How To Beat Google According To Mark Cuban

Blog Maverick - Mark Cuban has added his voice to the chorus on beating Google. Cuban presents a plausible argument. He argues that in essence, its no different that any other content aggregation play. Its paying for content.

Is there anything more fun than sitting around, growing your hair, drinking a Bud while listening to Jethro Tull and pondering how to change the balance of power in the search world and unseat Google?

Better search? Too subjective. Better monetization? After the fact. Better User Interface? Will we know it when we see it? A new and different search? Semantic? Human powered? We won't know till we know.

But what about the Google Index, all the websites that are indexed by Google? What is it worth to be in the Google Index? What would you, as a website owner require in order to remove your site from the Google Index and no longer be available when someone does a google search?

It should just be a matter of dollars and cents and sense, shouldn't it?

How many websites would have to recuse themselves from the Google Index before Google Search was negatively impacted?

Mahalo.com thinks it needs to support the 25K most common search terms in order to be successful. What would happen if MicroSoft or Yahoo or a MicroHoo went to the 5 top results for the top 25K searches and paid them to leave the Google Index?

A theoretical maximum of 125K sites, but with overlap, probably closer to 100K or less, times how much per site on average?

The math starts to get interesting. At $1,000 per site average times 100K sites, thats only $1 Billion Dollars. The distribution would obviously favor the larger sites, so of that billion dollars, would the top 1K sites take 500K each and the remaining 99K split the rest?

Given the stakes, why stop at $1 Billion Dollars? Would the top 1k most visited sites take a cool $1mm each, plus a committment from MicroSoft or Yahoo to drive traffic through their search engines to more than make up for the lost Google Traffic. After all, once consumers realized that Google no longer had valid search results for the top 25K searchs, that traffic would most likely go to MicroSoft and Yahoo.

And why we are at it, why not require that these 100k sites switch from Googles Publisher Network to Yahoo's or MicroSofts? It would start to earn back the $1 Billion paid out very quickly.

On top of that, in order to grease the skids even further, why not issue advertising credits to the sites that switched off Google? Its soft dollars, that would sweeten the pot and drive more traffic.

IN essence, its no different that any other content aggregation play. Its paying for content. But, it would take some big ones to go for it and see if it worked. However, without question, every search engine has some number of core sites, that when removed from its index, destabilizes the value of its search.

The question is how many? What would it cost to get that number of sites to turn Google off and stay off, and would the traffic created as users switch from Google more than compensate for the cost?

Or would Google recognize the risk and jump in and offer more to websites to stay?

Sure would be interesting to find out.

ASK Buys Dictionary.com - Drops Focus On Women

Ask.com, plans to acquire Lexico, which owns Dictionary.com, as well as Thesaurus.com and Reference.com. Ask.com’s chief executive, Jim Safka, declined to disclose terms of the deal but it is estimated to be about $100 million said a person with knowledge of the transaction. He also said the company will drop its focus on women and focus on being a general purpose search engine.

Dictionary.com had about 15 million visitors in March and is growing rapidly. It sells ads on its site, and Mr. Safka said it is profitable, though he won’t discuss any actual numbers. Ask.com, which has an advertising deal with Google, will be able to make more money from the site, he said.

The deal is also an effort by Ask.com to increase the number of queries on its site. Ask.com and Dictionary.com will attempt to cycle traffic between each other, Mr. Safka said. If you search for “diabetes” on Dictionary.com, you’ll get a definition, but you’ll also be given the option to go further by searching, on Ask.com, for “diabetes treatment,” “types of diabetes,” “causes of diabetes” or “warning signs of diabetes,” for example. Similarly, if you search for a word on Ask.com, the search engine will be able to provide its definition along with traditional search results.

Mr. Safka say the two companies have a similar customer base. The second most searched term on Ask.com last year was “dictionary,” he said. “We’ll be able to dramatically grow our base of traffic,” Mr. Safka said. comScore puts Ask.com’s share of the search market, 4.7 percent in March.

Answers.com / Dictionary.com Purchase
Last year, Answers.com tried to buy Lexico for about $100 million in cash, but the deal fell through after Google changed its search ranking algorithm and Answers.com's traffic dropped 28 percent. As a result Answers.com could not raise the money it need to complete the Lexico acquisition and hence the deal fell through.

Can Icahn Yahoo?

Carl Icahn has notified the Yahoo board that he'll be leading a takeover of the company. The letter below was his notification to Yahoo, and included his intention to buy 2.5 billion in stock. Presumably Icahn has already confirmed that Microsoft is still interested in a takeover, and given Steve Ballmer's legendary temperament I'm guessing that he is giddy at the prospect of ultimately winning the battle he walked away from a few weeks ago.

I think Icahns prospects of losing this are small, and would guess he's in for one of the biggest paydays in corporate history. While Yahoo's board obsessed over the Microsoft takeover many shareholders simply wanted the best return on their Yahoo investment. Given that no dramatic new strategic proposals have come from Yahoo in (over a decade?), few shareholders are going to be willing to hold their breath while the current board pretends to be making major changes at the company that would justify a stock price in the ballpark of what Microsoft has already offered.

The fat lady is singing, and her name is .... Carl Icahn.

------------------------------------------
Carl C. Icahn
ICAHN CAPITAL LP
767 Fifth Avenue, 47th Floor
New York, NY 10153
May 15, 2008

Roy Bostock
Chairman
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089

Dear Mr. Bostock:

It is clear to me that the board of directors of Yahoo has acted irrationally and lost the faith of shareholders and Microsoft. It is quite obvious that Microsoft's bid of $33 per share is a superior alternative to Yahoo's prospects on a standalone basis. I am perplexed by the board's actions. It is irresponsible to hide behind management's more than overly optimistic financial forecasts. It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo's closing price of $19.18 on the day before the initial Microsoft offer. I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the Internet.

During the past week, a number of shareholders have asked me to lead a proxy fight to attempt to remove the current board and to establish a new board which would attempt to negotiate a successful merger with Microsoft, something that in my opinion the current board has completely botched. I believe that a combination between Microsoft and Yahoo is by far the most sensible path for both companies. I have therefore taken the following actions: (1) during the last 10 days, I have purchased approximately 59 million shares and share-equivalents of Yahoo; (2) I have formed a 10-person slate which will stand for election against the current board; and (3) I have sought antitrust clearance from the Federal Trade Commission to acquire up to approximately $2.5 billion worth of Yahoo stock. The biographies of the members of our slate are attached to this letter. A more formal notification is being delivered today to Yahoo under separate cover.

While it is my understanding that you do not intend to enter into any transaction that would impede a Microsoft-Yahoo merger, I am concerned that in several recent press releases you stated that you intend to pursue certain "strategic alternatives". I therefore hope and trust that if there is any question that these "strategic alternatives" might in any way impede a future Microsoft merger you will at the very least allow shareholders to opine on them before embarking on such a transaction.

I sincerely hope you heed the wishes of your shareholders and move expeditiously to negotiate a merger with Microsoft, thereby making a proxy fight unnecessary.

Sincerely yours,

CARL C. ICAHN
----------------------------

Disclosure: Long on YHOO

CBS Acquires CNET For $1.8 Billion In Cash

CNET is being acquired by CBS for $1.8 billion in cash. The purchase price is a 44.6 percent premium over last night’s closing price of $7.95. CBS CEO Les Moonves said “CBS stands for premium content and unparalleled reach, and CNET Networks will add a tremendous platform to extend our complementary entertainment, news, sports, music and information content to a whole new global audience. Together, CBS and CNET Networks will have significant additional exposure to the fastest- growing advertising sector and can accelerate our growth through a number of new content, promotion and advertising initiatives. We could not be more pleased with the prospect of adding CNET Networks and its tremendous team of people to the CBS family. I look forward to working with Quincy Smith, Neil Ashe and the considerable combined talent at both companies, as we build upon our success.”

Neil Ashe, CNET's CEO stated "CNET Networks operates some of the most important premium online brands, serving the most sought after online audiences. Today’s announcement brings together two organizations that complement each other and working with Leslie, Quincy and the talented people at CBS, we look forward to taking our business and our brands to the next level.”

Among the sites in the CNET family that will be part of CBS Interactive pending approval: CNET, ZDNet, GameSpot.com, TV.com, mp3.com, CNET news.com, UrbanBaby, CHOW, Search.com, BNET, MySimon and TechRepublic. The company has also been building out its China operations, with sites devoted to womens content and auto.

Brijit: Death of another Startup

You've reached this page because, at the moment, Brijit is out of money and can no longer afford to bring you the world in 100 words. We're working hard to find a way forward for our service and hope to relaunch in the not-too-distant future.

So reads the home page of Brijit, a startup that sought to bring quality content to folks by paying reviewerss $5 per review to summarize high quality articles in major media. The website was a sort of search and navigation of the high end press. Brijit was even in the process of increasing their (very modest) levels of traffic.

Why would this startup fail after initial investment of at least 1 million? The $5 per article didn't break this bank. With only 16,000 article total they only spent $80,000 on the content. But I think this is a great example of how difficult it is to generate online revenues. Online publishing companies that have robust advertising generally must have a valuable type of audience and have huge levels of traffic. Brijit may have had an *intelligent* audience, but I'm guessing most of the users were using the site to create their own derivative works or find material for their own writing projects. This audience was probably unlikely to click off to advertising for pencils and paper or magazine subscriptions, and even if they did click Brijit was only seeing about 20k-30k visitors per month - not enough to generate more than a few thousand in even highly targeted, high CPM advertising.

Comcast Buys Plaxo For Social Media: Google & Cisco Pass

Plaxo today announced that they have just signed an agreement to be acquired by Comcast. Details of the price were not disclosed but it is rumored to be in the $140 - $175 million range.

The company blog says "Plaxo Pulse is to become central to creating a unified “Social Media” experience across the web and television". Not sure what exactly that means for Comcast? Given that 75% of Plaxo's users are business users. I am surprised that Plaxo was not acquired by Google or Cisco.

Google because Plaxo could have been the center piece for its OpenSocial and Friends Connect initiatives, it could provide Google with its own LinkedIn type service and become a sourcing pool to extend Google Apps into the enterprise. Further Plaxo is funded by Google's Founding Board Member Ram Shriram. So the sale would not have been a stretch.

Even more puzzling is why Cisco didn't jump on it - it would have been great to drive adoption of Cisco's Webex products. In fact Cisco has invested close to $15 million in Plaxo. At the time of the investment a Cisco spokes person said "The investment by Cisco reflects an interest in the emerging social-networking space, Plaxo's strength lies in its ability to connect people with those they already know or do business with".

For Comcast this is an expensive way to get into Social Media when there are far better alternatives that are more synergistic to its core business (maybe Comcast knows something I don't). Plaxo's site is still in beta after all these years and millions of dollars in development. Further, their traffic is headed downward. Plaxo management probably decided that any exit is better than no exit. Your thoughts?

ATT Says A Revolution In Speed Is Coming Soon

Even as broadband penetration in the USA increases, many users are still frustrated with the lack of enough data transmisson speed to bring really great internet functionality to all the devices in your life.

Ralph de la Vega, COO of ATT, says that things are going to change fast and get faster. Speaking at a Morgan Stanley event he said that sometime in 2009 ATT would be able to deliver speed in excess of 20 megabits per second. That is fast enough to allow some spectacular streaming of data and video content, provide downloadable movies to a video capable phone with no wait times, and allow amazing on-the-road mashups for travel that could, for example, provide a driver with extensive real time traffic data and routing.

Sure, many great things can be done now at slower speeds but super high transmission rates are going to resolve some of the peskiest problems with data sharing applications and video.

"It's clear to us that we are in the very early stages of what I would call a wireless data revolution...." said de la Vega.

As we noted earlier this week, mobile is the most explosive market for online services. One of the bottlenecks there has been the lack of cheap bandwidth. With speeds like those discussed by de la Vega we'll see more people using their phones as modems for other applications or moving to ISPs like Sprint and ATT to fuel their home and laptop broadband as well as their phones. Although it is far too early to know how things will shake out in the broader market, high quality mobile broadband may bring an economy of scale to the mobile market that would change the game entirely as people may shift away from Cable, Satellite, and DSL broadband in favor of solutions integrated with their mobile devices.

Yahoo! Buzz Surpasses Digg

Acccording to comScore unique visitors on Yahoo! Buzz surpassed Digg in April for the first time. Buzz got nearly 7 million U.S. unique visitors which is 74% growth over March.

Buzz, is a social news service by Yahoo! that is similar to Digg. These site can drive a large amount of traffic and comments to websites.

The following graph shows that, for the first time, Buzz's traffic surpassing Digg's in unique visitors per month.

What's more, about 51% of Yahoo! Buzz users are women, compared to just 39% women for digg.

Travel Website UpTake Launches

UpTake.com, formerly Kango.com, launched today with features on thousands of destinations and over two million reviews aggregated from other travel websites such as Orbitz, Travelocity, Virtual Tourist, and Yahoo Travel.

Working to bring semantic search to travel, Uptake:

.... tries to understand travelers' intentions - if a traveler is looking for a hotel that is "good for kids", UpTake interprets it to have the same intent as phrases such as "child friendly" or "family vacation."

The online travel space is one of the most competive in the online world but the semantic approach to search and aggregation of reviews may give UpTake a strategic advantage over other Travel sites.

Craigslist v eBay : Deceptive Google Ads Used By eBay

craigslist v eBay Complaint (SF Superior Court) - Upload a doc

Read this doc on Scribd: craigslist v eBay Complaint (SF Superior Court)

Craigslist v eBay: Craigslist Fights Back

Ebay sued Craigslist some time ago, suggesting that the site had engaged in anti-competitive practices. Craigslist has decided to fight back with a counter lawsuit.

Writing at the Craigslist blog, Jim Buckmaster, CEO of Craigslist, says:

We filed a complaint in California today, charging eBay with unlawful and unfair competition, misappropriation of proprietary information, deceptive passing-off, business interference, false advertising, phishing attacks, free-riding, trademark infringement, trademark dilution, and breaches of fiduciary duty.

We respectfully ask the Superior Court in San Francisco to enjoin this conduct and order eBay to (1) make full restitution to craigslist, (2) disgorge their related profits (3) restore to craigslist all shares of the company acquired by means of, or for the purpose of unfair competition, and (4) pay punitive damages for their malicious behavior.

Ouch!

See: Deceptive Google ads used by eBay to channel traffic from Craigslist to eBay's Kijiji per court documents.

Icahn Eyes Yahoo for Possible Takeover

Billionaire takeover strategist Carl Icahn is looking at a possible play to force Yahoo back to the table with Microsoft to sell the company at a big profit. The news today sent Yahoo up about 1.30 and YHOO is still rising in after market trading.

Given that the prevailing stock price of Yahoo is well below Microsoft's top offer of $33 per share, this play has only one key challenge - making sure you can get Microsoft back to the table. Frankly I think that is not much of a hurdle to overcome as I think Microsoft Steve Ballmer's decision to drop the bid was 1) Mostly strategic to force the issue and 2) Will be quicly overcome if Icahn can seat a more sympathetic board of directors.

I'm guessing that Ballmer will have two basic requirements to return to the Yahoo table:
No Google deals and no more Jerry Yang. Although it would be sad to see a founder of Yang's vision leave the company one does not need to feel too sorry for him. A Microsoft merger would value his stock close to 100% higher than the lows of a few months back, netting Yang in the neighborhood of an extra half billion over that low price.

Of course Yang has seen Yahoo trading at over $100 and I think part of his malaise over the deal is a longing for the good old pre-Google days where Yahoo was the high flyer in terms of value and buzz. Sorry Jerry, but despite Yahoo's suberb ongoing work in many aspects of the online experience, those days ... are ... gone.

Most analysts do not feel Yahoo can sustain even the current price levels without the "threat" of a takeover looming, which is propping up a share price that will likely drop to $20 or below if Yahoo had no serious takeover suitors. In fact YHOO was trading at about $18 per share a few months ago just before Microsoft bid which valued the internet empire at about 60% more than the market. Yet Yahoo argued this was not enough and the board, especially in the form of CEO Jerry Yang, went to great lengths to prevent the Microsoft Merger.

Icahn is no stranger to this takeover strategy and the graph above shows how successful it has been for him.

Image Credit: Fortune Magazine
Disclosure: Long on Yahoo

Website With Embarrassing Zuckerberg Details Acquired

The magazine that published the infamous diary and application of Mark Zuckerberg, one of Facebook's founders, has been purchased for an undisclosed amount. The magazine called 02138, which is named for Harvard’s ZIP code published embarrassing detail about Zuckerberg during the court proceedings between him and Facebook's original founders. The suit was finally settled.

Zuckerberg took o2138 to court to force the website to take down the embarrassing details. However a Federal District Court in Boston denied Facebook’s request to take down the documents.

Manhattan Media bought 02138 from Atlantic Media. The new owners have visions of expanding it into social networking and event sponsorship web site. Manhattan Media is backed by Isis Venture Partners.

The Facebook Files

1) Mark Zuckerberg's Harvard Application (PDF)

2) Mark Zuckerberg's email to Harvard’s Administrative Board (PDF)

3) Mark Zuckerberg's testimony #1 (PDF)

4) Mark Zuckerberg's testimony #2 (PDF)

5) Facebook Statement of cash flows 2005 (PDF)

6) Cameron and Tyler Winkelvoss's testimony (PDF)

7) Mark Zuckerberg's online diary (PDF)

8) Statement of damage done to La Jennifer sublet (PDF)

Mobile Market Set For Explosive Growth

A key theme at this year's Consumer Electronics Show CES 2008 was that mobile computing - especially in the form of mobile smartphones - was set to become the key computing platform, especially in many parts of the developing world where it is expected to be the *only* computing platform for some time as new users flood online in the millions.

Two key reasons for this shift from computing on the desktop with a desktop and computing in hand with a handheld device are simple convenience and cost.

Business users are often "on the go" and need to carry their computing with them. Laptops offer some mobility but for most business users a small mobile phone now offers most of what they need and allows them to carry their computer throughout the day. Laptop and desktop computing are certainly not going to stop, but already we see even heavy users shifting to mobile devices and mobile or hybrid platforms like Twitter to carry on their daily business. There will be modest growth in the use of ultra mobile computers like the inexpensive eee PC, but the huge growth is likely to come in the form of mobile smartphones.

Coming up later: Battle for the new smartphone operating systems

Nokia's Google And iPhone Strategy

Nokia CEO Olli-Pekka Kallasvuo told investors that company would like to act "more like an internet company" than a "traditional manufacturer". Translation - we have a Google Strategy and an iPhone Strategy.

The company has been on a buying bing very much like AOL has been. However instead of buying into new markets like AOL, the company has been making acquisitions that extend its core products in new markets.

Google Strategy
Nokia has bid to acquire car navigation devices and mapping services company Navteq for $8.1 billion to gain digital maps of 69 countries. Google has been making inroad with device manufacturers and carriers to provide Google Maps as the default mapping service on their handsets. Google has an initiative with BMW to provide in car mapping services. Sales of navigation products is expected to triple to $12.8 billion by 2010, according to iSuppli Corp.

Recently Nokia launched a mobile ad network for placing advertisements through text messages and e-mail. The mobile advertising market is dominated by Google and Yahoo. Global sales are estimated to rise to $11.4 billion by 2011 from $2.17 billion currently, according to Informa Telecoms & Media Group. Nokia acquired the technology via the purchase of Enpocket.

iPhone Strategy
In March of this year Nokia debuted its online music retailer in Germany. The company acquired Loudeye to create a mobile music service to counter the iTunes and diversify its offerings. The services enables user to download music directly to their handset. Devices with mobile music players and cameras fueled a 74% increase in profit in the first half of 2007 for the company.

HP Poised to Buy EDS

Hewlett Packard and EDS are expected to announce a deal soon where HP will aquire the data services company for about 13 Billion. This deal will make Hewlett Packard the number two global provider of enterprise technology services (IBM is number one). HP, however, is already the world's largest manufacturer of computers with no competition from IBM in that department because IBM sold their entire computer manufacturing business to China's Lenovo some time ago.

The move is likely to allow HP to consolidate several management functions as well as enlarge their services footprint considerably. This will make them more competitive with IBM, which is the ultimate goal of the buyout of EDS.

WorldWide Telescope Launches

Microsoft has released the WorldWide Telescope application, a desktop environment for visualizing the cosmos. Most early reports suggest that WorldWide Telescope is one of the finest educational applications ever developed. It was showcased earlier this year at the TED Conference in Monterey but not released to the public, and was then eclipsed by Google's Space viewer - an excellent spinoff from another of the finest educational applications ever created - Google Earth.

Google Friend Connect Launches

Three major social networking applications have jumped online in the past week. Myspace, Facebook, and Google are all offering new tools to embed social networking in websites.

Google's friend connect looks like the simplest of the three in terms of helping you create a small snip of code which is planted on pages, instantly delivering social functionality. I can't say for sure because I'm in the process of testing each, but Google has a history of delivering high functionality to websites with very simple, non-programmer instructions and tools.

More on each of these as experiments continue...

Overcoming Social Media Objections

“Don’t worry about people stealing your ideas. If your ideas are any good, you’ll have to ram them down people’s throats.” – Howard Aiken

As Dr. Aiken discovered, knowing which direction to go doesn’t mean much if you can’t get your team to follow. Thankfully, unlike Dr. Aiken we don’t have to convince people to buy in on an idea as crazy as building a computer at a time when phones were considered state of the art. But knowing that doesn’t make our job any easier.

All marketing campaigns come down to getting time, money, or resources and to be done properly, your Social Media Marketing campaign will likely need a little of all three. For many of us, this means approval from one or more decision makers on a marketing campaign that may be fundamentally different from anything they’ve done before.

The people considering your idea are going to have a running list going of positives and negatives. If they’re like most humans, this list won’t be entirely rational and will likely end up coming down to one major factor either way. Whether choosing new cars, new houses, or even new presidential candidates – people can usually narrow down their decision making criteria to one or two factors, positive or negative.

There’s no way to know which factors will be most critical to the people in your audience but if they’re anything like the folks I’ve been working with, here’s a few that come up almost every time.

• “The devil we know IS NOT SOCIAL MEDIA MARKETING”. This is where many good ideas have gone to die. While it’s true that building a social media project likely won’t be as predictable as a more traditional campaign, there is a healthy amount of data out there already. Besides this blog and my personal blog, success stories and ROI can be found on sites such as Conversations Matter, Groundswell, The Social Organization, and Marshall Kirkpatrick.
• “We’re already doing social media marketing. We have a website, and it has a “talk to a sales rep” button – what else is there?” There is a common misconception amongst the uninitiated that if a company is online, it’s “connected”. As much hype as Web 2.0 receives, there are still many people who don’t get what it is, what it’s for, and more importantly where it might help. The only way to correct this is with education. In addition to collaborating on Web 2.0 projects enterprise-wide, I drive adoption through educational blog posts, workshops and webinars. I’ve found that most people, especially in marketing, have a remarkable capacity to learn about the bleeding edge but if they’re making a go/no go decision on your new project, it might be too late. The way to beat this one is early and often.
• “OK, even if we do it with social media, how would we know if it worked?” Unlike “direct response” or “click through” marketing, social media campaigns aren’t as easily measured. Oftentimes we’re counting things like “engagement” and “connections” that don’t have a correlation to existing marketing metrics programs. At first blush, this seems like a minor point that will get fixed in time. But if your team is compensated on traditional marketing MBO’s, they might not be as motivated to kick off a social media endeavor. Marketing runs on metrics, but somehow TV and print ads get approved every year – stick to your guns, metrics are important but there are other factors to consider.

These certainly are not the only objections that you’ll run up against in trying to get your social media campaign off the ground, but they seem to be pretty common. Feel free to share objections you’ve come up against and any ideas on how to work through them.

Social Media Strategies Event Wrap-Up

The WebGuild's Social Media Strategies Event on May 7 was very successful and a social affair. Many thanks to the stellar speakers: Sam Lawrence, CMO, Jive Software; Sylvia Marino, Executive Director - Community Operations, Edmunds.com; and Felix Serna, Sr. Director Global eMarketing, Sun Microsystems. They were highly knowledgeable and entertaining, and shared great anecdotes. Thank you as well to all who attended and we look forward to seeing you again. Photos of the event.