Category: Internet

The opaque Alphabet

Alphabet’s results are impressive but the lack of detail remains troubling

Late last year Google announced it was restructuring and creating a new holding company called Alphabet, at the time I hoped it would bring more accountability into a business that’s becoming notable for easily distracted management and sprawling bureaucracy.

Yesterday the company released its latest quarterly reports and it appears far from improving transparency, the restructure has resulted in the operation of ‘moonshots’ – termed ‘Other Bets’ in the reports – becoming even more shrouded in mystery.

Other Bets, which includes Google Fiber, Ventures and Google X,  made a stonking $3.1 billion loss while 90% of revenues still comes from the advertising business.

Even within the advertising arm there’s little transparency as the division includes Apps, Android and YouTube along with the lucrative Search and Ads business. There’s little information of how these divisions are travelling on their own.

As Dennis Howlett at Diginomica points out, there will come a time when shareholders demand some accountability as the losses in the Other Bets are not trivial but it seems that time is some way off.

For Google, the biggest risk is being disrupted themselves. Their ‘river of gold’ is not dissimilar to that the newspaper industry floated along prior to the web – and Google – arriving.

Another aspect is that of culture where most parts of the business are free of accountability as the lucrative Ad division’s revenues allow disinterested management and needless bureaucracy to thrive.

While Alphabet’s revenues are impressive, this is a company dangerously reliant on one line of business. History has not treated such ventures well.

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Google’s locksmith problem and the perils of crowdsourcing

Google’s continued disinterest in local search continues to hurt honest business and consumers

An ongoing frustrations of this blog is Google’s failure to execute in local business search despite the massive advantage it has in that field.

One notable aspect of Google’s failure is the locksmith problem where thousands of fake businesses have slipped into the company’s database. The result is thousands of consumers being ripped off and honest local businesses being overlooked in search results.

Spam in Google’s local business search is not a new problem, Search Engine Land reported it as being an ongoing issue in 2009 and the New York Times ran a feature on it two years later highlighting how genuine local businesses and consumers suffer.

Now, five years on, the New York Times has revisited the problem of Google business listings and finds the problem hasn’t changed a great deal with locksmiths and other local search engine results being hijacked by scammers filing false listings.

It’s hard not to conclude that the local listing service isn’t really a high priority to Google’s attention deficient managers and it isn’t surprising given maintaining databases is nowhere near as sexy as being involved in moonshots or as lucrative as the company’s core adwords business.

Google’s bureaucrats think so little of the service that they give the task of maintaining its integrity to an army of unpaid volunteers. The New York Times tells the tale of one of these ‘Mappers’, an unemployed truck driver named Dan Austin, who proved so good at the role he was ‘promoted’ – still unpaid of course – and then ‘sacked’ when he demonstrated how easy it was to plant a false listing.

That weakness in Google’s system shows how crowdsourced services can be subject to abuse and how volunteers themselves are abused by companies taking advantage of ‘free’ labour.

Another weakness illustrated in the Locksmith story is the collateral damage of the ‘fail-fast’ mentality where features are released without the developers really understanding the consequences. The cost of failure may be felt by innocent parties more than the company that’s ‘failed’, as Search Engine Land flagged in its 2009 article.

Google has continued to release features into local that are open to abuse. Google has used its release early and iterate tactic to gain market share at the expense of more circumspect competitors and on the fragile incomes of small businesses.

The continued failure of Google’s local business service remains frustrating for small businesses, having destroyed the Yellow Pages and local newspaper advertising models most neighbourhood services have few places to advertise. While Google and the other internet giants remain focused on other matters, local business search remains a great opportunity for a smart entrepreneur.

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Splitting two former internet giants

The results of eBay and PayPal show how combining the two internet companies was a folly

Just how mismatched PayPal and eBay were is now becoming apparent since the two companies separated last year.

Yesterday, PayPal beat the street with 23 percent growth in its payment figures along with an additional six million new users. The company’s stocks rose 17% following the news.

For eBay’s investors the news wasn’t so good with the company reporting no increase in US sales over the key Christmas buying quarter despite the National Retail Federation reporting a nine percent gain for the entire industry.

One of the main criticisms of eBay being part of PayPal was that there were no reasons for the two companies to be joined and so it is proving now they have gone back to separate entities.

For eBay, it’s hard not think that the opportunity has passed with the market moving on from the days of households selling their unwanted items to e-commerce now being a major industry dominated by traditional chains and, most menacingly, Amazon.

While PayPal is travelling better its business is still under great threat from other payment platforms, particularly while much of its revenue is still locked into desktop software. Shifting to more API and mobile based streams is going to be essential for the company wanting to compete in a very changed marketplace.

The failed PayPal-eBay venture will go down as one of the great missed opportunities of the first Dot Com wave as both companies were distracted from growing while the industry evolved over the last decade. No doubt some of today’s unicorns will suffer the same fate as they respond to a changing marketplace.

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Bringing the Internet to the masses

In India and Myanmar we may be seeing the effects of the internet on developing economies

For the developing world, broadband and mobile communications are helping

In Myanmar, the opening of the economy has meant accessible telecommunications for the nation’s farmers reports The Atlantic.

At the same time, Indian Railway’s Telecommunications arm RailTel is opening its fibre network to the public, starting with Wi-Fi at major stations.

What is notable in both cases is the role of Facebook. In India, Facebook’s project to offer free broadband access across the nation is meeting some resistance and it’s probably no coincidence Indian Railway’s WiFi project is being run as partnership with Google.

In Myanmar on the other hand, Facebook and Snapchat are the go to destination for rural communities, it will be interesting to watch how this plays out as farmers start to use the social media service for price discovery and finding new markets – as Tencent Chairman SY Lau last year claimed was happening with Chinese communities.

One of the promises of making the Internet available to the general public was that it would enable the world to become connected, thirty years later we may be seeing the results.

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Anatomy of an internet exploit

The Angler exploit tells us much about the challenges of internet security

As one does on a weekend, I’m working my way through the 2016 Cisco Security Report.

There are plenty of insights on online security trends which I’ll cover in tomorrow’s blog post but one aspect that sticks out in the report is the case study on the Angler Exploit which takes advantage of hacked domain registrar accounts to create new domain names to serve phishing pages, ransomware sites and malicious advertisements.

Dealing with these sites is a major problem for network administrators and Cisco claims many of the domains registered haven’t yet been used by online criminals.

The Angler exploit shows just how complex internet security has become. The issue of trust is a complex thing and certainly no-one can trust every domain we see. That there are thousands of ‘disposable’ domains available to scammers only makes things more difficult for the average user.

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Discrediting the dark web

The Dark Web is in decline after the Silk Road was broken up

The Libertarian dream of a free trade zone out of reach of authorities on the Dark Web has come to an end reports Wired.

Ironically it’s not the authorities that have discredited these sites but the untrustworthiness of the various contraband services’ operators that have doomed these illicit marketplaces.

While there’s still potential for these dark web markets to evolve into something more robust their current failure shows that radically changing existing institutions and systems is rarely happens quickly and without cost, as those with stolen Bitcoins are learning.

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Cutting the broadband cable

The latest Pew Internet survey shows America’s changing attitude to broadband

It appears the penetration of home broadband has peaked in the United States report the Pew Research Centre.

Since the organisation’s last home broadband survey in 2013, the proportion of adults living in a household with a fixed high speed connection has fallen from 70% to 67% while those relying solely on a smartphone connection has gone from 8 to 13 percent.

This also coincides with 15% of respondents reporting that they’ve cancelled cable or satellite TV subscriptions as they can now get the content they want from the internet. It’s clear the shift away from broadcast is now firmly on.

One of the jarring notes from the Pew survey is the digital divide developing with nearly half those without a home broadband connection citing cost, either of the Internet service or that of a computer, being the main barrier to going online.

According to Pew, Americans are acutely aware of the problems of not having broadband with two-thirds of those surveyed believing not having a home high-speed internet connection is a major disadvantage to finding a job.

The Pew survey shows how attitudes to Internet accessibility is changing, increasingly we’re seeing it as an essential like power and the telephone. Increasingly access to broadband is going to be a political issue.

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