23
Oct

It takes more than design components to produce online editorial content likely to attract habitual use from readers

Medium and Tumblr both offer visually strong statements to readers. The editorial content published on both sites, from a visual perspective, can be said to be a consistent combination of very prominent images and text laid out with special fonts and background color. Ostensibly the presentation should drive engagement. But readers are likely to experience difficulty getting to the content they want as the result of less than ideal curation efforts. In the case of Tumblr, less than ideal curation, in this writer’s opinion, will likely lead to lower revenue.

There is no search box on Medium. Perhaps this is intentional. Tumblr has a search box. Running a query for “tech” brought up an enormous page of en vogue “cards” (if readers aren’t acquainted with “cards” they are the now familiar graphical branding for information on most smart phone displays and tablets with browsers trapped in mobile view only). While the presentations may captivate attention, a running list of semantic abstractions — “futurescope”, “thetechgets”,”prostheticknowledge” — are completely opaque, leaving readers with a simple binary choice: either jump in and search around on a hit or miss, or just pass. This writer opted to simply pass. It’s likely a lot of other readers will take the same course of action, if their reason for landing on Tumblr is to find something specific, rather than just searching around.

Missing a likely subtle nuance about the differences in behavior exhibited between business users after some specific information, and folks wandering around a super store, passing down aisle after aisle simply checking things out, is a real reason why, in this writer’s opinion, online promotion opportunities are just not magnetizing interest from any manufacturers of products requiring a considered purchase decision from prospects. Everything is boiling down to an appeal to folks buying toothpaste (and similar absolutely tangible commodities). This is not good, long term, for the health of the online click ad business.

From the appearance of content as published on Medium, in this writer’s opinion, Evan Williams and Biz Stone (both played a part in the original Twitter effort) wanted to represent a clique on line. Information is certainly not easy to find on the site. This is a shame. There is a lot of very useful content on Medium. It’s just hard to get at it.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

2
Jun

Google Teeters at the Top of Internet Search Options

On May 20, 2014, Google evidently rolled out yet another major change to the algorithm(s) supporting its search engine. This major update, dubbed “Panda 4.0”, changes the Search Engine Results Pages (SERPs) served in response to web search queries.

Matt Southern commented on the Panda 4.0 update in an article titled Who Was Hit Hardest By Panda 4.0? The Answer May Surprise You, which was published on the Search Engine Journal web site the day after the changes were implemented, May 21, 2014.

According to Mr. Southern, Searchmetrics published some findings soon after Google implemented these new tools. These include noting “. . . eBay was among the top losers, as well as competing search engine Ask.com. Former SEO darling, RetailMeNot.com, also lost a substantial amount of traffic.” (quoted from Mr. Southern’s article on Search Engine Journal)

In contrast, sites Mr. Southern claims are composed of ” . . . good quality content that’s useful to searchers saw huge gains in traffic thanks to Panda 4.0.” He provides several examples of this good quality content: “[t]he biggest winner was Glassdoor, a site that provides useful information for job seekers. Next on the list is eMedicineHealth, which provides health information for consumers, and Medterms, a medical dictionary.” (ibid)

Unfortunately, he doesn’t support his claim about content quality with any attempt to demonstrate why a job rating service like the Glassdoor web site ranks higher than an entire community of seller sites like eBay, or a search engine (which, after all, merely applies its own algorithm against the information its crawler identifies online, and happens to compete with Google).

But leaving aside, for a moment, whether Mr. Southern’s claims make any sense, at all, readers may benefit more by considering the significance of the Panda 4.0 update, given Google’s position as, clearly, the dominant search engine for the Internet. Perhaps the need to provide yet another update to this platform for ranking results, together with Google’s familiar practice of changing quality ranking methods, piecemeal, on a daily basis, speaks more to the flaws in Google’s search engine product than anything else.

As I’ve written earlier to this blog, Google’s search engine method, in my opinion, actually did more to limit the exposure of otherwise obscure web content than anything else. By applying quality metrics to web sites, Google provided a rationale for condensing its index of web content, so as to provide greater efficiency. After all, why index web pages no one looks at, anyways?

But a key component of Google’s quality ranking tool kit is, of course, its ability to collect enough personal information about just who is submitting a query to its search engine, to ensure the results it returns meet or exceed user expectations. This personalization method positions Google squarely for, in my opinion, a head on collision sooner or later with regulatory bodies in the U.S. and Europe established to protect individual privacy, online.

Once the inevitable happens, if readers choose to follow my reasoning, the usefulness of Google’s search engine is almost certain to be negatively impacted, which will likely give a big boost to competitors, and open the door wider for an entirely different approach to curating web pages and monetizing the effort.

Disclaimer: I have no position in Google, or any other publicly traded business mentioned in this post

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

18
Apr

Some Thoughts on Google’s Growth Rates as Reported for Q1, 2014

During the Google, Q1, 2014 Earnings Conference Call, Patrick Pichette, CFO, presented a set of headlines on business performance:

  • Google’s revenue grew by 19% year over year to $15.4 Billion, which was down 2%, quarter over quarter.
  • Google Sites revenue was up by 21% year over year, to $10.5 Billion.
  • Network revenue grew 4%, to $3.4 billion.
  • Other business revenue grew by 48%, to $1.6 Billion. In this category, Chromecast sales were a strong performer

Pichette provided his own judgement of the quality of business performance for the first quarter. Interspersed among his remarks were a lot of “good”, “very strong”, adjectives. But are these results typical of a still early stage ISV? Or are they, actually, signs of a maturing ISV struggling to retain the early shine of meteoric growth results.

Perhaps one can argue the performance of the “Other Business” group still retains the growth characteristics of an early stage ISV, but how many Chromecasts will Google need to sell (with an MSRP of $35.00 per Chromecast) to power this vertical to some sort of meaningful stature as a revenue producer for the company? In contrast, a very mature ISV, Microsoft®, recently reported meteoric results for Office 365, a Cloud, SaaS offer requiring no hardware, shipping, etc.

It may be time for analysts and investors to close the book on the question and just treat Google, going forward, as a mature ISV. A check of the GOOGL Class A stock P/E ratio on Thursday, April 17, 2014, reveals near parity with MSFT: GOOGL carries a P/E Ratio for trailing 12 months of 14.99, just 2% higher than MSFT at 14.68 for trailing 12 months.

Despite the recalibration of Google’s stock prices, analysts continue to make a big deal of the pace at which revenue growth has decelerated, perhaps more from a concern over the actual forward potential of the entire online advertising market (of which Google is clearly the leader) than anything else. This concern makes sense given the comparatively poor performance of the display network vs. Google Sites businesses.

If the concern is justified, then one would think the valuations of online businesses like Yahoo, Twitter, and even Facebook may soon experience versions of the same recalibration to better align them with their more mature ISV competitors.

Disclaimer: I’m long MSFT and have no current position in Google, Twitter, Facebook, or Yahoo

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

21
Feb

Some Perspective On the Role Played by Personal Data for Online Search

On Saturday, February 15, 2014, The New York Times published an article by Claire Cain Miller, titled ‘The Plus in Google Plus? It’s Mostly for Google’, Miller clearly presents a challenging component of the type of highly effective personalized search ISVs (principally Google) need to leverage to deliver satisfactory returns for the advertisers buying their online promotion services in the form of click advertisements.

Google Plus, for Miller, is ” . . . a lens that allows the company to peer more broadly into people’s digital life, and to gather an ever-richer trove of the personal information that advertisers covet.” (quoted from an article written by Claire Cain Miller and published in the New York Times on Saturday, February 15, 2014. A link to the complete article has been provided in the paragraph above).

I personally think Google “covets” this data a lot more than its advertisers. As I wrote recently, anyone listening to the webcast of Google’s most recent quarterly results will note mention of a more “precise” search technology. This “precision”, in my opinion, can’t be delivered without extensive collection of personal data. Apparently, Google Plus provides Google with a very valuable method of collecting this information.

From Miller’s article, it’s clear Google Plus provides Google with a method of innocuously collecting this data. Is this activity bad? I don’t think so. Rather, it’s an example of present day technical limitation on online search methods like the Google search engine.

A couple of posts back in this blog I argued for a different technical approach, namely one less likely to produce the kind of “bull in the china shop” (pardon my use of a cliché) effect on personalities which, unfortunately, plagues today’s methods.

To reiterate: any ISV with the technical components required to produce a less “person-dependent” online search method stands to make a bundle. If you’ve got the technology, please let me know.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

7
Feb

Why There is Still a Very Large Opportunity for Further Improvements in Online Search

During Google’s Q4 2013 webcast, Nikesh Aurora, Senior Vice President and Chief Business Officer answered a question with a remark about how people search on the web ” . . . over time, when people look on the web, they look for more and more precise answers, and which was the genesis of why we believe that entity level search begins to make more and more sense, whether it’s in travel, it’s in hotels, or in product listings. People are looking for more specific answers and as you get mobile you want even more bite sized answers so that people can get the information as quickly as they want.” (quoted from a webcast of Google’s Q4 earnings conference call).

If it’s safe to assume the Google Search Engine is, by far, the most popular method web visitors use to find information, then we can say the range of opportunities for early stage ISVs to better satisfy the needs of consumers of online search services have never been better. A simple scan of Mr. Aurora’s comments produces a couple of very important conclusions:

  1. Google completely sees the search experience from an ecommerce perspective. Earlier in the call, Mr. Aurora referred to the average search consumer as an “end user” who, at some point in her/his search experience, will buy something.
  2. Incorporating abstract terms into a presentation of how search is changing, in other words, referring to a heightened level of consumer interest in “more specific answers”, and, further, a keen need, for mobile users, for “bite sized answers” caters to a very simplistic view of, truly, a very complex process.

Online Search is All About ecommerce
Probably this is very much an erroneous assumption. A combination of Google’s dominance in this market, together with Google’s one dimensional approach to catering to online shopping needs for consumers generally looking for tangible products (the stuff PLAs are all about), has, perhaps, rendered the online search experience into something “all about ecommerce”, but, long term, in my opinion the direction will change.

Online Search is Gaining Precision
Serving up truly precise answers to millions of entirely unique, dissimilar search consumers is a very complex and intricate process. As privacy concerns build I can’t help but consider the task of accumulating the requisite amount of personal information about billions of search consumers as something of an insurmountable obstacle.

Early stage ISVs may want to jump into the market, the upside seems very great, from here.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved