Tag: google

  • Fighting in the sandbox

    Fighting in the sandbox

    The current spat between Microsoft and Google over the Windows Phone YouTube app illustrates the value, and hindrance, of the internet’s walled gardens.

    Google’s locking Microsoft Phone users out of YouTube shows the strength of these online empires and when coupled with control of the mobile phone platforms, as Google has with Android, it makes it hard for outsiders to compete.

    In one respect, this is corporate karma coming back to bite Microsoft who ruthessly exploited their market position with Windows, MS-DOS and Office through the 1990s and early 2000s.

    That doesn’t change the problems facing Microsoft Windows Phone users who want the same access to internet services enjoyed by Android and iPhone owners.

    Being locked out of a service because of the product you choose to use is in many ways the antithesis of the internet and challenges the underpinnings of the online economy.

    All internet and mobile phone users need to watch how this spat between Microsoft and Google develops, captive markets aren’t good for anyone.

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  • Google and Microsoft show how online business is changing

    Google and Microsoft show how online business is changing

    Both Microsoft and Google yesterday reported their second quarter earnings for 2013 and both missed the targets expected analysts. Does this really mean anything?

    Microsoft’s earnings were particularly notable as they included a $900 million dollar write off on Surface RT inventories, this almost certainly means a key part of the company’s tablet strategy has failed.

    What’s striking in Microsoft’s earnings report is the terrible performance of the Windows Division which saw sales increase 10% year-on-year to 4.4 billion dollars, but earnings collapse by over 50%. Excluding the Surface RT write off, the division would still have seen a ten percent fall.

    The company’s statement emphasised how the division is struggling with increasing costs.

    Windows Division operating income decreased $1.3 billion, primarily due to higher cost of revenue and sales and marketing expenses, offset in part by revenue growth. Cost of revenue increased $1.2 billion primarily reflecting product costs associated with Surface and Windows 8, including the charge for Surface RT inventory adjustments of approximately $900 million. Sales and marketing expenses increased $344 million, reflecting advertising costs associated with Windows 8 and Surface.

    At Google, the company’s 2nd Quarter report show trend is still upwards but the core business of online advertising is showing some cracks as the total number of paid clicks grows, but the value of each falls. At the same time traffic aquisition costs are rising at the same rate as revenues.

    This could indicate that advertisers’ appetite for online links is fading. For smaller businesses, the cost of adwords campaigns has been escalating to the point where the old days of newspaper classifieds and Yellow Pages listings start to look cheap.

    Couple the cost of advertising with the inevitable ‘ad blindness’ that web surfers have developed and a worrying trend for Google starts to appear. Overall Google’s net profit margin was 26%, down from 31% a year earlier.

    While both companies remain insanely profitable – Google earned $14 billion this quarter and Microsoft $6 billion – both businesses are showing stresses as their markets evolve. It proves no business can afford to be complacent in these times.

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  • Politics, business and leadership

    Politics, business and leadership

    I’ve covered the New York Times’ interview with Google’s senior vice president of people operations, Laszlo Bock previously in describing what the business has learned from its scientific method of hiring people.

    One striking aspect of that story that deserves further discussion is Bock’s thoughts on leadership;

    We found that, for leaders, it’s important that people know you are consistent and fair in how you think about making decisions and that there’s an element of predictability. If a leader is consistent, people on their teams experience tremendous freedom, because then they know that within certain parameters, they can do whatever they want. If your manager is all over the place, you’re never going to know what you can do, and you’re going to experience it as very restrictive.

    This is something that applies in all walks of life — whether you’re coaching a kids’ football team, running a corporation or leading a nation.

    Sadly in many of these fields we’re lacking the consistent leadership Laszlo Bock describes. That could turn out to be one of the greatest challenges for the 21st Century.

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  • Google’s simple recipe for management accountability

    Google’s simple recipe for management accountability

    One of the big challenges for larger organisations is giving managers the feedback they need to do their jobs properly. The New York Times interview with senior vice president of people operations at Google, Laszlo Bock, covers some interesting aspects of how accountability in the workplace helps executives.

    Google surveys its staff twice a year on how they think their managers are performing in a Upward Feedback Survey that pulls together between twelve and eighteen different factors which the company then uses to measure how their leaders are performing.

    That bottom-up, data driven approach has proved to be successful as Bock told the New York Times.

    We’ve actually made it harder to be a bad manager. If you go back to somebody and say, “Look, you’re an eighth-percentile people manager at Google. This is what people say.” They might say, “Well, you know, I’m actually better than that.” And then I’ll say, “That’s how you feel. But these are the facts that people are reporting about how they experience you.”

    You don’t actually have to do that much more. Because for most people, just knowing that information causes them to change their conduct. One of the applications of Big Data is giving people the facts, and getting them to understand that their own decision-making is not perfect. And that in itself causes them to change their behavior.

    Accountability matters – who’d have thought?

    The other thing that Bock and Google’s HR team have learned from their measuring management performance is just how effective consistency can be.

    We found that, for leaders, it’s important that people know you are consistent and fair in how you think about making decisions and that there’s an element of predictability. If a leader is consistent, people on their teams experience tremendous freedom, because then they know that within certain parameters, they can do whatever they want. If your manager is all over the place, you’re never going to know what you can do, and you’re going to experience it as very restrictive.

    Sometimes we make things too complex – and Google’s experience with managers shows that simple accountability and consistency are far more effective than complicated KPIs.

    Image by ulrik at sxc.hu

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  • Google and the workplace

    Google and the workplace

    Over the years Google has attracted attention for its employment practices, particularly for its quirky interview questions which challenged many a genius.

    It turns out those brainteasers have proved to be less than effective, as has the interminable interview process that saw job candidates endure dozens of meetings before being offered a role at the company.

    A recent New York Times interview with Laszlo Bock, senior vice president of people operations at Google, discusses some of the company’s employment experiences along with some of the ways the organisation manages staff.

    What’s notable is Bock’s findings on Google’s gruelling interview process with its brain teaser questions;

    We looked at tens of thousands of interviews, and everyone who had done the interviews and what they scored the candidate, and how that person ultimately performed in their job. We found zero relationship.

    The New York Times interview is particularly interesting as it reveals much of Google’s legendary employment criteria – particularly that of hiring only graduates with high university marks – turned out to be effectively useless.

    Most telling though is what Bock found about managers and leadership;

    We’ve actually made it harder to be a bad manager. If you go back to somebody and say, “Look, you’re an eighth-percentile people manager at Google. This is what people say.” They might say, “Well, you know, I’m actually better than that.” And then I’ll say, “That’s how you feel. But these are the facts that people are reporting about how they experience you.”

    You don’t actually have to do that much more. Because for most people, just knowing that information causes them to change their conduct.

    Who would have thought that accountability would make people behave better and more effectively?

    Despite Google’s learning on hiring and management, things still go wrong. Business Insider’s Nicholas Carson has a wonderful story on the difficulties at restaurant review site Zagats which was taken over by the search engine giant and absorbed into their maps and geolocation divison.

    The problems at Zagats though owe more to a cultural mismatch, as Carson writes;

    It’s about the collision between the wealthy dream world of the technology industry and the scratch-and-claw meager existence of freelance writers.

    One of the notable things about the current dot com boom is the contempt technologists and entrepreneurs have for content creators.
    In the Silicon Valley view of the world founders and coders deserve to be generously paid but artists, musicians and writers should be thankful for the exposure they get and the odd dime thrown their way.
    Google’s struggles with Zagats also exposes another problem with the tech industry’s hiring practices – that of ‘permatemps’ who never get on the payroll and have few benefits and no security. For years this was a problem at Microsoft and it remains a common practice today.
    The story of Google’s evolution in hiring practices and HR policies is something all managers should read as it describes the risks of relying on gut feelings and the importance of workplace accountability.

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