Rudelle Blogging

Google impressive financial quarterly results seem to confirm the tremendous power of its model. Furthermore, despite his increasing domination on the Internet, Google manages to still be perceived as a cool user friendly start-up, as opposed to Microsoft often depicted as the Big Evil.
However on a closer look, Google situation is somewhat fragile. First of all, 99% of its revenues come from advertising, and above all from AdWord. On the other hand, AdSense is facing a more challenging situation in terms of returns. Outside the comfortable cocoon of its search engine, Google indeed has some serious difficulties to generate actual efficient ads returns. AdSense semantic engine is regularly pointed out to show poor outputs, resulting in disappointing click through and transformation rates.
Furthermore, so far, all attempts of Google to diversify were failures. This includes in particular video, email, cartography, storage or shopping guide. In these areas, Google has not been capable to grab a significant market share compared to its main competitors. For video, the failure of Google Video has even forced them to acquire YouTube. This acquisition has also made Google to discover the charming world of copyright infringements.
Eventually, the power of Google is due mainly to its amazing market share in search. Its domination in this area is particularly strong in Europe. The question is therefore: can anyone ever challenge Google search domination?
Google’s power is due to the fact that the search industry has not evolved in the last seven years. No one has indeed succeeded to come out with any disruptive technology. Still, disappointing experience of search engines shows that some serious improvement should be expected sometime down the road. We all experience ourselves that any search results are not exploitable.
The day a brilliant start-up will invent a revolutionary approach, the position of Google will soon become uncomfortable. Either Google will manage to copy very quickly the new algorithm of the intruder, or the shake-up will soon proved very serious. Indeed, nothing is less sticky that a search engine. Barriers to change are pretty low. In two clicks, you can loose a user you had for years. Irony is that it's precisely this way Google started his irresistible growth in the early days, passing by incumbents like Yahoo! who were incapable to react.

Following the take-over of YouTube by Google last fall, we have seen many comments on the return of the Internet bubble. This 1.6 billion dollar deal for a company with virtually no revenues was illustration that irrational thinking was infecting us again.
Well, 6 months later, it does not look at such a bad deal for Google. On the contrary, the fast growing on-line advertising market shows that it should not be such an issue for Google to monetize this extra inventory.
On-line advertising growth is very much connected to the growth of Internet itself, especially of broadband access. And this broadband access is accelerating in all major countries. As a result, e-commerce is also growing at a nice 30% rate per year with no sign to cool down.
This strong and steady e-commerce growth is financing portals, media and community sites with profitable advertising budgets. This makes the whole picture much healthier than in 1999 & 2000. This is why there is not much to worry about a bubble bust as so far, there is no bubble at all, just plain fast growing market.
Remember all those crazy IPOs in 99. Anything similar today? Not really. Not only companies are getting profitable much quicker, but investors are also much more selective. It looks like for the first time they show some memories of the past to keep the market at a reasonable and healthy level. Not bad at all. ;-)

What is a mashup? To fully understand mashups, it is necessary to go back to another concept: public API. An API is an interface which makes it possible for two software programs to communicate together. Public API simply means an API published on the web and available for public usage.
To offer a public API became a must for any Internet site which claims to be Web 2.0. But why did this become so fashionable?
Well, it is related to the structure of the Internet. In a broad picture, one can consider Internet as a kind of giant publication tool.
You have this great content you want to share with other people. For that, you create an application to publish this content on a Web site. It looks simple, but in real life it can get very complex. Indeed, the issue is to present this content in the most appealing, intuitive and efficient way. The trouble of course is that these three characteristics are most often contradictory. Searching for the perfect balance, web publication results into eternal creative compromises. From a given piece of content, there are plenty of different marketing choices, resulting into a very large variety of concepts.
This issue has brought the following idea: I have some great content which I wanna share with the public. Potentially, there are thousands of different ways to publish this content. Sure, I can try to test myself all kinds of marketing ideas. But why not delegate this huge task to others?
For that, I just need to publish on line a public interface which gives free access to my content. In this way, a great number of independent developers will be able to publish my content each one with its own creative approach. Clearly, I no more control the whole value chain. But who cares? Collective intelligence has such a power that among all these pilots, there is a strong probability that some very good idea for my content will prevail.
For this reason, public API became very popular, especially among web 2.0 sites. Leveraging on the net community, it is likely to create more value than by controlling verything. Today, content accessible through a public API is huge. It ranges from Amazon cultural product catalogue to Google Maps geographical layouts, including also Flickr personal pictures and sophisticate predictive calculations for Criteo (yes, yes, you can check our public and free API!).
public API to produce a completely original service. A smart example of a mashup is the combination of Flickr + Navx + Google Maps which makes it possible to position pictures from a ski trip on a map using a GPS tracker.
Mashup potential seems endless. This is why in the coming years, you will see more and more of those smart hybrid applications launched every day on the web.

A couple of months ago, only experts were debating over the web 2.0 phenomena. But recently, we see more and more mainstream national Medias covering Web 2.0.This new buzz gives a fresh smell of bubble.
But what is behind all the excitement?
In fact, what fascines before all the mass media, is clearly not new technologies related to Web 2.0 (Ajax or RSS for instance), nor even the community aspect (which has existed for a long time). What fascines them is two things:
1) the irresistible growth of giant Google which is eating more and more in the mouth of old superstars Yahoo! and MSN
2) the irruption of an unexpected new generation of Net players. Unknown sites like YouTube, Flickr or MySpace made spectacular rises in traffic rankings in matters of months. And even more dary, they have achieved this spectacular rocket growth almost without any dollar spent in advertising!
In 2001, after the burst of the Internet bubble, one believed that the game was over. The survivors seemed to be able to lock the market, in particular large e-commerce sites. A that time, everyone considered for instance eBay untouchable. Moreover, traditional brands finally thought they had their revenge over those arrogant pre bubble start-ups.
Suddenly, this reassuring feeling disappeared. People were surprised to rediscover a basic rule of business: positions are never secured for ever. On the Internet even more than in the old economy, new entrants can always change the rules.
Fast successes tend to fascinate people. One thinks that there must be some hidden dark secret behind such miracles. Well, in some ways, this secret could be called Web 2.0 ;-)

Following the announcement of the partnership between eBay and Google at the end of last August, eBay stock has gained a steady 1.86%. However, on second thoughts, this giant deal seems rather surprising.
What is really behind this deal? As with Yahoo! for the United States, the king of auctions chose Google to fill its international sites with ads. This astonishing decision will create a new form of competition for all the small sellers on eBay. While seeking for a new revenue stream, eBay takes the risk to angry its most valuable asset: those thousands of small eBay sellers. It is likely that the recent pressure on eBay bottom line has push toward this delicate choice.
The other part of the agreement is also symptomatic. The deal consists in developing with Google a common click-to-call offer on its site, by leveraging on Skype. The trouble is that most click-to-call experts say that the vast majority of customers (almost 85%) prefer to use landlines rather than computers to call. Thus Skype ends up to be rather a barrier than anything else for the deal.
This seems to illustrate the difficult integration of Skype into eBay. Skype is a formidable telephone operator. Its economic model of voice over IP is very strong. On the other hand, synergies with eBay are far from obvious. That is for two reasons.
First able, a large part of Skype customer base is located in Brazil and India, that is to say very far from eBay customer base. The second reason is that allowing buyers to call sellers (which was the main rational of Skype takeover in the first place) was not welcome by those very precious sellers. Indeed, sellers are already having a hard time to cope with all the emails from buyers. The idea of having to answer buyer queries by phone gives them nightmares.
The future of eBay seems rather in pushing quickly towards Web 2.0 and smart collaborative filtering, as is doing Amazon. By offering a much more systematic usage of its fabulous “Long Tail”, eBay will greatly boost its powerful community of sellers. And as a result, securing its long term bottom line.

With the opening a couple of weeks ago of Writely and the launch of Google Apps, Google takes a new step to offer a complete Office solution. There was already Google Spreadsheet versus Excel, Google Calendar and Gmail versus Outlook. With Writely versus Word, it still needs to offer (soon) a clone of Powerpoint and the panoply will be complete.
The idea is of course to offer a credible alternative to the 800 pound gorilla Office. And in the backstage, with the will to challenge, via Office, with the very principle of traditional PC (which made and to still make the fortune of Microsoft).
Is this strategy poised for success? I move on quickly on the fact that this supposes to have a permanent high speed connection each time one wants to work. With the generalization of Wifi (and soon of Wimax), it is reasonable to think that within a few years, high speed Internet connections will be as usual as electric plugs.
The problem of Google is above all to fight against the inherent inertia of any user. To make a user change his habits (what an absolute horror), one should offer enormous incremental value. However on the functional side, even overpowered with Ajax, Writely remains definitely below Word. But, given that 90% of users master 10% of Word functionalities, it is not really important.
Paradoxically, the interest of Writely lies in fact within two characteristics not connected with the text processing itself: centralized data storage (which protects from the system crash) and the option to share a document among several users (a little like a wiki).
Will that be sufficient to lure tons of Office users? In the short term, that appears not very likely. Indeed, the concept of centralized data storage is challenged by spectacular progress of external flash memories, say nothing of the delicate issue of data privacy. To accept that all ones private and professional life be to stored by the king of keyword search, implies very strong trust. Regarding sharing documents, even if this functionality is rather extraordinary, its usage is justified only in very specific (mainly professional) situations.
In short, Microsoft should concentrate at last on the eradication of its eternal crash issues (which still occurs too often on Word) rather than on endless increase in new functionalities. And if in addition, Microsoft keeps its soft policy on licences, Office should be able to resist fairly well against Google new assault.