Proof: I coined "Consumer Computing Cloud"

...
Awesome!

Within half a day of my last posting on Consumer Computing Cloud, I now "own" the term on Google search with all 7 of 7 results pointing to this blog. See below (click to see larger image):


Alright alright... I know.. I know... don't get ahead of myself. It's not that hard to pick some phrase that has not been used - EVER before. Put a couple of references on a blog and let Googlebots do their work.

But hey, it's still fun! BTW Who the heck are those companies doing PPC on this term? It looks like they are going after %cloud computing% wildcard keyword match.

Have a good weekend.

"Consumer Computing Cloud"

...
So I have been talking about the future marketplace for Google and Microsoft(+Yahoo?) and what they would really be competing on (which is NOT search). I have taken to calling it "Consumer Computing Services". But Google has been referring to it as "Cloud computing"; see the Forbes' article called "Google's Cloud".

Forbes' explanation: "Cloud computing is a simple concept: Software and services are delivered over the Web and through a browser. No servers or client software to install. Available anytime, anywhere, from any device connecting to the Internet. Businesses call it software-as-a-service, or SaaS, but for most people, it's just the Web."

That's a pretty good concise explanation.

"Search engines are not the end but the beginning, like Edison's first light bulb illuminating a single room. Where information initially flowed in one direction, it now moves freely across both time and space. The increasing interactivity of life in the cloud creates a worldwide conversation, a multi-dimensional collaboration that seems endlessly possible."

Now we are getting a bit more ethereal (pun intended). Time and Space. Interactivity of life. Multi-dimensional collaboration. Is this a PH.D thesis?

Anyhow, in the CNBC interview with Eric Schmidt, which I covered earlier this week, he also mentions the "cloud".

So I give in. I am going to rename my coinage of "Consumer Computing Services" to "Consumer Computing Cloud". Which can also be known as "CCC", "C-Cubed" or "Triple C"; it definitely rings better. The term "consumer computing cloud" (in quotes) is not yet found on Google as of today (9 May 2008); hence I can lay claim to have coined this term. See result below:

In the days that follow, this blog entry should be listed on there as our friend spiderbots will come and read this page. I am going check using this link. Let's see if this term starts to catch on. Hahahahha.

Peace. Out.

CNBC's Interview of Google's CEO - Part 1

...
CNBC's tech sweetheart Maria Bartiromo interviews Eric Schmidt on Wednesday 30th April. Here are some highlights IMHO....

Schmidt: ... In our case, we focus on quality, and we have a very simple model. If we show fewer ads that are more targeted, those ads are worth more. So we're in this strange situation where we show a smaller number of ads and we make more money because we show better ads. And that's the secret of Google.

He forgot to add that more targeted ads mean that advertisers will compete and try to outbid each other and drive up the price of the ads. Hence, "those ads are worth more". Not strange at all. It's economics. And it's not a secret. Well not any more.

Bartiromo: ... what Mary Meeker was saying. She's saying, `Look, it could be that they're actually benefiting from a recession because they're monetizing the ads better.'

Schmidt: There's been--you you know, if you were running a business today, you would be looking very carefully at where is your marketing spend going? And we think that you'll choose to put your marketing spend on the thing that's most measurable, the thing that's most, you know--because you can always defer a branding campaign that may or may not work, but you want to get those customers and those leads right now, and that's what we do.

Those of us in Digital Marketing have been saying this for years. And we are all hoping that Mary Meeker and eSchmidt is right: Digital will do better in a downturn. It seems very straightforward; when you need to be more careful with your marketing dollar, you should spend it where you can see results and KPIs. However, many marketers can not tear themselves away from Print and TV. And obviously the big ad agencies don't want to move away from that cashcow either. So you got Digital and Traditional people in the same ad agency telling clients to do different things - fighting for that same dollar. It's not going to be pretty.

Bartiromo: It's no secret that Google owns search, but what about the display ads? Is it--is it fair to say that's sort of up for grabs? You know, you've got DoubleClick, Microsoft has aQuantis. It's up for--up for grabs, that part of the business.

Schmidt: Well, it's fair to say that that Google is not the leader in display ads, but our customers want to be able to purchase text ads and display ads and other advertising in one purchasing bundle, and the combination of the tools that we're developing, plus the DoubleClick integration acquisition and so forth, allows us to offer a single product for those advertisers. So we think that will help us with our display ads competitiveness. We think our technology is better. And so really now it's a question of earning those customers' respect and knowledge.

1) Recently Wired, now CNBC. GOOGLE OWNS SEARCH.

2) Eric humbly says that Google is not the leader in display ads, but with DoubleClick, they (not so humbly) have the best technology to combine text and display ads on a single platform.

3) Customers want to purchase text and display ads and other advertising in one bundle perhaps, BUT not from necessarily from ONE VENDOR. So yes, GOOG better earn those customers' respect and knowledge.

4) So in this scenario, ad agencies are then reduced to ad creative and media scheduling. OUCH! Media buying? Who needs that when you (like us) have a Google MyClientCenter (MCC) account?

Bartiromo: So what do we know about Microsoft and Yahoo!? Tell me this. I mean, I know that, you know, we're waiting on possible news from Microsoft, possibly, a hostile--we don't know what's going to happen next. But what kind of a challenge would Microsoft/Yahoo! be for Google?

Schmidt: Well, today we actually do not know what's going on. We read in the press that there's discussions and we'll see what they decide to do. If they go ahead and the merger's ultimately successful, it would be possible for Microsoft to integrate some of the properties and essentially eliminate consumer choice, particularly in electronic mail, instant messaging, the things where they have 80 or 90 percent market share, and that's a sweet spot for Microsoft in its ability to eliminate choice.

Eric is just skirting around the question. Not giving away what he really thinks. Like I said about this whole MicroHoo! and Google thing: it's all about "Consumer Computing Services". See here and here. I coined this term back in Feb.

But Maria digs in and brings it out from Dr. Schmidt. (The transcript refers to him as "Schmidt" and "Dr. Schmidt" while Maria calls him Eric. Schizophrenic I tell you.)

Bartiromo: Mm-hmm. And, of course, Google has been getting all these new killer apps, whether it's Gmail or Maps or, you know, spreadsheets. Ultimately is the game to compete direct, head on, with Microsoft?

Schmidt: Well, Google is actually trying to be an innovator, and we're always concerned about competition. We have found that if we can simply invent a brand-new product that really solves a problem that really does matter to you, we can get your business, we can get your attention, we can get your traffic and your customers or what have you. We're trying in a new thing called cloud computing to offer very powerful Web services that do the common things--e-mail, word processing and so forth--where the data's kept in the cloud, it's kept by somebody else, it's managed by professionals. You don't need to worry about where you keep all that information. We like that model a lot. We're getting traction. It is a competitive threat to other companies, but we think it's a technological breakthrough.

So Eric obfuscates the issue (yes he watches X-Files). Obfuscate means "to make obscure or unclear", and - classic Eric - he obfuscates with .... cloud computing!!!!! hahahahahha...

What he really wants to say is:
"YES!!! Google and Microsoft will be competing for these Consumer Computing Services - direct, head on, 'in your face', 'winner takes all', 'bust yo ass!' - kind of way. Because they are EVIL, and we are not!"

Schmidt: We believe the best products are coming out this year. And they're new products. They're not announced. They're not just putting in-line ads in the things that people are trying. But we have a number -- and, of course, Google is an innovative place. The Yahoo! team are trying various new forms of advertising, ones which are much more participative, much more creative, much more--much more interesting in and of themselves. Google believes that advertising itself has value. The ads literally are valuable to consumers. Not just to the advertisers, but the consumers.

Bartiromo: They want to look at them.

Schmidt: When they're targeted. When they're the right ad for what you're doing or what you care about.

Alright.. so YaGoog is colluding to do what FaceBook fcuked up with Beacon, but do it right this time. Don't publish the freaking data about what they purchased to their "friends". That's valuable data... that's like throwing money away. Keep that data, build up their profile and keep serving the right ads. Ads that will go beyond CPC model and into CPA model. CPA model that will eventually go into Commission model. Then they become online retailers without any warehouses, order processing and payment processing headaches and overheads - and without any customer servicing or warranties to worry about!!!!!

Schmidt: ... We have pointed out, and I'll repeat again, that the whole social networking space has been harder for us to monetize--that is, develop advertising businesses again--than some of the other--than some of the other spaces that we're in. It has to do what people are doing. When you think about it, you're in a social network, you're looking at people's photos, you're figuring out where your friends are. You're not as likely to be purchasing a new car at the same time or purchasing clothes or purchasing a book or what have--whatever business that you're in. So the development of the advertising tools and techniques, literally the platform, has been more difficult than we have thought. But we're working on it, and we're hopeful.

So besides telling us what we already know. He is also sending a message to all those ex-Google defectors who have left to join FaceBook: "Those new shares ain't worth much.. MWAH...MWAH...MWAH...."

Bartiromo: You've got $12 billion in cash right now?

Schmidt: A little more than that.

So according to Finance Y!, the cash position is at USD 12.13Billion. So Dr. Schmidt was not really right about the "little more than that" or is he? The Y! Balance Sheet from YE 2007 shows:

$ 6 billion in Cash and Cash Equivalents, $8.1 billion in Short Term Investments.

How much of these Short Term Inv can be converted to cash as needed?

Anyway... This a long interview with lots of nuggets. Part 2 coming up later.

"The search wars are over, and Google has won."

I made a similar comment when blogging about the MicroHoo? merger back in Feb. ("The search engine game is over. GOOGLE WON.")

But it is now OFFICIAL, because it is printed in Wired Magazine. See here.

I had postulated that Google and Microsoft are in this fight over Yahoo! for the future of "Consumer Computing Services".

In this Wired article however, they have a different theory:

"Microsoft's Bid for Yahoo Is All About Big-Budget Brand Advertising" was the title of the article.
"But the good news for all of Google's rivals is that online advertising is about much more than search. The new battleground is display — the kind of graphics-intensive spots that were left for dead after the Internet bust — and the emerging category of video."

Great stuff. While I still think on the tech side they are going after those services, advertising is a major source of revenue. For any media owner (TV, PayTV, Radio, yahoo, etc), there are two main sources of revenue: Subscription and Advertising. Consumer Computing Services follows the Subscription revenue model whereas this article suggests that adverting - brand advertising in particular - will be the main source.

"... ultimately it comes down to advertising. Web advertising is in the midst of a metamorphosis. As television implodes, marketing chiefs are turning to the Net to create branding initiatives. They know you can't build a brand with little text ads that pop up next to search results."

I would have to agree with that, but search engines and content networks are more targeted rather than shotgun advertising approach.

"Web advertising, which passed $20 billion last year in the US, is expected to surpass $60 billion in four years, and display and video ads will account for more than a third of the total."

"mmmm... money" - says Homer.

So what would MicroHoo! look like in the brand advertising space?

"What Yahoo brings to the table is numbers: It is the world's most popular Internet publisher, delivering Web pages to nearly 140 million people a month in the US alone. Yahoo also delivers ads to a vast network of independent sites, increasing its advertising reach to 85 percent of US Internet users, according to comScore. Microsoft reaches 56 percent of the US Internet population through MSN and Windows Live, but it still lacks credibility with Madison Avenue. Put it together with Yahoo, however, and you have a scale that even Google can't match."

I don't disagree, but I can't help but refer back to the classic advertising problem of "Half of all my advertising is wasted. I just don’t know which half!" You spend money on brand advertising but you don't know what works because you can't always track people to the ultimate interaction with a brand.

But online brand advertising is soooo much more measurable than offline advertising --- with the right analytics tool - like Omniture. So the shift in ad dollars from offline to online will accelerate as the Google and MicroHoos get their platforms into shape.

Google & Friends need more power!

Alright remember the mentions in my posts about Google put buildings and server farms near powerplants? This was in Google vs MicroHoo? and in Consumer Computing Services.

Now there is evidence that Microsoft, Yahoo! and Ask.com have done the same thing along the Columbia River in Washington State, and Google is credited with starting this new "arms race".
Here is the article from Harpers with more details. It's entitled: "Keyword: Evil"

With a title like that, this article is obviously targeting Google's efforts. It is written by Ginger Strand who is the author of "Inventing Niagara: Beauty, Power, & Lies".

Google's recently announced plans "to develop a gigawatt of new renewable energy" is questioned as they also have many other negotiations to draw energy direct from the grid (near power stations) at a lower cost. The article also puts questions on Google's tactics of getting tax breaks, state givebacks and subsidized power: "YouTube is bankrolled by us."

Well, we ARE getting gmail, Google Docs, YouTube, Picasa, Blogger, etc without paying upfront. These things are worth something...

The "arms race" points to all these companies' need to "compete to offer software, music, and videos over the Web in the new era if 'cloud computing'."

"Even if Google offsets its own energy use with green power or carbon credits, it cannot guarantee that its competitors will do the same. The company's motto is perhaps due for an addendum: 'Lead others not into temptation'."

This is not realistic. It is capitalism no matter what their current or future motto says. They have to remain competitive and that means on costs as well as services.

This is a great article for highlighting these issues but there are no solutions. (Nuclear anyone?).

"American data centers consumed more power than American televisions." Scary thought, but less people are watching TV now right? And they are buying Plasma TVs and LCD TVs which hog up less energy.

SIDENOTE: Heard from the last Web Wednesday Singapore - "The new color of the Green movement is blue.".

The Economist: Facebook is not a business

Ran across this article from the venerable Economist.com that led in with the by-line:

"Social networking will become a ubiquitous feature of online life. That does not mean it is a business"

YES!!!! I finally get some validation to what I have been saying here, here , in Dec 2007, and in Nov 2007: Facebook does not have a business model worth USD 15 billion.

The article likens AOL's recent purchase of Bebo for USD 850million to Microsoft's purchase of Hotmail back in 1997 for USD 400million and made Sabeer Bhatia very rich.

"Both deals, in their respective decades, illustrate a great paradox of the internet in that the premise underlying them is precisely half right and half wrong. The correct half is that a next big thing—web-mail then, social networking now—can indeed quickly become something that consumers expect from their favourite web portal. The non sequitur is to assume that the new service will be a revenue-generating business in its own right."

Free webmail is great. They are everywhere now, and Microsoft, AOL, Google, and Yahoo! are the largest providers. Microsoft wanted the subscribers and relaunched Hotmail under passport.com (remember that one?) to try to get these people onto an eCommerce gateway/platform. After that failed, passport.com became live.com to get people onto their search/online gaming/lifestyle/entertainment platform. All the while, people are still getting their free webmails, and their email account space has increased from a measly in 2MB in 1997 to a whopping 5GB or so in 2008.

"Social networking appears to be similar in this regard. The big internet and media companies have bid up the implicit valuations of MySpace, Facebook and others. But that does not mean there is a working revenue model. Sergey Brin, Google's co-founder, recently admitted that Google's 'social networking inventory as a whole' was proving problematic and that the 'monetisation work we were doing there didn't pan out as well as we had hoped.' Google has a contractual agreement with News Corp to place advertisements on its network, MySpace, and also owns its own network, Orkut. Clearly, Google is not making money from either."

So as that old Wendy's lady says, "WHERE'S THE BEEF?!??!"

The argument is that it is very useful for users, but it will be like "air" (needed, but free).

“We will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to be social,” says Charlene Li at Forrester Research, a consultancy. Future social networks, she thinks, “will be like air. They will be anywhere and everywhere we need and want them to be.”

But wait! There's more:

"The problem with today's social networks is that they are often closed to the outside web. The big networks have decided to be 'open' toward independent programmers, to encourage them to write fun new software for them. But they are reluctant to become equally open towards their users, because the networks' lofty valuations depend on maximising their page views—so they maintain a tight grip on their users' information, to ensure that they keep coming back. As a result, avid internet users often maintain separate accounts on several social networks, instant-messaging services, photo-sharing and blogging sites, and usually cannot even send simple messages from one to the other. They must invite the same friends to each service separately. It is a drag."

Total drag. I mean I have accounts on Linked In, Facebook, WIWIH, Xing, Evite, Socialzr and a few others that I can't even remember who they are much less user name and passwords. (Please do not look me up in those networks and add me as your "friend".) I have heard so many people saying that they resisted getting a Facebook account, but were so bombarded with invites that they eventually gave in. And then what happens? "On Facebook, a social graph notoriously deteriorates after the initial thrill of finding old friends from school wears off." (i.e. you forget the user name and password.) OR Social Networking becomes Social, NOT Working.

Go on read the Economist article. I know it is the Queen's English but you will enjoy it nonetheless.

One last thing the article notes: "Google, Yahoo!, Microsoft and other firms are now discovering that they may already have the ideal infrastructure for social networking in the form of the address books, in-boxes and calendars of their users."

Well this all ties in very well with what I have been saying about Consumer Computing Services... Another piece of the pie that those BIG guys are fighting for.

You read it here first....

MicroHoo? Revisited

Just came across an interesting article on NY Times entitled "Hostility Has Its Rewards". It talks about hostile takeover attempts in Silicon Valley and how Larry Ellison jump-started the recent flurry with Oracle's take over of PeopleSoft in 2004. A few interesting notes (italicized below):

Everyone said Mr. Ellison was bound to fail. After all, as they love to say here, a technology company’s most valuable assets — its engineers — walk out the door every evening. And with a hostile bidder circling, PeopleSoft’s engineers were bound to run... Only they didn’t.

- So all those that think the corporate culture at Microsoft will not fit with Yahoo! might just be overly pessimistic. The culture is obviously different, but at the same time, many of us work for a salary and if we think the combined entity is a better horse to ride into the future than each alone, then we just might ride it out and see how things progress rather than jump ship... especially with the economy in its current shape.

But in Silicon Valley, unlike elsewhere in the country, even some of the biggest companies like Yahoo are “are still run by founders who are unwilling to sell for emotional reasons,” Mr. Ellison said, perhaps taking a swipe at Jerry Yang, Yahoo’s chief executive and co-founder, who has been frantically searching for an alternative to Microsoft’s bid.

- True enough. Jerry should be looking out for his shareholder's value. And this may mean marrying the Borg, but staying in to keep the best of Yahoo! and even take advantage of Microsoft's strong points. And even prosper in the long term. It's all in the prenup, man. I would not mind seeing Jerry Yang as CEO of MicroHoo! one day. That would be very, very interesting.

Mr. Ellison, whose distaste for Microsoft is legendary, hinted that he’s actually rooting for his longtime nemesis over his neighbor, Yahoo. “I’ve certainly watched Bill for years,” he said, referring to Bill Gates, Microsoft’s chairman and co-founder. “MSN is modestly successful. It would be a formidable portal combined with Yahoo.”

- Agreed! Notice he says "portal" and nothing about search. Like I said, "Search war is over. Google won." They are fighting for the portal that will hold the Consumer Computing Services.

The people who are most likely to scream and moan about an acquisition are the marketing people and salespeople — who, by the way, are the most dispensable, he said.

- Yep, when the Consumer Computing Services are launched by MicroHoo! there will be less need for salespeople and marketing folks. All will be done online!!!

"Consumer Computing Services"

In my posting last month about "Google vs MicroHoo?", I postulated that Microsoft and Yahoo! need each other in order to compete with Google for online services like spreadsheets, email, word processing, community, etc.

A Cnet blogger, Charles Cooper, has rumoured that this would be "Microsoft's Google killer strategy". This is based on Nick Carr's blog post that Microsoft is embarking on this "software plus services" strategy.

Microsoft is now rolling up its sleeves in this arena because:

1) "its business and marketing priority has been the rollout of the recent upgrades to its core Windows and Office programs. It's had to milk the cash cows... The upgrades have been out for more than a year, and, despite some glitches, have generated a lot of cash for the company."

2) "it's been building out the backend infrastructure - the data center network - required to run web apps reliably and on a large scale... As for its infrastructure, a massive new data center near Chicago is expected to come online this year, adding to the capacity of the new centers the company has built or bought in Washington, Texas, and California."

CNet quotes Ballmer:

"We can have service-based offerings that essentially line up with our information worker infrastructure products--Exchange and SharePoint, Office Communications Server--if we have instances that sort of line up to what people do, development and deployment applications, database applications, etc. That is more value. We can help people reduce management costs, deployment costs, operations costs, data center costs..."

As I said, this is the next big war between the tech giants. It may be corporate at first, but Microsoft will make plenty of money from consumers directly. And while they are both building out data centers, I have NOT heard that Microsoft is locating next to power stations though..... Maybe they will just build their own nuclear power plants since these are coming back in style now. They only cost a couple of billion dollars a piece, and Microsoft can sell the excess output back to the grid!

Anyhow, I think "Consumer Computing Services" will catch on, or CCS, or ConCompServ (in the tradition of "newspeak" from the Orwellian 1984 World). Terms like "online" and "web" will be superfluous, redundant and even passé in a world where we are always connected to the Matrix - I mean - Network.

Google vs "MicroHoo?"

The hostile bid for Yahoo! by Microsoft is probably THE topic of the month, if not the year, so far. Google has responded aggressively asking regulators to block the deal on grounds of anti-competition and anti-monopoly grounds. (see NY Times article here).

It would seem ironic that Google with over 60% of the search marketshare would be worried about Yahoo! (14%) and MSN (3.5%). From my old post:


Is Google really that paranoid about a "MicroHoo?"

My opinion is "Yes" and "No".

"No", Google is not worried about the search business. Google still owns the PPC and SEO game. Yahoo!'s Panama platform is a step up but still very far away from the usability of Adwords. Microsoft's ad platform is a perpetual work in progress to put it mildly. Even if MicroHoo? can pull together a competitive advertising platform, their organic search technology is so far behind Google - who has something like 100,000 servers sweeping the internet every day and indexing everything in sight with the ultimate purpose of giving the users as relevant results as possible. MicroHoo? will still have to try to compete in this arena but they will be perpetually behind as Google continues to pump resources and research into this area. The search engine game is over. GOOGLE WON. Seriously, Google is locating itself next to power stations in order to ensure it has enough resources to power its needs!!!! That's forward planning.

But here's the "Yes". Google wants to be the default platform for all users: Gmail, Google Desktop, iGoogle, Google Documents, Google Checkout, Google Maps, YouTube, and many, many other "betas". So whatever you do, you can find it at Google - espcially in the future where we will always be online. And a Microsoft-Yahoo! merger would be a formidable competitor in THAT arena. Microsoft is already controlling 90% of users's operating systems, and Yahoo!, while it is not great in Search, knows how to build online communities and services (Y! Finance, Y! Mail, Y! Messenger, Flickr, Y! Travel, HotJobs, del.icio.us, Y! News, Y! Groups, Yada.. Yada... Yada.)

And Microsoft and Yahoo! together? What's the fit? Well, Yahoo could get quick distribution into the desktops (though this would still be considered MS anti-trust, no?). Yahoo users would also get MICROSOFT OFFICE ONLINE EDITION - Yahoo! has not entered that productivity suite arena yet. Microsoft is still printing money so it can finance a lot of expansion and development (including above mentioned organic search technology) and may be a power station or two! So while these two seem to have culture clash issues, there do seem to be some sort of synergy. Oops.. the dreadful "S" world. Maybe "marriage of (in)convenience" is a better description.

In any case, Google vs MicroHoo? is not about Search - it is about the future of "Consumer Computing Services". (Hahaha!!! "Consumer Computing Services" ... I just made that up! Sounds about right though.) You read it here first!