LIVE from TechCrunch Disrupt: John Doerr, Mark Pincus, Bing Gordon

TechCrunch Disrupt, the tech blog’s annual conference in San Francisco, is underway. I’ll liveblog the highlights of this first panel of luminaries, which is looking at Building Internet Treasures. FYI, John Doerr is a partner at Kleiner Perkins, as is Bing Gordon (former longtime creative guy at Electronic Arts), and Mark Pincus is CEO of social game giant Zynga.

Actually, Doerr is soliciting audience questions for everyone, and then they presumably will address them. They’re all over the place–where do you look for new ideas, what about micropayments, the wisdom of developing on a closed platform (in other words, Facebook), is advertising the revenue model for the Internet, what’s the future of companies like Groupon, what matters most for the future of the Internet, what is the future of social games, is the intelligent Web real or a myth, is there a future for Flash vs. HTML5, Internet disruption in health care.

Pincus starts out. 33 million people as of yesterday played a Zynga game. 1200 full-time people. Won’t disclose revenues.

Pincus says the best companies are creating products and services that we now can’t imagine living without–Amazon, Google, etc. That’s what an Internet “treasure” is. He says Zynga measures its users’ “net promotion score,” which has to do with how much they spread the word of their game experiences to others, if I understand correctly.

Doerr says he’s getting a different sense of games culture today–more analytical than creative. “We’re data junkies. We measure everything,” he says, and Zynga has invested in big data warehouses–more than a petabyte of data a day. “We’re adding a thousand servers a week.” Yikes.

But, he adds, design and creativity still really matters.

Doerr: What is disruptive about social games? Gordon: Four big disruptions from the Internet: Social, analytics, APIable Internet (app economy) and new payment methods. What’s disruptive about social games is that they combine all four in one. Pincus: In summer 2007, I was here for the Facebook apps platform launch (so was I). Games and fun were not a big macro on the Internet yet. The disruptive thing for me was not apps and platforms, but that they took down the barriers to entry to playing games–you could now design games that three clicks in, you know how to play them.

Doerr: Is the social Web going to create other great possibilities beyond games? Pincus: We are going through the biggest change in Internet consumer behavior since using the browser. Somebody will become the travel icon on my phone–and be that throughout the Web as a result. Health is waiting for someone to turn it into a consumer product that’s useful.

Turns out John Doerr’s daughter Mary, in high school when meeting Pincus along with her dad and Gordon to assess whether Kleiner would invest in Zynga, sealed the deal by saying, “He’s cool.”

Pincus: Wanted to keep control of the company to avoid “death by a thousand compromises.”

Doerr: Zynga has the notion that every employee is a CEO. That can’t be right, can it? Pincus: We sure try. People have to define what they’re the CEO of, and how they’re going to kill it (that goal).

Doerr: Is it the app economy? Pincus: Every consumer behavior on the Web is going to become an app and a new kind of industry. Consumers are going to expect the way they interact with a service is an app.

Will there be a revenue stream besides advertising? Pincus: I’m a big believer in the user-pay economy. Just as offline, ads will eventually be a small part of the overall Internet economy. Advertising [online] is only a $50 billion industry–smaller than the auto industry.

Pincus: We’re still far far away from being an Internet treasure. People can still imagine life without playing our games. Gordon: I don’t know, I was harvesting wheat at 6:15 this morning. Pincus: We have to make the daily grind have more meaning. It’s a big challenge.

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How Long Will Social Games Keep Us Hooked?

Not long after I started my farm (pictured above) on FarmVille, the leading social game on Facebook, I got a message from a friend. He was relaying a question from his wife, who had seen countless semiautomated posts to my Facebook Wall chronicling my progress in the game. Her query: “What’s the matter with him?”

It wasn’t the only such reaction I got from playing Farmville. I started the game as research to write a story on their rise for Graduate School of Business alumni magazine at Stanford University, where a surprisingly large number of social games founders or managers got degrees. It seems that people either love social games (one friend either is doing a very deep research project on them or needs an intervention) or hate them. But it’s hard to deny that they’re a game apart from most previous online games, because millions of regular people who don’t even know the term “gamer,” let alone touched an Xbox console or joined a World of Warcraft guild, are playing them.

I hope my story explains some of the reasons why, but what I’m uncertain about is how far social games can go. Clearly, Zynga and other social games leaders have found a way to provide entertainment people enjoy–and, let’s not mince words, appeal to people’s addictive nature by adroitly manipulating game mechanics to keep players coming back again and again. As a result, Zynga is raking in big bucks and seems headed for a blockbuster IPO. And games may well support a second big business in virtual currency for Facebook.

Given their undeniable appeal, it seems that social games are here to stay for a good long time. But I also wonder if the slowdown and churn we’ve seen in social games this year indicates a certain weariness on the part of players. I’m afraid I don’t have the addictive gene, so much of the appeal of social games is lost on me (although I would like to reach level 12 in FarmVille so I can plant chile peppers…).

But even people who respond to the rewards of these games can feel like they’re on a treadmill. As a result, social games companies are trying to add more wrinkles to their games to keep users from getting bored. But then, like so many tech companies that have fallen victim to the Innovator’s Dilemma, they may start losing the mass market, for whom the simplicity of social games is key. Only a few companies, I’ll wager, will be able to walk that thin line.

LIVE at Yahoo’s Product Runway

Yahoo’s set to announce a new product strategy shortly at what it’s calling Yahoo Product Runway. I’ll blog the highlights as they come from Blake Irving, EVP and chief products officer ad Raymie Stata, VP and chief technology officer.

And we’re underway, with some observations on Yahoo on Irving’s hundredth day here. Things are great, he says, and what else would he say? Essentially, he elaborates, Yahoo is a killer technology company. Deep connection between labs at Yahoo and the product organization. You’ll see things in the next year or three or five that look different from before–more iterative products, but more unified under Yahoo as a whole.

Yahoo will be something you take with you rather than someplace you go–content, friends, etc. We’re going to be finding a lot of harmony between advertisers and consumers (code for behavioral targeting, I think, which isn’t new, but clearly Yahoo could lead in making targeting more palatable).

Now on to Yahoo’s product vision, a graphic of which looks like part of a periodic table of elements:

* Me, for bringing personal meaning to the Web.

* Ec, for building an ecosystem.

*Si, for creating personal relevance through science and data. 300 million log into Yahoo a month, providing a wealth of data about what those people are doing. Yahoo will start honoring Facebook, Twitter and other IDs.

* Cu, for being where the customer goes. Will see a lot more mobile versions of products, sometimes before Web products. More folks will be typing on glass vs. keyboards before long.

* So, for owning real social relationships on the Web. Social networking is just starting, despite Facebook’s apparent dominance. People still want more control to socialize with lots of small groups of friends.

* En, for “engage and delight.” Best-in-classes news, sports, entertainment, mail, etc.

Now on to products that are being demonstrated here today:

* Mail: Has been re-architected from the ground up, from infrastructure to user interface.

* What’s New page: Twitter integration and other things.

* Search: More visually appealing and with more of an ability to act on the search result. People don’t want to just search, they want answers.

* Lots of Twitter integration, such as the ability to tweet from particular stories on Yahoo.

So we’re going to be moving fast, with more incremental changes to products.

So far, my socks are still on.

Now Stata comes on to tell about the technology underpinnings of all this. Lots of generalities to my ears, but some specifics:

* Relevant, personalized content for consumers. Much deeper than it has been–content optimization on every page, including those of partners such as AT&T. This will produce higher engagement, he says, which is what advertisers want as well.

Yahoo’s services are supported by a cloud infrastructure, a network of data centers of various sizes all over the world, to make the services faster for users anywhere they are.

I think of Yahoo as a big ship, need to maintain powerful engines while swapping some out. But the new engines are now in place.

Now it’s time for questions:

Q: Can you expand on the new search experience? Shashi Seth, who runs this, steps up to explain: We’re going to provide the best guess we can but provide an “accordion” to let people expand on what they really want.

We’re going to need to see the demos outside the conference room, clearly, to judge what Yahoo’s doing on all these products.

Q: On mail, what sort of innovation will we see that goes beyond regular email, which can be inefficient? Irving: Raise the things most important to you on the top (sort of like Google’s Priority Inbox? Sorry…). At its core, Yahoo’s new email service is faster, will incorporate instant messaging as needed.

Q: How are you distinguishing Yahoo search from Bing? And in three years, what will Yahoo be? Seth: On search, Yahoo no longer has to do the backend stuff like crawling and determining relevance. In three years, search won’t look or act anything like what search is today. We’re trying to take the science and tech we used to apply to backend and bring it to the forefront to reimagine what search can be. Nothing specific yet, though–that’s on the come.

Irving: In three years, Yahoo will be a global series of experiences… that are very personalized and targeted. (Uh-oh–sounds a little amorphous again, which is Yahoo’s perennial problem.) I would hope that when you look at us, you’ll say we delivered on that.

Q: Skeptical question asking for specifics, but we don’t get much.

Q: Several of these products now elevate Facebook and Twitter–are you allowing them to drive Yahoo products? Irving: It’s just providing users with what they want to do. But there are holes in what people want to do in social networking. The social networking game isn’t over because we’re doing integration with Facebook and Twitter.

Q: How are you integrating on various platforms like Android, iPhone, Windows, etc.? Irving: We’re a friendly company to do business with, helping companies provide a good Yahoo experience on all the platforms.

Q: What were your misconceptions about Yahoo before you came? Irving: One, I wasn’t sure about the technology company thing (as opposed to a media company that Yahoo kept saying it was). Found that Yahoo at its core is a tech company that finances itself through media/advertising. For another, found that there was in fact a horizontal platform that allows acquired services (such as Flickr and many others) to get off their own platform stack and use Yahoo’s underlying technical resources.

Q: Could you sum that up in a tagline? Irving: I’m in the product team, so no.

And that’s about it.

Update: I think Yahoo might have better off leading with the demos, which were pretty interesting. Yahoo Mail, in beta inside Yahoo but slated to be rolled out to all users this fall, looked fast and clean, and might keep me from my longtime threat to abandon it.

On the advertising front, Yahoo is testing out several new kinds of ads. One, called a Content Mashup, has tabs inside the ad for videos, Twitter, and other custom categories the advertiser can set up and populate with content. Another, called a Digitorial, can run games, videos, polls, and other services inside the ad, all trackable so advertisers know what’s most engaging people. And there’s also an interactive video-in-a-banner ad; when you mouse over the ad, there are links overlaid to other experiences such as games.

And there’s a new search interface coming as well, one that has vertical tabs that let you reach Yahoo content relevant to a particular search result.

LIVE at Google’s Search On Event: Google Instant Debuts

Google‘s much-anticipated event promising to chart out the future of search is about to start, and the auditorium at SF MOMA is packed with press. You can view the event on YouTube. Assuming the wireless network holds up, I’ll liveblog the highlights here. And the anticipation is indeed thick. Google Fellow and search honcho Amit Singhal, sitting in front of me, leans back to tell me, “This is a day you won’t forget.” OK!

Update: Google’s blog post on Google Instant is up now, along with lots more information. To sum up, Google has essentially slashed several seconds off the time it takes to form and type in queries. As you type, Google keeps guessing what your full query is, streaming out new search results with each new letter. And that’s huge. Maybe, as some people have speculated, the rise of Microsoft’s Bing search engine goaded Google into making more and faster improvements in search–or maybe not. But it’s clear, if it weren’t already, that Google isn’t resting on its laurels. And for now, it has set a new bar in search.

Here’s a video intro from Google:

And on to the event: PR director Gabriel Stricker comes on to explain that what Google does is one part art, one part science (well, seems like at least 5 parts science but anyway). Thus the event here at the Museum of Modern Art.

He adds that speed will be a large part of what’s being announced today. And now Marissa Mayer, VP of search products and user experience, comes on. She says Google has just passed 1 billion users a week, making Google one of the most-used services (Internet or not) in the world.

In 2009, Google rolled out more than 500 changes in search. Already this year, more than that.  A few of the improvements:

* Caffeine: 50% fresher results.

*Real-time search, including timeline views and conversation views.

* Spell corrections: They’re now part of the autocomplete function as you type in a query.

* Enhancements to questions and answers.

* Stars in search: the ability to bookmark results for users signed into Google.

* Redesign: In April, Google added a left-hand panel to refine search results.

* And of course fun: first TV commercial, during the Super Bowl.

“We want search to be fun, fast, and interactive.”

And so, today’s announcement… but first Mayer provides a little art history on a Matisse painting at MOMA. Which she points out would have taken days in a library to research in 1935. Today, the Internet provides real-time info, like whether the piece is actually on display at this time.

Mayer says people take about 9 seconds to enter a query, Google takes about 300 milliseconds to deliver it, plus 800 more milliseconds network time, and then people take 15 seconds to select a result. But at some point, we’re up against speed of typing and thinking. The past few months, Google has been attacking this problem. So: Today Google is launching Google Instant, which gives search results as you type and streams those results real-time–apparently like what I saw last night.

The home page looks the same until you start typing. So type “sfm” and you get actual results for SF MOMA. So that obviously has the potential to vastly reduce the query-typing time.

Actually, Mayer says, it’s not “search as you type,” but “search BEFORE you type,” in a sense. “There’s even a psychic element to it,” she adds, anticipating what you might mean. (Sure to freak out privacy advocates.)

Mayer: It means much faster search, much easier search, more ways to explore. Google Instant will be available later today on Chrome, Firefox, Safari, and IE8, rolling out gradually. It will be part of the core Web search experience. Also will roll out in the UK, France, Italy, Germany, Spain and Russia in the next week, if you’re signed into Google.

We think Google Instant will help users save 2 to 5 seconds per query. May not seem like much, but that’s a lot of time, over time. And of course, potentially a lot more Google ads viewed.

Now Joanna Wright, director of product management, and Othar Hansson, senior staff software engineer, come onstage to show the three main features of Google Instant. Wright says to think of the features as gears in a system.

1) Instant results: There’s no need to finish typing or type “enter.” Hansson types one letter, “w” and gets results for weather in San Francisco.

2) Set of predictions: Hansson types in “the gi” on the way to typing “the girl with the dragon tattoo,” and links for the movie and book title appear. This is an example of the idea of “search before you type.”

3) Scroll to search: Hansson starts typing “yose” and gets results for Yosemite, and can quickly scroll the suggestions in the drop-down box below the search box, and as he scrolls, those results come up instantly, so you don’t have to leave the original query and can quickly scan a lot of relevant results. For example, he starts typing in “Addams Family,” then sees that the musical is what he’s interested in, and pressing tab adds that word. Then he wants tickets, so he types “t” and then a suggested result for “Addams Family musical tickets” appears instantly.

Wright: Google works seamlessly as it always has. All it does it speed things up. So if you know how to do Google search, you know how to do Google Instant . (This is key, since too many newfangled search features require changing behavior, taking extra steps, and the vast majority of people just don’t do it. Google has been bemoaning this for years, but here it has found at least one way for people to refine results with virtually no added effort.)

And now a sneak preview of something coming out this fall: Hansson: We’re working hard to get this on mobile. Because typing on a phone is slower than on a keyboard, Google Instant should be even more useful on mobile devices. This will be available later this fall.

Ben Gomes, a Google distinguished engineer, comes on to explain the technology behind it. He says some people within Google said it would be too expensive, or too complex. But upper management said, “We have to do it.” Three challenges: user interface design, search as an application, and efficiency and scale.

On the user interface: Actually, one Google engineer demoed this years ago, calling it “incremental Google search,” but Google wasn’t fast enough to handle it. Hansson says showing early incremental results was actually distracting at first with test users, but says Google eventually got the timing right to reduce that distraction factor.

On search as an application: Had to optimize all kinds of things, most of them way over users’ heads.

On efficiency and scale: Gomes: How do we possibly do this without melting down our data centers? Several optimizations, says Hansson, in the initial prototype, in prioritizing searches, in caching (storage) of results, and many more they’re not talking about.

Gomes thanks the team that did this, showing a slide with the photos of more than 200 people.

Summing up, Gomes says Google Instant “makes search much more fun, fluid, and interactive,” as well as faster. Mayer calls it “search at the speed of thought.” Now she talks about the Google Instant team was inspired by Bob Dylan, showing a video to Dylan’s Subterranean Homesick Blues. OK, I think it’s time for questions…. And indeed it is, with the principals joined by Google cofounder Sergey Brin and Udi Manber, the VP of engineering responsible for core search.

There are numbers counting on two screens at the sides of the auditorium, clicking upward by 11 each second–the number of hours saved per second by Instant, according to Google’s estimate.

Q: When will Instant get into the browser itself (where many people do queries)? Mayer: A few months. (Not sure why it will take that long, but it can’t come too soon. I don’t often search from Google.com itself.)

Q: What impact will Instant have on advertising? Mayer: The overall clicks to a site should remain similar.

Missing a few questions, sorry….

Q: Is there a blacklist for certain words? (This from an AdAge reporter with the last name of Slutsky.) Wright: We filter for violence, pornography. We won’t show results until you actually press enter.

Q: How much personal info is needed to do these predictive results? Mayer: For weather, for example, it’s not personal info, it’s IP address that implies location.

Q: Where does the machine-human interface go from here? Brin: Jokes that he wanted to say “We want to make Google the third half of your brain.” “It’s a little bit of a new dawn in computing. Things have been stagnant on the desktop for a decade.” That’s changing now with the Web and new platforms.

Q: What’s the impact on search engine optimization? Gomes: Basically, ranking stays the same. So in that sense there’s not that big a change in people trying to adapt to the search engine (changes).

Q: What about China, given that Google results are blocked there? Mayer: Goal is to roll out in as many platform and geographies as possible. Hope to roll out on Google.hk, the Hong Kong site.

Q: What are the benefits of this for the average user? Does the average user want faster search? Duh.

Q: How will this impact concerns about privacy? Brin: Privacy is something that we think a lot about as a company. Users place a lot of trust with us. I don’t think Google Instant is any different in that respect.

Q: How will user behavior change over time with Google Instant? Gomes: You may do more multiple queries around your result… because it’s such a fluid experience. People are going to explore their topic of interest much more than they did before.

Q: Did some test users not like this, and if so, why? Mayer: Some users did choose to turn it off, but mostly for connection speed issues, and a very small percentage.

Q: Is this separate from Caffeine? Gomes: Not directly related, but faster cache of Caffeine makes Instant more possible.

Q: How will Instant affect paid search, and will it mean the end of SEO? Wright: The ranking of our search results is the same.

Q: Did you ever think that you would reach this point? Brin: It’s kind of amazing the things we can do today, with Moore’s Law etc. We did have to spend a lot more compute power on it.

Q: Can search get even faster? Gomes: Tomorrow, I’m sure we’re going to go back tomorrow and try to make things even faster, because that’s what we do. Manber: You ain’t seen nothing yet.

Q: Won’t the fact that this reduces the need to go to Page 2 of search results affect search ads? Wright: This is a user-focused launch. And we really believe that’s going to be better for advertisers. Don’t anticipate any fewer ads to be shown. (Wright seems confused by the question, but I also wonder why there wouldn’t be some impact on the number of ads shown, or at least whether advertisers will bother trying to get ads anywhere but the top and right of the first page. Indeed, Steve Rubel thinks Instant makes SEO irrelevant. John Ebberts at Adexchanger.com also has some insider thoughts on what Instant could mean for various kinds of online advertising.)

Q: Last one, from Search Engine Land’s Danny Sullivan: Sometimes the top search results are not really right, so how will Instant affect that? Hansson says basically that it’s faster to get to more relevant results, even those that would have appeared on page 2 or later.

And that’s it.

Google to Revamp Search Results, Yet Again

Google’s much-teased search event at San Francisco’s Museum of Modern Art gets underway at 9:30 a.m. Pacific Wednesday, and I’ll be there to blog the highlights. (You can also watch it live on Google’s YouTube channel.) Tonight, after checking out the new logo that progressively recovers its usual colors as you type in letters, it sure looked like it had something to do with real-time updating of search results as you type. Google has been testing those for some time, but not in such a forward fashion if memory serves.

The logo replaced an earlier one that involved bouncing balls that interacted with the cursor, which the company said was intended to show how it aims to make search “fast, fun and interactive.” The Guardian noted that the way that logo was coded suggests the next, more interactive generation of Web programming. Google also promised invited press that it would “share our latest technological innovation and to get an inside look at the evolution of Google search.”

I suspect from the hype that there will be much more. Barry Schwartz of the Search Engine Roundtable blog has a few guesses:

(1) AJAX powered search results. Yes, I believe Google will go forward with the AJAX powered search results tomorrow. Yesterday, I and others began noticing 30 results per page, but when I look deeper, it is driven by the AJAX like results. I can search, the URL doesn’t really change, it just adds on parameters, which makes me believe that it is done for analytics software. Why? This is something Google tested in February 2009 and stopped when complaints about referrer data not being sent using these AJAX results. Is it time for Google to go full force now with the AJAX results? It is “faster” for the user, which is a clue from the line above.

(2) 30 results per page is something I personally see myself and so do others. People are reporting it atWebmasterWorld and Google Web Search Help. It does make the results a bit more in your face, giving you more room to scroll. I am not sure if that makes things all that faster, but I guess it does. Is it more “fun,” I don’t know.

(3) Streaming Results As You Type. We know Google has been testing updating results as you type for the past few weeks. Many more are now seeing it, which is even more of a sign that this is coming soon. We have new reports of it at Google Blogoscoped Forums and WebmasterWorld. It does make the search results more “interactive” and a bit “faster.” More useful, I am not sure.

Google has been continually criticized, most recently (and inaccurately) by competitors, as failing to move beyond the iconic “10 blue links.” I suspect whatever Google announces will finally put an end to that epithet.

When Will People Understand Virtual Goods Are Real?

Look, I know virtual goods sounded kind of exotic–four or five years ago. But when it’s a multibillion global business today, it’s past time to dispense with the notion that crops on Farmville and flowers on Facebook aren’t really real. While I’ve been guilty of describing virtual goods as imaginary at times, what set me off most recently was a story in the New York Times that couldn’t seem to hammer enough on the idea that they don’t actually exist in any meaningful way.

Consider the language in just the headline and first two paragraphs: “Fanciful items.” “Things that do not exist.” “Pretend merchandise,” in contrast to “actual goods.” “Make-believe items.” Later, the article asserts that “virtual merchandise is in its infancy.” Perhaps that’s true compared to what it can become, and it is relatively new as a sizable business in the U.S. But estimates of the value of virtual goods sold worldwide range from $2 billion to as much as $6 billion a year. That seems well beyond infancy.

The thing is, what we call virtual goods are really no different in the pleasure or utility they offer people from other virtual things we consider “real”: Digitized photos. MP3 files. Videos uploaded to YouTube. And of course, online newspaper articles. So why the continual amazement that people will pay for virtual goods?

Partly it’s because the very term “virtual goods” connotes an air of unreality. But I think it’s also partly because, even 15 years after the World Wide Web took off, many people still haven’t quite realized how much of our lives have moved online. You can argue we’ve gone too far, of course. Hey, I’ll choose a walk in the woods with my family over leveling up in Farmville every single time. But it’s time to get over the idea that virtual things aren’t real.

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