The Day Is Coming

Remember when I said this:

Expect display and video ads on the home page of Google very soon.

Well here's a summary from a Bloomberg story via IWantMedia:

Google May Run Display Ads With Searches

Google is considering running display advertisements alongside the results of Web queries for pictures, moving beyond text-based ads. "There's lot of potential for advertising revenue there," says VP Marissa Mayer. Google is seeking new revenue sources as its growth slows.

• Posted by John Battelle at 4:40 PM
• Permalink
• Comments (2)
• Sphere It

"Gagging librarians is horrendous." The Internet V. FBI: Net Wins

Great news for democracy:

The U.S. Federal Bureau of Investigation has withdrawn a secret demand that the Internet Archive, an online library, provide the agency with a user's personal information after the Web site challenged the records request in court.
The FBI sent a national security letter, or NSL, to the Internet Archive in November and included a gag order barring site founder Brewster Kahle from talking to anyone other than his lawyers about the request. Kahle, the Electronic Frontier Foundation (EFF), and the American Civil Liberties Union (ACLU) filed a lawsuit to challenge the subpoena, arguing that the NSL program is unconstitutional, and the FBI withdrew the NSL on April 22.

The settlement between the FBI and the Internet Archive allowed Kahle to break the gag order, a standard part of an NSL request. The Internet Archive's challenge of the NSL is only the third case that the ACLU is aware of in which an NSL has been challenged in court, said Melissa Goodman an attorney for the civil liberties group's National Security Project.

"The NSLs basically allow the FBI to demand extremely sensitive personal information about innocent people without any prior court approval, often in total secrecy," Goodman said Wednesday.

I've covered this here, here, in my book, and a lot of other places (87 posts, according to Google. I must be on some list somewhere in the National Security offices).

In a news conference, Kahle had this to say:

"We see this as an unqualified success...The goal here was to help other recipients of NSLs ... understand that you can push back on these....Gags don't seem to be necessar. Gagging librarians is horrendous."

Danny also covers it here.

• Posted by John Battelle at 12:25 PM
• Permalink
• Comments (0)
• Sphere It

The Future of Search Series

Danny and I have contracted with Thomson Reuters, a sponsor of Searchblog, to write a series of posts on the future of search. They've given us no guidance, just asked us to ponder the topic. This is my first post, "A search is not just a search," longtime readers will find it familiar, if updated. From it:

In the past few years, a significant new feature has crept into the results portion of this otherwise predictable interface. Called “universal search,” the idea is to incorporate more than simple HTML pages into the results. A search for “London restaurants”, for example, might bring up maps and local results, as well as videos, images, organized reviews, and of course web pages. Every major search engine, from Google to Ask, has incorporated some kind of universality into its search results.

But while universal search points the way toward a new approach to getting you the answers you seek, it’s a half step at best. The results change, somewhat, but the process is pretty much the same. You enter a query, you get a set of results. Not particularly new.

What I find interesting are entirely new approaches to the interface of search.

We'll be writing one post every week or so for the next six weeks. I hope by the end it'll be an interesting body of work, it certainly will be if you give me input on what to think about, and critiques of what I've written. Thanks!

• Posted by John Battelle at 10:14 AM
• Permalink
• Comments (8)
• Sphere It

The Music In Magazines

I remember being 10, or thereabouts, sitting in front of my parent's stereo system, entranced by the albums they had collected in college. The system - tuner, turntable, and speakers - was a Craig, cheap, Korean, and dependable, an early indication of where the consumer electronics business was heading. I'd put on the albums they owned - Rachmanioff #2, Man of La Mancha, a lot of Kingston Trio - and listen, right up next to the speaker. I was entirely engaged - the albums were transits to another world, a world of music, no matter that it was entirely inconsistent with the world of a ten year old boy. I'm pretty sure the only new album my parents bought between 1953 and 1983 was the soundtrack to Cats, around the time I was a junior in high school.

But that stereo system, the turntable in particular, was my introduction to recorded music.

Now that entire world is dead, gone, history. 30 years after I was entranced, it's been eclipsed by the iPod, the cel phone, the Internet.

Fast forward to now. I look around my house, and I find my son's analog to my parent's music system. And what is it? In a word: Magazines.

I'm a magazine guy. My wife loves them too. We still subscribe to about a dozen of them, and they are all over the house. In particular, they dominate the bathrooms. As my son ponders his mortality on the porcelain throne or in idle moments in our living room, I wonder about the "music" those magazines are bringing to him.

And I wonder, how is the web bringing that music into the digital age? Just a thought, a note written down. For one thing I am certain of. In thirty years from now, magazines will be the albums of their time - an anachronism created for effect, but not a dominant medium of distribution for the music they contain.

I love having kids.

• Posted by John Battelle at 11:12 PM
• Permalink
• Comments (11)
• Sphere It

One Can Only Hope This Is A Trend

Via Paul, a chart of US vehicle miles over time:

• Posted by John Battelle at 10:54 PM
• Permalink
• Comments (2)
• Sphere It

The New Live.Com

Ah, Simplicity. What do you think? Methinks it looks familiar, as all have since Alta Vista days.

• Posted by John Battelle at 10:15 PM
• Permalink
• Comments (0)
• Sphere It

Independence for Microsoft? No Way. The Thesis Remains.

Recent rumblings out of Redmond have stated that Microsoft, post the Yahoo axel wrap, will pursue and independent path on the Web. No freakin' way, is my first thought. That might be refined once I spend some time with their senior management later this month, but if the company is going to go it alone, it means going back on Steve Ballmer's promise of 25% of Microsoft revenue as advertising. And I really don't think the company plans to throttle back on its plans to own a major share of the web media world.

Hence the rumors that Microsoft is talking to Facebook again, this time for the whole enchilada.

What I find interesting is the thesis, because all good corporate development must be informed by a decent thesis. The thesis here is simple at a meta level, but near impossible at an operational one: If you have a ton of engaged inventory (ie, people using the web in ways that they value), then you can and should figure out a way to provide marketers access to those people for a premium price that will make network TV look like a blip in the history of marketing.

Google has engaged people. REALLY engaged. For about .2 seconds, you can't get a more engaged person. But brands are not built in .2 seconds. As I've said too many times to count, Google is the greatest harvester of brand equity built elsewhere in the history of media. And kudos to the company for figuring out a way to do it.

Now, the hard part comes. How to build brand equity, awareness, preference, and the like, on the web? It's one of the largest questions facing the web economy. And while the thesis that Microsoft is pursuing is sound, the proof, well, that's quite a bowl of messy pudding at the moment. Buying Facebook, or Yahoo, or any other major nexis of engaged consumers is only step one.

• Posted by John Battelle at 9:33 PM
• Permalink
• Comments (3)
• Sphere It

Will We Get WiMax?

Om has analysis of the Clearwire/Xohm deal. Perhaps we will.

• Posted by John Battelle at 8:37 PM
• Permalink
• Comments (1)
• Sphere It

Schrage to Facebook

This is an interesting move:

Google has lost another senior executive to Facebook with the departure of the search giant's VP of global communications.

Elliot Schrage, Google's VP of global communications and public affairs is to take up the role of VP of communications and public affairs at Facebook based in the US.

His departure follows the recent departure of VP of global online sales and operations Sheryl Sandberg.

Elliot was at Google for less than two years (correction, he joined in Oct. 2005), but he was a major force there. This feels like Sheryl's building her team...

• Posted by John Battelle at 7:56 AM
• Permalink
• Comments (7)
• Sphere It

The Best Minds of the Web...

...are increasingly thinking about problems that are not Web-specific. This is one of the themes of this Fall's Web 2, more to come on that in a moment. But here's an example from Tim.

I am increasingly coming to the conclusion that if we're going to make our way through this challenging time, we're going to have to enlist, well, all of you. The best minds of the web.

• Posted by John Battelle at 7:58 PM
• Permalink
• Comments (10)
• Sphere It

User 927

Got a very cool email over the weekend from Katharine Clark Gray, the producer of a play in Philadelphia:

I'm writing because you unknowingly had a profound influence on me as I completed my recent play, USER 927, commissioned by Philadelphia's Brat Productions [www.bratproductions.org]. When AOL released the search log data of 658,000 of its users back in August 06, a director friend of mine approached me with an idea: why not write a work for stage based on one infamous product of the AOL debacle, the user known only as User 927 [http://consumerist.com/consumer/notag/aol-user-927-illuminated-192502.php]? An unabridged 3-month record of his search engine queries produce a penchant for kiddie porn and hentai unnervingly interspersed with searches for flowers, song lyrics and Elmo.

Taking this true story and extrapolating for stage, my director-partner and I set out to construct fiction from one central fact: a real person's unique search log, their digital fingerprint, their- ahem- Database of Intentions. What came out instead was a noir cyberthriller framed by a larger existential consideration of the nature of search.

More on the play here. My coverage of AOL's data leak here and here.

• Posted by John Battelle at 8:24 AM
• Permalink
• Comments (2)
• Sphere It

Wow.

Dell ran a second Green contest with FM, and it's amazing. Check out the top 150. And the text expressions here.

• Posted by John Battelle at 9:22 PM
• Permalink
• Comments (1)
• Sphere It

Something to Think About

Thanks, Paul.

• Posted by John Battelle at 9:15 PM
• Permalink
• Comments (0)
• Sphere It

That Which I Missed

Last week was odd, I was engrossed in New York all week visiting FM clients. But there was a lot going on I wished I had noted. Here are some of the items I found worthy:

How does Google treat Right Media redirects? Hmmm.

Wikia Search May Have Trouble Achieving Critical Mass from TechDirt

A rather predictible iGoogle promotion. Come on, do we need famous artists to use an app?

History will prove, I am sure, that the Bush administration was, well, evil when it comes to transparency.

Eric on CNBC, unedited.

Google attempts to patent the idea of attention as currency. Well, OK, attention as currency for free TV. This is not a new idea.

• Posted by John Battelle at 9:07 PM
• Permalink
• Comments (0)
• Sphere It

Microsoft Bails, Yahoo's Google Threat Appears to Have Worked

Posting what I was just sent:

Microsoft Withdraws Proposal to Acquire Yahoo!

REDMOND, Wash. — May 3, 2008 — Microsoft Corp. (NASDAQ: MSFT) today announced that it has withdrawn its proposal to acquire Yahoo! Inc. (NASDAQ: YHOO).

“We continue to believe that our proposed acquisition made sense for Microsoft, Yahoo! and the market as a whole. Our goal in pursuing a combination with Yahoo! was to provide greater choice and innovation in the marketplace and create real value for our respective stockholders and employees,” said Steve Ballmer, chief executive officer of Microsoft.

“Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo! has not moved toward accepting our offer. After careful consideration, we believe the economics demanded by Yahoo! do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal,” said Ballmer.

“We have a talented team in place and a compelling plan to grow our business through innovative new services and strategic transactions with other business partners. While Yahoo! would have accelerated our strategy, I am confident that we can continue to move forward toward our goals,” Ballmer said.

“We are investing heavily in new tools and Web experiences, we have dramatically improved our search performance and advertiser satisfaction, and we will continue to build our scale through organic growth and partnerships,” said Kevin Johnson, Microsoft president for platforms and services.

Below is the text of the letter from Microsoft CEO Steve Ballmer to Yahoo! CEO Jerry Yang.

May 3, 2008


Mr. Jerry Yang
CEO and Chief Yahoo
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089


Dear Jerry:

After over three months, we have reached the conclusion of the process regarding a possible combination of Microsoft and Yahoo!.

I first want to convey my personal thanks to you, your management team, and Yahoo!’s Board of Directors for your consideration of our proposal. I appreciate the time and attention all of you have given to this matter, and I especially appreciate the time that you have invested personally. I feel that our discussions this week have been particularly useful, providing me for the first time with real clarity on what is and is not possible.

I am disappointed that Yahoo! has not moved towards accepting our offer. I first called you with our offer on January 31 because I believed that a combination of our two companies would have created real value for our respective shareholders and would have provided consumers, publishers, and advertisers with greater innovation and choice in the marketplace. Our decision to offer a 62 percent premium at that time reflected the strength of these convictions.

In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity. This increase would have added approximately another $5 billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70 percent compared to the price at which your stock closed on January 31. Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer.

Also, after giving this week’s conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft.

We regard with particular concern your apparent planning to respond to a “hostile” bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:

· First, it would fundamentally undermine Yahoo!’s own strategy and long-term viability by encouraging advertisers to use Google as opposed to your Panama paid search system. This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth.

· Given this, it would impair Yahoo’s ability to retain the talented engineers working on advertising systems that are important to our interest in a combination of our companies.

· In addition, it would raise a host of regulatory and legal problems that no acquirer, including Microsoft, would want to inherit. Among other things, this would consolidate market share with the already-dominant paid search provider in a manner that would reduce competition and choice in the marketplace.

· This would also effectively enable Google to set the prices for key search terms on both their and your search platforms and, in the process, raise prices charged to advertisers on Yahoo. In addition to whatever resulting legal problems, this seems unwise from a business perspective unless in fact one simply wishes to use this as a vehicle to exit the paid search business in favor of Google.

· It could foreclose any chance of a combination with any other search provider that is not already relying on Google’s search services.

Accordingly, your apparent plan to pursue such an arrangement in the event of a proxy contest or exchange offer leads me to the firm decision not to pursue such a path. Instead, I hereby formally withdraw Microsoft’s proposal to acquire Yahoo!.

We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners.

I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares. By failing to reach an agreement with us, you and your stockholders have left significant value on the table.

But clearly a deal is not to be.

Thank you again for the time we have spent together discussing this.

Sincerely yours,
/s/ Steven A. Ballmer

Steven A. Ballmer
Chief Executive Officer
Microsoft Corporation

• Posted by John Battelle at 5:02 PM
• Permalink
• Comments (6)
• Sphere It

Yureekah

Interested in the advertising biz? Love search? This should be a tool for you. Via WP:

A new search engine called Yureekah launched this week to help ad agencies and advertisers find where competitors are advertising and determining the best options for future brand advertising.

Devaraj Southworth, one of its creators, said the idea stemmed from his own company's needs. He runs a small creative agency and a media planning firm, and it often took several weeks to put together an online ad strategy because he had to manually go through Web sites, ad networks and portals to figure out where his client should be visible. Southworth said he's even had to cancel a campaign because finding that information was too labor-intensive to meet the deadline.

• Posted by John Battelle at 9:51 AM
• Permalink
• Comments (5)
• Sphere It

PS: Remember my Modest Proposal?

One of my musings from more than a year ago makes more sense to me now, given that Yahoo is trying to fend off Microsoft with search monetization from Google:

One of the longer bomb predictions made by a number of analysts and pundits in the past 12 months has been the following: Microsoft will take its pile of cash and massive market valuation and buy Yahoo. Hell, I even suggested it. The logic goes something like this: Combine the two companies' reach and search share, their CPM advertising businesses and various other plays, and you have a behemoth that can take on Google.

Fine, except I don't buy it anymore, mainly because I think both companies are not well positioned to deal with a successful merger. And, I think there might be a better way. Now, those of you who read regularly may recall my LiveSoft post a year ago, in which I suggested that Microsoft set its Internet businesses free. Well, thanks to many folks who work in the industry (and one in particular who will remain anonymous for now), my thinking has evolved. I no longer think Microsoft should spin out LiveSoft, nor do I think it should buy Yahoo. Instead, it should roll out a new company that focuses on one thing: Search monetization. But it shouldn't do it alone. Instead, it should be a joint venture with Yahoo.

• Posted by John Battelle at 9:05 AM
• Permalink
• Comments (3)
• Sphere It

Addict-o-matic

My pal Dave Pell's new Web hack is up: Addict-o-matic. It's a fun approach to indexing the live web.

• Posted by John Battelle at 8:45 AM
• Permalink
• Comments (2)
• Sphere It

Read This Book: Little Brother

I was honored to read it early, and loved it. Cory Doctorow's Little Brother reminds us that we're dangerously close to a world that none of us would want. And it's a ripping good story to boot.

• Posted by John Battelle at 8:38 AM
• Permalink
• Comments (0)
• Sphere It

The Other Shoe, About to Drop

How long will it take for Steve Ballmer to drop the other shoe? The Journal, which seems to be Microsoft's most favored journalistic nation, says Yahoo is about to take its own poison pill: Swallowing a Google deal.

• Posted by John Battelle at 8:35 AM
• Permalink
• Comments (0)
• Sphere It