Monday, February 4, 2008

Google admits they don't understand social software, stock down

Previously I played with the idea that the fact Google's (GOOG) stock was down was correlated with their Reader's privacy scandal and their lack of understanding of social software. Now it is official:

CFO George Reyes said the company has found that “social networking inventory is not monetizing as well as expected,” leading to higher than expected traffic acquisition costs.
http://blogs.barrons.com/.../-not-monetizing-as-well-as-expected/

Google on Thursday blamed the difficulty of making money from placing adverts on social networking sites for holding back its growth in the latest quarter, contributing to a 9 per cent slump in its shares in after-hours trading.
http://www.ft.com/.../-0000779fd2ac.html

Brin noted some things were tried that didn’t pan out. While Brin won’t talk about partners it’s fairly obvious that MySpace is an issue. Google is obligated to pay at least $900 million in minimum revenue guarantees to MySpace through 2010. Later, the question was revisited again. He noted that Google also has Orkut and other social networking partners. “We have an incredible amount of this inventory,” said Brin. “I don’t think we have the killer best way to monetize social networks yet. We have had a lot of experiments (and some disappointments).”
http://blogs.zdnet.com/BTL/?p=7835


One of the failed "experiments" Sergey Brin might be referring to is the US$900 million deal they made with MySpace in August, 2006. Maybe they were happy then, but just as they were inking the deal, Facebook was preparing their surprising growth in the shadows. The final blow came when Microsoft, and not Google, bought a portion of Facebook on October, 2007. A big difference on these deals: Microsoft bought Facebook, Google only the right to place ads in MySpace for a lot of money.

Now Google has a bigger threat to worry about: Microsoft is going to buy Yahoo. Google even wrote an official plea at their blog. But I'm not sure who the good guys are anymore. Historically Microsoft has done a lot of wrong, but at least they have never misused my personal data. Not the same with Google. I really trusted Google until they started pushing my shared data to all my GMail's contacts. Almost two months have passed since that day, and they still haven't done anything to correct their wrong. So who should I worry more now? The desktop monopolist, or the personal data one?

More at Techmeme: Google not monetizing social network inventory and their anti MSyahoo plea.

Wednesday, January 16, 2008

should people invest in the old new Starbucks?

Howard Schultz is back at Starbucks (SBUX). Recently people were leaving the company for dead as their last CEO - Jim Donald - kept destroying its values. A sign of their despair was that they had never bought TV ads, until their same store sales kept going down for the first time in their history. Previously a leaked letter revealed how Schultz pleaded Donald not to forget Starbucks' roots.

On January 2008 David was "fired" and Schultz came back to replace him. The question is: Will Schultz be able to recover Starbucks' former glory?

McDonald's (MCD) had a similar story on 2002-2003. Their stock kept going down until Jim Cantalupo came back to the CEO post. He had retired on 2002, but he came back on 2003 as the company kept destroying its value. After his comeback McDonald's experienced an amazing recovery.

Will people come back to Starbucks now that Schultz is back?

On 2003 my question was if people would go back to eat junk food. They did thanks to Cantalupo. Will they go back to drink coffee thanks to Schultz?

Maybe a key difference is that's not the same going back to buy cheap food as going back to buy expensive coffee. Especially in the current crisis enviroment.

a social blog platform business plan

Bligoo is a Chilean based social blog platform. Previously I've offered them some public criticism and advice (both links in spanish).

Today they unveiled (link in spanish) their new business plan developed by MBA students at UCLA. You can find the whole presentation online (video, audio and slides).

Basically they plan to get $1.5 million in funding before October 2008 to grow from the 50,000 current users to more than 1 million in 2010, while they grow their revenues from $432,000 to $2,556,000 at the same time (mostly by advertising). Their projected valuation is $12.7 million in 2010 based on value per-user.

The main advice from the MBA students to Bligoo was to focus on a niche, and they found the most fitting for them is "social activism" (education, Greenpeace, legal reforms, "green" blogs, etc).

What I found interesting of this business plan is the following: I looked for the MBA class professor resume (Robert Spich), and there I found this interesting bit about him:

"...Dr. Spich continued his professional formation with field experience in economic development projects and technical assistance for the Peace Corps in Chile and the Agency for International Development in Washington D.C..."

So the guy that guided this business plan not only has lived in Chile, he has also shown great interest in social activism. Did he give the best advice for Bligoo, or was he slanted towards this conclusion?

Note (as a reader asked me about the confidentiality status of this information): The referenced business plan was published by Bligoo's CEO in his blog linked in the second paragraph.

Thursday, January 3, 2008

Scoble kicked out from Facebook

Blogging celebrity Robert Scoble has been kicked out from Facebook today.

Using his own words "I could call people idiots for not understanding the meaning of the..." Facebook terms of use, that disallow using automated scrapers. There is even a Facebook API that could have helped him obtain this information easily and without trouble. On the other hand, Facebook could have avoided this new "scandal" if they warned users before completely disabling their accounts. Why call the users idiots, Robert, if companies can act smart and adapt to human nature (instead of dictating them how to behave)? Contracts and legal terms might improve lawyers lives, but they won't improve normal human relations or any company's reputation.

The good news: The Standardized Data Portability efforts will get a boost thanks to this situation.

As usual, more at Techmeme.

Update: He was using a tool to extract his friends e-mails. Unfortunately Facebook's API doesn't allow exporting e-mails, although the platform will happilly import them from elsewhere.

Google stock down after Reader's privacy scandal

After Google Reader's privacy scandal got to the major press (and elsewhere) GOOG stock has just gone down. Their own stock market site shows the news as one of the factors involved:



That reference has misteriously disappeared since, but the stock keeps going down:



I don't think the market is that simple, and a single factor can't explain why the stock market goes up or down in the short term. Nevertheless it's a fun way to tell the Google Reader team to at least worry about their stock options. If they don't care about their users' privacy, maybe they'll care about their own money.

Tuesday, January 1, 2008

Google Reader's poor decision making

Google Reader's blunder has been covered by The New York Times, The Guardian, and many other media around the world. The big backslash started when this post was featured on Slashdot's front page. The scandal has centered on privacy issues and how many people feel this is a big privacy slip up, while others just don't think so. What has been overlooken so far is how many business, design and technical mistakes were commited by Google on this ocassion. I've compiled several of those in the following article as it really makes you wonder what's happening behind Google's doors:

When shared means public and public means private

"Each tag you share will get its own public page and feed URL, the same way shared items has a public page and feed; these tags will not be shared with anyone unless you send them the public address." -- Official Google Reader blog

So "shared" posts that where previously private between you and your friends now will be published to everyone. If you want to keep something private you have to follow their documented too-many-clicks process and tag those same posts "public". Don't worry about the name, they will remain private, just how "shared" items worked previously. Is that clear enough for you?

If he sent you an e-mail two years ago he must be your friend

Google Reader will put in your "friends" list everyone you've exchanged mails with. They say "chat with", but that's not how it really works.

You can turn off this light, but you won't find the switch in this building

Do you want to stop any of your Google imposed friends prying at your Google Reader stuff ? You can do it, but Google Reader offers no controls do so. Instead you will have to pay a visit to another Google product - GMail - and there you will find the secret lever to stop this unwanted leak.

If she's not your friend you must delete her and never email she again

When you get to the GMail interface you will find a button to block someone from chat. That's what you always did when you wanted to keep someone's contact for e-mailing purposes, but you had no need to chat with them. Unfortunately that "block" behaviour won't block them from your Reader's shared stuff. The only way to stop it is deleting them. And if you ever exchange e-mails again, you'll have to keep repeating the motions.

"Additionally, please note that blocking a person in Google Talk doesn't remove them from your Reader friends list. They'll need to be actually deleted for this to happen." -- Google Reader official Guide

"I sold something to some stranger on eBay this past week, and now I'm receiving his shared feeds! And to avoid sharing my feeds I have to delete perfectly good contacts from my contacts list just because I don't want to share my reading material with them?" -- Carol, an user, answers.

Don't make me look at that

You might have shared nothing, but you might still be an innocent victim of this feature. Every time you log into Google Reader it will highlight all what your so called "friends" have shared. It might be pornography, violence or anything you just didn't ask to see. There is no filter in place for offensive stuff. The best you can do is react, but you can't proactively prevent it.

In the other hand, if you just want to annoy people Google has given you a great tool. Send people a couple of friendly e-mails, have them answered and you will be inside their Reader's interface. Now you can start having fun, and Google has not put any spam filter in place.

What does "hide" hide?

Once you have been offended by someone you can hide him. It won't stop him looking at your shared stuff, but at least you won't see his updates. Problem is that Google has created one of the most confusing interfaces I've seen lately to do so.

Look at the following screenshot (actual contacts renamed and/or removed):



Google gives you a list of your friends "that can see your shared items (and you can see theirs)". Next to each one you have a "Hide" button. Many people have thought that this is the control to hide your stuff from them, but it isn't so and there's no way to guess that from the interface. It will just hide them from what you see.

Note also that you can't proactively hide contacts that haven't shared until they do. So first they'll have to start sending you information you don't want to see. Only after you receive it you will be able to stop this happening.

It's your fault if you press the "yeah, whatever" button

Part of Google's defense is that they told you about this changes the first time you logged into Reader after they introduced this feature. Maybe they did, but they used a big annoying popup with text that blocked your normal use of the product. Maybe you were in a hurry, maybe you weren't paying attention, and maybe you just clicked on it without realizing all the consequences of this warning.

For example when I read it I realized something unwanted was happening, but didn't have time to fix it right at that moment and had to agree with the warning just to be able to continue using the product.

Google, how does this show respect and care for your users?

We told you unguessable urls where private, but what made you think this one was?

Many bloggers have noted that you can't expect privacy from an unguessable URL. The problem is that is the exact same mechanism Google uses to keep your stuff private in most of their products, including Reader, Picasa Web, Calendar, Docs, etc.

The problem with Google is that they have taught me to expect privacy with unguessable URLs, and I don't expect to have them shared unexpectedly by Google. Can I expect privacy for my calendars, documents, and pictures then? Or Google will just start sharing them with all my GMail contacts?

Creating spammers

If I want to sell something maybe I'd like telling all my GMail contacts about it, but I wouldn't do it as that would be spam. If I had shared a post about it now Google just spammed everyone with it, and guess who is getting the blame?

We really do value your feedback. We'll come next year see how your are coping with it.

When deploying new experimental services it's really a bad idea to do it on a Friday if you are not willing to come back to fix it on the weekend. That's what the Google Reader team just did when they deployed this feature at the of Friday, December 14th 2007. Worse than that, now it's January 2008, and they still haven't produced an acceptable answer as they mostly disappeared for the holidays. In fact there has been no official messages for the last 6 days.

Who wouldn't say that isn't a sign of poor planning?

If we learn from Facebook mistakes we should be able to repeat them

Facebook just had to face a similar drama when they released their Beacon feature. Only one month after it was released their CEO came forward, apologized and offered an opt-out button. Some people would say opt-out isn't good enough, and that these features should be opt-in, but at least Facebook users got an opt-out button. 18 days and loud complaints everywhere still haven't got Google Reader's users an opt-out button to go back to their previously comfortable state.

Can we repeat Microsoft sins then?

An important point on the verdict of the United States v. Microsoft case was that they were guilty of unlawfully tying products.

As the verdict said: Microsoft also violated Section 1 of the Sherman Act by unlawfully tying its Web browser to its operating system.

Almost every day Facebook, LinkedIn and many other sites with less reputation ask me for my e-mail contact list. I just won't give it to them. On one hand I value my contacts, and the other hand each of my social networks is different. Why then Google Reader can just grab without asking my Google Mail contact list? They are different products, and I don't want to tie them together.

As Google grows into a monopolistic position they'll too have to worry about unlawfully tying their products together to give them unfair advantages.

We won't use our own interfaces

Everyone knows Google wants to be social. They even created released the OpenSocial api so people can "build apps that easily interact with your friends and colleagues."

Why did they just ignore it?

Updated 2008-01-02: Rushed products

Google is known for their cautious deployments, extended beta periods, invitation only products, "go back to our old interface" buttons, etc. Surprisingly this time they just let the bull free. Even more astonishing has been their response, instead of taking the bull away they are just giving us instructions to handle it. "The bull has been freed, we are not taking it away, best get used to it. You should have seen the bull coming, any damages caused are your fault". -- Fh in "The new Google strategy behind their Reader debacle"

Yes, you are allowed to mistakes. In fact, you're supposed to make mistakes. But have some humillity, be willing to try different alternatives and learn quick from small experiments. Why annoy everyone, if you can manage to only annoy a small subset of your users and learn from that experience?

Closing words

I used to look up on Google just to follow their example on how to do things right. Not this time. It's amazing how many mistakes and goodwill have they burned with just one decision. While we count how many days they'll need to solve this case I compiled this list so other people can learn from their mistakes. Let's hope we remember Friday 2007-12-14 as the day Google did a really big mistake, and not as the start of a new Google era. If the latter, not everything will be lost, as they will be opening space for more privacy minded competitors to fill the void.

Help Google pay attention: Slashdot It!

Friday, December 28, 2007

The new Google strategy behind their Reader debacle

First I thought this crisis was due to an arrogant intern or middle manager mistake. But it was so Google unlike it amazed me it could happen, or how long the violation has (still!) been unsolved.

But this article unveils this wasn't an operational mistake or a tactical one. It's 2008 Google's strategy, and it signals things to come. I'd love to know what internal structure changes made this possible.

The overall gist of the video is that Google wants to take its existing set of applications and integrate them around Google Reader. Google Reader will become, not just a way to track news items, but also where you can see what your friends are up to.

Now granted, you can already do that to some extent, but you need to set things up by hand. What Google would like to do is automate and streamline the process — as well as add more data to the mix.


This according to a leaked internal Google video. Details at wisebread.

If I had to guess I'd say Brin&Page finally realized they are very good at many things, but not at social software. Look at Google's product history if you want to check. This wasn't a big problem, as they could always buy Youtube or make a strategic deal with MySpace. But then Facebook came around, Microsoft and not Google got the deal, and desperate measures were needed. Finally B&P decided to take a step back and let someone else's criteria lead the war against Facebook. Badly. With the arrogance and results you have seen these two weeks.

Google is known for their cautious deployments, extended beta periods, invitation only products, "go back to our old interface" buttons, etc. Surprisingly this time they just let the bull free. Even more astonishing has been their response, instead of taking the bull away they are just giving us instructions to handle it. "The bull has been freed, we are not taking it away, best get used to it. You should have seen the bull coming, any damages caused are your fault".

What do you think?

Maybe we just have to wait for an anonymous Google employee to tell us the whole picture.

News continue rolling at Techmeme.