content, services, and advertising. Mobile is a great signal generator.

But I’ve also been saying that mobile will become a meaningless word as we become connected everywhere, all the time. Who’s to say or care whether we’re connected with a phone as we walk, through our car, on our couch via the TV, in the kitchen via the iFridge, or at the desk (remember that?). Mobile=local=me.

I disagree with those who say that Google had hardware envy vis a vis Apple. Google went into the hardware business and was smart enough to get out. I imagine that Google will operate Motorola as an independent entity; it won’t become Googley. Indeed, I can imagine Google spinning off the product arm, keeping the rat poison.

So this is a good if unfortunate deal to have to be done. That’s my take.

What Google+ adds to news

July 5, 2011 by Jeff Jarvis
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To paraphrase Mark Zuckerberg, it is too soon to know what Google+ is. But I’ve been trying to imagine how it will and won’t be useful to news. You should add rock salt to anything I say, as I thought Google Wave would be an important journalistic tool. With that in mind, a few opening thoughts:

* Google+ likely won’t be good for live coverage of breaking events because its algorithm messes with the reverse chronology, promoting old posts when they get new comments. It doesn’t favor the *latest* the way Twitter and liveblogging do and live news is all about the latest. I don’t see Andy Carvin making the switch.

(I’ve wished that I could have the option to get a stream only of newly submitted posts. Many have complained about the promoting of too much old stuff. Sergey Brin said on G+ yesterday that they’ve tweaked the algorithm to give less weight to comments from people you don’t follow.)

* G+ should be good for collaboration on reporting. When I ask a question, the answers appear with my question and subsequent responders can improve on earlier answers. With Circles, I can focus my questions on a specific group (e.g., VCs) and can benefit when their circles see their interaction with me — so long as I am not fool enough to disable sharing.

* If Google gets its synergistic act together and incorporates Google Docs — and some of the tricks from Wave — into G+, then this could be a very good collaboration tool for communities to gather together and share what they know. That’s the basis for news.

* G+ will be good for promoting content. The service isn’t yet open and I have almost more than 7,000 followers. Memes spread quickly on G+, but because of its time-bending algorithm, they also last longer if they spark conversation — that’s its plus side (no pun intended). Automated spewing of headlines likely won’t be effective, but conversing will.

* I see a big problem in the G+ restriction of one link per post. I find that sadly ironic. G+ is a service for sharing and links are the essence of responsible sharing, revealing the provenance of facts and giving credit. A blog post is a better vehicle for a well-sourced, well-linked post.

* G+’s identities likely won’t be as reliable as Facebook’s, as it is easy to create an account and identity on there are not the social pressures for authenticity. Then again, people will invest in their Google profiles, especially as they become more prominent in search (see what Google is doing with authors, broadly defined; I’m one of them in the test). I’m still trying to get my head around the play on identity among Google, Facebook, Twitter, and players yet to join in.

* G+ may be a good place to find photos from news, depending on whether witnesses favor putting them there or on Twitter or on Facebook or on Flickr and how well Google does at making them searchable.

I see that we will have to teach Google Plus at my J-school. Especially at the start, it will be valuable to have students brainstorm how they could use it. That’s the way journalists should approach every promising new tool.

What do you think G+’s uses are for news?

What did Google do?

January 21, 2011 by Jeff Jarvis
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Reuters asked for an op-ed on the handover at Google. Here it is:

The miracle of Google was that it could accomplish anything—let alone become the fastest growing company in the history of the world and the greatest disruptive force in business and society today—while being run by a committee, a junta, a council of the gods.

In management, as in every other arena of business, technology, and media, Google broke every rule and made new ones.

It should not be a shock that Eric Schmidt has stepped aside as CEO and made room for Larry Page. Schmidt was the prince regent who ruled until the boy king could take the throne while training him to do so. We knew that this would happen. We just forgot that it would.

When I interviewed Schmidt a few weeks ago and asked about pressure over privacy, China, and lobbying, he said, “This is not the No. 1 crisis at Google.” What is? “Growth,” he said, “just growth.”

Scale is Google’s greatest skill and greatest challenge. It scaled search (vs. quaint Yahoo, which thought it could catalogue this web thing). It scaled advertising (vs. the media companies that today don’t know how to grow, only shrink). It is scaling mobile (by giving away Android). It has tried to scale innovation (with its 20 percent rule)—but that’s the toughest.

How does Google stay ahead of Facebook strategically? The war between the two of them isn’t over social. The next, great scalable opportunity and challenge is mobile, which in the end will translate into local advertising revenue. Mobile will give Google (or Facebook or Groupon or Twitter or Foursquare … we shall see) the signals needed to target content, services, search, and advertising with greater relevance, efficiency, and value than ever. As Schmidt told broadcasters in Berlin last year: “We know where you are. We know what you like.” Local is a huge, unclaimed prize. The question is how to scale sales.

I have no special insight into the Googleplex. But I have to imagine that when the company’s three musketeers sat down and asked themselves what impediments could restrain their innovation and growth, they were smart enough and honest enough to finally answer, “us.”

As well as their holy trinity worked setting strategy and reaching consensus—the one thing I did hear from inside Google was that nothing happened if they did not agree—it has become apparent that Google became less nimble and more clumsily uncoordinated.

Google is working on two conflicting and competing operating system strategies, Android and Chrome. It bungled the launches of Buzz and Wave, not to mention Google TV. It is losing talent to Facebook. It needs clearer vision and strategy and more decisive communication and execution of it.

If it’s obvious to us it had to be obvious to them that that couldn’t come from Largey-plus-Eric. Google, like its founders, is growing up. It needs singular management. So let’s hope that Schmidt did his most important job well—not managing but teaching.

Now we will watch to see who Larry Page really is and where his own vision will take Google. Will he give the company innovative leadership and can Sergey Brin give it leadership in innovation?

I imagine we will see a new support structure for Page built from below now rather than from the side. I’m most eager to see how he will cope with speaking publicly for the company. Schmidt’s geeky sense of humor was not grokked by media. (When he set off a tempest in the news teapot saying we should all be able to change our names at age 21 and start over with youthful indiscretions left behind us, he was joking, folks. Really, he was.) Page is even less show-bizzy.

As for Schmidt: I have gained tremendous respect for him as a manager, thinker, leader. His next act will likely surprise us more than this latest act.

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And here’s my appearance on The Takeaway this morning:

Lock up the kids, here comes the EU

November 30, 2010 by Jeff Jarvis
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If you want a sign that Google is past its prime, you got it today: The EU is investigating it for antitrust.

Remember Microsoft: The EU took 11 years investigating it — during which time, the web was born — and by the time it finished in 2004 and brought its mighty hand down upon the mighty Microsoft, the market had already done the job, thank you. Microsoft was a has-been, a joke as a monoplist, a laggard legacy company left behind by new technology, a threat to no one but itself.

Now the EU is going after Google. No surprise. One thing that has surprised me lately is the anti-Googlism (read: anti-Americanism, anti-capitalism) I’ve seen reflected in the nasty rhetoric over Google’s Street View. In my trips to Germany and talks there, I regularly heard that Google is too big (can someone please send me to the statute that defines big and thus too big?) — not too big to fail but too big to live in Europe. I’ve also heard people say they don’t want Google making money on them (but it’s OK for the corner store or the local newspaper to?).

Now the crows come home to roost with this EU investigation. But as Danny Sullivan argues in a wonderfully smart-assed and logical post, the EU is going after this search engine for acting like a search engine. When he searches for cars, Google has the audacity not to point to other search engines. It points to car sites! Bad Google, Bad.

And what if Google does point to its own businesses: YouTube, shopping comparison, Gmail, whatever. That’s business. Yahoo points to Yahoo; I’ve sat in meeting with them back in the early days of the web when they bragged about how they could point their “firehose” at their own stuff. The New York Times points to The New York Times. Microsoft links to Microsoft. So?

Remember that it was Google that created the ethic of search results untainted by business. Its model before that was GoTo/Overture, which *sold* search position. Analysts thought they were nuts — Commies, maybe — when Google decided *not* to tell search position out of some strange sense of ethics.

So now the EU wants to take Google’s own standard and interpret it against Google? Where the hell does this?

Last night, someone said to me something I also hear a lot: that search is a utility and utilities need to be regulated. Europeans reflexively regulate.

But Google isn’t a utility. There are plenty of other, competitive search engines. The fact that Google has 90+% penetration in Europe is the choice of the market, nothing Google did through unfair advantage.

And — shades of the Microsoft case — Google is being challenged now by other means of discovery: namely us sharing links through social means. Google is no longer the all-powerful Oz of the internet. The EU’s timing is impecable.

Now there is one arena in which Google does have much power: advertising. It’s not as effective to market on Bing as it is on Google. And I’ve said before — just yesterday — that I think Google would be wise to establish a Constitution and Bill of Rights and channel of appeal of its decision on advertisers so it cannot be accused of manipulating things behind the scenes through its sole power.

In that sense, Google is not a utility. It is law. And laws require principles and means of appeal. That’s what I said yesterday and what I’ll argue again in this case. Google would be wise to be more transparent about its advertising rules and decisions (not its algorithms but its judgments) and open up that process to trusted outsiders. Google needs a court.

But now the EU is looking to take them to court. Oh, boy.