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Barbarians in the valley

Reading Time: 5 minutes

Over the space of one life time the below San Francisco around the Santa Clara valley went from apricot farms and orchards to urban development based around hardware (the silicon in silicon valley) and then on to campus design sites preferred by software companies.

At the time of the PC revolution was kicking in, which gave use the consumer side of consumer technology we live with today like iPhones and the MacBook Pro this post is written on.

Over the space of this time, it wasn’t only the landscape that changed but the way we work and entrepreneurship was rewarded. There were decades of unparalleled economic growth driven by companies firstly in hardware, then software and finally in networking and communications – the internet.
During the early 1980s, America had Ronald Reagan as president. The manufacturing industry that had driven post-war prosperity in the country was suffering from global competition and businesses were under attack. This was the golden age of the corporate raider who destroyed businesses in the name of shareholder value. Carl Icahn was considered responsible for the bankruptcy of Trans-World Airlines (TWA).

By comparison Silicon Valley was in a spate of explosive growth. Computers and software were changing the way business operated. Spreadsheet software enabled the kind of models required for corporate raids on main street. Apple, Adobe and Aldus came up with the different components required for desktop publishing revolutionising design in the process.
The fall of the Berlin Wall - November 1989
The cold war ended and the Berlin Wall came down, corporate raiding ran out of steam as corporate lawyers began to construct effective barriers on behalf of besieged companies. Silicon Valley started a move away from ‘hard’ innovation to the soft innovation of gadgets, software and services. But that was fine, there where other places in the world who wanted to make the hardware components because of the jobs and wealth it created. The modern internet started to be built on Sun and Silicon Graphics servers connected with Cisco routers. The web was designed on the same Apple Macs that designed brochures.  Technology companies became media companies, retailers and super-fast courier companies. Wired magazine talked about the ‘new economy’.

The industry was also riding on a one-time offer. Older computers that now ran the modern world had a ‘millennium’ or Y2K bug, which was a bonanza for business IT companies. A dot com bust dampened enthusiasm, cleared out some of the more egregious business models.  Out of the fire sales of Aeron chairs and Cisco Catalyst series routers paired with cheaper broadband came web 2.0 – where the web became a platform rather than just a catalogue.

For many of the previous businesses in Silicon Valley growth slowed. Most business software looked like a solution looking for a problem. High-performance hardware could be cheaply replaced with more commodity priced boxes. Eventually for many people’s needs, hardware became a service that could be rented according to need. Business models were disrupted, sales dried up, licences weren’t renewed and advertising sales dried up.

Enterprise software companies were hoovered up by private equity firms eager to leverage their steady cashflows to service debt from further transactions.

Businesses like IBM and Nokia look like the TWA or Goodyear Tire and Rubber Company in the 1980s. The story of Yahoo! over the past six years looks like one corporate raider greenmail scam after another. Jerry Yang who has recently started to see his reputation rehabilitated was turned out of the company he founded by shareholders influenced by Microsoft and Carl Icahn. The subsequent replacement Carol Bartz supervised over a spectacular desstruction in value at the company. Current CEO Marissa Mayer, like her peers at Apple and IBM faces constant corporate raideresque behaviour to leverage up and return money to shareholders as part of a share buyback.

Microsoft who seemed to have used corporate raiders against its foes like Yahoo! now has activist shareholders on its board and is being forced to rejig its own business.

Just what is going on?

I think it it down to a confluence of different factors:

  • Technology has had a spectacular growth spurt in Silicon Valley but the growth has spread beyond the valley. Huawei is arguably one of the most important companies in telecommunications and internet infrastructure now. Just over two decades ago it was a small business selling secondhand company switchboards to the new businesses springing up in Shenzhen. Zhengfei Ren moved from selling equipment he sourced in Hong Kong to manufacturing it himself. Now the company makes everything from core network switches and submarine cables to smartphones, tablets and wearables. Shenzhen is full of companies like Huawei – some more successful than others. The most powerful names in silicon are also Asian companies TSMC and Samsung Electronics play a key role in the manufacture of non-PC style computers: phones, tablets and even televisions. It is often easier to name products that aren’t becoming ‘smart’ in some way
  • There isn’t the same willingness in the US to fund start-ups looking at smart innovation, instead the focus is on areas like social applications. Technology industry veteran Judy Estrin identified this as a key problem in her 2008 book Closing the Innovation Gap: Reigniting the Spark of Creativity in a Global Economy. There are serious technology challenges available that need to be addressed: the break down of Moore’s Law in semiconductor manufacture, commercially viable nuclear power and quantum computing to name but three
  • The technology has been demystified and is yet another industry. There isn’t that much difference between LVMH and Apple or Caterpillar and Oracle. Software as a service moved the buying decision on a number of products from the IT manager to the marketing manager or department head. Cheaper smartphones saw the rise of bring your own device (BYOD) policies. I sat in an old warehouse turned conference centre last week when announced off the stage that ‘Designing hardware isn’t hard, filling Wembley stadium, that’s hard’. Eco-systems from OEMs to Kickstarter have democratised and demystified technology businesses. And with this familiarity has come at least some contempt

More information
Closing the Innovation Gap: Reigniting the Spark of Creativity in a Global Economy
Finding Alibaba: How Jerry Yang Made The Most Lucrative Bet In Silicon Valley History | Forbes
Yahoo Stock Crashes As Alibaba IPOs – Business Insider
Marissa Mayer’s day of reckoning at Yahoo is rapidly approaching | Quartz
BlockBuster: Lyme Regis Sues Icahn, Accuses Sabotage –
Carl Icahn 2.0: an icon of ’80s greed is back to shake up Silicon Valley | The Verge – 2 words: TWA, Yahoo!

创造力 | innovation | 독창성 思想 | ideas | 생각

I like: Nick Bostrom: Superintelligence talk at Google

Reading Time: < 1 minute

Really interesting talk to listen to over lunch from Nick Bostrom on how the future and innovation may affect society. Real blue sky thinking that science fiction tends to be better at rather than academics.

The video is on YouTube so may not be visible to all readers.

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What’s eating Google’s brand?

Reading Time: 8 minutes

Back in 2005 when I started work at Yahoo!, the internet was a very different place.  It was an exciting time, web 2.0 was a technological and philosophical step-change for online services. We had cleared our palates of the bad taste left by the silliness of the dot com implosion.

Social networks weren’t mainstream in the way we would understand them now – though there were social networks prior to the the then nascent Facebook. Instant messaging was just starting to move on to mobile devices and were more a source of ‘presence’ information – whether someone was free or not than mobile messaging. Instant messaging on the desktop was big and everyone thought that Skype actually worked really well at the time.

We were conscious of security, but again Skype promised privacy and security (except in China) through secure encryption.  The 800LB gorilla in the room was Google. Yahoo! had managed to survive the dot com bust and subsequent 30+% drop in online advertising revenues because of the Yahoo! Dating business. Even in a recession people still need love. By comparison, Google had been on a tear, Adwords promised marketers greater transparency where they money had gone and what action had been derived from their advertising spend. There were even some nice charts that they could cut-and-paste directly into a PowerPoint presentation.

Google’s impact was much bigger. Yahoo! had pioneered search with Jerry Yang and David Filo’s directory in the mid 1990s. You can still find an iteration of the directory at Yahoo! here. In 1999, the front page of Yahoo! still reflected that directory heritage, as you can see from this screen shot
Yahoo! early morning of March 3, 1999
By the time I joined Yahoo! we had a search page that looked much more like the clean design of Google’s search page. The product was comparable in performance to Google as well, it just wasn’t Google; which is what most UK web users wanted.
Y! search late 2005
We struggled to get media mentions for Yahoo! in comparison Google’s coverage wrote itself: Google spots Jesus in Peruvian sand dune | The Register. Products like Lycos’ IQ service didn’t get the attention they deserved because if it didn’t come from Google the digerati weren’t interested.  At the time Google had 70% or so of the share market, rumours I heard at the time from colleagues were that up to 95% of searches from Yahoo!’s UK office actually used Google – which foreshadowed Google’s European dominance.

Google’s dominance could be said to have peaked around 2006, social was starting to appear and consumers started to learn the downside of what beta meant as services started to disappear or become amalgamated into other products. Services that they wove into the fabric of their online life disappeared. Tools that helped them work became less useful as functionality was dialled back.

I have compiled a list of products that Google has launched and closed and ignored US-only products. There are some specific omissions:

  • Deja News had been already shutdown by the time Google acquired the company, Google sucked the service’s Usenet archives into Google Groups
  • Google launched ‘Click-To-Call’ twice. It was closed down for the first time in 2007 and was trialled again in April 2010
  • Hello was a Picasa-based picture file transfer app similar to ‘send file’ on your favourite instant messaging platform, it was axed in 2008, but it always felt like a feature to me rather than a product
  •  SearchMash always was a testbed for different search user experiences. It was not a product by any stretch of the imagination
  • Google PowerMeter was a piece of software from – the charitable foundation set up by Google
  • Google Directory used data pulled from the Open Directory Project, it just ranked them using its algorithm
  • Google Pack was a marketing ploy and possible revenue generator rather than a consumer product per se

A number of businesses that Google got involved with where acqu-hires:

  • Aardvark
  • BumpTop
  • DocVerse
  • Dodgeball
  • fflick
  • Gizmo5
  • Jaiku,
  • Meebo
  • Picnik
  • Postini
  • Quickoffice
  • Slide
  • Zingku

Spun-out / rebranded  products

Product nameDate of launch (DD/MM/YYYY)Fate
Google body15/10/2010Google Body was part of Google Labs. It was handed over to Zygote Media Group on October 13, 2011.  It is now called Zygote Body. The source code is available under an open source license
Google gears31/05/2007Removed from Google’s product set, Gears was released under a BSD license. News of Google’s migration away from Gears broke in November 2009

Discontinued products

Product nameDate of launch (DD/MM/YYYY)Fate
Google answers04/2002Google has taken a number of runs at Q&A services. Google Answers shut down was announced on November 28, 2006
Google deskbar06/11/2003Google Deskbar came out of Google Labs; it put a Google search box inside the chrome of the operating system, allowing consumers to Google not just from inside the browser, but also productivity software.  It was discontinued on May 8, 2006. A similar feature was incorporated into Google Desktop Search.
Orkut24/01/2004Facebook-like social network that used to be popular in India and Brazil.
Google desktop14/10/2004Searched across the computer similar to Spotlight in OS X and a web search box a la Google Deskbar. Desktop also had Konfabulator-like web applets that provided information on weather, news etc. It was announced that it would be discontinued on September 2, 2011
Google Notifier2005I can’t find a specific date in 2005 when Notifier was launched. It let desktop users now when an event was due on their Google calendar or an email available in Gmail
iGoogle05/2005Discontinued on November 1, 2013
Google talk24/08/2005Google’s VoIP client, replaced by Google Hangouts on May 2013
Google reader07/10/2005Google closed down Reader despite the outcry from users. According to Google it had a loyal but declining user base so shut it down on July 1, 2013
Google page creator24/02/2006A simple way of web publishing, which Google replaced with Google Sites in September 2008.
Google notebook10/05/2006Google Notebook was a bit like a proto-Evernote. Content was exported to Google Docs on November 11, 2011 and the service disappeared by July 2012. On March 20, 2013, Google launched a similar service called Google Keep
Google brower sync08/06/2006Rolled out of Google labs as a way of synchronizing settings, passwords and bookmarks across say work and home computers running the Firefox browser. Google’s Chrome browser has a similar function and shutting this function down would have been designed to persuade consumers to jump ship when it was discontinued in June 2008.
Google image labeler31/08/2006Google copied the idea behind Carnegie Mellon’s ESP game to find a better way to teach its search what images were. Since it depended only on common answers from two random players, it prevented foul play so to speak. It was shut down on September 16, 2001
Google code search05/10/2006Vertical search looking at open source code on the web, announced for shutdown on January 15, 2012
Google website optimiser10/2006Free website testing tool to enable site owners to get more value from their site. Discontinued on August 1, 2012
Google question & answers28/05/2007Google’s latest attempt at a Q&A service was ran as localized services in Russia, France, international English and China through a partnership with Tianya. It was closed down on June 23, 2014
Knol13/12/2007Kind of similar to Squidoo in that it allowed experts to develop a sphere of content as user-written articles. It was announced on November 22, 2011 that it would be shut down.
Google friend connect12/05/2008A social media profile that was exportable (possibly as a widget), what Wikipedia called a social networking script. Google signaled it was killing it off on November 23, 2011 to make way for Google+
Google health20/05/2008Centralised personal health record service. It didn’t get to the UK but did influence David Cameron’s thinking on health IT. Discontinued January 1, 2012
Google lively08/07/2008Google Lively was a way of creating a SecondLife-type environment for conference calls – one of the reasons why IBM was so interested in SecondLife in the first place. Lively was discontinued on December 31, 2008
Google insights for search05/08/2008Google Insights for Search was merged with Google Trends on September 27, 2012
Google latitude05/02/2009Location aware social application, similar to Dodgeball that Google had acquired and closed down. Latitude itself was shut down on June 10, 2013
Google squared12/05/2009Google squared provided some of the functionality of Wolfram Alpha, in particular adding structure and relationships to apparently unstructured data sets. It was shut down on 05/09/2011
Google wave27/05/2009Google Wave was a hybrid communications platform that allowed document collaboration and a mix of email and messaging. Google Wave was culled in a batch of ‘spring cleaning’ announced by Google in November 2011. Source code from Google Wave was released under an Apache license.
Google fast flip14/09/2009Provided a flip board type of experience aggregating content from 39 news partners. It was axed on September 5, 2011
Google building maker13/10/2009Allowed users to model existing buildings for inclusion in Google Earth as a 3D model. Shut down announced on March 13, 2013
Google dictionary12/2009Google Dictionary was launched as a standalone product after being a feature in Google Translate. It was shut down without warning on August 5, 2011. Google has a dictionary function build into search using ‘define:”
Google buzz9/2/2010A social network that integrated into Gmail, it was discontinued on December 15, 2011.
Google cloud connect24/2/2011Google Cloud Connect was a Microsoft Office plug-in that allowed you to easily save documents to Google Docs. It was discontinued on April 30, 2013
Google schemer18/11/2011An invite-only clone of 43 Things was shut down on February 7, 2014
Quickoffice05/06/2012 (date Google acquired the company)Quickoffice was an established mobile application when Google acquired the company, discontinued on June 29, 2014

The closure of Google Reader felt to me like a water shed moment. Google Reader had come along and eviserated the current marketplace for RSS readers, though the size and reach of the Google network. Names like Fastladder and Bloglines. Once the competition was demolished Google then withdrew of the sector and a scramble of cottage industry services sprung up to try and fill the gap; my personal favourite being Newsblur.

I suspect and have heard others suggest that Google has a problem getting users to use and commit to new services. I don’t think that Google Wave’s issue was consumer commitment, but poor product design, but the lack of adoption for say Google+ screams consumers and early adopters could be indicative of a wider wariness of the general public to invest their data and time in a new Google service. This maybe part of the reason why Google seems to be gradually extracting Google+ from its product matrix; just a few days ago no longer using Google+ author ranking in search.

If one looks at Google+ versus other services in Google Trends we can see a similar level of interest to say Google Reader, something that Google has already admitted was a non-viable product.

Google finds itself in a more normal internet brand marketing position: asking consumers for brand permission to innovate so that consumers will engage with their new products and services. Having been on the other side of that fence I realise what a challenge that can be.

More information

Lycos IQ
Lovely Jubii-ly | renaissance chambara
IAC | Ask and the social web | renaissance chambara
Open source intelligence | renaissance chambara

Google Click To Call
Google Tests Phone Numbers In AdWords Ads | SearchEngineLand

Google Reader
Reader May Have Died To Feed Google+’s APIs | Co.Labs

Google Answers
Adieu to Google Answers | Google Official Blog

Google Deskbar
Google’s Deskbar; Search Engine Forums Spotlight | Search Engine Watch

Google Lively
Be who you want on the web pages you visit | Google Official Blog

Google Questions and Answers
Baraza turning read only | Google Help

Google Groups
How to Search Today’s Usenet For Programming Information? | Slashdot
Google’s Abandoned Library of 700 Million Titles (UPDATED) | Wired
Google Begins Fixing Usenet Archive | Wired

Google Wave
More spring cleaning out of season | Google Official Blog

Google Gears
Stopping the Gears | Google Gears Blog

It’s Over: The Rise & Fall Of Google Authorship For Search Results | SearchEngineLand