Marketing Ninja

A couple of months ago when Google purchased Jaiku for $30m I confided the following to one of my schoolmates who interned for a high-profile I-Bank in New York:

To be honest, this acquisition seems outright stupid to me; Google could develop its own service for less than that, plus the service doesn’t seem particularly capable of being monetized to begin with.

To which he replied:

It’s Google, man. You’ve got to think that those people know what the hell they’re doing; they wouldn’t be growing so damn fast if they weren’t.

I think my friend is wrong; I think Google has become too comfortable, too complacent with its growth rate and its cash flow, and the Microsoft/Yahoo acquisition talks have brought out the worst in Google.

I’m going to go over 3 moves by Google that make me wonder if Eric Schmidt needs to be put on Ritalin, and I’m going to go over them in from the most recent moves to the oldest.

Google Reports Low Q407 Figures as a Result of Social Networks, Contemplates Purchasing Weakling Social Network for $1.5b in Wake of Microsoft/Yahoo Acquisition

TechCrunch just ran an article a few hours ago about Google or MySpace possibly purchasing social networking weakling Bebo for between $1b and $1.5b; nothing is confirmed yet but the possibility of Google acquiring another social network for over a billion dollars was enough to convince me to sit down and write this article.

First, let me rule out the possibility of MySpace (News Corp) buying out Bebo for $1b. Rupert Murdoch simply doesn’t have any capital left in the coffers to finance another major acquisition; he did, after all, just shell out a mountain of cash for the Wall Street Journal a few months ago. Do rumor mongers forget stuff like this?

Second, if Google really is considering this, expect their stock to drop by a few dollars per share tomorrow; most Google shareholders are feeling shaky enough in the wake of the Microsoft/Yahoo acquisition, and the proposed acquisition of a sketchy startup, a social network no less, will only convince people to keep selling those shares.

I don’t mean to bash the good people at Bebo, but Bebo is not a good product, and it’s not going to help Google jump-start its social networks. Orkut is pretty useless unless you speak Portuguese.

In addition, how in the hell can anyone at Google think this is a good idea, given that social networks are the cause of their slide in Q407 profits? Here’s the comment I left on TechCrunch:

I assume this is a joke.

If not, what a great way for Google to ruin it’s public image even more.

1. Hey, social networks are to blame for our drag in Q407 earnings
2. Hey, Microsoft is buying out our biggest competitor in online advertising and paid search
3. HEY, I’VE GOT A GREAT IDEA: BUY A WEAKLING SOCIAL NETWORK AT A PREMIUM!!!!!

FAIL.

If this is Google acting on impulse, is it just trying to do anything to get the attention away from their Q4 slide and the likely increase in competition for paid search / contextual advertising revenue? If this rumor turns out to be true, and I doubt it will be, then I guarantee you I won’t be the only one writing about Google acting impulsively.

Microsoft Moves to Buy Out Yahoo; Google Responds by Tarnishing its Public Image and Investor Confidence

Let’s say you’re Eric Schmidt.

You’re in the driver’s seat of a company that owns 75% of all online paid search/contextual advertising revenue.

Your stock price is falling as a result of a number of factors: a weak Q407 report, fears of slowing growth, and perhaps shareholders just feel that the stock can’t go any higher than $700/share.

Your market share is still increasing.

And then suddenly, the #3 player in your domain, generally considered to have a somewhat dubious track record, makes an announcement to acquire the #2 player, a falling star, at a premium high enough to empty the deep pockets of the #3 player.

What do you do?

1. Hold a press conference welcoming the challenge, demonstrating your confidence in your product and your momentum?
2. Nothing.
3. Have a nameless lawyer/VP write a desperate blog entry condoning the acquisition as "anti-competitive" and accusing the #3 player of "inappropriate and illegal" conduct?

As you can guess, Eric Schmidt picked option #3. Oops.

Google’s reaction has caused even some of the biggest Google cheerleaders to go "huh? This David-and-Goliath diatribe doesn’t work when you own almost all of the marketshare in your business."

It’s almost as though Google doesn’t have a strategy for competing with Microsoft; Google wants to keep being Google without having to respond to changes in the competitive environment. For a company that self-righteously touts its "don’t be evil" moniker so often, this seems pretty damn "evil" to me.

While Microsoft may be doing a magnificent job trying to block Google’s DoubleClick acquisition in Europe, at least they have a legitimate concern, given that DoubleClick is one of the largest players in online advertising second to Google. Google’s reaction to the Yahoo! takeover comes off as petty, immature, and worst of all, anti-competitive.

There are a lot of people out there, vocal ones at that, who are cheering Microsoft on over Google; I could have not have imagined that happening two years ago.

In order for this kind of dramatic shift in public sentiment to occur a lot people must now perceive Google as a giant that threatens competition, and Google’s pedantic reaction to Microsoft’s acquisition attempt has confirmed that perception for a large audience.

This is the price Google pays for reacting impulsively, without appropriate prior self-inspection, and without regard for the reality of their own business domain.

Facebook Catches Google By Surprise with F8; Google Scrambles with Yet-to-Be Completed OpenSocial API

Although Facebook’s future looks a bit uncertain with that -$150 million dollar cash flow projected for 2008 (ouch,) you have to give Zuckerberg credit for absolutely blind-siding Google with his brilliant F8 platform.

F8 was announced in the late Spring of 2007 and took off with a totally unprecedented rate of adoption among developers; I myself, who had never used any sort of Web 2.0 API before, was intrigued enough to give Facebook Application Development a go.

At a Facebook Developer’s Garage in San Diego, Rodney Rumford of FaceReviews told me that somewhere between $900m and $1b dollars were actively being invested into Facebook Application Development, and that was in mid-August. I don’t know if those figures are true or not but that’s the point; the point is the that the amount of attention, dollars, and developer hours spent on developing Facebook applications have propelled Facebook into the stratosphere of social networking buzz, and dollars.

Google, who is aggressively pursuing online real-estate to help them monetize the "second click" in addition to the first, scrambled to respond; after all, Google, an innovative company in their own right, is trying to move into the social networking space. They needed to get some traction and they needed it immediately.

Their solution was to form an alliance with all other networks not included in the F8 platform and launch the OpenSocial platform, pitting the might of Google against the buzz of Facebook.

However, Google OpenSocial has been an epic failure for the following reasons:

• OpenSocial was announced in November, (actually, late October) nearly 6 months after the launch of F8. Many developers who were interested in building applications for social networks had already committed to F8 by then, myself among them.
• OpenSocial hasn’t even got off of the ground yet. I’ve been hearing "launch imminent, look out F8" for three months with nothing substantive to show for it, other than some lame social graph application built by Plaxo.
• The entire OpenSocial concept made Google look like a bully, for one thing, and it also made it clear that Facebook is the thought leader in 3rd party integration.

Google, for all of its resources, didn’t anticipate or plan ahead for the popularity of Web 2.0 APIs until it was too late, and it impulsively set out to try and crush Google with a half-baked API/Alliance that is so far behind in production that I actually question whether or not OpenSocial is still relevant.

While I’m Drinking the Google Hatorade, I’d Also Like to Thank Google Desktop for Corrupting WSOCK32.DLL and Wasting 5 Hours of My Paid Consulting Time

I was up until 4:00am last night getting all of my week’s remaining schoolwork out of the way so I would have a nice 5 hour block of consulting time to distribute among my clients today; that was until Google Desktop corrupted the DLL necessary for me to connect to the Internet!

Google Desktop came pre-packaged on my Dell XPS M1330, and the widget bar was cool to begin with, until it randomly stopped working about 8 weeks into the laptop’s life. Last night it randomly started working again, that is until I unplugged my network cable so I could move my computer away from my desk.

All of the sudden, BAM! The Google Desktop process kicked an error, then WSOCK32.DLL kicked an error, and then every other thread depending upon the network (including remote error reporting, funnily enough) kicked an error asking me "what in the hell happened to WSOCK32.DLL!?!?"

Those five hours I set aside today were spent using Vista’s restore features (System Restore doesn’t do much for corrupted files and broken configurations) to fix my laptop and restore its network connectivity. In addition when I uninstalled Google Desktop and the Skype Plug-in that I had for it, my Skype installation got corrupted. Looks like Google needs to hire someone who can write an installer worth a damn.

To Google: I expect a full press release on the Google Blog explaining why this issue I experienced with your product is Microsoft’s fault, and I expect it soon.

 

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