Showing posts from 2009

Google's vertical search

I have been writing for a while about how Google's search results stink, and how vertical search is far better. Some companies might continue on their existing trajectory towards failure, but not Google. Over the past six months, Google has been steadily adding vertical search features, although of course in a very Google way. Rather than having the user pick a category such as music or stocks and then search, Google guesses what vertical your search is in and puts that result at the top of your search results. Examples include: Addresses -> Maps Businesses -> Map & Reviews Stock Quotes -> Stock Chart Music Artists -> Artist Tracks For some types of searches, Google just shows the results in the Google Suggest feature, so you don't even have to click search! Examples include: Weather Flight Status Missing are Facebook & LinkedIn for people searches and shopping comparison for product searches. I can understand Google's reticence about integrating su

The Microsoft comeback

Everyone is writing Microsoft off, including the New York Times epitaph last month. I think that it is premature to discount Microsoft. The Cloud The overall transition to cloud computing has been incredibly slow. Most small and medium sized businesses are still running their own mail servers, file servers, wikis and applications, and the fact remains that most of these businesses are running Microsoft software on their desktops and servers. When these businesses finally transition to cloud computing, what are they likely to do? Try to migrate everything to GMail and Google Apps? That is a huge pain and requires a ton of user training. Microsoft is going to come in and say "we will migrate your Exchange to hosted Exchange, your files to hosted NTFS, your Office to Hosted Office, your SharePoint to hosted SharePoint and your .NET/MS SQL Server apps to Hosted Azure. All for less than the cost of an upgrade cycle." And then Microsoft will turn their license revenue stre

The commercial open source failure

This post was also published in BusinessWeek . So what happened to open source as a business? There was a wave of “commercial open source” companies that were going to change the world, including SugarCRM, Alfresco, Jasper, Pentaho, and ActiveGrid, a company I started in 2003 to bring open source software into businesses. Each of these companies were going to lower costs with the open source business model and displace existing vendors in categories such as CRM, Document Management, Reporting, and Business Intelligence. It’s been over six years, and no commercial open source companies other than Red Hat, MySQL, and JBoss have had liquidity events. So what happened? Oracle and IBM, which derive the vast majority of their software revenue from proprietary software, have an increasing share of the software market. And there’s a bunch of commercial open source companies still trudging along. 1. The only successful open source companies sell commodities. Linux, MySQL, and JBoss are the on

Startup 101: Capital efficiency

You may have read in BusinessWeek or TechCrunch when iWidgets closed an A round in January, despite the tough economic climate. In addition to having a strong product that solves a big headache for content publishers, a big part of why we got funded is our capital efficiency. iWidgets spent only $1.5M in 18 months to bring our iWidgets platform to market, launch it with a major customer (CBS), and then sign three more customers. Our leading competitor spent $10M in the same amount of time, just laid off a large portion of their staff, have no business model, and a product that solves yesterday's problem. While you can’t build a business without a plan, capital efficiency is the often-overlooked key ingredient for a successful startup. Capital efficiency isn’t just about not wasting money, it’s also about not having any fat. Too often, bloated, fatty companies are insulated from market realities — you can’t feel it when the road starts to get rough. So it is not just in this eco

Video killed the banner-ad star

This post was also published in AdWeek. Over the past couple of years, the decreasing effectiveness of banner ads has led to increased hand-wringing. When I give talks nowadays, I start off by asking who clicked on a banner ad that day. No hands go up. Banner ads were all the rage for many years, culminating in 2007 with Google's $3.5 billion acquisition of DoubleClick. But as more people spend more time online, banner ads are becoming the billboards of the Internet. Billboards can be very effective. Ubiquitous Coca-Cola billboards build the brand. Billboards placed in highly visible locations like Times Square and Giants Stadium attract a premium. But it's quite the exceptional billboard that actually makes you take action -- calling a listed phone number to learn more about the business, for example -- just like it's quite the exceptional banner ad that gets you to click on it. And well-placed billboards, such as one on a highway advertising a restaurant in a ne

Share beats search: more hits from Facebook than Google

A monumental shift in web traffic happened over the holiday season. Sites ranging from gossip such as to live streaming such as suddenly began getting more of their traffic coming from Facebook than from Google. As reported in HitWise , last week had 8.7% of its visits from Facebook vs. 7.62% from Google. is a very popular site that recently scored its best traffic day ever in late February with 13.9 million page views. Content sites have spent billions of dollars — $12.2 billion in 2008 according to a recent eMarkerter report — on search engine optimization and search engine marketing in order to get traffic from Google and the other search sites. Yet organic traffic from Facebook is beating hits from Google. Why? The answer is pretty simple. It’s the same driving force that’s behind so much of social media. You are much more likely to click on a link that your friend recommends than you are to trust the arbitrary d