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Archive for the ‘Google’ Category

Top Three Europe-specific challenges for Google Inc.

Posted by annplugged on May 15, 2007

So what does Nikesh Arora, who manages and develops Google’s operations in the European market, consider as the top 3 challenges for Google in Europe (vs. Google US). Nikesh Arora Google Europe VP at Budapest press conference

This morning started with a press event in the Four Seasons Hotel in Budapest (great place, great food, no wifi).

The intended focus of the press event was to officially announce the strategic co-operation between Google and the Hungarian market leader T-Mobile and T-Online (using Google search results as part of Google syndicate, content network expansion through the search page called ok.hu).
As the news got around the blogosphere days before the official announcement, I was more interested in what Nikesh thinks about the major differences between Google US and Google EU. The top three should not come as a surprise:

No. 1 Europe is multicultural, multilingual so there is no general solution for the EU as a unit.
No. 2 In the last two years businesses have become more internet savvy. Yet, European businesses do not value the internet as much as their American counterparts. Mind you, it is not the users who would undervalue the power of the web, but rather enterprises in Europe.
No. 3 In Europe it is more challenging to find good people who have a high capital of risk tolerance.

I definitely agree with all three, although my general impression is that enterprises, sadly many times with excellent ideas, simply lack entrepreneurial skills, including calculating the value of web presence and the money available for risks. Moreover, they may not go and look for professionals who possess such skills. Nevertheless, I do hope that things are changing faster than expected, especially regarding the latter two challenges as they can be improved, unlike EU multilingua (multilingualism is a hard nut to crack, harte Nusse, kemény dió etc.).

To test risk tolerance, i.e. how much risk your investment can handle, here are two main questions to ask yourself (from investopedia through forbes) if you have not done so far:

  • How much time do I have? “Before you make any investment, you should always determine the amount of time you have to keep your money invested. With a longer time horizon (young), investors have more time to recoup any possible losses and are therefore theoretically be more tolerant of higher risks” So, it seems that the old continent is old in this respect. European businesses with a longer time horizon are less willing to tolerate risks at higher levels for higher potential yields. Playing safe.
  • How much can I lose? “Determining the amount of money you can stand to lose – i.e. risk capital – is another important factor of figuring out your risk tolerance. By investing only money that you can afford to lose or afford to have tied up for some period of time, you won’t be pressured to sell off any investments because of panic or liquidity issues. The more money you have, the more risk you are able to take and vice versa.” Again, European companies appear to draw the line tighter – saying they cannot afford to lose ‘that much’ – in all probability, due to lack of experience, in general, but especially in diversifying risk programs (which prevents you losing money and/ or face all too sudden)

There are, of course, more questions to be answered, according to Chad Butler “What is my risk tolerance?” The answer will vary based on your age, experience, net worth, risk capital and the actual investment or trade being considered.” However, he also points out that “with today’s growing life expectancies and advancing medical science, the 65-year-old investor may still have a 20-year (or more) time horizon.”

ps: yes, the Google mirror effect is intentional in the pic

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Posted in Google, Marketing, Online, Search marketing | 5 Comments »

A Few Tips on SEO: Choosing Relevant (.edu) Inbound Links and Testing in Paid Search

Posted by annplugged on May 15, 2007

By these days, it has become common knowledge that your placement in search results pages can be better if you do something with your keywords on the site, and pay attention to whom are linking to your site (inbound links), and who you are linking to (outbound).

A recent article on CNN Money, has three hot SEO tips for newbies:

1, hunt for relevant (.edu) links to point at your site: “find academics and hit them up for links. But remember that for lasting credibility with Google, the links need to be relevant. Villanueva, [kitchen furniture retailer] for instance, e-mailed dozens of college instructors who teach woodworking and courses about the lumber industry and snagged two .edu links.” Relevance on furntiture – woodwork suffices, as you see.

2, learn from rivals: “figure out who’s linking to your competition and cut deals with them. Yahoo’s Site Explorer (siteexplorer.search.yahoo.com) will show you a site’s inbound links. Joining Web directories is also worthwhile. Lesser-known ones like BOTW.org and JoeAnt.com can be helpful, but be careful: If your site is about phone services and you don’t see Sprint or Verizon, you might be right to assume that they won’t provide much of a boost on Google.” (registering in Yahoo catalogs and that of Business.com is also said to be working)

3.  need good search phrases? “You can use tools such as Wordtracker to find the phrases that people tend to type when looking for a specific product. But this has its shortcomings. Curiously, popular phrases aren’t always the best. One way to find the most effective phrases is to buy ads on Google’s paid search side. You bid on keywords – related phrases, such as “discount kitchen cabinets” – to ensure that your ad ranks high. Then, using Google Analytics or another system, track which phrases best convert into sales. The terms that work for paid search typically work in organic search. ”

Although the article does not mention it, but I find it especially important: make videos on your products, services, PR events, make interviews with your stakeholders, locally with the citizens you are concerned about etc. or sponsor videos whose content you agree with. Then use SEO optimizing techniques to make your video clips rank better in video search engines like the one running under YouTube (i.e. Google Video Search). Make careful your filename of the video reflects the content and the business intention.

You can start with the key search phrases both in texts accompanying the videofilms, and especially in tags (but do not cram them). Don’t forget to give your website url at the end/ beginning of the film (post, or pre-reel, as you like it) and again, also in the text (on the left side on youtube). Make sure you get a nice and relevant bunch of links (both in and out). If you are satisfied with the results, test the video on a microsite through paid search strategy. Track results, and make even better video content – this time experiment with the a version optimized for cell phone screen resolution, browser, and cell phone use too.

ps: according to Paul Goode from M:Metrics, cell phone is still a white spot regarding frequency, duration, session time etc. but there is a fair amount of data on demographics, genres, types of sites visited. John Baker from Ogilvy One says that a lot of the enterprises are showing strong interest in mobile ads, and soem of them have completed tests. (Advertisers are keen to learn the Web browsing patterns of mobile phone users. CNN’s Jim Boulden reports)

Posted in Google, Marketing, Mobile/Cell, Online, Paid search, Search marketing, SEO, Video, Yahoo | 2 Comments »

Seth Godin: All Marketers are Liars (Google Talk in the Author series)

Posted by annplugged on May 11, 2007

Here is another great presentation by Seth Godin from February 2006. It is based on his book, All Marketers are Liars subtitled The Power of Telling Authentic Stories in a Low Trust World. But the focus is not on this somehow (it only comes up in the discussion phase how the ‘360 degrees web presence’ makes any fraud the worst thing to risk for businesses, or for anyone).

The first half of the presentation is instead where Seth tries to outline why he thinks Google has succeeded to date and how repeating that could really help Google moving forward. He says: “there’s a belief among a lot of companies, especially in the valley, especially on this road, Amphitheater Road (Google’s HQ address) is that technology wins. And what I want to sell you really hard on is, not that technology wins, because I don’t think it does. I think what technology does, is it gives a you a shot at marketing. And if you don’t buy into that the company sooner rather than later is going to smash into a wall. Sun Microsystems said technology is going to solve every problem, then marketing will take care of itself…. I believe that the underpinnings and what made Google work were some brilliant, maybe not intentional, but brilliant marketing decisions.”

The story that Google sells is that ‘I am your friend,’ with the right tool at the right time. And it is very much in line with Google’s personalized search project, the next big phase in Google’s (I wanted to say ‘life’ suddenly), in Goolge’s focus. What does Seth suggest for Google? To start to build their permission asset, to build the ability to have people want Google as a closer partner. He is totally convinced that people want it.

Challenge: according to Seth, Google Mini‘s challenge is that small and medium-sized businesses rarely tell each other about their successes (his remark is related to a Googler called Patsy’s question on Google Mini), discovered new tools, solutions. They don’t tell it to a friend. So it’s not entering a marketplace that’s geared to have these evangelizing, word-of-mouth conversations. Consequently, Google as an organization needs to bring small enterprises together to have these conversations (see Google Groups, and also Google AdWords seminar series, and also Google Academy for Educators for such events). “what you can do is share a couple of case studies, and then get out of the way (!), and let them tell each other the truth. And as you build these communities of people who talk to each other, things happen.”

Seth refers to the TV Industrial Complex, his notion on how traditional marketing works through mass media: buying ads, interrupting people and thus getting more distribution, then more profit, which in turn is recycled into more ads to interrupt more people. He suggests that that’s why web 1.0 was not successful, that’s why many of the old-school advertisers still think merely in CPM (cost per thousand impressions), and buy keywords, yet keep sticking to the old design and funnels of the already stale website. They do not adapt.

As a solution he recommends the so called Fashion Permission Complex (again as a buyer- prospect communciation process):

  1. step 1: make sth worth talking about (or womm) (the important footnote he adds is that “If you can’t do that, start over.”)
  2. step 2: tell it to people who want to hear from you
  3. step 3: they do what other people used to think others would do, i.e. marketing
  4. step 4: (the hardest part) get permission from these people to tell them about your next fashion (so as your asset base grows think about the iPod, and the 60.000 people tuned into Steve Job’s keynote…) And you end up not trying to find customers for your products but products for your customers.

Some of his examples, jokes overlap with ones used in the TED Talks, but again he has very entertaining new illustrations (e.g. the socks for 11 year old girls – I would surely go for it if I was still 11 years old.

Posted in Google, Marketing, Online, Presentation, Subtitles, Talks, Video, Web 2.0, Word-of-mouth | 5 Comments »

Barry Schwartz and The Paradox of Choice revisited

Posted by annplugged on May 7, 2007

In 2006 April Barry Schwartz, an expert psychologist in the intersection of economics and psychology gave his keynote presentation on the Paradox of Choice at Google Talks – based on his book published in 2004.

If you listen to his presentation given in 2006, you can discover how at certain points the professor of Social Theory and Social Action has revised/ refined his theory on the paradox of choice regarding online retails, especially search keyword-based marketing solutions. In short, well-designed websites can hide the overabundance of products (unlike brick and mortar stores), and are able to overcome the difficulties created by the paralysing effect of having too many choices. This way, Long Tail has been incorporated into Schwarz’s theory, I think.

Besides, it is worth checking out earlier interviews too: excerpts from an interview with Barry Schwartz made by Mark Hurst (January 2005)

Mark Hurst: What is the “paradox of choice”?
Barry Schwartz: Everyone agrees that having choice is better than not having choice. It seems evident that if choice is good, then more choice is better. The paradox is that this “obvious” truth isn’t true. It turns out that a point can be reached where, with more choice, people are worse off. People can’t ignore options – they have to pay attention to them. If they make a choice, is there another choice would have been better? There’s more effort put into making decisions, and less in enjoying them. What’s nagging is the possibility that, if they had chosen differently, they could have gotten something better…if a decision is non-reversible, you’ll make yourself feel better about the choice you made. If it’s a reversible choice, you don’t do that. And that’s not the road to happiness.
Mark Hurst: And not in retail, either.
Barry Schwartz: If you provide sales options in a retail store or website, you might think the way to attract people is to provide as many alternatives as possible. But that’s wrong. You’ll attract people, but they won’t buy as much as they would with fewer choices… For example, e-commerce sites should be designed so that the complexity is hidden, so that people who really care, or know a lot, can find their way to the complexity, and the rest of us who can’t be bothered to find it, won’t have to. That’s how software, websites, and retail stores should be designed… We can only learn by experimenting. I think that somewhere in the range of six to twelve options is what most people would be comfortable with, most of the time. But we have to do the research on actual websites, in places where people make their choices and buy.
Mark Hurst: What can customers do to avoid the paradox of choice?
Barry Schwartz: Most importantly, learn that “good enough is good enough.” It’s what I call “satisficing” in the book. You don’t need the best; probably never do. On rare occasions it’s worth struggling to find the best. But generally it makes life simpler if you settle with “good enough.” … arbitrarily limit the number of options you’ll consider. If your friend won’t choose your digital camera for you, then promise yourself that you’ll go to only two websites and then stop your research and make a decision; or you’ll buy the best choice in one store. It’s just not worth it to look in every store, every website.
comment by Karl Thomson: Of course, there are different kinds of shopping. Groceries is likely enjoyed less than the purchase of some great clothing. I, for one, _like_ the process of purchasing a car, and delight in learning as much as I can about the possible candidates… So to me, the paradox of choice is the personal one: some consumers will relish a multitude of options, while others prefer a smaller number of choices
comment by Paula Thornton: Yes, the possibilities are endless, but what are a few of the possibilities? I explained that they needed to create and price some ‘standard packages’, each with a specific goal or selling point — something the individual would be looking to accomplish/achieve.
comment by Rebecca St Martin: Most importantly, customers need to be guided about offerings based on their values and whatever parameters they bring with them. While it certainly is easier to create standard packages as samples than to lay all the options out and overwhelming the client, I believe the most satisfied customer comes from the opportunity to interact with a human being who is knowledgeable, who presents a meaningful line of questioning regarding their needs and resources and who is genuinely interested in their satisfaction… This is why the consultative salesperson in the new ecomomy of choices has not become extinct
comment by Marijka
last fall I spent HOURS researching vegetable juicers and vacuum cleaners. I just couldn’t stop, certain there was one just a little better or cheaper on the next site… Anyway, my solution to this obsessive decision-making is a digital kitchen timer! I give myself a set amount of time to reasearch and make a choice, and once the buzzer goes off I stop. Period.

Posted in Decision making, Google, Marketing, Online, Subtitles, Talks, Video | 2 Comments »

The Long Tail keynote by Chris Anderson

Posted by annplugged on May 3, 2007

As part of the Authors@Google series, Chris Anderson visited Google (July 18, 2006) to discuss his book, “The Long Tail.” The title refers to a phenomenon describing a well-known feature of statistical distributions (Wikipedia: also known as heavy tails, power-law tails, or Pareto tails) and has been capitalized popularized and creatively applied for web trends by Chris Anderson in an October 2004 article (Wired magazine) to describe business and economic models, especially referring to wealth distributions or vocabulary use.

The main idea is that those businesses that are caring to serve the millions of niche markets (neglected and untapped by most of the (big) companies working with large numbers), besides catering for the masses, are the tenets of business successes in the future that is becoming more and more digitalised and trackable.

The revolutionary idea has been developed into a blook (blog book), and is still evolving well after its first edition on the Long Tail Blog: e.g. from 18th April, 2007: “Those of you who have seen my speeches on the legal dimensions of the Long Tail know that I consider the absurdly complicated and expensive process of rights clearance to be the primary barrier to unlocking the latent Long Tail value in content archives. The example I usually give is WKRP in Cincinnati, not because there’s necessarily a lot of value in that 1970s sitcom, but because it’s often cited as one of the hardest TV series to clear. ” Chris has already given a speech on Second Life as a virtual Long Tail author. As Ilya writes: “Chris Anderson’s avatar talked about the effects of the long tail on media, the future of 3D printing, the incentives behind niche content production, and the implications of the recent YouTube-Google deal.” So this book will just go on and on, with a long tail.

Just to highlight two slides:

1, Does more choice mean more sales?

2,

  • Isn’t the Long Tail full of crap?
  • Yes. But so is everything else.
  • Sturgeons Law: Ninety percent of everything is crud.

It is a pity that “Adding comments have been disabled for this video.” It seems like Google is applying the same no-comment approach in its YouTube communication as in its Official Google Blog, which I cannot agree with (even if there is a 60% chance for flame war, it is better to see the freedom for adding comments than one single note).

Oh, yes, the keynote starts in medias res (the beginning, or the head belonging to the long tail has been cut off by the editors for some reason).

Posted in Google, Long Tail, Marketing, Online, Presentation, Talks, Video | 2 Comments »

Business communication transparency through blogging

Posted by annplugged on May 3, 2007

My friend, and husband Attila has called my attention to a Wired article on The See-Through CEO, basically about the need to open-up as an enterprise to engage in any public discussion, or even better, to engage in business (2.0) at all.

Clive Thompson:

“it’s a cultural shift, a redrawing of the lines between what’s private and what’s public. A generation has grown up blogging, posting a daily phonecam picture on Flickr and listing its geographic position in real time on Dodgeball and Google Maps. For them, authenticity comes from online exposure. It’s hard to trust anyone who doesn’t list their dreams and fears on Facebook. So maybe it’s not very surprising that at firms like Zappos.com, the rapidly growing online shoe retailer, CEO Tony Hsieh can experiment with levels of disclosure that most executives would consider freakish. A company-wide wiki lets staff members complain about problems and suggest solutions.”

While reading the article I recalled some moments when I was blogging for my ex-company (a Hungarian search marketing agency) on the official company site that has been turned into a blog (partly because of my encouragement, and personal experiences as a private blogger). Needless to say, it was a completely different thing to blog for my workplace than blogging for myself (a private blog on search marketing, web tech and online media issues). Whenever I wrote a corporate blogpost, I asked my boss to read it through, and give a green light to it. Asking for permission in itself was strange – compared to my former personal freedom. Most of the time, he just said ‘great, go ahead,’ however, there were other times when he asked me to highlight a certain thing (give a sales pitch, for instance), or not to write about something, as ‘the market is not mature enough for such things yet,’ etc. We were working in increasing competition, and he was eager to level the message at points his intuition indicated as thresholds.

So, reading Thompson’s article in the light of going through months of ‘corporate blogging’ I have quite mixed feelings. Total transparency? Personally, I wouldn’t suggest it to everyone, to all enterprises – not in the first round, if they feel fear. But it is well worth testing some gradually growing pilot projects whether open-ended communication through blogging works for that particular company, and if so,

  • when (continuously or just for certain campaigns, periods),
  • how (team, individual, semi-controlled, free-rein etc. blogging),
  • by whom (the PR person/ team, or anybody who has time, or anybody the CEO wants to have time…),
  • on which platforms (The Official Site in its entirety, or just one pale link from the front page hidden at the bottom, or independent privately held blogs linking back to the HQ blog),
  • under what policy (anything goes, anything except for the dirty dishes and strategic points, professional articles mixed with personal experience, or topic of the week/ month, or mostly survey type posts etc.)
  • and so on, and so forth

And it is well worth not giving up after the first few negative experiences. Blogging is scalable, so there is room for experimentation on various lines. In the long run, the aim is to reach constant, consistent, co-operative and conscientious communication with all of the stakeholders.

There are three basic things to pay attention to in the pilot projects for entrepreneurial blogging:

  • what are the objectives of a specific pilot period (choose possibly one solid goal)
  • what are the topics to be covered in blogposts and for what audience (ideally for our customers, including suppliers, stakeholders, employees etc.)
  • how is success measured?

But back to Thompson: “It’s not secrets that are dying, as one reader named gjudd noted, but lies….Which illustrates an interesting aspect of the Inter net age: Google is not a search engine. Google is a reputation-management system. And that’s one of the most powerful reasons so many CEOs have become more transparent: Online, your rep is quantifiable, findable, and totally unavoidable. In other words, radical transparency is a double-edged sword, but once you know the new rules, you can use it to control your image in ways you never could before.” Strongly agree.

Posted in Blog, Google, Marketing, Online | Leave a Comment »

EBiTDA regarding DoubleClick and Right Media

Posted by annplugged on May 2, 2007

There have been two big deals in the online media landscape show recently, namely DoubleClick has been bought by Google for approx. 10 x 300 mm USD, i.e. 10x the annual revenue, (or even 20x?) while Right Media has been bought by Yahoo for 12 x 70 mm USD, again 12 times the annual revenue.

DoubleClick going GoogleClick

According to Catherine Holahan, “In a call following the acquisition announcement, CEO Eric Schmidt characterized the deal as helping Google gain a greater foothold in the display advertising market. “It is accelerating our display advertising business,” said Schmidt. So far, search rival Yahoo! has been the main player in display advertising on the Web. Google’s display efforts to date, like its attempts to expand outside of search in general, have been marginally successful at best.” and “Paid search advertising will account for more than 40% of the $19.5 billion expected to go to online advertising this year, according to a Mar. 7 eMarketer report….

DoubleClick serves ads on both Time Warner’s AOL and News Corp.’s MySpace, two of the Web’s most popular properties. Google has the rights to provide search ads on both those sites—it bid aggressively to do so, agreeing to pay nearly $2 billion to both companies (“Google Gets Back into MySpace”). But if Microsoft had acquired DoubleClick, it could have had a competitive position at the two companies, jeopardizing Google’s expensive search agreements….To advertising industry executives, such as Gossman and Morgan, Microsoft’s unwillingness to pay such a price showed that the company isn’t as serious about the market as Google….But is a win worth $3.1 billion? It just may be—provided DoubleClick’s valuable clients are not scared away by the presence of the increasingly powerful Google. That’s a big if.”

Right, Yahoo, Media

“Yahoo bought a 20% stake in the company in October as part of a $45m investment and has now paid $680m for the remaining 80%,” says Jemima Kiss. VentureBeat‘s Matt Marshall said the acquisition could give Yahoo an advantage because Right Media is a more transparent system than Google’s AdSense. Shortly after the announcement to shareholders last night, Yahoo chief executive Terry Semel blogged that the acquisition is a key step in the company’s long-term vision.”

Healthier competition

““Advertisers don’t want a Wal-Mart-isation of digital advertising,” where one firm (like Wal-Mart in retailing) becomes so big that it can dictate prices, says Tom Chavez, the boss of Rapt, a firm that analyses online-advertising data on behalf of publishers and advertisers. That said, Mr Chavez adds, Google is still far from becoming a Wal-Mart—and even Wal-Mart is not facing an antitrust investigation.” (from Financial Express)

Fred Wilson is giving a possible calculation behind the ‘more than ten times phenomenon:’

“I believe that ultimately price needs to be factored as a function of EBITDA – earnings power.

  • It could be the present value of future cash flows,
  • it could be a mutiple of current EBITDA,
  • it could even be a multiple of the cash flow that a buyer believes it can get by merging the asset into its business.

So when I see online advertising assets trading at north of 10x revenues, it makes me think that it’s the latter factor at work.”

But what is EBITDA? Well it’s short for Earnings before Interest, Taxes, Depreciation, and Amortization, and it is exactly what its name says. The most simple way to get it, is to take away the total expenses from the total revenue, and add back the costs of Depriciation and Amortization.
But let’s see an example of EBITDA (source here), through the imaginary Jabberwockyboom Corporation Income Statement
(All figures are in thousands)

Revenues:
Creative works Revenue — $60,000
Room Revenue — $25,000
Entertainment Revenue — $7,000
Food & Beverage Revenue — $23,000
Total Revenue — $115,000

Expenses:
Creative works Expenses — $30,000
Room Expenses — $6,000
Entertainment Expenses — $5,000
Food & Beverage Expenses — $14,000
General & Administrative — $10,000
Depreciation & Amortization — $5,000
Total Expenses — $70,000

Operating Income = $115,000 – $70,000 = 45,000

Operating Income 45,000
– Interest Expense $12,000
Income from Continuing Operations=$33,000

Income from Continuing Operations
Before Income Taxes $33,000
– Income Taxes $8,000
Net Income $25,000

From this information, we can easily determine the EBITDA the Jabberwockyboom Corp. delivered in this particular quarter. To do so, we simply need to start with net income, and then add back interest, taxes, depreciation, and amortization:

Net Income — $25,000

+ Interest — $12,000
+ Taxes — $8,000
+ Depreciation & Amortization — $5,000

EBITDA — $50,000

In this example, Jabberwockyboom Corp. posted EBITDA of $50 million in the most recent quarter.

Posted in Display advertising, Google, Yahoo | Leave a Comment »