Tag Archives: Google

A Deeper Look At The New Google

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From MIT Technology Review:

Before Apple’s Steve Jobs died in 2011, he told Google cofounder and CEO Larry Page that his company was trying to do too much. As Page later told the Financial Times, he replied, “If we just do the same things we did before and don’t do something new, it seems like a crime to me.” Yet Page also acknowledged that Jobs was right in one sense: he could manage only so many things before too many would get lost in the shuffle.

Those twin desires—to do new things regardless of how weird and unrelated they seem to Google’s core search and advertising business, and yet still find a way to manage them to fruition—explain Page’s surprise announcement Monday that he was creating a holding company called Alphabet. It will separate Google’s lucrative ad-related businesses, including Android mobile software and the video site YouTube, from the company’s wide-ranging efforts on self-driving cars, human longevity, Internet access balloons, the Nest connected-home devices, and more, each of which will probably become discrete subsidiaries.

But the move, while cheered by investors, is just the first step to fulfilling the company’s long-standing goal to “make Google a long term success and the world a better place.” In the view of several management experts, Alphabet will be successful only if the individual projects and companies can be successful enough on their own to be spun off into freestanding companies eventually. The new corporate structure enables that to happen, but it surely doesn’t guarantee it.

First, it’s important to dispel the assumption that Page and cofounder Sergey Brin have created something like the Berkshire Hathaway of the Internet, an updated version of Warren Buffett’s conglomerate. “The comparison is silly,” says Michael A. Cusumano, a professor at MIT’s Sloan School of Management. Buffett, he says, invests in existing, undervalued companies, a bit like a mutual fund—precisely the opposite of Alphabet’s VC-style focus on risky new ventures like Calico, which wants to somehow fight aging. ….

Read the complete analysis.

Spelling It Out: The Real Reasons Google Will Become Alphabet

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googlealphabet

From my Forbes blog:

Google CEO Larry Page never fails to surprise. Google just renamed itself Alphabet, creating a holding company that includes the search company (Google) and a bunch of others that no one could figure out why it was doing. Page will be CEO of Alphabet, Google cofounder and executive-in-charge-of-cool-stuff Sergey Brin will be president, and senior VP Sundar Pichai becomes CEO of Google.

It sounds like a big deal, and in a sense it is always a big deal when a company changes its name and corporate structure. But in other ways, not much has changed, because Google has essentially run its far-flung collection of businesses, from its Calico human longevity company to its X lab that’s working on Internet balloons, self-driving cars, and drone product delivery to investment arms Google Ventures and Google Capital, pretty independently already.

Either way, the move raises a few questions:

* What’s the big idea?

Well, it’s probably not just one idea, but let’s start with one: This will keep left-brain investors happy, or at least happier. They’ve always been wary of all the non-search, non-advertising businesses Google has entered, and their inevitably uncertain prospects have no doubt weighed on the shares if only because they’re much more of a cost for years to come rather than significant revenue generators.

So this is a way for the company, which will now report the core Google business results separately in earnings reports, to make the company’s various businesses clearer to investors. It worked, at least for now: Google’s shares rose more than 6% in extended trading after a nearly flat day today. As Pivotal Research Group analyst Brian Wieser put it in a note to clients, “Perhaps there will be incremental value assigned to the totality of the new Alphabet because, undoubtedly, real value exists within the company’s emerging ventures.”

But given that Google rarely seems to make big decisions to please investors, it’s probably best to take Page at his word that the main impetus was to make each business able to operate more independently–and thus more likely to succeed or at least to get the chance to succeed without needing to be related to the core ad business. …

* What’s with the name?

With a funny name like Google, you certainly have to come up with something for the holding company that’s at least a bit whimsical (the URL is abc.xyz) or you will look lame. So that’s one. Another interpretation from an esteemed analyst (my wife): “Are they going to control everything from A to Z?” I wouldn’t bet against their trying.

But as Page puts it in his blog post, the name also fits:

We liked the name Alphabet because it means a collection of letters that represent language, one of humanity’s most important innovations, and is the core of how we index with Google search! We also like that it means alpha-bet (Alpha is investment return above benchmark), which we strive for!

Yeah, he’s still a nerd at heart. (And can you tell he’s stoked?!) …

Read the complete post.

Why Ad Blockers Won’t Destroy Online Advertising … Yet

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adblockpagefair

From my Forbes blog:

Today’s release of another study on the rising use of ad blockers has sparked a new round of hand-wringing over the software’s blow to the online ad industry. Some $22 billion will be lost worldwide this year, according to the report from Adobe and PageFair, an Irish company that helps advertisers get some of that lost ad revenue back.

Sounds scary! But the concerns are overblown, at least for now. Here’s why:

* It’s still a relatively small percentage of people especially in the U.S., where only 15% of users employ ad blocking, according to the study.

And the U.S. is by far the most lucrative ad market in the world. So in the places where most online companies advertise, they’ll continue to reach the vast majority of users.

* Only desktop ads are getting blocked for now. And we all know we’re rapidly approaching the time when most of the ads we see will be on our mobile devices. So the fastest-growing ad market, on mobile devices, isn’t even affected yet, not least because app stores such as Google’s don’t allow ad blocking apps. …

All this isn’t to say advertisers shouldn’t be concerned. They should be. The ad blocking trend line doesn’t bode well for brands that expect to keep reaching people as easily online as they have everywhere else.

But advertisers that create ads that aren’t intrusive and may even be useful have less to fear. Those that keep trying to shovel pop-ups and annoying mortgage come-ons? They probably deserve to lose business anyway.

Read the complete post.

As Mobile Video Ads Soar At Facebook, Big Brands Pile In

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Facebook CEO Mark Zuckerberg

Facebook CEO Mark Zuckerberg

From my Forbes blog:

Facebook’s second-quarter results today didn’t thrill investors, who knocked shares down more than 3% in after-hours trading. They don’t like to hear about an 82% jump in expenses to get revenue growth of half that much–even less so when Mark Zuckerberg, CEO and founder of the social network, says that spending won’t slow down much anytime soon.

But advertisers were a different story–in particular, big brand advertisers like Procter & Gamble and Under Armour that are looking to reach people via the mobile devices they carry with them all the time. Mobile ad revenues shot up 74% from a year ago, considerably faster than ads overall, which rose 55% after taking out currency impacts, and it’s now 76% of ad revenue.

In particular, Facebook is starting to become a must-buy for big brands that still spend the most on television, because it has the reach and the impact they want. Now, according to ad agency executives, they think Facebook is finally poised to capture more TV ad dollars that Chief Operating Officer Sheryl Sandberg has spent years pursuing.

“We see Facebook at a core pivot point,” says David Hewitt, VP and mobile lead at the digital agency SapientNitro. “It’s now a safe bet to put a lot of money into.”

In the last six to eight months, he says, brands have started to understand the reach Facebook has among smartphone users–some 844 million people each day. “It’s hard to get reach on mobile,” he says, but now “Facebook checks that box” in a way that few others online besides Google can. …

Read the rest of the story.

Unhappy With Google’s Mobilegeddon, Advertisers Spend More On Facebook

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ADI_Global Display Ad CTR Growth

From my Forbes.com blog The New Persuaders:

When Google changed its formula for showing search results in April to favor websites it deems mobile-friendly, some businesses worried their sites would disappear from results. Mobilegeddon, as the algorithm change came to be called, was intended at least in part to spur publishers to quit sending people to sites that looked terrible or were downright unreadable on the smartphones where people spend more and more of their time online.

Perhaps that will happen eventually, but for now, according to a new report out today from Adobe, the change has indeed hurt brands that weren’t prepared. The Adobe Digital Index‘s second-quarter report on digital ads and social intelligence, which measures nearly a billion online ad impressions and 21 billion referred social visits from Facebook, Twitter, YouTube, and other social sites, shows that unprepared websites have lost 10% of their traffic compared with a year ago. And that decline is continuing to grow, says Adobe Digital Index principal analyst Tamara Gaffney.

Google has benefited, at least in the short term. Many marketers and ad agencies believe one clear goal was to boost mobile ad prices, which have continually lagged those of desktop computer ads. Indeed, prices measured as cost per click rose 16% from a year ago, according to Adobe.

But for marketers, the benefit is far less clear. Click-through rates on ads have fallen 9% from a year ago. “The bottom line is Google’s mobile business got better and marketers’ mobile business is getting worse,” says Gaffney. “They’re not getting the traffic they’re paying for.”

That situation obviously can’t last. …

Read the rest of the story.

Google Wants To Own Your Mobile Moments

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googmoments

From my Forbes.com blog The New Persuaders:

For a few months now, Google has been pushing a new vision of advertising in the mobile age: Advertisers, it says, must capture the “micro-moments” when peripatetic consumers land on an app, a video, a website or anywhere else.

That’s increasingly important because despite today’s “mobile first” mantra among tech companies and publishers alike, the fact remains that people use all kinds of devices throughout the day to find what they’re looking for online–their phone, their tablet, a laptop, a desktop computer, even an Internet-connected TV. What’s more, these people are often open to commercial messages for only short periods of time in just the right context: the age-old right-place, right-time, right-message but faster and more fleeting than ever.

And so Internet publishers and their advertisers need to reach not just faceless audiences but actual people, or at least detailed profiles attached semi-anonymously to real people. This “people-based marketing” is something Facebook has made huge coin on, and even companies such as Google are playing catch-up.

So today, Google is aiming to close some gaps in its powerful but (in the mobile age) rather less dominant advertising system. …

Read the rest of the story and interview with Google display and video ads VP Neal Mohan.

With Android Pay, Google Closes Gap With Apple In Mobile Payments

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From my Forbes.com blog:

Apple vaulted ahead of Google in mobile payments last September when it announced Apple Pay, its long-awaited entry into mobile payments. By comparison, the three-year-old Google Wallet looked tired and limited.

Now, Apple’s head start has nearly vanished. Today at its I/O conference in San Francisco for software developers, Google introduced Android Pay, a successor to Google Wallet that, when it launches this summer, will come close to matching Apple Pay for making payments via smartphones easy in stores and inside apps.

They won’t quite be identical. Apple Pay’s security system is somewhat different, and Android phones won’t have fingerprint identification like Apple’s until the new version of Android comes out this summer, and even then only on phones that have fingerprint I.D. capability. But they’ll be close enough that consumers should be comfortable using either one in largely the same way–and at the very same 700,000 store locations that have the right checkout terminals.

That’s a big step forward for Google’s mobile payment ambitions. A competitive mobile wallet is key for the search giant because the ability to pay with a couple taps on a smartphone will grease the e-commerce skids for app developers and marketers alike.

If you’re tuning into the mobile payments business recently, you might wonder if Google is simply copying Apple. Actually, it’s more the other way around. …

Read the entire post.

Google Glass May Not Be Dead, But It Sure Needs A Complete Overhaul

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Google cofounder Sergey Brin wears Google Glass.

Google cofounder Sergey Brin wears Google Glass.

From my Forbes blog:

Google Glass is dead. Long live Google Glass.

That’s what Google Executive Chairman Eric Schmidt essentially insisted today in an interview with the Wall Street Journal. Actually, he specifically said it was still very much alive following January’s announcement that the Glass Explorer program was ending and Glass work moving from secret lab Google X to Google itself, under Tony Fadell, who heads Google’s Nest connected home division. Schmidt added that Glass will be the basis of “a big and very fundamental platform.”

But given how much it’s likely to be changed, Schmidt might have been better off pronouncing it dead. If new versions of Google Glass are to succeed, they need to change in a whole host of ways that literally will make it unrecognizable compared with the $1,500 version it sold to bleeding-edge people like me. After using it only intermittently for a year now, I think Schmidt is right that Glass could become a compelling product, but only if:

1) Google hides Glass behind actual glasses. No matter how elegant Google made Glass, that little block of plastic that serves as the screen is simply too weird-looking. In its current form, the device screams, “I’m a Glasshole.” Instead, as rumors indicate, Google will have to incorporate that screen into existing eyewear.

Read the rest of what Glass will need to be successful.

How Do You Google? New Eye Tracking Study Reveals Huge Changes

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The classic "golden triangle" reader heat map

The classic “golden triangle” reader heat map

From my Forbes blog:

Google used to be criticized for providing little more than “10 blue links” in its search results that sent searchers to other sites. More recently, it’s getting lots of flack from companies and antitrust officials in Europe for the opposite–providing direct answers that make it less likely searchers will click through to the sources from which it drew the information.

Either way, Google is spitting out instant results on billions of our search queries a month in a way that’s radically different from how it used to do it. Not only has Google personalized results based on previous searches and myriad other things it knows about us, but it often presents direct answers to queries in the form of everything from maps, photo carousels and movie time listings to fact boxes from its encyclopedia-like Knowledge Graph and even spoken answers.

Now we have a graphic visual representation of exactly how we’re viewing these results, and the differences from a decade ago are striking. That’s apparent in a new study conducted by the digital marketing firm Mediative, which tracked eye movements of 53 people as they did a wide variety of Google searches on desktop computers and perused the results. The results of the study were presented today at the search marketing conference SMX West in San Jose.

Now, you may already sense instinctively how things have changed, since you probably do a gajillion searches a day. But the upshot for marketers, including the search engine optimization or “SEO” companies that flocked to the conference is both less obvious and more critical: In short, they can’t just try to get into the first few search results and expect that to send business rolling in. (A couple of caveats: The study didn’t look at how people do searches on smartphones, which involves an entirely different set of behaviors, and it was conducted only in North America.)

Basically, the study found that the “golden triangle” identified in a 2005 eye tracking study, which has served as the guidepost for search advertisers ever since, no longer exists. The golden triangle, shown in the heat map from the 2005 study above, showed that people’s attention on search results was focused almost entirely on the upper left side of the page. …

Read the details in the full post.

The Art Of The Nudge: Why Google Wants To Be A Wireless Carrier

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From my Forbes blog:

Confirming rumors circulating for some time, Google today said it will indeed launch its own wireless Internet service later this year. But the Internet giant said it plans to do so on a small scale, to prove there’s a better way to combine free WiFi-based phone and data services with cellular networks.

Sundar Pichai, Google’s senior vice president of products, told an audience at the Mobile World Congress conference in Barcelona that Google will announce more details of its plan to become a Mobile Virtual Network Operator, or MVNO, offering service for smartphones under its own brand. Recent reports said Google will work with T-Mobile and Sprint to provide cellular network coverage in cases when WiFi isn’t available, even to the extent of resuming a call on those networks if it gets dropped.

It’s yet another in a long line of moves by Google to push often recalcitrant industry players along. That includes its Android mobile software (which arguably has become a profit center of sorts if you count some $10 billion in gross app revenues), its Nexus phones and tablets (which surely don’t bring in much if any profit), its fiber broadband service in several cities (probably the closest analog), all the way back to its 2008 bid for radio spectrum (which it lost, perhaps purposely, to get Verizon and others to buy it and eventually expand wireless Internet access).

While Google at times in the past has been more cagey about its intentions when it introduces products and services outside its core, this time it was quite clear about why it’s doing this. It isn’t trying to become a large-scale wireless operator, Sundar Pichai, Google’s senior vice president of products, told attendees:

“We don’t intend to be a network operator at scale. We are working with carrier partners. You’ll see our answer in coming months. Our goal is to drive a set of innovations we think should arrive, but do it a smaller scale, like Nexus devices, so people will see what we’re doing.”

In other words, it’s the latest example of how Google has become a master of the nudge. All of those moves are intended to push software developers, hardware partners, carriers, and competitors to improve their products and services, because the better the hardware, software, and Internet access they provide, the better Google’s advertising business does.

Read the rest of the post.