google | Paul Wallbank - Communications Professional

Facebook’s and Google’s enlightened self interest

Facebook and Google both put their users first in their latest updates. It’s something other business should consider.

Over the last few weeks much has been written about Google’s mobile search update that went live on Wednesday, some said it would be the death of small business on the internet while others claimed it would be the end of corporates online.

While all the focus has been on Google’s search changes Facebook quietly made a change that will probably be more vexing for many businesses.

Both Facebook and Google are struggling with making their services more useful for users, with the Google changes the intention is to make search on mobile devices more useful in giving preference to websites that work on smaller screens.

In a post on Google’s webmaster blog, Developer Programs Tech Lead Maile Ohye answered the basic questions about the search engine changes which dispelled much of the hysteria and myths about the update. The main point of Ohye’s post is that Google want to show users useful information.

Facebook have a similar problem, they have to balance the often competing interests of their users and advertisers with the main aim being keeping visitors on their site for as long as possible.

The objective of keeping users engaged is the reason for a series of tweaks Facebook announced this week that change the newsfeed visitors see.

The goal of News Feed is to show you the content that matters to you. This means we need to give you the right mix of updates from friends and public figures, publishers, businesses and community organizations you are connected to. This balance is different for everyone depending on what people are most interested in learning about every day. As more people and pages are sharing more content, we need to keep improving News Feed to get this balance right.

Facebook are putting their users priorities first in making sure the news feed is interesting and relevant, which the company believes will entice visitors to spend longer on the site and make advertising more attractive.

If it works then it’s a win for Facebook, their users and those who pay to advertise on the site. Again though, the losers are the companies and brands not advertising who thought they could get views by the quality of their content.

Unless the content is very good, those companies not paying Facebook are in for more disappointment as their reach collapses even further than its current pathetic rates.

Google’s change too is something that puts users first; rather than dumping mobile web surfers onto an unreadable page, they are making sure people get to sites that are useful.

In many ways Google is only encouraging what has been best practice for at least five years, that every site should work equally well on mobile devices as they do on desktop computers.

What Facebook and Google are showing us is the value of putting users’ needs first. If your guests are happy then your business model has a much better chance of succeeding, regardless of who the eventual customer is.

Making business more user friendly should be a priority for all companies in a competitive world.

Dropbox and Microsoft’s alliance of convenience

The Microsoft alliance with Dropbox puts Google at a disadvantage and shows how alliances are evolving on the cloud

Today’s announcement that Dropbox and Microsoft have deepened their alliance throws a further challenge out to Google’s ambitions to take a slice of the office productivity market while further reducing profits for the once dominant software giant.

Dropbox’s new deal with Microsoft give of users the ability to edit Office documents natively in their browser. It’s an advanced version of the feature that Google have offered with their Docs service for some years.

A notable aspect of this deal is how Dropbox have been prepared to partner with Microsoft – a decade ago smaller and relatively new companies were suspicious of working with Microsoft given the giant’s well deserved reputation for ruthless behaviour.

Equally Microsoft teaming with more agile newcomers rather than trying to bully them out of business is a distinct change from the company’s peak days under Bill Gates.

The real target of the alliance though is Google and the Dropbox-Microsoft deal makes Office 365 a far more formidable offering as a cloud service.

For Google the deal means they have to add more features to their Docs service to counter a more competitive Microsoft offering. It also shows the marketplace is shifting as alliances of convenience are forming.

How Google could be about to disrupt the telco industry

Is Google about to disrupt the global telecommunications industry?

Google are in talks with Hutchison Whampoa for the Hong Kong based conglomerate to provide global roaming for Google’s proposed mobile phone network reports the London Telegraph.

Hutchison, who recently agreed to buy UK operator O2 for £10.2 billion from Spain’s Telefonica, are one of the quiet global telecommunications players with services in East Asia, Europe and Australia. An international roaming agreement with Hutchison would give Google a substantial global headstart.

While the mobile phone angle is the obvious service for a global cellular network, another attraction for both Google and Hutchison is the Internet of Things. Being able to offer a worldwide machine to machine (M2M) data service fits very well into Google’s aspirations with products like Nest.

For the mobile phone operators, the prospect of Google entering their market can’t be comforting with the search engine giant having three times the stock market capitalisation of the world’s biggest telco, China Mobile.

It may well be however communications companies have little choice as the software companies start to take the telcos’ profits just as they have done with many other industries.

Should the story be true about Hutchison and Google being in talks it will probably be the start of a massive shift in the global communications industry and one that will see many national champions threatened.

Google’s global network ambitions could change the future of the Internet of Things industry.

User generated content starts getting expensive

As YouTube faces competition we may be past the glory days of free user generated content

Ten years after being founded YouTube is facing competition as new sites are being setup or existing video services start aggressively courting creators reports Variety magazine.

YouTube is the poster child of the user generated content movement where it’s largely unpaid contributors who generate the material that people watch on the service.

This model works fine as long as it’s amateur cat videos people are watching but when as it becomes a big business the justification for not paying content creators becomes flimsy.

Google’s management recognised this some time back and started rolling out its own partnerships with creators to add more income than the often tiny advertising revenues most earn.

Now it turns out those popular video bloggers are being tempted over to other sites and for YouTube the cost of premium content is about to get expensive.

For the Silicon Valley businesses is requires a change of culture as they simply don’t like paying creators; in the tech startup view of the world it’s only coders, founders and few lucky support staff who get the rewards while the bulk of people who add value to the product are treated as commodity ingredients.

For a period it was difficult for media startups to get funding unless they had a free source of user generated content, as Buzzfeed founder Jonah Peretti revealed in 2012.

Tech investors prefer pure platform companies because you can just focus on the tech, have the users produce the content for free, and scale the business globally without having to hire many people.

The movie studios and record companies on the other hand have a culture of paying their artists and production staff, despite their reputation of exploitation and stinginess.

It may well be that we’re past the golden era of user generated content and the free lunch for the sites that depend upon free materials.

If it is, then standards on sites like YouTube can only improve even at the costs of Google’s profit.

Where are all the salesfolks’ yachts?

Thinner margins for cloud services mean no more fat commissions for IT salespeople

“All the pieces are now in place,” President of Google At Work, Amit Singh, tells Business Insider in an interview about how the company’s enterprise offerings are competing in the marketplace and, perhaps most critically, undermining Microsoft’s Office products.

While Singh may be confident about Google’s products, the company’s earnings from its cloud services are trivial compared to its competition.

‘Other’ categories

Google don’t break out their income from their apps services, instead lumping it into ‘other’ revenues which also includes Google Play, Apps Engine and all their other non-search products. In the last quarter that was $1.9 billion, barely 10% of the organisation’s entire income.

Microsoft also obscure their office software earnings having split its products into the Devices and Consumer licensing division and Commercial Licensing however the last quarter Office’s income was reported it was a seven billion dollar a quarter business.

While Microsoft’s income from the various forms of Office will have shrunk in the shift onto the cloud, it’s still safe to say it still dwarfs Google’s income from Apps.

Google’s ‘other’ category is also a general bucket of products that is competing against Microsoft Office, Amazon Web Services and Apple iTunes – with a combined total of 17 billion dollars, ten times Google’s quarterly income.

Slim pickings

Another problem for Google are the margins in its cloud services, as Microsoft have found the profits from online products are very slim compared to those from boxed software or advertising. For Google to continue its impressive profits, it’s going to have to find something more lucrative than cloud office software.

These slimmer margins also have another effect on the business model as Singh would know well from this days of working at Oracle.

Oracle, like many of the 1980s and 90s software companies, boasted extraordinary margins. This allowed them to pay huge commissions to salespeople, engineers and executives. A single enterprise sale for an Oracle, IBM or SAP salesdroid could pay for a decade of private school fees or a very nice yacht.

At Google and its partners the idea of being able to pay off the mortgage with the commissions from a single corporate deal raises a hollow laugh; there simply isn’t the money to pay for armies of hungry salesfolk.

Those thin margins also mean a change to Google and Microsoft’s business models. Shareholders expecting big profits from cloud services may need to be looking elsewhere.

Samsung needs a win with the Galaxy 6 smartphone

Samsung are staking a lot on their new Galaxy 6 smartphone

Having seen its dominance of the smartphone market eroded by a resurgent Apple and a range of upstart Chinese vendors, Samsung has announced it will launch its Galaxy 6 smartphone on March 1 reports the Sammobile website.

The new phone is reported to boast a curved screen measuring somewhere between 5.1 and 5.3-inches a fingerprint sensor and a 20 mega-pixel camera, which compares well to the iPhone 6’s eight mega-pixel camera.

While the proposed specs are impressive, the company has a challenge ahead as consulting firm IDC reported its smartphone shipments dropped 11% year on year last quarter in an market that grew by quarter.

Top Five Smartphone Vendors, Shipments, Market Share and Year-Over-Year Growth, Q4 2014 Preliminary Data (Units in Millions) source IDC Research

Vendor	4Q14 Shipment Volumes	4Q14 Market Share	4Q13 Shipment Volumes	4Q13 Market Share	Year-Over-Year Change
1. Samsung	75.1	20.01%	84.4	28.83%	-11.0%
2. Apple	74.5	19.85%	51.0	17.43%	46.0%
3. *Lenovo	24.7	6.59%	13.9	4.75%	77.9%
4. Huawei	23.5	6.25%	16.6	5.66%	41.7%
5. Xiaomi	16.6	4.42%	5.9	2.03%	178.6%
Others	160.9	42.9%	120.9	41.31%	33.1%
Total	375.2	100.0%	292.7	100.0%	28.2%

*Lenovo + Motorola	24.7	6.6%	19.5	6.7%	26.4%

While the numbers for the Chinese manufacturers are impressive, Apple’s shipments should also worry Samsung given the two companies are fighting for the top end consumers in the European and North America markets.

For Samsung its smartphones form a central part of its Internet of Things strategy so the success of the Galaxy 6 is critical to the company’s future plans, particularly given the lukewarm reception to the Tizen based Z1 phone on the Indian market last month.

Samsung’s China Crisis

With Samsung struggling with both its high end Android smartphones and its lower priced Tizen devices as Chinese manufacturers like Lenovo, Xiaomi and Huawei steal market share, the company desperately needs to hit the mark with the Galaxy 6.

Google as well has a stake in Samsung’s success as the Chinese manufacturers are increasingly turning to open source versions of Android for their smartphone systems. A flagship device for Android to counter the iPhone 6 is desperately needed to keep consumer and developer interest in the Google Play store and for Google’s consumer IoT ambitions.

The stakes are high for both Google and Samsung, the South Korean giant getting a mis-step with the Galaxy 6 could see it following the faded fortunes of its Japanese competitors.

Advertising and the mobile, digital consumer

Bigger smartphones are redefining media consumption, how does Google and traditional media companies respond to this?

Last week Google and Facebook announced their quarterly results with the search engine giant continuing its worrying slowing of advertising revenue. The respective changes of the two online services show how online advertising is changing.

While Google slows, Facebook is showing accelerating growth for its advertising, driven mainly by mobile users, illustrating the shift in internet usage from desktops to smartphones.

In its 2014 New Digital Consumer report, market research company Nielsen observed that US consumers in 2013 were spending more time accessing the internet on their smartphones than on personal computers; PC use had fallen seven percent to 27 hours a week while mobile use had surged 40% in 2013 to 34 hours.

Television still remained dominant with the combination of live and time shifted TV viewing making up 144 hours of the average American’s week, although it did fall slightly.

Those figures are a year out of date and there’s no doubt the numbers have accelerated since then. One of Tim Cook’s triumphs at Apple has been the release of the iPhone 6 and the larger form factors in the current generation of smartphones is a response to consumers’ demand to watch video on their devices.

Bigger Android, Windows and Apple smartphones will only seen even more people using their mobiles to watch video and surf the web.

Which puts Google’s predicament in sharp focus; we are definitely in the post-PC world yet their revenue still overwhelmingly comes in from desktop users while Facebook’s is increasingly coming from mobile consumers.

A strength Google has is that its revenues still dwarf the social media upstart’s – Google’s income is currently six times greater and its gross profit margin doubles that of Facebook’s – giving it plenty of leeway to change.

The question is where do the new revenues come from? Probably the biggest opportunity Google missed was in replacing the Yellow Pages franchises with their own local small business listings with Google Your Business (aka Google Place and Google Plus for Business) being lost in a confused and bureaucratic corporate strategy.

Compounding the problem for Google in the small business space is Apple’s entry and while Apple Maps is no contender against Google’s far superior product, an integration with Apple Pay would give Apple far more rich data to enhance listings with – not to mention more of an incentive for merchants to sign up.

With the changing web, Google are going to have to change as well. If advertising is going to remain the mainstay of their business then the company needs to find a way to capture smartphone users.

It could be worse however, a report from consulting firm Strategy Analytics estimates print media’s share of advertising revenue fell another seven percent this year. Time is running out for newspapers.

While print is ailing, the advertising battleground is mobile digital although TV still dwarfs the market. How this evolves in the next five years will define the next generation of media tycoons.

Google’s Microsoft problem

Google’s key revenue source is slowing, where do they go next to avoid falling into Microsoft’s trap?

The one factor that saw Microsoft become the biggest computer software company was the rise of the personal computer, similarly the decline of the PC has seen Microsoft stagnate.

One of the companies that benefited from the forces that pushed Microsoft into stagnation was Google and now it appears they could be suffering the same fate.

Yesterday Google released their quarterly results which showed the rate of growth in online advertising is slowing, which is a worry for the company as internet marketing accounts for 90% of the firm’s income.

Like Microsoft, Google has to diversify. Whether it’s the internet of things, smartphones, apps, driverless cars or something else remains to be seen but the pressure is building. Should the shift to mobile or other advertising mediums accelerate, Google could be looking at a declining market and the same problems as Microsoft.

Daily links: The IoT goes to sea, building the innovation state and Boko Haram

The IoT goes to sea, building the innovation state and Boko Haram’s murderous rampage

The scale of the carnage Boko Haram has inflicted on remote parts of Nigeria is becoming more apparent every day and satellite imagery shows just how much damage the insurgent group is doing to communities in its territories.

Closer to home, Google’s Project ARA gets another outing, we look at how economies can deal with the jobless future, what a terrible aunt Ayn Rand was and how the IoT is going to sea.

The IoT goes to sea

At the CES show two weeks ago Ericsson launched their new maritime cloud service that promises to connect ocean going ships to the same services available on land

Google unveils more about Project Ara

Project Ara is Google’s attempt to reinvent the smartphone, the project came a little closer to completion with the company showing off some of its progress

Creating the innovation state

What do we do in a world where most people’s jobs have gone? Create an innovation state rather than a welfare state could be an answer suggests one economist.

The extent of Boko Haram’s massacres

Words fail to describe the horrors being visited on the people of Nigeria.

Ayn Rand was a terrible Aunty

What happened when one of Ayn Rand’s nieces asked aunty for a $25 loan?

Daily links – the future of Google, Silicon Valley’s name and how startups die

The future of Goodle,,how the name ‘Silicon Valley’ came about, why solar power is getting cheaper and how some startups die.

On many measures Google are in trouble, but one analyst thinks we’re panicking and his view is the lead of today’s links of the day. We also look at how the name ‘Silicon Valley’ came about, why solar power is getting cheaper and how some startups die.

Does Google’s future lie in R&D?

“Google is down but it’s not out” is the warning of this analyst’s report on the company’s earnings and strategy. Interestingly Google outspends Apple by $4bn a year on research and development, but both of them are dwarfed by Microsoft’s spending, which indicates R&D investment doesn’t guarantee success.

The origins of the name ‘Silicon Valley’

Last Sunday marked the 44th anniversary of the first time the label ‘Silicon Valley’ appeared in print. The US Computer History Museum looks at how the name came about and no-one will be surprised it was a marketing person who coined it.

Why does solar power keep getting cheaper

A few years ago putting solar cells on a building was expensive, now in many parts of the world the price of PV panels is becoming competitive with mains power. Vox Magazine looks at the factors driving the price drops and finds that economies of scale are now the main factor affecting the falling cost of installed solar power systems.

RIP Urbanspoon

One of the earliest food review platforms was Urbanspoon which was founded on the basis it would only grow as a bootstrapped company. In 2009 the founders sold out to a larger company who have now sold it onto an Indian business who is going to shut the name down.

Startups who’ve fallen off the map

Business Insider lists 17 formerly hot businesses who’ve fallen out of the public view this year, while some of them haven’t disappeared, it’s a list that reminds us that most new businesses, particularly tech startups, fail.

Daily links

Apple extends its lead over Android in smartphone activations, a teenager’s view on social media and Google’s declining market share.

Today’s links are somewhat more upbeat; starting with Apple extending its lead over Android in smartphone activations, a teenager’s view on social media and Google’s declining market share.

Apple takes the lead in smartphone activations

In their regular survey of mobile phone activations, research company Kantor found that Apple have taken the lead back from Android phones. The Kantar Worldpanel ComTech global consumer panel monitors the brands of phones being connected through selected apps to give them an idea of what’s going on in the smartphone marketplace.

While not an absolute numbers, and one that was inflated by the new range of Apple iPhones released late in the year, it’s clear Apple are by no means out for the count when it comes to the smartphone market.

What teenagers think of social media

I’m not sure how accurate or scientific this story is, but it illustrates how complex the social media industry is and how dangerous assumptions are with what age groups use new media channels for.

How boring can driverless cars be?

Another story points out driverless cars are actually quite boring to ride in. Maybe we’ll all catch the train insead.

Google loses market share

Since signing an agreement with Firefox to be the default search engine provider, Yahoo! sees its share of the marketplace spike upwards. Should Google be worried?

So you thought a tech job was safe?

Document service Evernote cuts jobs proving that even a job in the hottest parts of the tech sector isn’t safe. Notable in this story is the concentration of employment in two locations which shows Silicon Valley isn’t keen on remote working at all.

Links of the day: Connected cars and fast trains

CES, Connected cars, fast trains and copyright laws are today’s links

The Consumer Electronics Show in Las Vegas kicks off today with thousands of product announcements at what is by far the biggest technology convention in the world. No doubt news from the show is going to dominate the tech media for the rest of the week.

One of the biggest fields for tech vendors at CES will be Internet of Things with connected cars being in the spotlight with both BMW and General Motors leading the way.

GM unveil their connected car of the future

For some years GM have offered a connected car service with their OneStar system. At this year’s CES they’re showing how they intend to extend the service with more integrated social and navigation services.

Driving the crashless car

While we fixate on the driverless car of the future, the next few years are going to see the technologies be incrementally introduced into our motor vehicles. A good example of this is BMW’s Active Assist that CNET writer Wayne Cunningham claims he could not crash.

The story points out Active Assist isn’t affordable in today’s cars but undoubtedly much of this technology will be standard in many automobiles by the end of the decade.

California starts work on its high speed railway

Cars aren’t the only thing in the news with California turning the first soil in its Los Angeles to San Francisco high speed railway.

This troubled project has been years in the making and it’s not expected to be completed until the end of the next decade at a cost of over 60 billion dollars. An interesting aspect in the story is how communities in California’s Central Valley region are pinning their hopes of an economic resurgence from the project.

Google takedown notices explode

While cars and trains are being reinvented, the entertainment industry is still struggling with its disruption. Torrent freak reports Google is being overwhelmed with movie industry take downs notices.

As the story suggests, this campaign is hurting Google’s relationship with the movie industry.