What Happened in 2010–and Didn’t

Somehow I persuaded myself a year ago to offer up predictions for what would happen in 2010–and what wouldn’t happen. Now it’s time to take my medicine and see how I fared.

What I said would happen:

* Merger mania will accelerate in technology, especially acquisitions of smaller firms. OK, so it was a bit of a gimme, but I got that right. Google alone bought more than two dozen.

* Branding will start to become more apparent in Internet advertising, with Google leading the way in display. I guess it became somewhat more prominent a push, but I’d say I was a year too early on this.

* Google’s software efforts will finally establish it as more than a search company, making it apparent what this pony’s second trick is. Android certainly established itself, the Chrome browser made significant gains, and Google Apps got some big new customers. Chrome OS was late, though delivered through an alpha laptop, and remains unproven, and so does Google TV. Overall, it’s an impressive showing, if not enough to identify software as its next trick.

* Yahoo will surprise on the upside, thanks in part to a pickup in brand spending. Wrong! Well, the latter happened, but not enough to buoy a sinking Yahoo. It laid off 4% of its staff and jettisoned once-promising operations. Well, there’s always 2011–and maybe that’s all there will be if CEO Carol Bartz can’t demonstrate that she can finally turn things around.

* Mobile applications will start to take off for the masses. Two words: Angry Birds.

* Twitter’s main business model will become more apparent, but won’t knock everyone’s socks off. That’s just about right.

* Facebook will keep growing, providing perhaps the first test of whether social media is a blockbuster business after all. No doubt about that, even if it’s not yet certain how profitable the company will be.

What I said wouldn’t happen:

* Tablets won’t be the next big thing in client computing. As popular as Apple’s iPad was, tablets didn’t take the world by storm in 2010. But I don’t doubt they’ll be much bigger in 2011.

* There won’t be as many tech IPOs as venture capitalists and startups are hoping. And no, there weren’t, even if 45 did go public, up from 16 in 2009. And none of them were the big names such as Twitter or Facebook that some had hoped for.

* Real-time won’t be a business. When’s the last time you heard that buzzword? Maybe when real-time search engine OneRiot did a layoff?

* Online advertisers won’t escape a privacy backlash. And they sure didn’t. More trouble is coming in 2011, too.

* Google won’t get hit with a major antitrust lawsuit that so many have been predicting for years. True, and it doesn’t look any more likely today.

So actually, I did pretty well, even if you could argue that some of those weren’t exactly stretches. Next up, predictions for 2011, and another opportunity to look like an idiot.

Eric Schmidt: Google’s Next Big Business Is Display Ads

Annual shareholder meetings can be anticlimactic snoozers, but often enough, Google’s are not. There was the time in 2008 when cofounder Sergey Brin abstained from a motion for Google to end its activities in China, on which the rest of the board voted no–providing a clue to Google’s recent decision to stop censoring search results in that country. And with many issues, from antitrust to Android’s challenge to onetime Google partner Apple, continuing to percolate, it’s worth hearing the latest official line from the company’s executives.

Indeed, judging from questions already posted on Google Moderator for the meeting, the interchanges could be lively. One question: “Google top management seems to be too egotistical and aloof about the stock price Shareholders are mad,the stock is down 21%YTD,You play catch up with apple with nexus one and now verizon tablet What is actually going on?” Hostile tone aside, interesting questions.

There are also several shareholder proposals, on China, behavioral advertising and privacy, and sustainability, all of which Google is officially opposing.

So I’ll liveblog the highlights of  the meeting here starting at 2 p.m. Pacific–and in the unlikely event there are any big surprises, I’ll also tweet them here. I’m told there will be a Webcast here, though it wasn’t listed on that page earlier today.

And we’re nearly underway, as Joe Cocker’s Feelin’ Alright and smells from the adjoining cafeteria waft across the room.

CEO Eric Schmidt comes onstage with what will be the usual board introductions, including John Doerr and cofounder Larry Page. And then the shareholder proposal presentations. First the proposal on asking Google to do a sustainability report. Then the proposal asking Google to strengthen its privacy policy, especially with regard to behavioral advertising. Finally the one calling for more protections for human rights in China–by a guy who I think has asked pointed questions at at least one previous annual meeting (I recognize his T-shirt). And, big surprise, they’re voted down.

Now Schmidt comes back on to talk about Google’s business. “We had a very good year.” And did better coming out of  the crisis than many other companies. Core business grew well, internationally and in the U.S. “So all is well after a year of great tumult.”

So what’s next: Schmidt shows a slide entitled “The rich Internet,” and explains the explosion of data, now about 800 exabytes (which is a billion gigabytes), from 5 exabytes from the dawn of civilization to 2003. “No wonder we all have headaches.” Except Google, of course, because search becomes all the more important with that infoglut.

“Search is no longer just a static Web page.” YouTube and search “audiences” are already larger than most television companies. Taking off in mobile too–number of mobile searches up five times from two years ago. “Search is not just a query”–Google Goggles lets you use a photo as a query. Also 550 quality improvements in the last three months.

Schmidt talks about what he calls “the engaging Internet,” like YouTube. Now all of a sudden, the ads need to be engaging too. In five years or so, “the ad we  grew up with will go away.” Click to call, direct links to store locations or the particular product being searched, etc.

“A huge success for us now is display.” DoubleClick was “money extremely well-spent.” Also announced an ad exchange. Some 60% of display advertisers are new to display. “This is probably our next huge business.”

Enterprise business is growing fast too–a few thousand businesses a day, he says, starting to use Google Apps.

Android is going to be either the No. 1 or the No 2 player in the mobile market–not sure yet. We’re trying to build an entire system of openness–the opposite of the other guys. (Yes, he used a plural, even though we all know he’s talking about Apple.)

The Chrome browser, he says, is also a huge success, because of speed, simplicity, and security. Schmidt says Chrome OS should become a third platform for computers (I guess Linux doesn’t count?).

OK, time for questions. Onstage are Schmidt, Page, search experience chief Marissa Mayer, products head Susan Wojcicki, CFO Patrick Pichette, and Kent Walker.

A guy from Consumers Union (I think) asks a couple of questions that seem rather inside-baseball. One is on use of SSL more broadly–Mayer says stay tuned. Another, more interesting: Is there a $700 million kill fee on the AdMob deal. Schmidt doesn’t say, but says he expects the deal to get approved because mobile is a “highly competitive market.”

Another guy asks a convoluted question about the mobile market, ending with: Why isn’t Google doing mobile devices and products more directly? Page says Google is making “tremendous progress” in those areas but thinks the best strategy is to provide a mobile platform.

Q: Is it over in China or what? Schmidt says Google wants to continue business operations in China, but the situation isn’t settled yet.

Q: Will Google run out of computer space for all that data? Mayer: It’s a big challenge to keep up with data, but that’s what makes it exciting. Wojcicki: Algorithms and better technology will improve Google’s ability to deal with growing data.

Q: What is the next big thing? Page: One of the next big things is translation. Other two-thirds of world population not yet online need that. I think that’s really going to significantly change the world.

Three people now have complained about the lack of responsiveness of investor relations. Pichette tries not to look too uncomfortable.

Q: What’s happening with that competition for Google to build a citywide fiber-optic network? Schmidt: Winnowing the list down but no decision yet. Page: We had an Olympics for trench diggers. (Yes, they did.)

And that’s it.

Peter Norvig: An Insider’s Look at Google Research

Google is such a business powerhouse that people sometimes forget that every single penny depends on the research of thousands of engineers toiling in the bowels of the Googleplex. That’s why I always like to hear what Google’s rocket scientists have to say. This morning, at the Search Marketing Expo, Pete Norvig, Google’s director of research, is holding forth. I’ll liveblog the highlights here. (And there’s more coverage by Cade Metz at The Register and Tom Krazit at CNET News’ Relevant Results.)

His opening Powerpoint slide promises a review of 21 projects in 15 minutes:

1) Person Finder, following the Chile earthquake.

2) Power Meter you can plug into your house power system to monitor how much you use.

3) Earth Engine, which can show areas of deforestation using Google Earth.

4) Trike and Snowmobile that can contribute to Google Earth views.

5) User photos in Google Street View.

6) Image Swirl, image recognition software.

7) Web-scale image annotation, matching words for images.

8) Image rotation captchas, so you don’t have to divine those increasingly ridiculous captchas.

9) Google Goggles, take a photo of a product and Google will tell you what it is.

10) Discontinuous video scene-carving.

11) Sharing cluster data.

12) App Inventor for Android, introductory programming development environment for phones, in alpha test.

13) Speech recognition, and how much better it’s doing over time.

14) Punctuation/capitalization in transcribed speech. (I want this!)

15) Translating phones, or at least two pieces of it–translation and voice recognition.

16) Low-resource MT: Yiddish–better translation even with languages with not much written material.

17) Sound understanding: Show me all the car crashes in YouTube. Not quite there yet, but it’s coming.

18) Google Squared

19) Clustering of words within a context, like “Whistler” creates clusters of the painter, Olympics, British Columbia, etc.

20) Attribute extraction, to improve search results.

21) Browser size–tool that puts overlay on pages that shows which percentage of the page can be seen on each browser.

Whew. Barely kept up there.

Norvig: We’re trying to observe the world of the Web… try to understand all of that that’s going on by observing the data and creating models.

Chris Sherman at Search Engine Land, which puts on the SMX show, asks about 20% time. Norvig says Google’s ability to scale Webwide using Google’s infrastructure is key, because it allows much faster testing and deployment.

How do you decide the balance between short-term and long-term research? Norvig: We’re pushing very hard toward doing something useful. Always in service of something we eventually want to get out there.

Danny Sullivan, Search Engine Land’s editor in chief, asks about what has come out of 20% time. Norvig: Gmail is one example. Though right away that became that engineer’s 100% time. Speech recognition is another.

How much are cofounder Larry Page and Sergey Brin involved now? Norvig: They’re very involved. They’re setting the long-range direction. And they’re really trying to evaluate as many projects as they can. Their life hasn’t changed very much, because they’re still at their deep level. But for rest of us, a lot has changed–takes them longer for them to get to any particular new project.

What are you researching now? Norvig: Education. Ways to lead people to information over an entire semester, not just this moment.

How are projects segmented in various regions? Norvig: Some are local because we need local translations or products. Remote product development sometimes because that’s where the right people are.

What technologies do you see out there that would change how search is done? Norvig: Lots of emphasis on mobile.

How has Google come up with new signals to do real-time search? Norvig: One thing that I still think is overhyped in PageRank. Just one of many things. We never felt that it was such a big factor. It’s got the catchy name but we’ve always looked at all the available data. How do users interact with them, etc. You’re combining every available signal. It’s just a slightly different combination.

What enables that is the infrastructure that we’ve built. That’s allowed us to do real-time.  I remember when we went to hourly (updates of the index), and Larry pushed back and said that’s not good enough. The engineers said, well, we can’t do better yet. In the end, Larry gave in, but said they needed to call it the 3600-second index, otherwise the hour would remain an hour.

Is it time for new marketing beyond PageRank? Norvig: I think that’s right. We need some better branding.

On the Caffeine infrastructure update, what’s your group’s role and where’s it at? Norvig: Gives only vague timing, despite coverage lately that it might be late.

Do you have some signals Google uses that people don’t realize? Norvig: Bibliographies in Google’s book scanning.

How separate is the search and the ad side? Norvig: Just the way a newspaper has editorial content and advertising content, and those don’t mix. Of course, we use Google File System and Big Tableing and things like that in both.

Is there more work put into core search vs. ads? Norvig: Doesn’t quite say (though I suspect most of it is core).

Now that the Web is an index of objects as much as pages, will there be a different notion of how to treat those objects, like companies or people’s names? Norvig: We are moving in that direction. We want to support types of queries like “show me these types of companies and rank them by revenue.” You’re on your own now unless some page has done that.

What are the really hard problems today? Norvig: Vision is the big problem today. There haven’t been really big breakthroughs from 20 years ago. Still images and especially video images. There’s just so much more data involved in video vs. a text file. And parsing video into understandable objects. I’m excited about that.

Do you have any solutions for email overload? Norvig: Actually I had an intern last summer working on that project. Some experimental things will roll out before long. Another thing is saying, Is email the right tool? Maybe just slashing all that down and starting all over again is the way to go. Google Wave? Google Buzz? Not sure, but maybe. But still people trying to figure out where Wave works. Do I make a Google doc, do I make a Wave, do I make a site? I think we’re going to have to see some consolidation… based on the content.

Sergey has talked about embedded chip in your head to do searches–anybody doing that? Norvig: Uh, not yet.

How do you ensure that people get training and knowledge to work at Google? Norvig: When people doing information retrieval in college come to Google, they realize all I knew was wrong. That’s changing a little bit. Also we have an internal course on all the Google tools. Then give them a starter project. Then they get ready to do something else on their own.

Do you move people around a lot to different projects? Norvig: We encourage that. We like to keep our projects short–three or six months rather than a year. Often they find a couple things out of those projects to do, so they stay a little in that same area for awhile. But we do make it easier to move from one place to another.

What’s next in search–any dramatic changes in the metaphor beyond the list? Norvig: You see the page becoming more interesting and varied–pictures, video, etc., rather than 10 links. Mobile is also driving things hard because the screen is so small. There we’re really forced to do a better job. That will require more of a partnership, more interactive. Won’t be as stateless–will have more of a dialogue that both sides are contributing to. Right now, we force the user to do most of the work.

And that’s  a wrap.

Another Round of Privacy Changes From Facebook–Can’t It Stop Chasing Twitter?

Like millions of other Facebook members today, I was asked by the social utility to check my privacy settings. Changes in these settings had been announced last week by CEO Mark Zuckerberg, but they started rolling out today. Members will be able–actually, are required–to choose whether to share updates, photos, and other items on Facebook with just friends, friends of friends, or everyone. And they can choose what individual items to share, or not, with specific people. The clear default, from my and other people’s experiences, is to make more of this activity public.

This is the latest of a series of moves intended to encourage members to open up. But while it might work to prompt most people, who never change their privacy settings, to be more public, I think there’s a lot of risk for Facebook. And I don’t mean just from privacy hawks, who raised objections today.

For me, and for many people I interact with on Facebook, the service is the best way to share their lives with specific people, not the world–and we absolutely love it for that purpose. Many of my friends on Facebook avoid Twitter precisely because it’s so public and they don’t want the whole world (or, say, their boss) to know what they’re doing. Me, I love Twitter when I want to say something publicly, but even I’m wary of inflicting my personal life on my 3,500–plus followers–and sometimes, frankly, it’s none of their business because most of them are professional contacts, or at least readers who I think expect only occasional strictly personal observations.

While Facebook is providing pretty granular controls over what gets shared with whom, I’m skeptical most people will bother using them. It’s just too much work. So by introducing more ways to share things more publicly, Facebook risks muddying its essential value proposition.

Some things needed changing. Facebook’s regional groups were becoming so large as to be meaningless, so it’s understandable that it’s doing away with them.

But for all the transparency Facebook is implicitly suggesting its members embrace, the company could have been more transparent with its own intentions. As Danny Sullivan explains, it’s not at all clear to users why they should change their privacy options. In fact, it wasn’t even clear when I went through the process what I had actually changed. At first, Facebook indicated that I had made some things fully public that I had specifically opted not to. Then when I checked the settings, they had retained my previous choices. I think.

Fact is, this isn’t so much about giving people more privacy, as laudable as it is that Facebook is providing more controls. It’s more about Facebook trying to blunt the rising popularity of Twitter and providing a truly searchable real time web index, as Mark Hopkins puts it on SiliconANGLE, that can rival the utility of Google’s index. The more public the information is, the more usable the data is for better targeting of ads, which is what will Facebook must provide to live up to its huge valuation.

I’m just not sure Facebook will be able to escape its heritage as a place where friends share stuff with real friends, not where people share stuff with the wide world. For now, at least, its fitful moves to expand its appeal still don’t quite add up. As Twitter’s wild growth shows, it’s simply a lot easier for people to use a different service for what is really a fundamentally different purpose, rather than trying to shoehorn that activity into Facebook’s existing service.

Zuckerberg surely realizes that the far simpler choice would have been to suck it up and buy Twitter when it could and run it as the separate, public-facing service that it always has been. But I suspect it’s too late for that now. So now the question is whether it’s also too late for Facebook to change its stripes.


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