MappingTheWeb //

Google has been on a tear recently. The stock closed at a 52-week high today (just over $740 a share). The announcement of OpenSocial catapulted the stock to new heights. The upward climb has been fueled constant earnings blow-outs. But these can’t last forever. With every consecutive positive surprise, more and more pressure is placed on the company. Mark my word - one of these earnings reports will fall short of expectations and will stock will get absolutely hammered. A $300+ drop in a day is not out of the question. As they say, nobody stays at the top forever.

What are some potential flaws, faults, concerns, or dangers that the company needs to address or guard against?

• Revenue diversification - still completely dependent on advertising
• New search players and search technologies
• Click fraud issues

Their long-term strategy is still an enigma, although the platform move may give some indication. Nevertheless, it may also simply be a move to take the spotlight away from Facebook and regain superiority status. Google’s ability to work together with other companies and services is crucial. This brings us to another piece of news - or lack thereof. There is no GPhone. However, the announcement of Android may ultimately be a smarter move in the end. Finally, the integration and strategy surrounding recent acquisitions will be interesting to watch.

As I say, Google will not be at the top forever. What brings the company down is still a question mark. My gut tells me Google may even experience a similar fate to Microsoft - user backlash. The Internet giant used to be the wonder child of the net. Now, users are starting to voice their concerns with the bureaucratic Googleplex that has emerged. 

Every hot Internet space goes through an evolution. There is an initial acceptance stage, followed by hyper-growth. Recent spaces that fit this description include micro-blogging, online video, and social bookmarking.

Buzz and exposure in these areas exceeds that of most other areas. Furthermore, acquisitions have taken center stage. Google, Yahoo, and Microsoft are the usual suspects, but traditional media companies (Fox, Viacom, etc…) are beginning to recognize that the web is going to play a vital role in the progression of media.

High valuations are also an indicator of a hot sector. They may reflect actual value, factoring in future growth and earnings, but often these stratospheric numbers are pulled out of the air by Kool-Aid drinking analysts.

So… back to the title of the post… what is the next hot space?

We’ve been hearing a lot about ’semantics’ and the ’semantic web’, but when is there truly going to be an app or service that regular people can use that leverages this technology? It’s been talked about for years now, but we have yet to see much progress (at least in my mind). New search engines Powerset and Hakia promise to revolutionize search using semantics - I guess time will tell.

Platforms and aggregators seem likely poised for success. They bank off raw data and information to create interesting, value-added services. The Facebook platform is a great example of this. Now, MySpace and Bebo have introduced similar platforms.

Perhaps, simple apps or feature-specific apps (think 37signals) will be the future. Keeping it simple and not over-crowding the offering with useless features is more complicated than it seems. Though this cannot be classified as a given space, it is more of a strategy that can be applied to any space.

To me, it seems that the most successful apps will either be more complicated or more simple than current services. This may seem like a generic statement that covers all bases, but I’ve been amazed (and unimpressed) with the majority of recent offerings.

What do you think the next hot space will be?

In the past couple days, we witnessed the acquisition of two web 2.0 contenders - Newsvine and Jaiku. The former was scooped up by MSNBC, while the latter was bought by Google. Interestingly, both sit second in their respective industries, trailing space leaders Digg and Twitter.

What’s the advantage of buying a second-tier player? Price obviously. I’d imagine that Digg or Twitter would be looking for several multiples of what Newsvine and Jaiku sold for. To their credit though, these leaders have shaped their respective industries and tallied up enormous user bases. Brand equity and recognition cannot be overlooked. For this very reason, I was surprised that Google didn’t buy Twitter. The search giant is known for buying high-profile, industry leaders (i.e. YouTube, DoubleClick, Blogger, and FeedBurner to name a few).

I’m not a regular user of micro-blogging platforms (i.e. Twitter, Jaiku, Pownce, or Tumblr), but I have dabbled from time to time. Having said that, it is hard for me to compare Twitter to Jaiku. Nevertheless, I’ve heard whispers that Jaiku is a more powerful platform than Twitter with more robust functionality. Ambiguity aside, this may be a reason Google opted for the lesser known name. Price may have been a bonus.

As for Newsvine, it will be interesting to see how MSNBC decides to incorporate and/or integrate the service. Left in the uncapable hands of Microsoft, the service will probably fail. The Redmond giant has a history of botching web 2.0 acquisitions. Let’s hope that they keep it separate and consider it a ‘portfolio asset’.

To MSNBC’s credit however, I think Newsvine is a great acquisition. As opposed to Digg, the site is truly focused on the news. Though the design and much of the news are highly professional, Newsvine is still able to successfully incorporate the concept of social news and user-contribution - a slippery slope to say the least.

Kudos to all parties. I look forward to seeing what happens next, especially with Jaiku…

Any thoughts? Anyone know the acquisition prices? What do you think of the fit?

There has been a huge fuss about TechCrunch’s valuation and a possible buy-out from CNET. A $100 million price tag has been tossed around and Arrington has joked about the whole situation. Rumours and possible acquisitors aside, let’s explore a deeper issue - the valuation. Digging even deeper, let’s take a look at how a blog (in particular) should be valued. Surprisingly enough, I’m not even going to use numbers.

Where does the true value of a blog come from? The content. Where does the content come from? The publisher. In the case of a multi-author blog, the true value is traced back to the original publisher. So what am I trying to say? A blog is worthless without the original publisher. Or, in this case, TechCrunch is worthless without Mike Arrington. You can strap a $100 million or $500 million price tag on the blog, but all goodwill is lost when the Arrington leaves. I think this is true for any blog. The user base is built around the style and perspective of the creator. All subsequent authors can try to mimick the original style, but it truly cannot be copied.

If CNET does buy TechCrunch, I doubt Arrington will be around for long. My guess is that he’s looking to pursue more exciting and captivating opportunities. If this does happen, what’s the outcome? Well, CNET will have bought the most expensive content management system in history.

NOTE: This post wasn’t meant to put down any of the other publishers or authors of TechCrunch. In fact, I have quite enjoyed most of their work. All I am illustrating is the need for the creator.

Today, Yahoo added new search features and functionality. Video embedding (via Yahoo Video, YouTube, and MetaCafe), Flickr integration, event information (via Upcoming.org), and new Yahoo Shortcuts were all introduced. We’re seeing all this wonderful social media integration - so what’s the big problem? It’s biased. And search engines shouldn’t be biased.

To be honest, I’m genuinely upset about the changes. Not only do they add more clutter to the page, but they’re decreasing the overall quality and relevancy of the search engine. Furthermore, Yahoo is getting praise for these changes. Many are even saying that the company is catching up to Google. I even heard a whisper of the term “Google killer”. This is a bold statement and it can’t be farther from the truth. In reality, Yahoo is widening the gap. They are drifting further away from Google, as they are providing less relevant, more biased results. They are redefining ‘vertical creep’. On the occasion, Yahoo will have the most relevant result on the entire net, but more often than that, it won’t. What Yahoo needs to do is go back to the drawing board and work on their algorithm. This is the bread and butter of any search engine. Forget the web 2.0 app integration.

Pardon my rant, but I’m not a big fan of this move. It is company bias in a space where there should be no bias. All this new integration means that a given user will (in most cases) not be receiving the best quality, unedited, clean, no-strings-attached results. Rather, they are subjected to ’Yahoo’ results and links to Yahoo properties. In my opinion, this leads to higher short-term benefits (and revenues) for the company due to an increase in page views, but translates to long-term problems in the areas of relevancy and perception.

If Yahoo does want to include such results in search, place this information in the sidebar and provide disclosure around it. Numerous others have done it in the past, so why not Yahoo? By integrating company results into the natural search results, it confuses and/or deceives the user. This isn’t in the best interest of the company - at least in my mind. Another possible solution is richer functionality in the ‘vertical search tabs’. If I really want images or videos in my results, I search via Yahoo Image search or Yahoo Video search, not regular search. I think there is an opportunity here, but Yahoo is being greedy.

I say, “Just gimme the best damn results.” Google does a pretty darn good job of this. They haven’t cluttered the results or riddled the page with endless amounts of company-centric material.

One bright spot for Yahoo is Search Assist. This new tool (somewhat akin to Google Suggest) provides contextual suggestions and conceptual recommendations for your search queries. This saves time and hassle, and may indeed aide you in reaching the most relevant results. So why do I like this? As opposed to the other Yahoo features, this one is unbiased (at least I HOPE). It is based on user behaviour, patterns, and trends.

Below is a screenshot of Yahoo Assist (courtesy of Search Engine Journal):

In the end, I think what Yahoo is trying to do is capitalize on all their recent web 2.0 acquisitions by integrating them into search. I think it’s a valiant idea, but involved poor execution. As I mentioned before, I don’t think that integrating such results into the natural search results is the optimal strategy. Company bias and and self-fulfilling intentions start to play a role, and all of a sudden, people are starting to question the credibility and trustworthiness of search. Losing trust is probably the worst possible outcome for Yahoo at this point in the game.