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Is targeting Microsoft keeping Google’s eyes off the prize? April 18, 2007

Posted by Daniel Gardner in Business Thoughts, Google, Internet, TechCrunch, techmeme, Yahoo.
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Today at the Web 2.0 Expo Google CEO Eric Schmidt announced that Google will be releasing a PowerPoint like presentation tool for there online office offering sitting along there current Email, Word Processing and Spreadsheet tools.

Google is obviously serious about taking on Microsoft’s lucrative office suite head on as they now have the four most important applications of Microsoft’s Office suite despite Schmidt’s nonsense comment “We don’t think it’s a competitor to Microsoft Office”.

There is no doubt in my mind that Google are on to a winner here and will gain significant adoption if the product is integrated effectively into there existing office line-up though pricing pressures that Google and other online office vendors are putting on online office products will ensure that Google will never reach anywhere near the profitability they treasure in the Advertising space.

I think that Google needs to stick to there previous and most important strength which is leveraging off other companies platforms to perform advertising which means they need to stop building there own solutions and start growing there partner network, by utilising partners Google can mitigate the risk of moving into emerging product spaces such as online office products and can focus on increasing there advertising revenues (Kudos to Google on there Double-Click purchase), continuing to create these products just means that Google moves further away from being an advertising company and more like a product company (without the fat product revenues of companies like Microsoft).

I think that Google are still a great company and I don’t doubt there ability to grow though I just don’t understand what Google are playing at by expanding into things like Google Office, they are making the right acquisitions in the mobile space and are in a good position to capitalize on this as it emerges alongside the now Microsoft owned TellMe though Google might need to focus on these winners and keep the blinders on things like Google Office, as I have mentioned before in order for Google to win they need to bring the fight to there competitors, out-innovating them at every opportunity while protecting both current and future revenue streams particularly in advertising.

Skype enters the Enterprise April 12, 2007

Posted by Daniel Gardner in Business Thoughts, Current Events, GigaOM, Internet, Skype, VoIP.
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Skype has spurred lots of peoples interest in Voice Over IP especially with making people aware that communication with a PC is not only functional, it is easy!

Now according to GigaOM Skype will be making it’s first move into the enterprise space, this is an exciting but not unexpected move in order to expand from there current consumer focussed customer base into the enterprise as well, the deciding factor on how well they will fare in this already populated space is how serious they are about servicing these new customers as the feature set required by businesses will be much more demanding such as active directory integration for address books and users, legacy gateway connectivity (SIP/PSTN) and a flexible API for integration with business applications.

I think Skype can execute on this though they need to get the features out and commit themselves, they have the funding, they already have the infrastructure (a marked advantage over many ‘hosted’ providers) and they already have an excellent software application all it boils down to is execution.

I will be watching this to see how it develops but I think this is just what the SMB market needs, especially companies with many satellite offices and telecommuters as companies can give these users the functionality they need without having to pay the exorbitant rates currently charged by companies to use there hosted solutions.

5 things social networking sites can learn from Salesforce.com April 12, 2007

Posted by Daniel Gardner in Business Thoughts, Fox, Internet, MySpace, salesforce.com.
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After my post about Photobucket being banned from MySpace today I was thinking about the amount of people who say that companies built on the back of a large website are destined for failure, I tend to disagree, hundreds of widget companies have come out offerings add-on’s that add to the user experience on these websites and have raised plenty of venture capital and are moving towards profitability such as Slide and RockYou though without a clear channel for distribution and monetization of there products (as well as the uncertainty of if your widget will be available tomorrow *cough* MySpace*) many potential entrepreneurs and investors are scared of the prospect of creating a widget company.

In order to open up the doors to these entrepreneurs and investors I think Social Networking sites should adopt a model similar to that of the Salesforce.com Appexchange which allows companies to build products that sit on top of there platform in a controlled environment, by looking at salesforce.com I can see 5 key things that every social networking site should do in order to ensure both themselves and there widget companies prosper from a widget ecosystem:
1. Create a portal
Create a portal for companies to showcase there widgets they have built, these widgets should be free to post, view and try, possibly adding a voting or popularity feature to ensure the best widgets bubble up to the top to ensure users don’t need to dig around to find the best widgets
2. Create a development platform
By creating a development platform with site specific functionality companies can ensure widget providers will want to create widgets for there site as it is easy, code is easily manageable by the site owners and so that they can create a lock-in for there widget providers that cannot get the same functionality elsewhere.
3. Create a solid terms of use agreement
To ensure that widget providers don’t create something that violates copyright or infringes on a feature the site wishes to keep to themselves, a solid terms of use agreement should be decided upon so that widget providers know where they stand.
4. Acquire
Successfull widget companies that can enhance the companies platform should be acquired as is required, regular acquisitions will mean that budding entrepreneurs will spend there time and resources creating useful widgets in the hope they will be acquired.
5. Profit!
For companies that are not suitable for acquisition both the widget provider and the site can monetize there widgets, the site takes a cut off every sale and the widget provider takes the rest, this is direct profit and is not varied based on advertising.

“We are like dwarfs sitting on the shoulders of giants. We see more than they do, indeed even farther; but not because our sight is better than theirs or because we are taller than they. Our sight is enhanced because they raise us up and increase our stature by their enormous height”
Bernard of Chartres – 12th Century Philosopher

Why I think MySpace blocked Photobucket April 12, 2007

Posted by Daniel Gardner in Business Thoughts, Current Events, Fox, MySpace, Photobucket, TechCrunch.
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MySpace are at it again blocking third party content providers, today’s victim is Photobucket, specifically targeting there video offering that is heavily used across MySpace for sharing videos.

If Fox were to come out and say they wish to have full control over the video’s displayed on MySpace due to issues with policing content, I would totally understand as this directly relates to Fox’s other lucrative media properties but the fact that they are directly targeting Photobucket and are leaving others in tact (namely Google’s YouTube Videos which are notorious for containing copyrighted content) means that this decision was in relation to something Photobucket has done or is planning to do.

I would say the decision was made because of the latter as Photobucket is currently on the take for an estimated $300 – $400 million, this play may be an attempt by Fox to dilute Photobucket’s worth by distributing FUD with relation to the future of there Online Video offering and it’s actual value, possibly allowing them to pick up a bargain and expand there media powerhouse.

Google and Yahoo – Differences in media strategies April 11, 2007

Posted by Daniel Gardner in Business Thoughts, Current Events, Google, Internet, TechCrunch, Viacom, Yahoo.
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I don’t think anyone disagrees that video content is one of the most important and influential content mediums today especially with the advent of the Internet and the wide availability of fast always on connections we now have more choice of content providers and access to shows when and how we want them.

Two of the biggest announcements in video advertising have come in the past fortnight with Yahoo announcing there online advertising partnership with Viacom and Google announcing there foray into Television advertising.

There is obviously a marked difference in these strategies, Google has gone off-line to pursue television advertising whereas Yahoo is staying online pushing there advertising out to third party advertisers.

Google are currently in a sticky situation, they have brought the Video sharing website YouTube for 1.65bn late last year and are currently trying to establish it as the go-to place for consumers to watch videos online so by Google executing a video advertising strategy that drives users away from YouTube and allows them to monetize content elsewhere this would be a serious conflict of interest with there current offering though the current lack of effective monetization on YouTube means that YouTube cannot offer content providers enough incentive to host there content at YouTube (see the Viacom v Google 1bn lawsuit), a sorry see-saw story indeed.

So what have Google done? They have started to move some of there advertising off-line, last week announcing they will be moving into television advertising, I have covered this off in my blog post Will Google succeed in the Television advertising space?, I believe this is a poor move by Google, as there focus is pulled off-line and any messaging they planned to communicate to advertisers that they believe in online video is heavily diluted.

In the other corner though we have Yahoo choosing to advertise on other companies media properties (see the Yahoo Viacom Deal) online while keeping it’s own pay for play offering that offers a clear monetization channel for media companies, not unlike Apple’s iTunes music store.

By keeping all of there advertising and media properties online Yahoo will be able to continue to focus on and expand it’s primary advertising stream while building connections with large media companies as the online media space grows.

As I have mentioned before I don’t think Google will achieve the same domination in television as it has in online advertising unless they continue to innovate while there online video offering YouTube is looking to be sinking as they are currently losing content providers due to there blatant disregard for copyright and unless they change there policies quick they may taint themselves, I feel Yahoo however is going in the right direction, maybe it won’t have the same short term success that Google may get out of there move into television advertising though at least it will be sustainable especially as more and more video content moves online.