Category Archives: Microsoft

Discussion of Microsoft.

Why Is Google Even Involved In The Yahoo! Acquisition Talks?

'YAHOO in 2001.' photo (c) 2007, gaku. - license: http://creativecommons.org/licenses/by/2.0/

There’s been numerous news reports about Google considering “buying” Yahoo!, or at least teaming up with private equity companies to do so.

While most of the articles at least mention in passing that it’d be unlikely for this to pass government review, I haven’t seen many people actually discuss why Google is involved.

Why wouldn’t a Google acquisition of Yahoo! pass government review? Well, if the Department of Justice wouldn’t pass the search deal that Google and Yahoo! worked up in 2008 where SOME of Yahoo!’s search results were powered by Google, then why would they actually let Google take part in buying all of Yahoo!?

In fact, many thought that Google knew in 2008 it wouldn’t pass government review, but tried to do the deal just so Yahoo! would turn down Microsoft and waste a lot of Yahoo!’s internal time (and it worked). I sat in many meetings at Yahoo! that were spent talking about the tests we were running with Google and how we were going to implement the deal.

There hasn’t been enough change in search market share for anyone to seriously even think it could pass. I’m not entirely sure if Google being only part of an ownership group with private equity firms would change the government’s view, but I doubt it.

Which leaves us asking, why is anyone even taking Google’s interest seriously?

I can’t answer why anyone is taking Google seriously, besides the fact that they are one of the only players who actually have the cash to do something around Yahoo!.

'Red flags' photo (c) 2004, Rutger van Waveren - license: http://creativecommons.org/licenses/by-sa/2.0/It just seems like any major involvement on there part is going to just raise big red flags with the governments of the world and will never pass “go”.

Why would Google get involved then?

I feel like there are two obvious answers to this one.

  1. Google can pretend to at least have interest in Yahoo! to draw out how quickly something happens here. The more time Yahoo! is in limbo, and the more time Microsoft spends figuring out what to do about it, the better that is for Google to continue to separate itself from them.
  2. Google can go as far as even floating prices out there to try and get others (Microsoft) to feel like they have to pay more in order to get Yahoo!. The more money someone spends on Yahoo!, the better that is for Google.

I suppose it is possible that Google really does want to keep Yahoo! out of Microsoft’s hands, but it seems like Microsoft having to acquire and digest Yahoo! would just allow Google to accelerate ahead even further ahead. It’s all just a ruse to waste time by complicating matters and drive up the price. Well played Google.

Yahoo! and Microsoft Search Alliance Video

My team in partnership with the marketing team at Microsoft put together this new video explaining the Yahoo! and Microsoft Search Alliance.

Microsoft AdCenter scores the WSJ Properties

It looks like it’s really going to get interesting in the battle for publisher ad space. In the last year Microsoft has started to become much more serious about locking up publisher properties, and they’ve done so again with WSJ.com and its related properties.
Read More …

MSN AdCenter Launches Content Network

MSN AdCenter has announced that they’ve launched their content network to be available to advertisers. But my question is, where’s the content?

Well, I actually know that it’s supposed to be on MSN content properties and any other high-level publishers they may have ad distribution relationships. However, what’s interesting is they don’t have a publisher network out there along the lines of Adsense or YPN to distribute these ads. It seems like they’d be better off launching both around the same time, although the theory may be that getting the advertisers into it now will prime the pump for the publisher network when they launch it. And you know they’ll launch it especially since they announced “ContentAds” over a year ago.

I’d actually like to see another player in the contextual network market. As any of you who have been reading my blog know, even though I work for Yahoo!, I’m all about competition helping publishers earn more money. And of course helping provide the tools to make that happen….

Battle of the Advertising Superpowers: Who’s Got What?

adpowers.jpgIt’s been a crazy couple of months. Not only did my employer agree to be acquired by Yahoo!, but our competitive landscape has changed dramatically with Google acquiring Doubleclick, Microsoft acquiring aQuantive, WPP acquiring 24/7 RealMedia and AOL acquiring AdTech AG to go along with what they already own in Advertising.com.

Additionally, there are still some other large players who are also in the game such as News Corp./Myspace/Strategic Data Corp, and IAC/Ask.com.

Obviously this is a big land grab for these large companies, combined with trying to get innovative companies who are pushing things forward in online advertising. The Wall St. Journal talks about the ad exchange concept and how it relates to these acquisitions.

The media and blogs have been covering these stories quite a bit, but I’ve seen a lot of writers and commenters really not having a great gasp on what pieces of the advertising business each company has now, how they all stack up, and what it all means going forward. So, I’ll try and help out.
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Microsoft to Release Web Analytics Tool: Gatineau

Marshall Sponder turned me on to a post from Ian Thomas at Microsoft confirming the rumors that Microsoft is building a web analytics application code named Gatineau.

As noted in the post, Gatineau is built from Deepmetrix which Microsoft acquired last year, and they look to be aiming at a similar market as Google Analytics. Although Ian says they hope to not repeat the same problems Google Analytics did when it launched which was outages and slow response.

The functionality is not released at this point, but Marshall hopes that much of the MSN AdCenter tools and data are integrated as well, and even goes on to suggest that Google Analytics should snatch up Quantcast and integrate them.

Quantcast is definitely a cool service, and it seems to me like a useful acquisition for either an analytics company or even an advertising network or advertising technology company. Having that data on publishers integrated with an advertising solution would be rather handy.

Regardless, there’s no launch date on Gastineau, and from Ian’s post saying he hopes they get out in 2007 it could be a bit of a wait.

Microsoft Moves to Behavioral Targeting, Will They Acquire Help?

A space that’s been full of promise for the past few in the online advertising world is behavioral targeting. It’s actually probably been talked about far more than it’s been put into practice, but most studies and tests seem to show that it always provides much better results than showing users random ads.

Who’s been doing it? Well, Yahoo has been a leader due to all the data they have on a user as well as the massive reach, and a couple of ad networks with a focus on it are Tacoda and Revenue Science. You could make an argument that Google is doing behavioral targeting by showing you ads based on what you’re searching for, but I’m not sure it fits the standard definition perfectly.

The concept is great. You store data on users and where they go and what they do, then find them in other places and show them ads related to what they are interested in. The problem is that to work effectively companies end up needing a lot of data and a massive reach to find users they have information on in the right places to show them ads. It’s really been the primary reason that this type of targeting has been slow to pick up.

Now comes news that Microsoft is getting serious about it. I guess they’ve been testing it for over a year, but I was surprised that they weren’t already offering this to advertisers. After I got over that, I read an interesting post on HipMojo.com that theorizes that Microsoft will acquire an advertising network to expand it’s reach. Being that reach has been a problem for behavioral marketers, this seems to make sense. Especially when most people think AOL’s purchase of Advertising.com was a smart move for AOL. Who does HipMojo.com suggest they might acquire?

  • aQuantive
  • Valueclick
  • Tribal Fusion
  • Revenue Science
  • Tacoda
  • etc.

aQuantive is the operator of ad server Atlas DMT which is heavily used by agencies and large online advertisers. That could potentially provide a lot of reach in some ways, but Atlas has not been that known for having publisher relationships, although they recently acquired ad serving company Accipter which is more known to be an ad server for publishers.

Valueclick operates a number of businesses such as Commission Junction so it might be more than Microsoft needs if they’re looking for reach, but Valueclick’s ad network is one of the largest.

Tribal Fusion is more of a pure play network and may have a higher inventory quality than Valueclick, but it’s reach is most likely less.

Revenue Science and Tacoda are both leaders in behavioral targeting so that may make sense for technology reasons, but they also don’t have the reach of the larger players mentioned above.

Many interesting options, and it’s the first prediction I’ve seen that suggests Microsoft would acquire an ad network. In some ways I think it’s unlikely because Microsoft may figure they have the reach they need with all their properties, but I’m not sure they really do on the level they need to make it work. I’m not sure advertisers are thinking of going to Microsoft today as much as Microsoft would like, and maybe an acquisition like this would make them more of a player in the online advertising space.

What Digg and Netscape Can Do For You In Organic Search Results

diggsearch.jpg
Publishers and bloggers who have had the experience of having their content “Dugg”, “Scaped”, or featured prominently on any other social news or bookmarking sites have seen the short traffic spikes that tend to occur from this experience. Many have commented that beyond those huge traffic spikes there isn’t much long term value from having your content featured, and why submit to them at all if your content isn’t going to make the front page when the traffic spike occurs?

A recent experience with organic search results and some research has caused me to believe that the long term value proposition is changing and will get even better. It also sheds some light on which social sites may grow in traffic, and which of the three major search engines indexes them the best.

The Initial Query
My parents have an ecommerce site primarily selling an ergonomic stool called the Swopper Chair. I provide some technical consulting for them and I needed to look up some PHP shopping carts. So I did a Google search for “best php shopping cart”.

I started reading through the results, and noticed the result from Digg half way down. Knowing what Digg is, I figured it’d be a good recommendation and probably have some comments and additional links that might help me out. I read through the comments and ended up clicking through to both the Dugg URL and some of the URLs in the comments.

This made me wonder if there is potential for organic search results for social news and bookmarking sites to drive long tail traffic to your site, maybe even if your article never got many votes and never made the front page of the site.

The Tests
It was time to start picking some search queries and see what kind of results appear from social sites and what about those sites makes that happen. I’ll link to the query along with what social sites have results and where the original article ends up in the results.

Test 1: john battelle keynote

This was a search term from the post I made from John Battelle’s keynote at the Blog Business Summit last week that did not get many votes on the social sites, and got a few links to my post from the blogosphere.

Google:

  • 5th – Netscape
  • 7th – Digg
  • 11th – ConversionRater (my post)

The result of that is if I hadn’t submitted my article to Netscape and Digg I’d have no chance of getting any visitors who didn’t pass the first results page. Of course, the visitor has to click through Netscape/Digg to get to my actual article, but the chances of that are decent based on how those sites are structured.

Yahoo Search:

  • 3rd – ConversionRater

No results from the social sites. Either Yahoo doesn’t index them well, or index them quick enough.

MSN Live Search:

  • 10th – ConversionRater
  • 13th – Netscape

Interesting that Digg was not here at all when Netscape was listed.

Summary: Google provided the best and the most beneficial results for using social news to get higher rankings for an article than I could get on my own without submitting it.

Test 2: yahoo invests

This term is from the title of a more popular article than our first test. This one is from SmartMoney.com to the tune of 137 Diggs that was on the Business and Finance front section on Digg, and I also made a blog post with the same phrase in the title.

Google:

  • 3rd – Digg
  • 5th – Searchmob (A Digg like site from John Battelle about the search industry)
  • 6th – SmartMoney.com Article (Actual article that was Dugg)
  • 7th – ConversionRater blog post

Solid results, and the presence of social sites and linking between them and my blog post allowed this one story to take 7 of the top 10 search results, even though Yahoo has invested in many, many things over the years. This provides a lesson that sites like Digg hold a huge page rank and authority now that it ranks higher than most media outlet sites that have reported on Yahoo investing in various things.

Yahoo Search:

  • 17th – ConversionRater blog post
  • 21st – SearchMob
  • 23rd – DuggMirror (site that mirrors popular articles on Digg)

So where the heck is Digg? They haven’t been on either test so far. Does Yahoo not index Digg? Now that Searchmob has shown up on two engines, maybe it’s an important site to add to the submission mix even though it’s not as well known as others. This is the only story I’ve ever submitted there, so that looks promising. Yahoo also had much more varying results instead of just the Right Media investment story, so perhaps Google’s top results are more time-sensitive.

MSN Live Search:

  • 2nd – ConversionRater blog post
  • 11th – SmartMoney.com article that was Dugg heavily
  • 17th – Digg
  • 19th – SearchMob

Live Search likes my blog the best which is great, but also interesting to see SearchMob popping up again in the top 20.

Summary: Google’s results make Digg and Searchmob look especially important to get higher rankings. It doesn’t look like social sites matter to Yahoo, and MSN results are mixed.

Test 3: toyota logo

A few weeks ago my friend Mike Rundle had a little run in with Toyota based on a company working for them taking the 9rules leaf logo and barely changing it for a site they were running. I figured this search query might be a bit harder to rank high on, so it’d be interesting to see if the social networks helped out.

Google:

  • 6th – BusinessLogs.com original post
  • 10th – Digg
  • 11th – Netscape
  • 20th – Reddit

Not bad, but the social sites might not help all that much as the original post would probably get clicked on more. It is interesting to see our first sighting of Reddit.

Yahoo Search: No results

Ugh, Yahoo hates social sites and blogs!

MSN Live Search:

  • 4th – Digg
  • 8th – BusinessLogs Original Post

The Digg listing is a big help here at potentially getting more search traffic.

Summary of Tests
Even though it was a pretty quick test, and the search terms I tested aren’t that competitive, it’s clear that submitting your site to the social news services can help drive more traffic to your site through organic search.

I think we can also see that Google seems to embrace fresh content and the social news sites more than Yahoo and MSN, and Yahoo definitely isn’t a big fan. This is probably not a big deal as most publishers are primarily concerned with Google traffic anyway.

What does this tell us about the social sites?
Digg and Netscape were definitely the most commonly found sites, and I ran some more additional quick tests and found that Netscape seems to also show up ahead of Digg in many cases. I had an extremely hard time finding Reddit or del.icio.us in any results. Why is this? Let’s take a look at why each of these sites may or may not rank highly:

Digg:

  • Lots of link popularity and authority. 8/10 Google Page Rank (if that means anything).
  • Uses title of article in the page title well.
  • Article title in an h3 tag.
  • Uses title in search-friendly URL.
  • Community comments make the page have more text and makes the Digg listing page like an article itself. It can provide more keywords and variety.
  • They provide incentive to blog about their stories (and thus get more link popularity) by listing the Digg users who blogged about the story with a link back to their blog.
  • There are sites like Duggmirror and blogs that basically just republish Digg listings and content so it drives more links.

Netscape:

  • Even more link popularity than Digg, but this is a benefit of Netscape.com’s long time place on the web. 9/10 in Google page rank. This could account for why Netscape sometimes comes up ahead of Digg for the same stories.
  • Uses title of article in the page title well.
  • Article title in an h3 tag.
  • Uses title in search-friendly URL.
  • Community comments make the page have more text, but usually not as many comments as Digg.
  • Didn’t see any incentive to blog the stories.
  • Probably not as many mirrors or sites republishing their content as Digg.

Reddit:

  • Decent link popularity at 7/10 Page Rank, but not as good as Digg and Netscape.
  • Uses title of article in the page title well.
  • No header tag around article title (ouch).
  • Does not use the article title in the URL.
  • Community comments make the page have more text.
  • Didn’t see any incentive to blog the stories.
  • Probably not as many mirrors or sites republishing their content as Digg.

del.icio.us:

  • Link popularity is good and similar to Digg at 8/10 Page Rank.
  • Does not use title of the article as the title of the page.
  • Uses h4 tag for article headline.
  • Does not use the title of the article in the URL.
  • Instead of it really being comments and a discussion, users leave notes about the bookmark. They are usually very similar notes.
  • No incentive to blog the stories.
  • I’ve actually heard before that del.icio.us blocks search engines from indexing it with their robots.txt file. I haven’t researched if that’s true, but judging from how they have their bookmark pages set up it does not appear that they are trying to get good organic search results. I did find their tag pages listed in some search results however.

Searchmob:

  • Low link popularity, currently showing a 0/10 in Page Rank. The root domain of battellemedia.com does have an 8/10 though, so that probably carries over.
  • Uses title of article in the page title well.
  • Article title in an h4 tag.
  • Uses title in search-friendly URL.
  • There is the potential for comments, but since it gets less traffic there aren’t many comments.
  • It does take trackbacks which can encourage blogging the stories. Didn’t look too common though.

Social Site Summary
Based on looking at how they have set things up, Digg and Netscape are positioned the best to continue to grow from organic search results. This will be a key to break out of the tech audience and into the mainstream web userbase. If users find Digg through Google results they may be inclined to stick around. Also, as publishers learn about the value they can get from having their articles submitted to these sites, Digg and Netscape will get more submissions while other sites won’t.

It seems to me like Reddit and del.icio.us are missing the boat here and not doing some very easy things they could do in order to get their pages show up more in organic search. Do they not want traffic?

Revisiting Top 10 Web Predictions of 2006

As 2006 began I made a set of predictions for what I thought would happen related to web applications, comipanies, and “Web 2.0″.

We’re two-thirds through 2006, so I figured it was a good time to revisit how many of them have come true, and if any are still likely to occur in the rest of 2006.

1. RSS will become two-way with the help of Simple Sharing Extensions.

Hmm, well, this is slowly improving, but I don’t think I really nailed this one. Hopefully we’ll see more of this in the future but the buzz around it seems to have died down or just moved behind the scenes.

2. Social news site Digg will expand into other content areas and media types and then will be acquired.

I was half right on this one. Digg did indeed expand into other content areas and media types, but no acquisition has occurred. Will that still happen? There hasn’t been any buzz around it lately, and Digg has gone through some recent problems as bloggers have noticed that Digg might not be as democratic as we thought, and they’ve lost some top users to Netscape’s offer to pay top social news finders.

Digg also faces competition from other social news services like Reddit, Newsvine, and Netscape, and while none of them has gotten to Digg’s level, it’s still early in the social news race. There are also numerous sites launching all the time which work just like Digg but are focused on specific verticals. It may be that what they’re doing isn’t unique enough now to really warrant someone wanting to acquire them that badly.

3. Web 2.0 will be looked down upon as a buzzword, and it’s usage will drop off dramatically.

This has definitely occurred, and more people seem to be moving past the term into just accepting things as new web applications. We’re also hearing “social web” or “social media” for a lot of Web 2.0 applications.

4. Face-recognition photo application Riya will be acquired by a major player.

Oops, didn’t happen yet either. Riya switched up their model a bit and are taking on an even bigger challenge of web image search with their facial recognition technology being a big part of that mix. I’d say at this point an acquisition in 2006 is unlikely, but I wouldn’t rule it out in the long term.

5. Some ecommerce shopping applications using the more recent advancements in social web technologies will be developed and will succeed.

Web shopping seems to move a little slower than other applications, but we have seen some cool new shopping applications. Jellyfish probably has made the most noise this year with their Value Per Action advertising model, but taking a look at this Alexa graph it doesn’t look they’ve had much traffic uptake from consumers. Of course, don’t always trust Alexa, I think Jellyfish is compelling although not revolutionary, but has a long way to go before it’s a major player. jellyfishgraph.png

6. Google Analytics will again drop the hammer on the web analytics industry.

Another one I missed, there hasn’t been much out of Google Analytics besides finally opening up to the public. Google may be spread too thin in this case, or maybe they have no new analytics ideas, but they haven’t done anything special with it since launching it.

7. A forward thinking company will build technology to support transparency, efficiency, and relationships in the online advertising business.

Hey, what do you know, Right Media is doing this. Okay, I’ll admit this was a loaded prediction when I knew it was happening. Still, I think we’ve made great progress in 2006 thus far, and the rest of the year and 2007 could be really special.

8. Microsoft will launch a contextual advertising network that will either be huge, or fail miserably.

They have started issuing beta invites for advertisers to particiate in their content ad network. So we don’t really know yet if it will be a success or not. There hasn’t even been much detail yet on what the service will consist of, but if Adcenter is any indication it could have some interesting features, but be very IE-specific and bug heavy.

9. Two to three new startups will be so cool and successful they will make the heroes of 2005 like Flickr and del.icio.us seem small and insignificant.

I think YouTube makes a strong case for this being a correct prediction, and Digg has also been pretty cool and successful, although neither of them have been acquired like Flickr or Delicious. Of course, let’s recall that those two were not acquired for huge amounts of money though.

10. The venture capital investments and acquisition bubble will heat up even more, then deflate in the 2nd half of 2006 after a number of companies fail..

It seems as if things have cooled a bit in the 2nd half of 2006. Rojo was recently acquired by Six Apart, and there have been some recent venture capital investments but nothing too crazy.

Overall

Not bad, but I think I can do better with future predictions. I think I’m just early on a few of them, and maybe flat out wrong on one or two.

Microsoft Parties at Facebook’s Dorm

It was announced earlier this week that Microsoft has won an advertising deal with Facebook, and terms weren’t disclosed. Shoemoney seems to have a source saying the deal came in around $850 million, others hear it’s more like $200 million, but without knowing exact terms beyond it involving display advertising and sponsored listings it’s hard to really analyze the details too much.

Techcrunch thinks the most interesting part is that the deal wasn’t with Google. I disagree, I think the most interesting part is that Microsoft is working on becoming an ad exchange.

According to the New York Times:

Steve Berkowitz, senior vice president of the online services group for Microsoft, said ads would be made for Facebook, but they could also be aimed at any of MSN’s various Internet properties, which have a total of 400 million users worldwide. At the same time, ads running on MSN properties may also appear on Facebook, depending on what audience the advertiser wants to reach.

Also according to the Times:

Phil Leigh, president of Inside Digital Media, a market research firm specializing in digital media, said of the deal. “But Facebook is also a legitimate test bed, a place where Microsoft can test new technology in a commercial context,’’ he said.

“What we’ll see is Microsoft attempt to do some fairly leading-edge type of things, involving banner ads, animation and interactivity,’’ he added. “Whatever technology they develop and use effectively in Facebook, they’ll be able to use it elsewhere.’’

Couple those with Steve Ballmer’s quote back in May from Red Herring:

“…think of us as becoming the eBay of advertising where we will bring together buyers and sellers in an online marketplace.”

Looks to me like Microsoft just made the first big play towards their exchange marketplace, and Google’s really had their own “private” exchange for a while with Adwords/Adsense.

Already I see some difference in Microsoft’s ideas from other exchange marketplaces out there, and that they are exclusively representing Facebook’s advertising inventory. Is that really the best thing for Facebook long term? Sure, it helps with their guaranteed cash flow if Microsoft will throw hundreds of millions at their inventory up front, but doesn’t that mean in an open advertising marketplace they could make even more money if anyone could buy from them directly?

Microsoft is going to be taking a sizeable cut of any ad showing up on Facebook. Is that really the most efficient and profitable thing for Facebook? How much incentive does it provide for Microsoft to work their asses off when they’ve got the inventory locked up? What if Microsoft had to continually compete with others to win access to Facebook’s inventory?

Based on these things, I’d say Microsoft is the winner in this deal providing that Facebook’s inventory is worth what they’re estimating.

As Microsoft, Google, and others continue to move into the advertising marketplace/exchange space over the next couple of years, I hope people realize that buying exclusive access to inventory does not constitute providing a true advertising exchange.