Category Archives: Google

Google and Autonomy Spat, Round II

Autonomy and Google are at it again. Per this InformationWeek story:

For the second time in six months, Google has publicly challenged a white paper from enterprise search rival Autonomy, claiming the latest document contains “significant inaccuracies.”

For customers with demanding needs, the Google appliance lacks the necessary security and connectivity models,” Mike Lynch, chief executive of Autonomy, said in an emailed statement. “It is not possible to make successful high-end enterprise search solutions without mapped security and productized connectors to repositories.”

I’ve not yet had time to dig into the detail of this, so I’m sharing it more as a news item for now and will — if it proves interesting — come back with analysis later.

Google’s rebuttal is here on the Google Enterprise blog.

My free PR advice for Google is to avoid a spat and simply create a low-key white paper that responds to any claims they believe are incorrect. In my experience, in PR wars the big guy never wins. Sometimes the little guy wins. Sometimes both companies lose. So when you’re the leader the best strategy is not to fight. Much as you want to.

Google as Publisher: The Grassy Knol

On December 13th Google took its first step from organizer and indexer of the world’s knowledge to supporting-creator of it with the announcement of a new free tool called “knol” (a cutesy-ism which stands for unit of knowledge).

The folks at publishing industry watcher Outsell were quick to use the announcement as validation of their predictions that Google would eventually enter the publishing market:

While it was debatable in the past whether or not Google’s actions constituted those of a publisher, there can be no doubt about it today.

Outsell takes a broader view of the announcement than most, who generally see it as a clear, direct shot at Wikipedia. (For an example of the consensus viewpoint, see this Newsfactor story entitled Death Knell Sounds for Wikipedia, About.com. I’d add that lesser known and poorly named Freebase seems squarely in the cross-hairs as well.)

Outsell points out that once a large knol-base (phrase coined by me, you heard it here first!) is created, then Google can tweak its search algorithms to favor its content over competing sites such as Wikipedia, which currently enjoys great organic search rankings; About.com, which doesn’t; and Answers.com which was a casualty of an algorithm change in August, resulting in a 28% traffic drop and a nearly 20% drop in their stock price.

There has been plenty written about knol so I won’t add a deep analysis here. For more, I’d go to the official Google blog post that launched knol and scroll down to see the list of blog postings that refer to it.

Techcrunch has a great write-up here:

Google is moving away from simply indexing the worlds content to being a content provider itself. Of course Google in response would argue that it is simply facilitating user generated content (like with Blogger), that ultimately they are the host as opposed to the creator, but it still competes with existing content providers, many of whom rely on Google search results for their living.

If you thought publishers were uncomfortable partners with Google before, things just got a lot frostier.

To me, despite billions of R&D investment and boatloads of hype, Google remains, as Kris Tuttle at Research 2.0 says, “a one-trick pony (but it’s one darn good trick.)” So no new initiative can be presumed successful simply because Google is behind it. Consider the defunct Google Answers, or the perennially weak comparison shopping service, Google Products, nee Froogle.

Is knol a gimme just because Google’s its dad? No way. The poor choice of name will hinder it as will Wikipedia’s entrenched position, positive karma, and what I sense is a growing Google fatigue in the market.

(Like a boyish 40-year-old suffering from Peter Pan Syndrome, I think Google is increasingly out of touch with its perception. They’re not cute and cuddly techies who everybody loves anymore, so they should stop trying to do cute and cuddly things.)

So, should this make publishers uncomfortable? Yes.

Is it (another) warning shot for the information industry? You betcha.

Do I have three words of advice for publishers regarding Google? Watch your back.

Girouard Claims 90% Win Rate in Enterprise Search

See this CBR (a UK publication, nee Computer Business Review) article entitled Google Dismisses Noise and FUD in Enterprise Search for some great quotes from Google’s Dave Girouard, head of Google Enterprise and Applications.

“There are three things that IT departments and users want in the enterprise. They want the results fast; they want relevance, in that the results they are looking for are in the first few hits they get back; and they want security so it searches what they are allowed to and nothing else.”

“If we can get those right,” said Girouard, “and we believe we have, then we know that everything else the competition can sling at us is just noise and FUD.”

And the topper:

Girouard said that in competitive tender situations, the customer chooses the Google Search Appliance 90% of the time.

Wow. That’s a big claim. And if it’s true it validates everything I’ve been saying about enterprise search being caught between a rock and a hard place. Reinforcing this, the article ends with the statement that Google has 10,000 customers for the enterprise search appliance.

Aside for Marketers and Spokespeople
As a general rule, I always love reading the UK trade press because I think they are often able to “get the story” more effectively than the US trade press. Why?

  • Because I think UK trade press journalists see themselves more as reporters, in the classic sense of the word
  • The UK trade press therefore use more hard-ball techniques in extracting the story from spokespeople (e.g., buying the question, fake end of interview)
  • US spokespeople inexperienced in dealing with the UK press therefore often make major mistakes because they are unaware of these cultural differences.

For example, since Girouard isn’t double quoted in the story above that means that words “the customer chooses the Google Search Appliance 90% of the time” most likely didn’t actually come out of his mouth. I’d bet you $10 that the actual interview went down something like this:

DRAMATIZATION FOR EDUCATIONAL PURPOSES

CBR: “Dave, how often do you beat your competitors in customer evaluations?”

DG: “Well, I’d rather talk about us than them. And we think three things matter in enterprise search — ” [Trying to stick to party line.]

CBR: “But — let me dig into this for a second — would you say you beat them most of the time?” [Setting the trap.]

DG: “Well, yes, but I’d like to talk about what –” [Regretting having opened the door, but still trying to hold line.]

CBR: “Well does ‘most’ mean 51% or say 90%” [Tightening the noose.]

DG: “Well, of course it’s hard to put a number on it, but I’d say closer to the latter than the former.” [Thinking he's saying it without saying it.]

CBR: “OK, so you’d say that in evaluations customers choose the Google Search Appliance 90% of the time.” [Going in for the kill.]

DG: “I suppose so. Yes.” [Buying the question.]

Google Research from Outsell and Stephen Arnold

Information industry market researcher Outsell, working together with search guru Stephen Arnold, has been producing some excellent research on Google.

I wanted to highlight one piece, entitled Google as Publisher: Is Google Poised for a New Push into the Information Industry, which looks at how Google’s infrastructure and technology could be leveraged for a major push into the publishing business. In addition to pages of excellent analysis, the report concludes with four action items for publishers in managing this threat/ opportunity:

  • Come to grips with the impact. I think many publishers have their heads stuck in the sand when it comes to their “partnerships” with Google. Yes, the relationship is inherently co-opetition and it’s “cutting off your nose to spite your face” to not leverage Google’s spider and search volume. But make no mistake, you’re dancing with a partner who could decide to become the devil in an instant.
  • Adopt agile publishing processes, quickly. To me, this includes (1) “agile content” in an XML repositories like MarkLogic (cleaned up using lazy XML enrichment) and (2) agile software development processes. I’m amazed by how many publishers still do waterfall-based product development.
  • Use Google technologies in your own products. It’s best to both know and leverage your (potential) enemy.
  • Mobilize and modularize content. XML is also a great means for doing this, because of its presentation independence.

Postini Snatched Off IPO Track By Google

This just hit the wires this morning at 8:00 AM Eastern: Google to buy Postini for $625M in cash. Here’s the official press release.

Google will add Postini’s on-demand “security” (nee anti-spam) offering to its stable of Google Apps. Judging by the fact that Dave Girouard, VP and general manager of Google Enterprise, is the spokesperson in this Register story, and given the nature of the following quote, it seems clear that Google is attempting to build a base in small and medium business (SMB) on-demand productivity apps and then work their way up into the enterprise in the much same way that Salesforce.com did with on-demand sales automation apps.

Girouard’s quote:

The response to Google Apps has been tremendous, with more than 1,000 small businesses signing up for the service every day. At the same time, large businesses have been reluctant to move to hosted applications due to issues of security and corporate compliance. By adding Postini products to Google’s technology, businesses no longer have to choose,” said Dave Girouard, VP and general manager of Google Enterprise.

My guess is that Postini was tracking towards an IPO within the next 6-12 months, which suggests that they were doing somewhere between $80 and $100M in revenue this year (my take on the new IPO entry bar). This suggests a valuation somewhere between 6-8x sales. Salesforce.com, the king of the on-demand sector, trades for 9x TTM revenues (see here), and the industry and sector trade for 5-6x revenues.

Some simple math (assuming 40% growth and 40%/60% 1H/2H revenue linearity — both are standard assumptions and neither of which I have any specific reason to believe true) says that current year revenue is 1.2x TTM revenue, suggesting a 7.5 to 9.5x valuation for Postini, in-line with the premium you’d expect to pay for snatching the IPO dream from a company that could see it within reach.

Here’s the Google Blog commentary on the deal. Here’s their FAQ. Finally, here’s the Google Enterprise Blog commentary as well.

New York Times Article on Search

Here’s a link to a New York Times article on search and on the general topic of out-Googling Google.

The first company mentioned in the story is Powerset (slogan “natural language search”), a firm that remains mysterious to me and who still has only a shell of a website, here. Powerset’s main competence thus far appear to be PR, having had great visibility at the Web 2.0 Summit and earning themselves the lead in this New York Times story.

The story goes on to mention Hakia, a Web 2.0 Summit sponsor (slogan: search for meaning), which seems to be something of a semantic web play though not using any of the usual suspect semantic technologies (e.g., OWL, RDF). Hakia describes its technology, in brief, right here. (Gee, I wonder where they got the idea for SemanticRank(tm). I wonder if one of their founders is named Larry Semantic.)

The story also mentions Wikia, the for-profit spinoff of Wikipedia, and its search efforts which have generated significant confusion of late. This techcrunch article, which recieved a huge amount of pickup, incorrectly cited the project as Wikiasari, and according to Wikia, the screenshot in question was part of Wikisearch (the search engine that searches Wikipedia) and had nothing to with their efforts to out-do Google by fixing the “search is broken” problem through an effort called Search Wikia. (Anyone wonder why there’s confusion?)

I remember after Oracle made it big in the late 1980s that venture capitalists (VCs) poured around $100M into about 10 object database firms, hoping to catch the next Oracle. Times change, but VCs don’t. The article states that since 2004 VCs have poured over $350M into about 80 search-related startups.

The article adds the sobering reminder that A9 basically failed to become a major search engine, despite some very talented people, some great technology, and the backing of Amazon.

Marissa Mayer, Google’s VP of search, weighs in towards the end with a quote that I find pretty non-Google: “search is becoming an increasingly capital intensive business.” Which to me is a pretty way of saying “we’ll win because we’re big.” (I imagine that Google, in character, would say, “we’ll win because we have better technology.”)

What’s more, while A9 may have failed, Bezos isn’t done yet. His elastic computing cloud (EC2), Amazon storage services (AS2), and open access to the Alexa web crawl are all quite deliberate efforts to reduce barriers to entry in the business of web services, and eliminate the problem that Mayer talks about.