Google Shares Drop: Can you say Volatility?

Volatility. Risk. They go hand in hand.  I shudder to think about the roller coaster ride in store for Google shareholders if “concern that the outlook for holiday sales may not be as strong as investors had hoped” can hurt the stock so badly.

The holiday season is (the next) five weeks in length.  Last time I checked shrewd investors invested in stocks for the long haul. 

Here is the article.

BarCamp Toronto – Session #1

Levi and I attended barCamp Toronto this weekend – hat’s off to David Crow for making a real success out of this event.

For those who don’t know, barCamp is a movement in cities around the world to get the technology development community out of their respective holes and in touch with one another.  It’s a reaction to Tim O’Reilly’s FooCamp which was invite only and alienated a whole bunch of folks (Foo is the opposite of Bar).

Anyhow, it was great to get out and meet people like Rob Hyndman who I had met previously in Cyberspace (through email), but not in person.  I also managed to meet and alienate my first “blog reader” within an hour of arriving.  How? 

I was in a session where we were discussing RSS when we got into some of the social networking aspects of services like and blogs.  From the corner, Ken Schafer  piped up, “…for example, I’ll bet Michael doesn’t know I read his blog’. I was stunned(!), and he was right – I had no idea, nor did I know who Ken was.  The next session was on money and business models.  I went on a rant about Adsense driven portals and how I don’t agree with them as a viable business model.  Of course that’s Ken’s business model.  Way to go Mike.  Meet your first blog reader and alienate him all in a span of 40 minutes… 

Seriously though, it was great to meet Ken.  We both teach Internet Marketing here in Toronto and Ken is a real asset for BarCamp because he organized a similar community (AIMS) in the past and knows all about the growing pains of such an undertaking.  Ken is also a wealth of knowledge and a very approachable guy so it was fun to meet in such a forum.

It was also great to hear from Albert.  He is a living breathing success story for Web 1.0 and on his way to a second success with BubbleShare.  Albert said some things which will be the foundation to another essay in the web 2.0 essay.  (Subscribe to his feed or email me and I’ll let you know when it’s done.) By the way, judging from his name tag, Albert is hiring Ruby + C# developers if you know anyone who fits the bill. 

Finally, I’d like to say a word of thanks to Ken King who could not attend because something came up at the last minute.  Ken is a marketing guy who is developing a series of web services.  I asked Ken to add them to my list of Canadian Web 2.0 apps.  He said “I’m too Canadian to add them myself”, so I’m glad to do it here for him.

Thanks again to David Crow and John Lax for hosting.  Great to get out with our peers; lets do it again. And is anyone out there sitting on their hands, waiting for someone else take the initiative and provide a medium for your peers to meet?  Why can’t you do that yourself? Surely something good will come out of it…

End of the Sustainable Competitive Advantage?

Has Web 2.0 brought an end to the sustainable competitive advantage?  Look at Flickr, Delicious, even (read their prospectus and  they admit to have no patents and no sustainable competitive advantage) – none of these companies has a defensible technology position. 

When I speak with savvy business people they ask: “What is 2ndSite’s sustainable competitive advantage?”  Well … we don’t have one… does that mean we cannot build a successful company and a cash cow? No.

I do NOT think Web 2.0 is the end of the sustainable competitive advantage and I think that any investor would do well to explore this criteria in their investment evaluation.  I also think a sustainable competitive advantage is not be all and end all.  Today you can scale a business faster and more cost effectively than ever before (online at least).  First mover advantages exist in many categories for many businesses.  Therefore you can establish a sustainable advantage through scale if you invest in the right opportunity at the right time.

Things are changing for investors and VCs.  Read Paul Graham’s “The VC Squeeze”  for some ideas on how VC’s may need to change to keep up with the times.  I think that sustainable advantages and new ways that look at the issue of sustainable advantages are going to be industry “personal” growth issues for the venture capital community – at least into the foreseeable future. 

There are going to be more opportunities surfacing that leverage sustainable competitive advantages in the Web 2.0 space.  I just hope it is not only Google, Yahoo!, Microsoft, and other monoliths that secure them.  Here is a great post by Dion Hinchcliffe on that subject.  In the comments he and I get into it a little.  It might be worth having a look at.

The final word: if you find someone who believes the sustainable competitive advantage is dead, you’ll know we’re in a bubble.

Search Engine Expert Witness – Toronto, Canada

Disclaimer: this post concludes on a moral note. Apologies in advance it that is not your thing.

I got an interesting call on Monday from a lawyer looking for an expert witness on the topic of search engines. It’s not the first time I have been asked.  I turned down the last request due to other commitments.  That said, when I get these requests, it is hard to say if I would have been a good fit for the job. I have been in the industry for 6 years and that is pretty much the lifetime of the industry.  Also, since I teach Search Marketing at Humber College and for other organizations, and consult on it, I am probably appropriate for the majority of cases.

To be honest, I am not sure how many people in all of Canada can really qualify for the “search engine expert witness” title.  As I say, I can’t be sure I do either.  I asked Kathy (who manages Anicon now) to call back and learn a little more about the case to see if I was a suitable expert in this instance.  Kathy is well on her way to becoming a Canadian search engine expert herself, but you never know what knowledge will be relevant in a case.  For certain either of us could testify about the principles and best practices surrounding ranking a website, but if the case demanded someone who would be willing to comment on the intricate changes in search engine algorithms, that is not something we could do beyond speaking in general terms.  The fact is only those who work within the walls of the Googleplex or at Microsoft or Yahoo! can really speak to those kinds of specific changes, and I’ll bet you they are legally bound to keep their mouths shut.  Therefore, Kathy, I or Jeff (also an Anicon team member and search expert) are as likely to be certified as anyone to be an expert search engine witness.

But the point of all of this is that when Kathy called to find out more information on my behalf, this is what the lawyer said:

“I only want to go through this once.  I am a lawyer.  I don’t have time for this.”

That was just plain rude – and she clearly did not know who she was talking to (i.e. a very qualified person).  Guess what?  Kathy does not have time for you anymore, and I’ll back her up on that one.  I feel sorry for the client of this lawyer because her lawyer does not have a winning attitude and does not appear to be on track to build a team for a successful defence.  Nobody is perfect and we all make mistakes.  What else is true?  We’re all tight on time and you catch more flies with honey.  It’s important not to forget these things…

Canadian Web 2.0 Companies / Entrepreneurs

Do you know any Canadian Web 2.0 Companies and/or Entrepreneurs?  If you do please comment on this post (see below) and tell me about them or email me (see above).  Please be sure to include the company name and a URL. I’m trying to get a list together and I am hoping this is a good way to start.  (It’s also an experiment…so please participate!)


The Gloves Are Off

Wow – It’s getting nasty.

Google is now paying you $1 for every user Internet Explorer user you convert to the Firefox browser.  This is consistent with Google’s strategies as it works towards weakening Microsoft’s chance of using IE to take a shot at fortifying its virtual monopoly through the web browser.  People have long speculated that Google would develop its own browser.  This move seems indicate otherwise.  That said, the move should help encourage ongoing development of the Firefox browser and Google themselves may get actively involved in that development at some point in the future.

So, it’s officially WAR if you ask me.  The gloves are off. 

Here is the catch though, the “switchers/converts” must install the Google Toolbar for you to receive a credit and that means Google will be “watching you” and your online behaviour like they do with today’s toolbar users.  Therefore switching is sort of like selling your credit card information – Google will profile you, get smarter and make it easier for themselves to sell you services. 

Google’s powers are growing.  It is now a public company and so it serves the Street.  If absolute power corrupts absolutely, and if Google could be headed for (nearly) absolute power over the internet, then how much longer can they hold out before they are corrupted and their “don’t be evil” mantra rings hollow?

I'm for I Cringely

I’ve been sort of stuck on Mircosoft this week.  I can’t say why, but I have been.  Here are two great posts from I Cringely conerning Mircosoft’s future and their current activities.

1) Concerning Mircosoft’s “leaked” documents:

2) Concerning Google’s Walmart style strategy (I REALLY like this one) to disarm Mircosoft:

If you like the posts, revisit this site and post comments here as there is no facility to do so on the site iteself.

What Microsoft can learn from the Xbox

I had dinner with two old friends last Friday – both are veteran marketers.  Somehow we got to talking about Microsoft and the Xbox.  I had been thinking about the Xbox lately because of the reasons for its success with gamers.  Which reason in particular? Moding.  Basically, XBox can be manipulated/hacked so that gamers can play copied games and perform (illegal?) activities enjoyed by most gaming enthusiasts.  PlayStation can be moded too, but from what I gather Xbox moding gives you more features. 

Moding is just another way to free and manipulate data – just like an API with web services today.  So the lesson here is making it easier for users to free their data is a competitive advantage. 

For lesson #2 we return to the dinner party.  It turns out one of my guests got an Xbox as a Christmas present from his brother in law.  Being 30 and the director of marketing at a large Canadian company he barely had the time to use it.  3 months after getting it he tried to use it and found it was broken.  He called for technical support only to learn that he could PAY to ship it back and then PAY $200 to have the $300 device fixed.  The sales representative had the good sense to explain that if he had had this problem in the USA – and not in Canada – the part would be covered by warranty.  Whoops.  What’s the outcome of this experience?  My friends have made a choice for their family never to buy a Microsoft product again if they can help it.  That was the punch line to their story.  Not so good for Microsoft – especially considering the purchasing power of this couple.

Consumers are fickle, more fickle than ever.  Service and support are HUGE components in the brand relationships.  That relationship matters immensely for monoliths like Microsoft who will have many products to sell to a given customer over that customer’s lifetime.  What was the cost of that support call?  Certainly more than $2.25 (total guess) Mircosoft likely budgets for the average support call.

Missteps like this one build brand bias – in  negative way.  Over at Rackspace – the most service oriented company I deal with – they call these episodes paper-cuts.  Consumers  are fickle and service matters.  Imagine dying from paper cuts.  What a painful way to go…

Google Labels/Tagging

I have been thinking about the impact of on Search.  Having  people organize and rank content has huge potential in efforts to determine relevancy.  Google has been using its tool bar to collect information about “who bookmarks what” for some time now. a living breathing manifestion of this and I had thought that Google might be interested in buying because of their data – or at least figuring out how to crawl it.  I thought of some issues with using this data in a an algorithm factor (i.e. only geeks are using delicious….not a very wide ranging sample group), so I figured it could not achieve too much relevance in the algorithms.

Today I was reading The Globe and see Google has released their own tagging service.  Here is what Danny Sullivan has to say about it:

Labels let you describe what something is about. Want to list an actual web page in Google? No problem! You can enter a URL, assign it some words, and away you go. How heavily labels will be used as part of the ranking process remains to be seen. But I already have seen enough to find the entire thing a big giant step backwards.What’s a page about? Isn’t analyzing every word on the page better than depending on hand categorization? How about using some of the copious amounts of technology that exist to break down a document to main keywords or themes? Going to labels isn’t Search 2.0 or Search 3.0, it’s flipping backwards to Search 1.0.

The Long Tail of Web Services and Henry Ford

I haven’t read about “the long tail of web services” anywhere other than my comment here  – so I figured I’d coin the phrase for posterity.  Frankly the second half of Volume One  is almost all about the long tail of web services and the clutter that is already emerging in the low end of the web services market.

With that on the brain I got to thinking history last night and a few more things dawned on me.

Web services technologies are doing for software developers what the assembly line did for automakers.  Web services and their empowering development technologies have reduced production costs and made pricing more accessible to consumers.  Also, web services are easier to distribute than packaged software and they allow for standardized operating environments.   Standardized operating environments  – one of the huge benefits of web services – allow for maintenance and upgrades without the need for patches and reinstallations. 

OK – not much new there, except for perhaps the assembly line business.

But one thing of particular interest to me is something I cut out of Volume One is the significance of  distribution in Web 2.0.  Ford created the dealership franchises system.  As the long Tail of Web Services expands, consumers are going to need help sorting through the market’s offerings.  I foresee the need for comparison shopping sites growing.  Affiliates and search portals are going to be hugely important as consumers struggle to find services that are right for them in cluttered markets which contain many similar offerings – especially at the low end.  Here is the thing – I’m not sure today’s comparison shopping sites are going to cut it in the non-product “services” comparison world.  Services are much more about benefits and reputation than simply FEATURES which are the core of comparisons in the product comparison arena.  Now differentiators like uptime, usability, security and customer service – which are intangibles and require research and a measure of objectivity for worthwhile comparison  – will be huge.

Sounds like opportunity to  me…