RRW pens 11 trends that could disrupt Google. I thought “can we please move on… there will never be another Google” and the search game is over, unless you count mobile search, of course. But then seeing #11:
11. It’s the Adwords, stupid! All the search wizardry don’t matter a hoot if the monetization is not done right. There is plenty of motivation out there. Sellers want cheaper search words to buy. Publishers want a bigger piece of the cake. Buyers/searchers may even want cash back (we will see if Microsoft’s crude tactic, lambasted in the Blogosphere, makes it in the real world).
I thought: there are two sets of companies getting tired of the Google express:
- media companies tired of seeing Google index and YouTube host their content at their expense;
- MSFT, basically… since YHOO just capitulated in search and Ask.com and AOL use Google.
So here’s my thinking:
1 - If all of the media companies got together and created a free contextual ad network and allowed marketers to promote themselves for free… would that not disrupt Google’s business considerably? Sure they would be foregoing revenue in the short time, but the point of this would be to undercut Google enough to reduce its grip of ad dollars, reducing its leverage online.
Google really ate up the search market through AdSense and AdWords: the billboards that popped up all over the Web. Publishers initially embraced Google due to the ad share, but let’s face it, Google makes money off that, not the underlying partners.
2 - If MSFT were to give away advertising for free on MSN properties and then guarantee higher revenues to publishers and portals… then Google would lose out. Of course, Google’s better monetization engine means that it can outbid YHOO (historically, again, they are a mere footnote in search now) and MSFT for business… but if MSFT were to take even half of that $45B it was going to flush into YHOO and gave it to third party sites over time… many would get rid of Google and embrace MSFT.
#1 won’t happen… #2 could… either way, if any of this happens and Google’s revenues tumble, then its stock would nosedive, too… without Google’s high flying stock, it would have to deplete its cash reserves for acquisitions and before they know it, MSFT has disrupted Google considerably.
I think had MSFT bought YHOO it would have first sought to fight Google in a noble fashion. Had that not worked and Google walked towards a monopoly position regardless, then I suspect MSFT would have done this: underwrite a loss leader in search advertising using Windows and Office’s cash cow to hurt Google… which, by the way, is exactly what Google is seeking to do with Google Docs using AdSense’s cash cow.
Digg this Blog
Share on Facebook
WatchMojo on Twitter
WatchMojo on YouTube
Add to Favorites
WatchMojo NewsletterJeff Weiner just joined both Accel Partners and Greylock as en EIR. EIRs are basically former company execs looking for something to do… at a new company funded by the VC housing the EIR or at one of the VCs companies.
The thing is… usually it’s one VC, not two. Say what you want about how the VCs absolutely love Jeff and are willing to share him etc., but that’s BS. This one is pretty obvious: Jeff Weiner was tapped to become Facebook’s next CEO.
Accel and Greylock share an investment in Facebook and frankly, neither company has really helped Mark Zuckerberg navigate through privacy, advertising revenue, revenue in general… the one thing that Facebook has done well, frankly, is not sell to Viacom, IAC, Yahoo!, Google, MSFT and Yahoo! again… yet something tells me that Facebook’s VC did want to sell (at every cross road from $800M on out); the only one that held out was Mark…
Yet now, the VCs tagged team to lure Jeff with the promise on giving him the CEO role. This begs the question: did the VCs run this by Mark Zuckerberg before? If not, they are dumb as rocks because this will create a lot of friction between Mark and the VCs (Mark is said to own 30% of the company).
More importantly, in Yahoo!’s numerous failed attempts to buy Facebook, what role - if any - did Jeff have? Jeff basically had everyone and their cousin report to him… so naturally Mark has already once balked at reporting to Jeff… why should things be different now?
Sure, Beacon was a disaster and Facebook remains in search for a business model befitting the $15B valuation that MSFT bestowed on it… but is Jeff the man to deliver that?
No disrespect to Jeff at all, I don’t know him, never dealt with him, but I would not put too much stock in anyone hailing from YHOO these days, or ever. YHOO is the best example of a shipwreck.
Bottom line: Mark Zuckerberg just found himself in the corner with two less people to trust (hint: David Tse and Jim Breyer). The question is, did he ever trust Jeff to do a deal with him while at YHOO?
UPDATE: Valleywag has a great piece on why this actually might not happen.
I don’t for the life of me understand why newspapers (and magazines) are not more aggressively getting into web video. I understand management and staff might not have the expertise to move from creating text content to video content on the fly… in fact, something tells me beyond the operational aspects of video content creation, strategically they might not know how to proceed and package it either.
Anyway, McClatchy is cutting 10% of its workforce to make up for the reduction in revenues… even though the reduction of revenues will be far greater than the cost savings associated with the 10% cut in staff.
More details here.
Feel free to replace McClatchy with Tribune, Lee, etc. The result is the same.
Via StartupChatter: Jon Miller calls for an equivalent to TV’s 30-second ad spot.
Problem is: I’m not sure if we’re going to get it, at least not anytime soon.
After all, much the same way that the Web is radically changing the way things are done, I am not sure it’s reasonable to expect the “equivalent” or something from print, outdoors, radio or TV online.
You don’t see anyone looking for the Web’s answer to the CD, do you?
In fact, even more troubling is the fact that every time we think we’ve seen the second coming of the 30-second ad spot, it has fizzled. Let’s count the heir apparents that were not:
- The pre-roll? Nope. Let’s face it, this is the equivalent of the web’s pop-up and on the decline. Sure, traditional media firms are printing money thanks to pre-roll ads, but the danger is that they push away users and eventually shrink their audiences.
- The post-roll? That’s the pop-under… in other words, users are not as annoyed but marketers don’t think it’s worth a warm bucket of spit.
- The Picture-in-Picture? I suggested that… but not everyone digs that either?
- The Overlay? Video Egg made a clown of itself for boosting that… only to say that it represented tiny upside. I like this, but realize it’s not the equivalent of the 30-second ad… at all.
- The Companion ad is something I like and find valuable… after all, display banner ads in text content are worth jack because users scroll down and miss the ad quickly… but companion ads alongside video players are worth much more because they remain at eye-level… but try selling that to advertisers.
What else? I have a few ideas… but more and more, I think the big bet of ad-supported free video won’t be as interesting to content owners who distribute their content as licensing deals. The problem is only1% of content owners will be able to command licensing fees.
Yes, I know what you’re thinking, licensing fees limit your revenue upside… but I got news for you: 50% of $0 is pretty limiting, too. I am not saying most video distributors generate $0, but you get the idea.
I have explained why we’re all smitten by the ad share dream (think Google) and why media owners were burned enough (think MTV) to consider asking for a slice of the ad pie online… but given where online video advertising is ($1B in 2008 to grow to $7B by 2012), it’s way too premature to expect online video advertising to underwrite content production. Where this gets dicey is that UGC fails totally to deliver what marketers want… so one way or another, you need professionally-produced video content.
What does this mean? Otherwise really smart people like Jon Miller and Fred Wilson might be wrong in their vision, or at least, the timing thereof.
Here’s what Mr. Wilson said a couple of years ago in his 4 Rules of Media post:
1 - Microchunk it - Reduce the content to its simplest form.
2 - Free it - Put it out there without walls around it or strings on it.
3 - Syndicate it - Let anyone take it and run with it.
4 - Monetize it - Put the monetization and tracking systems into the microchunk.
I am of course referring to #4. That is true in theory but in practice, if anything, it’s premature…
Over time, there will be advertising-share kickers, too… but trust me when I say this, the paradox of video business models is quite ironic:
- traditional media companies that actually generate revenue don’t want to split any with third-party content owners, they will consider licensing video, whereby cutting a check and getting all of the upside.
- new media companies that tout the ad-share mantra don’t have two nickels to rub together so the revenue share terms are moot. It’s like trying to negotiate a carat size for a wedding ring for your favorite prostitute… the conversation is useless.
This is why media companies will eventually just buy content libraries… because content is not a net-zero game, unlike technology. Think about it: if I license software A, chances are I won’t need software B from A’s competitor. But if I watch one video, chances are I will watch more and more over time. When you start listening to music, generally speaking you don’t turn off your MP3 player after one song, do you?
Anyway… for this reason - and I say this very respectfully - I think Mr. Miller is wrong when he says:
“For Miller, video generalists are NOT winning propositions: Velocity Interactive considers targeted, “specialist” plays to be more certain investment opportunities.“
I won’t get into all of the ways… but on the front lines, the opposite is happening in countless ways and for numerous reasons… and Mr. Miller probably knows that too, all too well. But that’s for a separate post on a separate day.
Web series are such a bad idea… They have no real place online… at least not yet. Alley Insider says:
Whether a Web-only series gets viewers is largely a function of promotion, and on that front only a few sites really matter: YouTube and MySpace.
We partner with MySpace and YouTube… so I agree on that point: promotion makes a lot of difference… however, the problem with series is altogether different:
Promotion is great if you have a good product, but if you have a bad product… you’re dead in the water and all of that money (even if small relative to TV production) has been flushed down the toilet. Moreover, 99% of web series involve tits and ass and are an insult to any intelligent (or relatively intelligent) person.
More importantly: web series run counter to everything that makes the Web great. TV media companies can tease viewers by giving them a bit and forcing them to come back the next day (soap opera) or the next week (most drama series). But online, users want 100% of the info and they want it now… the idea is to create compelling stand alone features and sure, break it up into bite-size segments… but series?
I actually like a lot of what Michael Eisner is saying and doing in the broader video space, but every time I hear he’s burning money on one more series… I think I’m gonna hurl.
What the ?
Carl Icahn is hinting that he will potentially stop his proxy fight… because the Google/Yahoo! deal has some merit. I previously said that Icahn was not so clueless (his investment in How Stuff Works paid off quickly and handsomely)… but I am having second doubts about that.
If VISA said that they were going to allow consumers to use Master Card, too… does that have much merit to VISA shareholders? Nope.
Carl… on this one, you just showed you need some help online.
PLAY
