Paul Wallbank is a speaker and writer charting how technology is changing society and business. Paul has four regular technology advice radio programs on ABC, a weekly column on the smartcompany.com.au website and has published seven books.
The new company, which will continue to be listed as GOOG on the NASDAQ stock market, will have Page as CEO and Brin as Chairman with the various product lines and products split into discrete divisions under the umbrella holding company.
Page believes this will increase accountability and initiative within the divisions.
In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed. We will rigorously handle capital allocation and work to make sure each business is executing well. We’ll also make sure we have a great CEO for each business, and we’ll determine their compensation.
How well this Japanese style Keiretsu model will work for Google will be interesting. The initial problem for the company is going to be the jockeying for positions within the restructured divisions.
If you’re a Google employee you’d certainly be lobbying hard today to avoid being stuck in the division lumbered with the dying Google+ social media platform for instance.
The plight of Google+ may give us some clues to Page’s thinking. At the time of the 2008 financial crisis the company heeded the warnings of The Powerpoint of Doom and clamped down hard on costs. Since the crisis passed, Google has steadily become increasingly cumbersome and increased its headcount from 20,000 in 2009 to 54,000 four years later.
A restructure is an excellent opportunity to strip out a good deal of that fat.
For divisions like productivity apps, this sharpened focus may help the product and stir the teams into innovating. A Gartner report last week put Google Apps at a pathetic 2.1% of the global productivity while Microsoft maintains a 94% chokehold on the market. As an autonomous division, the Apps team is going to have to work a lot harder.
Protecting the core
Another question is how this will pan out for the core Google business. The combination of search and advertising remains a monstrous cash generator however its growth is slowing as the company struggles with the shift to mobile.
For the core Google employees, having profits sifted off their division for loss making moonshots may not be the most motivating thing and we may well see Sundar Pichai, the already announced CEO of the Google division, pushing back hard on the claims of other Divisional bosses for capital.
The restructure of Google is going to be an interesting experiment in how well the Japanese conglomerate model may work in the modern tech industry, if it does then we may see the modern equivalents of US Steel and AT&T develop.
For Google’s managers and employees however, having the harsh glare of shareholder accountability may not be the most comfortable experience.
For long timers in the IT industry this is a return to the Microsoft days of Patch Tuesdays, the monthly bundle of updates for Windows and Office the company used to issue on the first Tuesday of each month.
While Android has nothing the like the problems Microsoft did in the early 2000s with the explosion of malware that crippled millions of users, the risks to the Google system are real with some predicting a security armageddon.
For users, there’s a serious question in the problems facing Android system in that unlike the Windows systems the rollout of updates is controlled by the telcos or handset vendors rather than the software developers.
As a consequence many older devices simply aren’t being updated leaving millions of smartphone users exposed to malware and having no way of fixing known security problems.
The problems facing Android are common across the entire Internet of Things, how Google respond the current smartphone security problems is going to be a pointer for the rest of the IoT sector.
Social media influencer programs are challenging the ethics and pockets of PR and bloggers
So after five years about posting about food, travel, tech, fashion or reverse cycle widgets you’ve being listed by Forbes Magazine as one of the most influential voices in the field.
Now every morning in your inbox is another pitch from an agency offering you freebies and access in return for posting about their clients products, some are great while others are strange.
Welcome to the world of Influencer Programs, a strange hybrid bought about by rise of social media and the collapse of printed news. As overwhelmed salaried journalists at established media outlets have less time to deal with hundreds of PR people desperately trying to get their attention, those with decent social media followings start to look attractive.
The influencer theory
A key part of the PRs strategy in engaging with social media outlets are the influencer programs, where the agencies trawl Instagram, Facebook, Twitter and the other services to find those with large followings and then try to induce them into promoting their clients’ products.
These influencer programs are not anything new, while today we associate them with Kim Kardashian and Will.I.Am, in the 18th Century Josiah Wedgwood publicised his sales to the royal courts of Europe to generate sales for his earthenware and a hundred years later Mark Twain endorsed cigars in journals across America.
So congratulations on being the modern Mark Twain, now you have to decide if you want to play with Fat Fee Media and be part of their influencer programs.
The land of the free
Most of the time the initial approach from the nice folks at Fat Fee will try to get you to work for free in exchange for a shiny laptop, a free feed or even an overseas trip to The World Reverse Cycle Widgets conference.
That might work for you, if you have a full time job and the food blog or fashion Instagram feed is a hobby then this exactly what the influencer programs were originally designed around although there might be some quirks there
Should the blog be a business, or you take the distinctly unfashionable attitude that your time as a creative content creator is actually worth something that Fat Fee Media should pay for, then things get messy.
People die of exposure
The first response for payment from the nice folk at Fat Fee Media is that working with their client will be wonderful exposure for you.
In some respects this is probably true, however the reason Fat Fee Media has come to you is because their clients need exposure more than you do. Just the fact you’ve been listed as an ‘influencer’ shows you have credibility on the interwebs.
One of the traps many of us with consulting businesses on the side is the belief that doing a favour for BigCorp will open future paid opportunities. Sadly, the truth is somewhat different.
Pay the writer
“It’s the amateurs who make it tough for the professionals” says Harlen Ellison in his wonderful Pay The Writer rant. “By what logic do you call me and ask me to work for nothing.”
Ellison’s point is well made and those working for free are marked down as amateurs by the large agencies. Be under no illusion, when the paid consulting, speaking or writing gigs become available, the folks giving away stuff for free on the influencer programs won’t be getting them.
While Samsung’s behaviour was extreme, it’s by no means unusual. It’s common in these programs’ agreements to have ‘exclusivity’ or ‘no disparagement’ clauses.
The exclusivity clauses are particularly pernicious because they limit the scope of your writing and could even lock you out of future paid work in the industry you cover.
Controlling the copy
Another weird, but common, part of the PR control freakery in influencer programs is the determination to vet everything so only Nice Things are said about their clients.
This never ends well as the agency and its client spend the next six weeks rewriting your work. Inevitably the results look like something published in the Ministry of Public Works house newsletter.
Even if your blog or Instagram feed is just a hobby resist any request from agencies to pre-vet your copy. If they insist, send them your advertising rate card and tell them to hire a copywriter.
You can’t say bad things
The ‘non-disparagement’ clauses are equally pernicious. One of the curiosities of the social media world is that corporates are horribly risk averse.
As a consequence they don’t want the possibility of bloggers or the Twitterati saying nasty things about them and the non-disparagement clause becomes part of almost any agreement.
These clauses are usually far ranging, not only do they stipulate a blogger can’t say something less than glowing in a post but they also restrict any social media commentary on that business.
A recent agreement I was presented on behalf of one of the world’s biggest banks required me to say I wouldn’t say anything nasty about them. This is a curious way of shutting people up but one can’t blame them if it can be done cheaply for the cost of a meal or conference invite.
Happy shiny people
Ultimately the social media and digital media worlds are about happy and shiny. Given they are largely controlled by large corporations, this isn’t surprising and much of the attitude that you shouldn’t say bad things online comes down to how food, fashion and travel bloggers have regurgitated nice things rather than been genuine critics.
To be fair to the new breed of online writers, the dumbing down of travel and food writing was well underway in the mainstream media before the arrival of the internet. One could argue that mastheads devaluing their brand with puff pieces was one of the reasons alternative online media, particularly in food blogging, became so successful so fast.
A broken model
In truth, the whole social media engagement industry is broken, it depends on poor measurements and old school marketers applying 1960s Mad Men broadcasting methods to an industry that’s diffuse and diverse.
Over time, new more effective models will develop but the for the moment this is the way business is done as we wait for the new David Sarnoff.
Ultimately for influencers the question is whether you’ll keep your own respect and that of your audience. Just don’t expect the corporates and their agencies to respect you in the morning.
The whole concept of programmatic advertising is a good example of a business, and a set of jobs, being disrupted.
Media buying has been a cushy job for a generation of well fed advertising executives. David Sarnoff’s invention of the broadcast media model in the 1930s meant salespeople and brokers were needed to fill the constant supply of advertising spots.
Today the rise of the internet has disrupted the once safe world of broadcast media where incumbents were protected by government licenses and now the long lunching media buyers are finding their own jobs are being displaced by algorithms like those of AppNexus.
A thought worth dwelling on though is that media buyers are part of a wider group of white collar roles being disrupted by technology – the same Big Data algorithms driving AppNexus and other services is also being used to write and select news stories and increasingly we’ll see executive decisions being made by computers.
It’s highly likely the biggest casualties of the current data analytics driven wave won’t be truck drivers, shelf pickers or baristas but managers. The promise of a flat organisation may be coming sooner than many middle managers – and salespeople – think.
Rubenstein joined AppNexus as employee number 18 in 2009 and has been part of the company’s growth from a small startup to a global technology company with a workforce of 1,000 professionals.
AppNexus is one of the new wave of companies managing and programming online advertising, helping advertisers and publishers target their products better while giving ad tech companies deeper insights and data.
In this interview, Rubenstein discusses some of the forces changing global advertising along with the challenges of dealing with a high growth business.
How do we engage with an always on, connected workforce?
We need to rethink how we measure performance in the workplace says Andrew Lafontaine, Senior Director Human Capital Managemet Strategy & Transformation at Oracle Australia.
As business adapts to a changing society and mobile technologies, one of the questions facing managers is the mismatch between the Millennial generation and those GenX and Boomers who make up most of the executive suite, Lafontaine sees this as been in how the younger cohort approaches authority.
“There certainly can be a disconnect between Millennials and boomers. Millennials don’t see hierarchy the way boomers see it as important,” says Lafontaine. “Boomers have ingrained view of the way they have come through the workforce.”
Breaking the old rules
Unfortunately for those older managers, their world was based on a formalised, ‘straight line’ hierarchy dating back to the days ships’ captains used flags and voice tubes to communicate.
That rigid military style worked well for nearly two hundred years of business with mail and then the telephone only reinforcing that management model. Now newer collaboration tools mean different ways of working becoming possible.
A problem with those different ways of working in teams is how performance is measured warns Lafontaine. “What they are not measuring at the moment are what I call ‘network performance’. How workers they helping their colleagues, collaborating and working together.”
Separating home and office
With mobile technologies becoming ubiquitous it becomes harder to separate work from home life, “we working now from home and on the tram. You don’t need a nine to five workforce nad companies have to deal with and embrace the technology,” says Lafontaine.
In the context of babyboomers and GenX workers, that technology meant longer hours in the office but Lafontaine suggests things are now changing. “There other areas to measure. How are they looking after themselves? The days of babyboomers working 12 or 14 hours a day and neglecting their health or outside life are over.”
For the future company, the key to success lies in engaging their employees Lafontaine says. “A more highly engaged workforce delivers better outcomes. Engagement is the three S’s: Stay, Say and Strive”
Those S’s come down to three questions for the worker; should I stay? What should I say? and How should I strive to do a better job?
For managers the challenge is engage all workers regardless of age, the task of finding what engages and motivates workers of the computer generation is only just beginning.
Getting your business online shouldn’t require a doctorate says domain registrar GoDaddy’s international boss
“The days of getting a PhD to get your businesses online are over” declared James Carroll, GoDaddy’s International Executive Vice President last week on a visit to Sydney.
GoDaddy is the world’s biggest internet domain name registration service and Carroll was in Australia to promote the expansion of the company’s local operations.
Australia’s a prime target for the company with nearly half the nation’s two million businesses not having a web presence. “I think there’s an awareness issue about the skill that are needed to get online,” says Carroll.
GoDaddy’s Australia and New Zealand country manager Tara Commerford suggested two reasons why small businesses aren’t going online, “I think it’s lack of awareness and people don’t know how to do it”.
Commerford suggests that simplified online tools are making it easier along with the easy access to other platforms like social media and location online services.
One of the barriers to getting online is confusion and the new top level domains haven’t helped this by muddying the message about which domains they should be registering under. This is only increasing the fear among small business owners that going online is complex, expensive and risky.
It’s understandable that domain registrars like GoDaddy would push the new domains given the industry’s low margins and need for scale, but that’s not the problem for smaller operators.
The problem for small businesses is getting the basics right with with a mobile friendly website, particularly for hospitality and tourism operators. Having the right domain name is an important first start of an important journey for most businesses.
The CERN research project generates huge amounts of data however the human touch is needed to analyse and manage the information
How do you deal with the biggest data sets of all? Bob Jones, a project leader for the European Organization for Nuclear Research – commonly known as CERN – described how the world’s largest particle physics laboratory manages 100 petabytes of data.
The first step is not to collect everything, ““We can’t keep all the data, the key is knowing what to keep” says Jones. This is understandable given the cameras capturing the collisions have 150 million sensors delivering data at 40 million times per second.
Jones was speaking at the ADMA Global Conference’s Advancing Analytics stream where he was describing how the project manages and analyses the vast amounts of data generated by the huge projects.
Adding to Jones’ task and that facing CERN’s boffins is that data has to be preserved and verifiable so scientists can review the results of experiments.
Discovering the Higgs Boson for instance required finding 400 positive results out of 600,000,000,000,000,000 events. This requires massive processing and storage power.
Part of the solution is to have a chain of data centres across the world to carry out both the analytics and data storage supplemented by tape archiving, something that creates other issues..
“Tape is a magnetic medium which means it deteriorates over time.” Jones says, “we have to repack this data every two years.”
Another advantage with a two year refresh is this allows CERN to apply the latest advances in data storage to pack more data into the medium.
CERN itself is funded by its 21 member states – Pakistan is its latest member – which contribute its $1.5 billion annual budget and the organisation provides data and processing power to other multinational projects like the European Space Agency and to private sector partners.
For the private sector, CERNs computing power gives the opportunity to do in depth analytics of large data sets while the unique hardware and software requirements mean the project is a proving ground for high performance equipment.
Despite the high tech, Jones says the real smarts behind CERN and the large Hadron Collider lie in the people. “All of the people analysing the data are trained physicists with detailed, multi year domain knowledge.”
“The reason being is the experiment and the technology changes so quickly, it’s not written down. It’s in the heads of those people.”
In some respects this is comforting for those of us worrying about the machines taking over.
Hawk is particularly scathing about Google’s prospects of being trusted again by developers and the marketplace. “By quitting early, Google lost what little goodwill they might have to seed something in the future,” he says. “Who will ever take Google serious with social again?”
Once again we see the effects of Google’s corporate Attention Deficit Disorder and the message to developers and evangelists is clear – be very careful in devoting too many resources to any new product from the company.
Google Plus’ decline though signals something far more serious for the company however – it may well have missed some of the most serious shifts in its marketplace.
The SoLoMo opportunity
Four years ago when the service was launched with great fanfare SoLoMo was one of the key buzzwords and it was understandable for Google to want a slice of it. Unfortunately the company found that even an business as big as Google can’t force change by management diktat.
SoLoMo – Social, Local and Mobile – were seen as the big market growth areas and Google’s footprint in all of those spaces was poor. Although Google Places was leading the local search market at the time.
Google+ was intended to solve at least the social problem with the added advantage of overlaying personal information onto the already comprehensive ‘knowledge graph’ it’s gathered on users.
Four years later it’s clear Google Plus is a failure and much of that is due to the project being driven from the top down. From its launch the project was about meeting management imperatives and it’s notable in the company’s announcements about the service how little mention users get.
Google’s price of failure
The problem now for Google is they have wasted four years on the failed product at a time when Facebook have become the dominant social media platform and have successfully adapted the service to the mobile world.
Even in Local search, Facebook are making strong inroads into local business advertising, an area Google had the advantage by tying together maps and local search but lost because of inaction and bureaucracy.
A costly distraction
The Google+ distraction means the company has missed the entire SoLoMo opportunity and squandered the one area where they had a massive head start.
Google now face a future where their key advantage is stranded on the desktop without serious integration into social media. At the same time their ambitions to run a payments service seems stalled as well.
Whether Google+ turns out to be as strategic a mistake for the search engine giant as Windows Vista was for Microsoft remains to be seen but the similarity between the two companies stuck with declining desktop based business models in a world of mobile consumers is striking.
Now vendors have the ability to put a chip into almost anything companies and designers are tempted to add connectivity simply for the sake of doing so.
Coupled with the security risks of your intimate devices being hacked there’s the related privacy risks as millions of devices collect data ranging from how hard you press your car’s brake pedal through to last time you burned your breakfast toast.
In an era where governments and businesses are seeking to amass even more information about us, there are genuine concerns about what that data is going to be used for and why it is being collected in the first place.
The IoT manifesto looks to manage these problems facing the sector through ten guiding design principles;
Don’t believe the hype around the IoT
Only design useful things
Deliver benefits to all stakeholders
Keep everything secure
Promote a culture of privacy
Gather only a minimal amount of data
Be transparent about who that data will be shared with
Give users control over their data
Design durable products
Use the IoT and its design to help people
All of the principles are laudable and it’s not hard to think that meeting the guidelines would make devices and services that aren’t just useful and safe but also simpler, cheaper and more effective.
There’s many ethical, business and safety issues facing the Internet of Things as connected devices rollout across almost every industry. The IoT Manifesto may well be a good framework in which to design them and the cloud services they’ll depend upon.
What label should we give to businesses like AirBnB and Uber?
Stop calling it the sharing economy, cries marketer Olivier Blanchard in a blog post describing how the label is inappropriate and doesn’t accurately describe the imbalances in the relationships between providers, users and the online platforms that facilitate them.
The question is what do we call the business model of companies like Uber, AirBnB and the myriad other services that take providers’ time and resources – cars in the case of Uber, homes or spare rooms for AirBnB – then make them available to people who can use them, taking a commission in the process of course.
Blanchard wonders if much of the success of these companies is because America’s cash strapped middle classes are desperately trying to find additional source of income and there is very much a strong argument for that.
More importantly, is what do we actually call these businesses? While they are potentially are as exploitative as the free labour models that have evolved in the media with businesses like Huffington Post, at least they provide some type of income even if for Uber drivers the net returns may be marginal at best.
Blanchard himself suggests the Microtransaction Economy however that’s not a satisfactory label as the transactions – which may be many thousands of dollars for some AirBnB rentals – are not always small.
Maybe we should call it the downtime economy, where we’re using the time we’re not busy or when we’re not using our homes, cars or others assets to earn income. That too though doesn’t strike me as satisfactory although it does seem to address the underlying idea these services are really only intended to supplement somebody’s earnings, not be their primary livelihood.
None of these labels though are satisfactory and maybe we have to ditch the economy moniker. It’s time to start thinking about what we really should call these businesses.
Facebook and Twitter are proving to be very different business model
This week showed the disparate
At the time of its IPO in February 2012, Facebook claimed to have 845 million active monthly users. Eighteen months later at the time of their stock market float, Twitter boasted a more modest 232 million.
This week Facebook reported 1.19 billion monthly active users while Twitter still languishes at 300 million, a number that disappointed the market and saw the smaller company’s shares drop 11% after their quarterly earnings announcement.
Even more worrying for Twitter, and competing networks like Google, is Facebook’s success in mobile services with 874 million people accessing the service through their smartphones every day last quarter.
So successful is Facebook in engaging roaming users that some pundits are predicting the company’s Instagram product may well overtake both Twitter and Google in mobile advertising revenues over the next few years.
More concerning for Twitter is the company is still not profitable – of the business’ $957 million gross profit, an astonishing $854 million was eaten up in administration and sales costs which indicates their overheads are in need of some dramatic pruning.
What is clear that Facebook and Twitter have very different user behaviour and, as a consequence, the revenue models are not the same. Twitter is never going to be Facebook.
So the question for Twitter is what does it want to be? Certainly the current quest to drive up revenues seems doomed. Perhaps it’s time to accept the company is a smaller operation and start to plan accordingly.
