Presentation on theme: "Search and Browsers. Googlenomics (WIRED, Steven Levy, 2009) Hal Varian Google Chief Economist – expert on Adwords (most successful business idea in history)"— Presentation transcript:
Googlenomics (WIRED, Steven Levy, 2009) Hal Varian Google Chief Economist – expert on Adwords (most successful business idea in history) Analyzed Applied game theory “design an auction perfectly” Ads should be useful and welcome, not an intrusion AdWords analyzes every Google search to determine which advertisers get each of up to 11 "sponsored links" on every results page. It's the world's biggest, fastest auction, a never- ending, automated, self-service auction. Millions of small and medium sized companies Amount of next high, + $1
Secrets of Googlenomics Two-sided matching Economic principles Macro & Micro Macro – altrusic behaviors “giving away products” Browser Apps Android operating system Micro – Selling ad’s generates profits and data and predicts future behavior Heart & Soul of Googlenomics: Self-analysis, data- fueled feedback loop that defines Googles future
Auction crazy Place ads on other Web sites – AdSense Quality Score also influence Using it in the IPO Internal operations Eric Schmidt (previous CEO) thinks Goolge-auctions are applicable to many different transactions GOOGLENOMICS: “early recognition that the Internet rewards fanatical focus on scale, speed, data analysis, and customer satisfaction. (A bit of auction theory doesn't hurt, either.)” Data; what is scarce? Ability to analyze/use data
Google’s Algorithm Rules the Web (Wired, Steven Levy, 2010) 2010 – 550 improvements to algorithm Mission “organize the world’s information” Competitors don’t pose a threat, but combined cause a “messier future of search” Bing (biggest threat) – still? Mike Siwek Lawyer Mi comparison Algorithms interpret search (even misspellings) Began with PageRank rate pages based on the number and importance of links that pointed to them
Collect the contents of every accessible site, data is broken down into an index (organized by word). Every time a user types a query, the index is combed for relevant pages, returning a list that commonly numbers in the hundreds of thousands, or millions. Ranking process — determining which of those pages belong at the top of the list. Contextual signals (Title, Anchor text & Synonyms) Constantly Improving Matching meaning, not words Flexibility — the ability to add signals, tweak the underlying code, and instantly test the results – Google’s Success CSI – Crazy Search Ideas
How Yahoo Blew It (Wired, Fred Vogelstein, 2007) Terry Semel (legendary Hollywood dealmaker) Wanted to buy Google for $3billion Google was still a private company but estimated to be worth $5 billion Plan B – Beat Google Small deals made, but no big acquisitions in new media aspects Had the search engine aspect, but didn’t know how to make the money Combined with Overture, but there were issues He understands how to do deals and partnerships, he gets how to market Yahoo's brand, and he knows how to tap Yahoo's giant user base to sell brand advertising to corporations. But the challenges of integrating two giant computer systems or redesigning a database or redoing a user interface? Yahoo marketers rule & at Google engineers rule
CEO Fired (Sept. 2011) Carol Bartz – Yahoo CEO for two years (started Jan. 2009) Brought on to turn the company around Yahoo never decided whether it wanted to be media or technology company Rejected buyouts 600 million visitors to all its services, but not able to increase advertising revenue No successor ready
CEO “Undoing” (May 2012) Scott Thompson only CEO for five months falsified his resume Yahoo was already struggling Tried to get Thompson to apologize but other employees were getting angry Trust issue Tried to hide the lie Avoided the resume issue Thompson “resigned” Currently CEO of ShopRunner
Larry Page Wants to Return Google to Its Startup Roots (Steven Levy, 2011) -12 years ago, Larry Page and Sergey Brin decided they wanted to run Google themselves -John Doerr convinced them to meet with other Silicon Valley CEOs to find out what the job entailed; wanted to hire Steve Jobs -Page and Brin agreed they needed to hire a CEO, eventually hiring Eric Schmidt -Schmidt helped Google climb to the 3 rd largest tech company in the world (now worth over $37 billion in revenue) -Larry Page is back in CEO position, and wants renew Google’s energy and drive “I didn’t want to just invent things, I wanted to make the world better.” “If the company failed, too bad. We were really going to be able to do something that mattered.”
“How many engineers does Microsoft have?” Page asked. About 25,000, he was told. “We should have a million,” Page said, in all seriousness. -Schmidt seemed to be the voice or reason with Page, with him gone and Page back as CEO, there may not be anyone holding Page’s vision back. Potential risks? (Look at Google/Verizon radio spectrum bid) Used it as a ploy to assure Verizon that people were interested Schmidt’s take on Page taking over CEO: “Larry is ready... Day to day adult supervision no longer needed!” Note: Article written in Mar. 2011, before Google+ launch.
Marissa Mayer is Bringing Back Internet Portal Refocus the company Broadening scope with acquisitions Information is hoarded in proprietary databases Yahoo cobbles together information from the items to which it has access, Flickr, Yahoo Mail, now Tumblr Each info source doubles as an ad delivery channel What do you think is the future of the portal?
What Would Google Do? (Jeff Jarvis, 2009) “It seems as if no company, executive, or institution truly understands how to survive and prosper in the internet age… Except Google.” Is this true? Google operates under new rules of a new age: -Customers are now in charge. -Mass of niches. -Markets are now conversations. -Customer collaboration -Successful enterprises are networks. -Openness is the key to success. (Note the effectiveness of 2-way communication)
New Rules of the Modern Age Customers are now in charge. They can be heard around the globe and have an impact on huge institutions in an instant. People can find each other anywhere and coalesce around you—or against you. The mass market is dead, replaced by the mass of niches. "Markets are conversations," decreed The Cluetrain Manifesto, the seminal work of the internet age, in 2000. That means the key skill in any organization today is no longer marketing but conversing. We have shifted from an economy based on scarcity to one based on abundance. The control of products or distribution will no longer guarantee a premium and a profit.
Enabling customers to collaborate with you—in creating, distributing, marketing, and supporting products—is what creates a premium in today's market. The most successful enterprises today are networks— which extract as little value as possible so they can grow as big as possible—and the platforms on which those networks are built. Owning pipelines, people, products, or even intellectual property is no longer the key to success. Openness is.(Notice a trend here?) Jarvis wants to reverse-engineer Google in order to apply this model to other companies, institutions, and careers.
Search Engine Use (Deborah Fallows, 2008) -The percentage of internet users who use search engines on a typical day has been steadily rising from about one-third of all users in 2002, to a new high of just under one-half (49%). -Says 60% of daily use is email. Does this still apply? -Also says those of higher education and higher income, yet younger in age, tend to use search engines more frequently. Side note: Article discusses broadband v. dial-up users -Does a lot of this data seem relevant still?
History of Web Browsers (Jacob Gube, 2009) -1991: WWW invented by Tim Berners- Lee -1993: Mosaic is released -1994: Netscape is formed -1995: IE released, prompts browser wars -1998: Netscape goes public -2002: IE takes over 90% of market
2 nd Browser War 2003: Safari debuts 2004: Firefox 1.0 is released (2 nd Browser War) 2006: IE 7 released 2009: Google Chrome jumps in, intensifies browser war.
Firefox Explosion (Josh McHugh, 2005) -”Breath of fresh air” to those frustrated with IE (particularly due to the ease of malware and Trojan infestations) -10 million downloads in a month. -”Easy to use, easy on the eyes, and safer than IE” (to new to amass hackers) Is this still true?
Return of Browser Wars/The Browser Wars are Back (Sooraj Shah, 2012; JP Mangalindan, 2012) -IE v. Google Chrome v. Firefox -IE on the decline, Firefox and Chrome are virtually even. -A browser for every person…? What is your preference? -Now wanting to move into moble apps.
-Rumors of Facebook possibly getting into the game. “…the browser wars aren't just heating up yet again. In some ways, at least where mobile is concerned, they're just beginning.”
The Browser Wars Are Back Competition fierce, especially on mobile "It's about data and more control of the customer," says Greg Sterling, an analyst with San Francisco-based Opus Research. Yahoo and Facebook strategies?