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	<title>The Perils of Punditry</title>
	
	<link>http://ejschmidt.com/blog</link>
	<description>Business + Information Strategy + Technology</description>
	<pubDate>Wed, 09 Sep 2009 15:52:37 +0000</pubDate>
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		<title>iPod Day Predictions</title>
		<link>http://feedproxy.google.com/~r/ThePerilsOfPunditry/~3/j9UK2RKXEb8/</link>
		<comments>http://ejschmidt.com/blog/ipod-day-predictions/#comments</comments>
		<pubDate>Wed, 09 Sep 2009 15:52:16 +0000</pubDate>
		<dc:creator>Erik Schmidt</dc:creator>
		
		<category><![CDATA[Uncategorized]]></category>

		<category><![CDATA[Apple]]></category>

		<category><![CDATA[iPod]]></category>

		<guid isPermaLink="false">http://ejschmidt.com/blog/?p=243</guid>
		<description><![CDATA[Today Apple will be unveiling changes to the iPod lineup. Here are my (bound to be wrong) predictions:

Shuffle gets killed off.
Nano gets a complete overhaul with a groovy new shell and more capacity. No camera. No FM tuner.
Classic gets a camera, a groovy new shell and more capacity. No FM tuner.
Touch gets a camera and [...]]]></description>
			<content:encoded><![CDATA[<p>Today Apple will be unveiling changes to the iPod lineup. Here are my (bound to be wrong) predictions:</p>
<ul>
<li>Shuffle gets killed off.</li>
<li>Nano gets a complete overhaul with a groovy new shell and more capacity. No camera. No FM tuner.</li>
<li>Classic gets a camera, a groovy new shell and more capacity. No FM tuner.</li>
<li>Touch gets a camera and more capacity.</li>
<li>iTunes 9 rollout.</li>
<li>Sneak peak of Cocktail and of the new tablet, which will be ready in time for the Christmas season (going way out on a limb with this one).</li>
</ul>
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		<item>
		<title>Bartz is Nobody’s Fool</title>
		<link>http://feedproxy.google.com/~r/ThePerilsOfPunditry/~3/BbhKuOecO_Y/</link>
		<comments>http://ejschmidt.com/blog/bartz-is-nobodys-fool/#comments</comments>
		<pubDate>Fri, 31 Jul 2009 22:40:21 +0000</pubDate>
		<dc:creator>Erik Schmidt</dc:creator>
		
		<category><![CDATA[Marketshare]]></category>

		<category><![CDATA[Google]]></category>

		<category><![CDATA[Microsoft]]></category>

		<category><![CDATA[Yahoo]]></category>

		<guid isPermaLink="false">http://ejschmidt.com/blog/?p=234</guid>
		<description><![CDATA[Yahoo CEO Carol Bartz was smart to enter into a search deal with Microsoft. Many observers seem to believe that Microsoft pulled a fast one on the ailing Web pioneer. Make no mistake, Yahoo is in trouble. That&#8217;s exactly why they need to focus on their core competency.
Search has never been Yahoo&#8217;s competitive advantage, and [...]]]></description>
			<content:encoded><![CDATA[<p>Yahoo CEO Carol Bartz was smart to enter into a search deal with Microsoft. Many observers seem to believe that <a href="http://brainstormtech.blogs.fortune.cnn.com/2009/07/30/why-the-markets-mad-at-yahoo/">Microsoft pulled a fast one on the ailing Web pioneer</a>. Make no mistake, Yahoo is in trouble. That&#8217;s exactly why they need to focus on their core competency.</p>
<p>Search has never been Yahoo&#8217;s competitive advantage, and no matter how hard they&#8217;ve worked to catch up to Google, they haven&#8217;t had the muscle for it. Microsoft, on the other hand, has been trying for years to take down Google in search. In Bing they finally have a search product that isn&#8217;t embarrassing by comparison to Google. Leveraging Microsoft search technology will help Yahoo keep its customers happy without draining resources at Yahoo that should be directed at doing what they do best.</p>
<p>Microsoft has failed time and time again on the human side of the Web. Content is just not their bag. Social applications are not their bag. Yahoo does both of these quite well. Google&#8217;s mathematical, reductionist, relentlessly quantified search is not the only route to money. Bartz gets this.</p>
<p><img src="http://ejschmidt.com/blog/wp-content/uploads/2009/07/sprout.jpg" alt="sprout" title="sprout" width="400" height="267" class="alignnone size-full wp-image-235" /></p>
<p>Mark your calendars and come back in a year to taunt me if I&#8217;m wrong on this one. I definitely seem to be outnumbered, and I wouldn&#8217;t be surprised if the wisdom of the crowds prevailed. Still, I think that by shedding old baggage, a leaner, more capable Yahoo could emerge.</p>
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		<item>
		<title>Don’t Hide</title>
		<link>http://feedproxy.google.com/~r/ThePerilsOfPunditry/~3/wxS19KV1nj4/</link>
		<comments>http://ejschmidt.com/blog/do-not-hide/#comments</comments>
		<pubDate>Thu, 30 Jul 2009 17:02:10 +0000</pubDate>
		<dc:creator>Erik Schmidt</dc:creator>
		
		<category><![CDATA[Communication]]></category>

		<category><![CDATA[Keeping Customers]]></category>

		<category><![CDATA[Marketing]]></category>

		<category><![CDATA[Horizon Realty]]></category>

		<category><![CDATA[United Airlines]]></category>

		<guid isPermaLink="false">http://ejschmidt.com/blog/?p=223</guid>
		<description><![CDATA[Mistakes happen in every business. But these days you have to assume that any mistake you make could become public knowledge. When United Airlines broke David Carroll&#8217;s guitar and didn&#8217;t compensate him for the loss, he poured his frustration into a YouTube video that has been viewed millions of times and has done tremendous damage [...]]]></description>
			<content:encoded><![CDATA[<p>Mistakes happen in every business. But these days you have to assume that any mistake you make could become public knowledge. When United Airlines broke David Carroll&#8217;s guitar and didn&#8217;t compensate him for the loss, <a href="http://www.fastcompany.com/blog/ravi-sawhney/design-reach/youtube-serves-180-million-heartbreak">he poured his frustration into a YouTube video</a> that has been viewed millions of times and has done tremendous damage to United&#8217;s reputation and its bottom line.</p>
<p><object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/5YGc4zOqozo&#038;rel=0&#038;color1=0x3a3a3a&#038;color2=0x999999&#038;hl=en&#038;feature=player_embedded&#038;fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowScriptAccess" value="always"></param><embed src="http://www.youtube.com/v/5YGc4zOqozo&#038;rel=0&#038;color1=0x3a3a3a&#038;color2=0x999999&#038;hl=en&#038;feature=player_embedded&#038;fs=1" type="application/x-shockwave-flash" allowfullscreen="true" allowScriptAccess="always" width="425" height="344"></embed></object></p>
<p>Or consider Horizon Realty. They sued a former apartment tenant to the tune of $50,000 because of these words she tweeted: &#8220;Who said sleeping in a moldy apartment was bad for you? Horizon realty thinks it’s okay.” In bringing a libel case against this Twitter user, they <a href="http://mashable.com/2009/07/28/woman-sued-tweet/">generated a solid dose of attention and criticism</a>. Did the tweet do $50,000 worth of damage to the company? It is doubtful that a Twitter user who had only 20 followers and tweeted infrequently had much pull.</p>
<p>But here&#8217;s the thing: As soon as she got sued, her tweet instantly became the subject of public scrutiny. Even if Horizon Realty wins the lawsuit, they&#8217;ll at best look like bullies and at worst will generate even further negative scrutiny from Twitter users, bloggers, and the mainstream media. Imagine if instead of responding with a lawsuit, Horizon had replied with a tweet along these lines:</p>
<p><em>Hey @abonnen, are there any maintenance issues in your apartment? Please direct message us so we can get to the bottom of it.</em></p>
<p>A message like this shows responsiveness and a desire to make the customer happy. It&#8217;s done in public, so anyone who is watching @abonnen&#8217;s twitstream can see it. Who knows, if they&#8217;d responded in this fashion, she might have started singing Horizon&#8217;s praises. Real customer accolades are difficult to earn, but they&#8217;re much more valuable than any PR or marketing campaign.</p>
<p>Imagine how different things might have been if United Airlines had engaged in a real dialogue with David Carroll after his guitar, the source of his livelihood, was broken? Again, United may have been operating within its contractual obligations when it refused to fix the problem. But in so doing, they created another, much bigger problem.</p>
<p>You can&#8217;t control the message. But you can engage in conversations with your customers and with the broader world. Don&#8217;t hide. Engage.</p>
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		<item>
		<title>Go Where Your Customers Live</title>
		<link>http://feedproxy.google.com/~r/ThePerilsOfPunditry/~3/d3mYwf5itXw/</link>
		<comments>http://ejschmidt.com/blog/go-where-your-customers-live/#comments</comments>
		<pubDate>Tue, 28 Jul 2009 18:30:53 +0000</pubDate>
		<dc:creator>Erik Schmidt</dc:creator>
		
		<category><![CDATA[Communication]]></category>

		<category><![CDATA[Marketing]]></category>

		<category><![CDATA[Tools]]></category>

		<category><![CDATA[FastPencil]]></category>

		<category><![CDATA[productOps]]></category>

		<category><![CDATA[YouTube]]></category>

		<guid isPermaLink="false">http://ejschmidt.com/blog/?p=217</guid>
		<description><![CDATA[Your website is no longer the only place visitors will find out about your company. Rating and review sites, blogs, twitter, and so cramp your ability to control how your company is perceived. But while the Internet taketh away, it also giveth.
Here&#8217;s an example of using social media tools to good effect. FastPencil, a startup [...]]]></description>
			<content:encoded><![CDATA[<p>Your website is no longer the only place visitors will find out about your company. Rating and review sites, blogs, twitter, and so cramp your ability to control how your company is perceived. But while the Internet taketh away, it also giveth.</p>
<p>Here&#8217;s an example of using social media tools to good effect. <a href="http://www.fastpencil.com">FastPencil</a>, a startup that provides an integrated writing and self-publishing system, just posted a series of instructional videos on YouTube. By leveraging YouTube, they were able to get the videos posted quickly. YouTube videos are also inherently viral, so people who like the tutorials can forward them to friends. The videos are also easily embedded, so if at some point in the future FastPencil decides to build out a video tutorials section on their website, they&#8217;ll be able to show the videos there.</p>
<p>Or as you see here, if someone wants to blog about FastPencil, they can embed video directly in their blog.</p>
<p><object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/qVCSPfN60OA&#038;rel=0&#038;color1=0xb1b1b1&#038;color2=0xcfcfcf&#038;feature=player_profilepage&#038;fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowScriptAccess" value="always"></param><embed src="http://www.youtube.com/v/qVCSPfN60OA&#038;rel=0&#038;color1=0xb1b1b1&#038;color2=0xcfcfcf&#038;feature=player_profilepage&#038;fs=1" type="application/x-shockwave-flash" allowfullscreen="true" allowScriptAccess="always" width="425" height="344"></embed></object></p>
<p>This is the sort of thing that sounds simple and obvious, but most companies are still not using free and effective tools like YouTube to extend their message and help customers. </p>
<p>Full disclosure: FastPencil is a <a href="http://productops.com/">productOps</a> client, but they came up with the idea and implemented this on their own.</p>
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		<item>
		<title>Consensus Does Not Equal Success</title>
		<link>http://feedproxy.google.com/~r/ThePerilsOfPunditry/~3/qmDPRcUSjgY/</link>
		<comments>http://ejschmidt.com/blog/consensus-does-not-equal-success/#comments</comments>
		<pubDate>Mon, 27 Jul 2009 16:04:06 +0000</pubDate>
		<dc:creator>Erik Schmidt</dc:creator>
		
		<category><![CDATA[Building the Machine]]></category>

		<category><![CDATA[history]]></category>

		<category><![CDATA[leadership]]></category>

		<guid isPermaLink="false">http://ejschmidt.com/blog/?p=206</guid>
		<description><![CDATA[America&#8217;s Founding Fathers engaged in intense debates about how the United States should be structured. Many of the towering figures of that era were in nearly violent disagreement with each other for years. But they managed to build a disparate band of former colonies into a nation.
Decades later, the newly-elected Abraham Lincoln brought several of [...]]]></description>
			<content:encoded><![CDATA[<p>America&#8217;s Founding Fathers engaged in intense debates about how the United States should be structured. Many of the towering figures of that era were in nearly violent disagreement with each other for years. But they managed to build a disparate band of former colonies into a nation.</p>
<p>Decades later, the newly-elected Abraham Lincoln brought several of his most intense and capable opponents into his cabinet. During the biggest crisis the nation ever faced, he encouraged vigorous cabinet debate. At times the cabinet members were at each other&#8217;s throats. But under Lincoln&#8217;s leadership, the nation survived.</p>
<p>Hiring people who agree with you makes your life as a leader easier. You seldom get into arguments about your decisions. Nobody challenges you. </p>
<p><img src="http://ejschmidt.com/blog/wp-content/uploads/2009/07/opfor.jpg" alt="opfor" title="opfor" width="400" height="319" class="size-full wp-image-210" /></p>
<p><em>Nobody challenges you</em> is another way of saying nobody tests your assumptions. Nobody vigorously examines your direction. Nobody pushes you to come up with better plans. Nobody is helping you be as good as you can be at whatever it is you are doing.</p>
<p>General Ray Ordierno understands this, which is why <a href="http://blogs.harvardbusiness.org/baldoni/2009/07/hire_people_who_disagree.html">he brought in a dedicated &#8220;opposite&#8221; as one of his closest aides in Iraq</a>. He recognizes that a diverse team of advisors can provide more options and more insights than a group of like-minded thinkers.</p>
<p>Years ago I led the development of a secure web application that was designed for internal corporate communication. One of the team members was a born contrarian. He&#8217;d tell us why a particular feature wouldn&#8217;t work. He&#8217;d point out how a nefarious user could game the system. I admit that at first this grated on me. But then I realized the full value of his criticism. He was revealing problems that would manifest if we didn&#8217;t change the design of the application. What seemed like sand in the gears was really a big lighthouse beacon, warning away from dangerous shores.</p>
<p>Thankfully he raised his concerns early in the development process. As we reworked the system, I explicitly placed him in an <a href="http://en.wikipedia.org/wiki/Opposing_force">OPFOR</a> role. His job was to pretend to be a malicious user. He analyzed the system accordingly, and as he brought flaws to the surface, we would fix them. This was a huge learning event for me, but more importantly, the development process actually went faster and more smoothly. We delivered the project ahead of schedule, and the client was thrilled.</p>
<p>If you&#8217;re in charge, having in-house skeptics may seem like a challenge to your authority. But if you&#8217;re secure in your role, they can help you exceed your own limitations.</p>
<div xmlns:cc="http://creativecommons.org/ns#" about="http://www.flickr.com/photos/unc-cfc-usfk/3286954969/in/photostream/"><a rel="cc:attributionURL" href="http://www.flickr.com/photos/unc-cfc-usfk/">http://www.flickr.com/photos/unc-cfc-usfk/</a> / <a rel="license" href="http://creativecommons.org/licenses/by/2.0/">CC BY 2.0</a></div>
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		<item>
		<title>Turning Information Into Action</title>
		<link>http://feedproxy.google.com/~r/ThePerilsOfPunditry/~3/muU0boQHoUg/</link>
		<comments>http://ejschmidt.com/blog/turning-information-into-action/#comments</comments>
		<pubDate>Wed, 22 Jul 2009 17:02:14 +0000</pubDate>
		<dc:creator>Erik Schmidt</dc:creator>
		
		<category><![CDATA[Building the Machine]]></category>

		<category><![CDATA[Tools]]></category>

		<category><![CDATA[productOps]]></category>

		<guid isPermaLink="false">http://ejschmidt.com/blog/?p=198</guid>
		<description><![CDATA[A post at Harvard Business by John Sviokla points out that gathering information is not enough in today&#8217;s business environment. Successful companies are able to take information and rapidly act on it. In order to do so, they need to be able to assign context to the flood of information they are receiving.

Sviokla uses augmented [...]]]></description>
			<content:encoded><![CDATA[<p>A post at Harvard Business by John Sviokla points out that <a href="http://blogs.harvardbusiness.org/sviokla/2009/07/organized_information_is_the_n.html">gathering information is not enough</a> in today&#8217;s business environment. Successful companies are able to take information and rapidly act on it. In order to do so, they need to be able to assign context to the flood of information they are receiving.</p>
<p><img src="http://ejschmidt.com/blog/wp-content/uploads/2009/07/506742433_c455440256-300x225.jpg" alt="506742433_c455440256" title="506742433_c455440256" width="300" height="225" class="alignnone size-medium wp-image-199" /></p>
<p>Sviokla uses augmented reality as an example of making information actionable. AR has been used in the military and certain high tech industries for a long time. Heads-up displays have been helping fighter pilots consume and act upon vitally important information in real time for years. Workers at Boeing use AR when assembling the newest aircraft. </p>
<p>All of this is wonderful, but most companies are so far behind this level of technology that it represents a leap of two, if not three generations of technology. The challenge for most companies in making smart technology decisions is to balance tangible benefits with the disruption incurred by massive change. The <a href="http://productops.com/products/sales-mojo.html">SalesMojo salesforce automation platform</a> we developed at <a href="http://productops.com/">productOps</a> is an example of one approach to this balancing act. It does not assume that salespeople will always be online. Instead, it allows for online and offline use. It recognizes that companies already have sales processes and structures in place, and doesn&#8217;t impose its own structure. Information is automatically centralized on the server, and is immediately accessible, but that information can be displayed essentially any way sales managers prefer. </p>
<p>I&#8217;m not saying that SalesMojo is a silver bullet. There&#8217;s no such thing. There is no software solution that will slay all your dragons. But the first step in finding the best solution for your company is to look in the mirror and determine how much disruption you are willing to incur. Then narrow your technology search accordingly.</p>
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		<item>
		<title>Time The Avenger</title>
		<link>http://feedproxy.google.com/~r/ThePerilsOfPunditry/~3/An0aBm-5v40/</link>
		<comments>http://ejschmidt.com/blog/time-the-avenger/#comments</comments>
		<pubDate>Fri, 26 Jun 2009 16:48:14 +0000</pubDate>
		<dc:creator>Erik Schmidt</dc:creator>
		
		<category><![CDATA[Communication]]></category>

		<category><![CDATA[Marketing]]></category>

		<category><![CDATA[Facebook]]></category>

		<category><![CDATA[microblogging]]></category>

		<category><![CDATA[social media]]></category>

		<category><![CDATA[twitter]]></category>

		<guid isPermaLink="false">http://ejschmidt.com/blog/?p=194</guid>
		<description><![CDATA[Social media tools can be a tremendously valuable means of connecting with your customers, but you can&#8217;t just throw money at Twitter, Facebook, and your blog and expect to get any real benefit.
I spoke with a client yesterday who wanted me to create a social media strategy for his company. I impressed upon him the [...]]]></description>
			<content:encoded><![CDATA[<p>Social media tools can be a tremendously valuable means of connecting with your customers, but you can&#8217;t just throw money at Twitter, Facebook, and your blog and expect to get any real benefit.</p>
<p>I spoke with a client yesterday who wanted me to create a social media strategy for his company. I impressed upon him the importance of authenticity. Sure, I could write his blog posts and tweets for him, but I don&#8217;t have his professional expertise. At the end of the day, I&#8217;d be merely adding to the chaff created by countless other inauthentic bloggers for hire, and doing next to nothing to advance my client&#8217;s credibility.</p>
<p>He would have to get involved. He would have to write.</p>
<p>Unfortunately, writing takes time. Whether you&#8217;re tweeting occasionally, posting religiously to a blog, or weighing in with comments on other people&#8217;s sites, there is an opportunity cost to social marketing. If you&#8217;re busy writing, you&#8217;re not busy billing. </p>
<p>Determine how much time you really have to devote to social media. Then think about your writing style. Those factors will help you determine which social media tools are right for you.</p>
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		<title>Use of Color in Google Analytics Graphs</title>
		<link>http://feedproxy.google.com/~r/ThePerilsOfPunditry/~3/scJhk5_NsjY/</link>
		<comments>http://ejschmidt.com/blog/use-of-color-in-google-analytics-graphs/#comments</comments>
		<pubDate>Wed, 17 Jun 2009 03:23:54 +0000</pubDate>
		<dc:creator>Erik Schmidt</dc:creator>
		
		<category><![CDATA[Design]]></category>

		<category><![CDATA[Google]]></category>

		<category><![CDATA[user experience]]></category>

		<guid isPermaLink="false">http://ejschmidt.com/blog/?p=178</guid>
		<description><![CDATA[I like Google Analytics. It&#8217;s a solid, useful application that when used properly can provide a wealth of useful, actionable information. But the way Google uses green in comparison graphs bothers me.
Here&#8217;s how Google displays a traffic comparison. The blue line represents the current time period, while the green line represents the prior period.
This may [...]]]></description>
			<content:encoded><![CDATA[<p>I like Google Analytics. It&#8217;s a solid, useful application that when used properly can provide a wealth of useful, actionable information. But the way Google uses green in comparison graphs bothers me.</p>
<p>Here&#8217;s how Google displays a traffic comparison. The blue line represents the current time period, while the green line represents the prior period.</p>
<div id="attachment_179" class="wp-caption alignnone" style="width: 510px"><img src="http://ejschmidt.com/blog/wp-content/uploads/2009/06/analytics-1.png" alt="Green indicates the current time series as well as increased traffic" title="How Google Analytics Currently Displays" width="500" height="140" class="size-full wp-image-179" /><p class="wp-caption-text">Green represents both a time period and a traffic increase</p></div>
<p>This may seem incredibly picayune, but I frequently find myself looking twice or three times at the graph, trying to determine whether green represents the current time series or the time series it is being compared against. Why? Because green is used to delineate the prior time series, and it is also used to indicate an increase in traffic. </p>
<p>In this instance I see the 11.3% and get confused, because although there is an increase of 11.3%, the number is shown in green, which makes me look at the prior time series, rather than the current time series. Yes, I&#8217;m smart enough to eventually figure out that the traffic represented by the <em>blue</em> line is the traffic that has gone up by 11.3%, but it is confusing.</p>
<p>If I could, I&#8217;d change the green to a different color, something like this:</p>
<div id="attachment_181" class="wp-caption alignnone" style="width: 510px"><img src="http://ejschmidt.com/blog/wp-content/uploads/2009/06/analytics-21.png" alt="Using green for only piece of data eliminates the confusion" title="Google Analytics Alt" width="500" height="140" class="size-full wp-image-181" /><p class="wp-caption-text">Gold rather than green for the prior time series</p></div>
<p>Presto, no more confusion. Green now unequivocally represents an increase in traffic. Red represents a decrease in traffic. Blue represents the current time series, and gold represents the prior time series.</p>
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		<title>Why Google Wave is the Next Big Thing</title>
		<link>http://feedproxy.google.com/~r/ThePerilsOfPunditry/~3/vPzws0JmfGU/</link>
		<comments>http://ejschmidt.com/blog/why-google-wave-is-the-next-big-thing/#comments</comments>
		<pubDate>Tue, 02 Jun 2009 16:24:36 +0000</pubDate>
		<dc:creator>Erik Schmidt</dc:creator>
		
		<category><![CDATA[Communication]]></category>

		<category><![CDATA[Tools]]></category>

		<category><![CDATA[Google]]></category>

		<category><![CDATA[Google Wave]]></category>

		<guid isPermaLink="false">http://ejschmidt.com/blog/?p=170</guid>
		<description><![CDATA[What is most impressive about Google Wave is its scope. While the application itself garners the most attention, the real power lies in the foundation.]]></description>
			<content:encoded><![CDATA[<p>Since its public unveiling at Google I/O, Google Wave has generated tremendous buzz. The newest Google project is a blend of instant messaging, email, and collaborative document creation. It is an ambitious undertaking, and grokking it fully takes some time. This video of Google Wave&#8217;s unveiling is over an hour long.</p>
<p>It is a video worth watching, because it shows the breadth of Google&#8217;s vision. I am reminded of the early days of the Web, when explaining technology we now take for granted required lots of metaphors, hand gestures, and labored explanation. Then, as now, the best way to explain a new technology is to show it in action.</p>
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<p>What is most impressive about Google Wave is its scope. While the application itself garners the most attention, the real power lies in the foundation. Protocols are the vehicles by which messaging on the Internet takes place. For example, HTTP (HyperText Transfer Protocol) is used by web servers. SMTP (Simple Mail Transfer Protocol) is used to send email. The <a href="http://www.waveprotocol.org/">Google Wave Federation Protocol</a> is an extension of an existing protocol called XMPP (Extensible Messaging and Presence Protocol) Core. Google&#8217;s intention is to make this protocol the foundation of a new class of messaging systems, and their patent license is explicitly designed to keep competing users of the protocol honest (my italics):</p>
<blockquote><p>Subject to the terms and conditions of this License, Google and its affiliates hereby grant to you a perpetual, worldwide, non-exclusive, no-charge, royalty-free, irrevocable (except as stated in this License) patent license for patents necessarily infringed by implementation of this specification. <em>If you institute patent litigation against any entity (including a cross-claim or counterclaim in a lawsuit) alleging that the implementation of the specification constitutes direct or contributory patent infringement, then any patent licenses for the specification granted to you under this License shall terminate</em> as of the date such litigation is filed.</p></blockquote>
<p>A set of APIs (Application Programming Interfaces) sit on top of the Google Wave Federation Protocol. They allow developers to build new features into Google Wave applications and extend Google Wave functionality to other apps. This is where the magic happens. Google, as powerful as it is, doesn&#8217;t have an infinite supply of developers. They also can&#8217;t anticipate all the things end users might want from Google Wave. But an army of motivated third-party developers will take the APIs and create all kinds of interesting and useful new services, the way they have with Google Maps and APIs from Amazon, eBay, Netflix, and other savvy companies.</p>
<p>Many tech observers are making the mistake of focusing on the latest web applications, rather than on the APIs. Twitter is perhaps the best example of this: A minority of Twitter traffic moves through the Twitter website. Dozens of Twitter clients and mashups account for the majority. Because Twitter made the API available early in the game, it captured developer mindshare. A thousand flowers bloomed, and now Twitter is on desktops, laptops, Blackberry handhelds, Android devices, and iPhones. </p>
<p>Email has become unwieldy, particularly in business settings. Instant messaging is hampered by conflicting standards and limited extensibility. Document collaboration systems are fast improving, but they require initial intention; a Google Wave can effortlessly morph from conversation into document. The Google dev team also paid attention to making Google Wave play well with existing technologies. Developers and end users won&#8217;t have to shift over to Google Wave wholesale in order to start benefiting from it.</p>
<p>I expect to see a broad range of Google Wave applications not long after its official launch. Some of them will incorporate all or most of the platform&#8217;s capabilities. Others will be more lean and focused. There will even be Google Wave applications that provide interface polish and capabilities the Google Wave team hadn&#8217;t even considered. And that&#8217;s exactly why Google Wave will be a success.</p>
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		<title>Google is Reliant on Advertising</title>
		<link>http://feedproxy.google.com/~r/ThePerilsOfPunditry/~3/iT1frNYm6AI/</link>
		<comments>http://ejschmidt.com/blog/google-is-reliant-on-advertising/#comments</comments>
		<pubDate>Wed, 27 May 2009 00:27:00 +0000</pubDate>
		<dc:creator>Erik Schmidt</dc:creator>
		
		<category><![CDATA[Building the Machine]]></category>

		<category><![CDATA[Marketshare]]></category>

		<category><![CDATA[Google]]></category>

		<guid isPermaLink="false">http://ejschmidt.com/blog/?p=163</guid>
		<description><![CDATA[
The adulation of Google long ago reached fever pitch. I&#8217;d say it may have even peaked. But never one to undersell the wonders of technology, Wired this month published an article by Steven Levy which explains the auction mechanism behind Google&#8217;s phenomenally successful advertising platform. It is truly a wondrous vehicle for moving money into [...]]]></description>
			<content:encoded><![CDATA[<p><img src="http://ejschmidt.com/blog/wp-content/uploads/2009/05/rocks-ahead.jpg" alt="rocks-ahead" title="rocks-ahead" width="400" height="300" class="alignnone size-full wp-image-164" /></p>
<p>The adulation of Google long ago reached fever pitch. I&#8217;d say it may have even peaked. But never one to undersell the wonders of technology, Wired this month published <a href="http://www.wired.com/culture/culturereviews/magazine/17-06/nep_googlenomics">an article by Steven Levy</a> which explains the auction mechanism behind Google&#8217;s phenomenally successful advertising platform. It is truly a wondrous vehicle for moving money into the Bank of Google. </p>
<p>But Google is also tremendously reliant on advertising. Imagine a world in which Google doesn&#8217;t dominate the online marketplace. Or, if you want to get really radical, imagine an alternate reality in which online advertising is no longer the only big game in town for companies seeking online exposure. There are already signs that while online advertising is a moneymaking machine for Google, despite the brilliant algorithms and economic efficiency, it has weaknesses.</p>
<p>A <a href="http://www.nytimes.com/2009/05/25/technology/start-ups/25startup.html?">recent New York Times story</a> highlights the nervousness some companies and investors feel about ad-supported revenue models. OpenTable recently went public. The company relies on referral payments from restaurants, rather than advertising. To pull in revenue, companies like Wetpaint and Pandora are trying a variety of methods beyond advertising. </p>
<p>I expect this trend to increase as the effectiveness of ads continues to diminish. No matter how effective the targeting and placement of an individual ad, the gestalt effect of being overwhelmed with text ads, banner ads, Flash ads, et. al. is that users become immune to them. The lowest allowable ROI is different for each advertiser, but if all boats are sinking, more than a few Google advertisers may jump.</p>
<p>This represents a threat to Google, and an opportunity for a new breed of intermediary that can match content providers with companies that are currently using web ads to market their products and services.</p>
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