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Link to O’Reilly’s Post

Work on something that matters to you more than money.

Don’t be afraid to think big. Business author Jim Collins says that great companies have “ big hairy audacious goals.” Google’s motto, “access to all the world’s information” is an example of such a goal. I like to think that my own company’s mission, “changing the world by sharing the knowledge of innovators,” is also such a goal.

Don’t be afraid to fail. There’s a wonderful poem by Rainer Maria Rilke that talks about the biblical story of Jacob wrestling with an angel, being defeated, but coming away stronger from the fight. It ends with an exhortation that goes something like this: “What we fight with is so small, and when we win, it makes us small. What we want is to be defeated, decisively, by successively greater things.”

The most successful companies treat success as a byproduct of achieving their real goal, which is always something bigger and more important than they are.

Crate More Value than you Capture

1. Create more value than you capture.It’s pretty easy to see that Bernie Madoff wasn’t following this rule; nor were the titans of Wall Street who ended up giving out billions of dollars in bonuses to themselves while wrecking our economy. It’s harder to judge the average small business, but it’s pretty clear that most businesses do in fact create value for their community and their customers as well as themselves, and that the most successful businesses do so in part by creating a self-reinforcing value loop with their customers.

   For example, a bank that loans money to a small business sees that business grow, perhaps borrow more money, hire employees who make deposits and take out loans, and so on. The power of this cycle to lift people out of poverty has been demonstrated by microfinance institutions like the Grameen Bank. Grameen is clearly focused on creating more value than they capture; not so the like of Fannie Mae and Freddy Mac, or WaMu, or many of the other failed financial institutions involved in the current financial meltdown. They may have started there, but at some point, they clearly became more concerned with how much value they could capture for themselves.

   If you’re succeeding at this goal, you may sometimes find that others have made more of your ideas than you have yourself. It’s OK. I’ve had more than one billionaire (and an awful lot of startups who hope to follow in their footsteps) tell me how they got their start with a couple of O’Reilly books. I’ve had entrepreneurs tell me that they got the idea for their company from something I’ve said or written. That’s a good thing! I remember back in the early days of the Internet, when the buyer at Borders told me after one of my talks, “Well, you’ve just given your competitors their publishing program for the year.” If my goal is really “changing the world by spreading the knowledge of innovators,” I’m thrilled when my competitors jump on the bandwagon and help me spread the word!

   Look around you: How many people do you employ in fulfilling jobs? How many customers use your products to make their own living? How many competitors have you enabled? How many people have you touched that gave you nothing back?

   There’s a wonderful section in Les Miserables about the good that Jean Valjean does as a businessman (operating under the pseudonym of Father Madeleine). Through his industry and vision, he makes an entire region prosperous, so that “there was no pocket so obscure that it had not a little money in it; no dwelling so lowly that there was not some little joy within it.” And the key point:

   Father Madeleine made his fortune; but a singular thing in a simple man of business, it did not seem as though that were his chief care. He appeared to be thinking much of others, and little of himself.

Focusing on big goals rather than on making money, and on creating more value than you capture are closely related principles. The first one is a test that applies to those starting something new; the second is the harder test that you must pass in order to create something enduring.

Take Microsoft. They started out with a big goal, “a computer on every desk and in every home,” and for many years unquestionably created more value than they captured. They helped grow the PC industry as a whole; they built a platform that helped many small software vendors to flourish. But over time, they began to capture more value than they created: as the cost of PCs plummeted, hardware vendors had to survive on the slimmest of margins while Microsoft collected monopoly rents; bit by bit, Microsoft consumed its own developer ecosystem by building the features of successful startups into their own products, and using their operating system dominance to crush the early movers. As I’ve written elsewhere, I believe that Microsoft must re-commit itself to big goals beyond its own profitability, and to creating more value than it captures if it is to succeed. (Danny Sullivan wrote a great piece about the strategic relevance of this very idea just last week, Tough Love for Microsoft Search.)

Or take Google. Again, a huge goal: “Organize all the world’s information.” And like Microsoft in its early years, they are enabling others while making a pile of money for themselves. Any business with a web presence need only take a look at its referrer logs if it questions that assertion. How much of your traffic comes from Google? But again, as I’ve written previously, this test still looms in Google’s future. Will they continue to create more value than they capture, or will they seek to capture more of the value for themselves?

It’s a matter of balance. Every business needs to pay attention to its bottom line; every individual needs to put a roof over his or her head and provide food for loved ones. But take a look inside: how much are you thinking about yourself and what you might gain, versus what you might create?

It’s particularly tough to stay focused on big issues in the face of an economic downturn, because getting paid looms large. I look back at some of the decisions I made after the crash in 2001, when I became far more focused on the survival of my business than on the value we were going to create in the marketplace. We did some me-too publishing that I really regret; the things that ultimately made a bigger difference to our bottom line were commitments to the future: our Web 2.0 events were driven by the goal of reigniting enthusiasm in the computer industry as well as helping people to understand the new rules of the emerging internet platform; Safari Books Online was driven by the desire to create a new revenue model not just for ourselves but for all publishers; Make: was a celebration of the next generation of hackers; Foo Camp started as a way to give something back to all the people who’d contributed to our success.

But these two tests are not enough, because it’s become clear that we need a long term ecological perspective as well. So I’d add a third principle:

3. Take the long view.

Brian Eno tells a great story about the experience that led him to conceive of the ideas that led to The Long Now Foundation:

It was 1978. I was new to New York. A rich acquaintance had invited me to a housewarming party, and, as my cabdriver wound his way down increasingly potholed and dingy streets, I began wondering whether he’d got the address right. Finally he stopped at the doorway of a gloomy, unwelcoming industrial building. Two winos were crumpled on the steps, oblivious. There was no other sign of life in the whole street.”I think you may have made a mistake”, I ventured.

But he hadn’t. My friend’s voice called “Top Floor!” when I rang the bell, and I thought – knowing her sense of humour – “Oh – this is going to be some kind of joke!” I was all ready to laugh. The elevator creaked and clanked slowly upwards, and I stepped out – into a multi-million dollar palace. The contrast with the rest of the building and the street outside couldn’t have been starker.

I just didn’t understand. Why would anyone spend so much money building a place like that in a neighbourhood like this? Later I got into conversation with the hostess. “Do you like it here?” I asked. “It’s the best place I’ve ever lived”, she replied. “But I mean, you know, is it an interesting neighbourhood?” “Oh – the neighbourhood? Well…that’s outside!” she laughed.

In the talk many years ago where I first heard him tell this story, Brian went on to describe the friend’s apartment, the space she controlled, as “the small here,” and the space outside, full of winos and derelicts, as “the big here.” He went on from there, along with others, to come up with the analogous concept of the Long Now.

It’s very easy to make local optimizations, but they eventually catch up with you. Our economy has many elements of a ponzi scheme. We borrow from other countries to finance our consumption, we borrow from our children by saddling them with debt and using up non-renewable resources.

It’s hard to see beyond the “small here” and the “short now,” especially if you live in a favored place and time. That’s why so many of the really important things do end up on the plates of non-profits.

That’s why a time like this, when the bubble is bursting, is a great time to see how important it is to think about the big picture, and what matters not just to us, but to building a sustainable economy in a sustainable world.

Start Slide Show with PicLens Lite

1. Slide 1: Everything you always wanted to know about Google…But were afraid to ask Paris, December 2008
2. Slide 2: This work is licensed under the Creative Commons to allow for further contributions by other specialists and web users in the coming months. To view a copy of this Attribution-NonCommercial- ShareAlike3.0 Unported license, visit http://creativecommons.org/licenses/by-nc-sa/3.0/ or send a letter to Creative Commons, 1712nd Street, Suite300, San Francisco, California, 94105, USA. ..……. December 2008 • Everything you always wanted to know about Google… • 2
3. Slide 3: Google key success factors : Web specific ? Scalability Network effects Data mining • Ability to easily grow at • The utility of a good or a • The web offers the marginal costs service varies with the opportunity to exploit and • Applied to infrastructures : number of users analyze a very large ability to adapt its size to • The reach of a critical amount of data high load & volumes mass of users constitutes • Users’ behavior can be • Applied to business a significant barrier to the analyzed to create models : ability to entry monetizing value monetize millions of users Openness Cocreation Business model • The traditional walled • Non-traditional actors • Advertising is not a market garden1 media strategy become part of the value but a business model becomes irrelevant chain • Any market that attract • Content and services must • Users, content creators advertising is a target for be open and interoperable and external developers Google to favor audience are given the tools to circulation create new markets and enrich services ..……. 1 Network or portal which offers only its own content or services to users December 2008 • Everything you always wanted to know about Google… • 3
4. Slide 4: 1 Why won’t Google be affected by the crisis ? 2 Why is Google trying to change the mobile world ? 3 Why isn’t YouTube a content portal ? 4 Why does Microsoft fear Google ? 5 How Google wants to compete with Facebook ? 6 Why is Google buying satellites ? 7 How does Google buy traffic ? 8 Why did Google acquire DoubleClick ? 9 Why doesn’t Google monetize all its services ? 10 How does Google capitalize on Open Source developers work ? 11 How did Google capture the offline advertising market ? 12 Why is Google stealing our voices ? 13 Is PageRank a really competitive advantage ? 14 How does Google turn advertising into information and performance ? Annex: Network effect, two-sided market, glossary, financial , contact ..……. December 2008 • Everything you always wanted to know about Google… • 4
5. Slide 5: 1 Why won’t Google be affected by the crisis ? 4 levers will allow Google to increase its revenues amidst the economic crisis Performance Bn$ 35 1 advertising Licenses and During a crisis, other performance revenues advertising gains market shares Internet Explosion of the Mobile non advertising + 3% 2007-2008 1 revenues On line Monetisation of +450% 2007-2008 video the Internet Mobile audience YouTube Bn$ 201 monetization 260 millions mobile subscribers increases worlwide oct 2008 1 Estimates 2008 : Revenues = 200 M $ 1 Revenues 2008 Revenues 2012 Google is in a situation in which it can resist the economic crisis and find new revenue sources, both advertising and non-advertising ..……. 1: faberNovel estimates December 2008 • Everything you always wanted to know about Google… • 5
6. Slide 6: 2 Why is Google trying to change the mobile world ? (1/2) Mobile industry is based on a “ traditional” locked values chain. Operating Terminal Portal Operator Web Contents System Examples: Entry barriers stop Google from applying its models to the mobile industry: Access restricted to services/contents Limited Network Access and to their improvement • Terminals assigned to a unique operator • Operator portals favored over other portals • Difficulty of interconnecting networks • Services offered by terminal manufacturers favored over other services • Closed operating systems The mobile industry is not suited for the Google development model based on openness, interoperability and network effects. ..……. December 2008 • Everything you always wanted to know about Google… • 6
7. Slide 7: 2 Why is Google trying to change the mobile world ? (1/2) In order to duplicate its open model, Google designed a three fold strategy : Android : Open Source Lobbying Telco partnerships O.S.1 • Android Developer Challenge: • Google candidacy for mobile • Pressure from Google to force Contest for developers to create license attribution aims to force the operators to offer its applications new applications for Android FCC2 to impose an openness as default options clause to the winner • Open Handset Alliance: Common initiative of 34 mobile • Sharing of advertising phone industry players • A success : clause partially revenues between Google and (manufacturers, suppliers and imposed on the winning bidder, operators distributors) aiming at spreading Verizon. Android In addition, Google developed and acquired mobile devices applications : Location-based Social Collaborative Games services Networks Tools ShareYour Grand central 3 Cab4me FreeFamilywatch Golfplay JOYit Wertago Jaiku 3 Board Google breaks open the mobile industry value chain to create an environment that will be fit to the distribution of its products and monetization model. ..……. 1 Operating System 2 Federal Communications Commission 3 Acquisitions December 2008 • Everything you always wanted to know about Google… • 7
8. Slide 8: 3 Why isn’t YouTube a content portal ? (1/2) YouTube acquisition is part of a strategy to monitor key content and audience hubs. Monetise contents Give access to Organise information through various information sources of audience •A new information silo: video • YouTube bandwidth • Broadcasting of contents search spending estimated to reach through Google websites as 1M$/day1 well as other sites •Next : Speech to text technology : information • Revenue sharing logic searches within video contents YouTube has already won the audience battle … 75% … 60% May 2008 16% 9% 4%8% 2% 3% 1% 1% May 2007 Market shares of 5 leading video websites, United States (may 2008 vs.may 2007) [%]2 1 NewYork Times ..……. 2 Hitwise 2008 December 2008 • Everything you always wanted to know about Google… • 8
9. Slide 9: 3 Why isn’t YouTube a content portal ? (2/2) Unlike its competition, YouTube follows an open logic and focuses primarily on developing content distribution tools : Encourage content Attract as many viewers as Monetize through relevant providers to use the service possible advertising tools • YouTube Program Partner : • Broadcasting videos on • Traditional advertising: Payed providers of semi- YouTube website and other AdSense and banners professional content Google sites (ex : Google.com, GoogleNews) • In-video advertising : Pre-roll, post-roll, overlay2 • Broadcasting contracts • Exporting videos (blogs, with major content providers social networks) and • Brand advertising: developing API1 for broadcasting video ads advanced broadcasting on within an environment third party websites coherent with the brand’s image • Broadcasting on all video devices : television, mobiles, • E-Commerce: Affiliation of multimedia players, video partner websites (Amazon, consoles Itunes, video games) YouTube acts as the platform of a two sided3 market composed of content providers and video seeking users. 1 Application Programming Interface. Standardized programming protocol allowing applications to communicate 2 Clickable text advertising displayed on a video 3 See Annex ..……. December 2008 • Everything you always wanted to know about Google… • 9
10. Slide 10: 4 Why does Microsoft fear Google ? Google’s ambition isn’t limited to “in browser” Web services, but extends to any online or offline application market. Google sets out to enter the online application market, MSFT’s cash cow : Disruption of offline application Consolidation of the online market segments environment • Launching of the Office Google • Launching of Google Gears: software pack: a word-processor, Open Source project allowing an a spreadsheet program, a offline use of online applications presentation tool and a calendar • Free alternative to Microsoft Office pack • Claimed ambition of becoming a standard and encouraging online languages as opposed to offline programming languages • Acquisition of SketchUp, a 3D modeling software with a free version made available Google partly « destroys » Microsoft’s market when shifting value from offline to online ..……. December 2008 • Everything you always wanted to know about Google… • 10
11. Slide 11: 5 How Google wants to compete with Facebook ? In 2007, Google launched Opensocial : a series of multi platform API allowing developers to create compatible applications with partnering social networks, Ex : Slideshare application available on Linkedin and hi5 OpenSocial is not a Facebook competitor but a «meta-social network ». Network Network effects effects Network effects Google wants to become the « social data search engine » and to monetize this data, leveraging network effects. Facebook’s platform is limited, Google’s is the whole Web ..……. December 2008 • Everything you always wanted to know about Google… • 11
12. Slide 12: 6 Why is Google buying satellites ? (1/2) Since 2005, Google has been multiplying investments in all kinds of infrastructures: • Free Wifi in Mountain View • Investment in Fon: shared Wifi access Wifi Gratuit Satellite Wimax • 60 M$ Investment • Partnership • Internet access in • A mobile high-speed developing countries internet access technology • A 100 M users Baloon market by the end of Backbone1 Wifi 2008 • Partnership • 100 M$ investment announcement • Expansion of high- • Internet access speed networks technology superior to satellites for isolated areas ..……. 1 Long distance high-speed networks, core of the Internet network December 2008 • Everything you always wanted to know about Google… • 12
13. Slide 13: 6 Why is Google buying satellites ? (2/2) Internet infrastructures is actually Google’s business infrastructure: Traffic on Google websites depends on internet infrastructure development and availability (Backbone, Wifi, Satellite,…) Google has three objectives when investing in the upstream part of its value chain: Strengthen and secure existing • Strengthening and securing existing infrastructure infrastructure lightens Google’s dependancy on its providers • Favouring high-speed Internet access means more Favor high-speed Internet access time spent and usage volumes, thus increases Google services usage Prioritize Internet access for • Future web users are Google services’ next unconnected countries or populations users Through infrastructures investments, Google reinforces its traffic providers and increases access to its services. ..……. December 2008 • Everything you always wanted to know about Google… • 13
14. Slide 14: 7 How does Google buy traffic ? Google asserts its ability to attract users on the sole basis of its services quality and without turning to advertising… Truth is Google largely buys traffic from providers Browsers Manufacturers Toolbar Portals •Firefox: 60 million daily • In 2006, partnership users in 2008 deal with Dell to have the • The Google Toolbar is part of the web navigator, •Google finances 85% of Google search engine which makes Google the • In 2005, Google bought Firefox in exchange for appear by default on Dell a 5% stake in AOL for 1 computers default search engine having its search engine billion$ (20 million embedded in the browser • In 2008, partnership • Adobe installs it as part subscribers at time of deal) of a package with deal with Apple to have the • Google became AOL’s Google search engine Shockwave(2006) white label search engine appear by default on • Sun has been installing • Google expands its Iphones (13 million devices it as part of a package with advertising network reach sold by october 2008) Java since 2005 (20 million • Partnerships with uploads/month) manufacturers allow the search engine to be guaranteed to in a prime position. Google has the financial power to buy traffic from partners, accessing to massive audiences. ..……. December 2008 • Everything you always wanted to know about Google… • 14
15. Slide 15: 8 Why did Google acquire DoubleClick ? • In 2007, Google acquired DoubleClick, one of the world leaders in display advertising : To position itself on the banner To reach for highly popular market websites Google « moves up » the long tail Market shares of main online of advertisers advertisers in relation to website traffic 1 Ad budget per advertiser Advertising < 100k 100k- >1Mon houses UV2 1M UV2 UV2 Banner Market Adbrite 4,1% 4,9% 0,5% Text ad market AOL 1,9% 6,5% 5,7% DoubleClick 9,1% 29,9% 48,0% Google 71,4% 41,6% 15,8% advertising Traditional MSN 6,6% 6,3% 12,8% market Yahoo 4,7% 7,3% 16,5% Number of advertisers Google acquired DoubleClick to gain an expertise (display) and global market shares (highly popular websites) 1 www.attributor.com/blog/2008/03/ 2 Unique Visitors ..……. December 2008 • Everything you always wanted to know about Google… • 15
16. Slide 16: Why doesn’t Google monetize all of its 9 services? Some Google services are free of charge and monetized through advertising : Blogger: blog creating tool Google Health: service for managing and storing personal medical information GoogleNews: personalized mash-up of news articles and summary Picasa: photo sharing service Google SketchUp: 3D model creating tool Goog-411: phone information service … These services are actually indirectly monetized : Tools designed to Products specifically Attract new customers generate audience are developed to improve through loss leaders made available other Google products Monetization of blogs created on Google 411 created to better the Picasa devised as a loss leader Blogger through AdSense or video indexing on YouTube towards other Google products FeedBurner Google global strategy allows strong indirect monetization of its products ..……. December 2008 • Everything you always wanted to know about Google… • 16
17. Slide 17: 10 How does Google capitalize on Open Source developers work ? Google encourages development of open source applications: • Google code: platform designed for Open Source developers Supplied with guides, tutorials, code extracts of Google products • Google Search Code: code search engine Automatic referencing of all code sections that can be found on the Internet • Events created for the Open Source community: Google Summer of Code: grants awarded to Open Source student projects Google Developer Days: seminars dedicated to Google products Through support of Open Source community, Google pursues 4 objectives: Development of Open Increase of total Promotion of a more Assembling a free Source langages used Internet traffic « open » Web public relations team by Google •New applications •Increasing the •Developers’ chats are •The number of create new uses, interoperability a very effective public available Open Source leading to increased multiplies network relation tool codes encourages the total traffic effects1 emerging of new •Opensource is products becoming an •Feedback of Open advantage to attack Source developers proprietary code helps creating new strategies products Google supports the Open Source community in a spirit of collaborative creation, one of Google’s strategic pillars ..……. 1 See Annex December 2008 • Everything you always wanted to know about Google… • 17
18. Slide 18: 11 How did Google capture the offline advertising market ? Online advertising market accounts for only 8% of the US market1: 3% 7% 8% Billboards Radio Most offline media (television, 44% 17% Internet Daily Press radio, press,…) begin to be IP- News Press Television ready with online versions 21% Google is exploring the offline ad market! • Ad transfer from online to offline (YouTube on television) • Entry on traditional offline markets (radio, billboards,…) • Integration of offline techniques (traditional fixed pricing) • Partial adaptation of AdWords onto radio and television Google’s entry on this market anticipates new uses and broadens its offer. Not specifically successful for now… ..……. 1 TNS Media Intelligence, US advertising market December 2008 • Everything you always wanted to know about Google… • 18
19. Slide 19: 12 Why is Google stealing our voices? In 2007, Google launched Google Voice Local Search in the United States, a free and automated phone directory service : What is the business model of this free and ad-free service ? Google is creating a database of phonemes, recorded during calls in order to better its speech to text1 technologies: Creation of a Development Indexing of Indexing of all of « speech to phoneme text » YouTube audio/voice database audio tracks sources technologies 2 Bla bla bla Externalizing tasks onto users (« crowdsourcing 3») is a commonly used process by Google to improve its products. 1 Converting oral information into text 2 First experiments with political videos posted during the presidential campaign of 2008. 3 Neologism created in 2006 by Jeff Howe and Mark Robinson, Wired magazine editors ..……. December 2008 • Everything you always wanted to know about Google… • 19
20. Slide 20: 13 Is PageRank a really competitive advantage ? (1/2) PageRank is Google’s link analysis algorithm that measures the probability that a page will be relevant to user’s query : Based on the correlation between the amount of links towards a page and their relevance It accounts for the notoriety of the sites that link to the page in question PageRank’s simplified formula is : (A page’s (u) PR is the sum of all PRs of pages linking to u (v), divided by the respective number of outbound links contained in pages v) Google1 claims that PageRank is one of its search engine’s main competitive advantage : A « champion of The search engine’s A tool unlikely to be democracy » « cornerstone » tampered with 1 http://www.google.fr/why_use.html ..……. December 2008 • Everything you always wanted to know about Google… • 20
21. Slide 21: 13 Is PageRank a really competitive advantage ? (2/2) A tool that can’t be tampered with? An outdated technology? Sale or exchange of famous website links Launch of search engines that (webringing) don’t use tools such as Search Engine Optimization1 techniques PageRank (Cuil, Powerset) Google’s search engine success relies on other factors : Relevance guaranteed Scalable architecture Quick/simple queries by 200 other criteria • Capacity of increasing/ • Clear query interface • The search engine’s growing according to the • Simple and quick algorithm was subjected to volume of indexed pages presentation of results 450 modifications in 2007 and number of queries • 2 millions servers by 2008 PageRank is only one of many Google’s search competitive advantages. It is certainly not the main entry barrier to competitors on the search market. 1 Set of techniques aiming at improving a site’s referencing on a search engine. ..……. December 2008 • Everything you always wanted to know about Google… • 21
22. Slide 22: 14 How does Google turn advertising into information and performance?(1/2) « Advertising income often provides an incentive to deliver poor quality search results» Sergey Brin & Larry Page Most advertising models present strong weaknesses Undefined Strong intrusion Weak relevance performance • Large size adverts • Influence results by • Impossible to reward • Slows down results making paid for clients efficient advertising display from a search appear first • Example : television ads engine query • Example: Opentext/Kelkoo • No direct measure of real • Little or non-existent performance targeting • Example : invoicing according to the number of displays (CPM) ..……. December 2008 • Everything you always wanted to know about Google… • 22
23. Slide 23: 14 How does Google turn advertising into information and performance?(2/2) Displays advertising defines Relevance Quality Score Performance For the user Direct impact on advertising value For the advertiser Most relevant ad Qualityscore measures the relevance of the ad and is determined by the click throug rate on the ad. It impacts the display rank and Cost per Click: • Rank: relevant ads are pushed up, non relevant ads do not appear • Cost per click of the ad : performant Total cost of the advertising ads are charged less campaign is determined by the number of clicks on the ads and Less relevant ad not by the number of displays. Google’s advertising model benefits the user (improved relevance) as well as the publisher (performance based billing & rebates) ..……. December 2008 • Everything you always wanted to know about Google… • 23
24. Slide 24: Google : the network circulation value creation model Traditional value creation Network value creation Eg : Microsoft Eg : Google $ Gmail $ Apps Server Products $ Apps $ $ $ Search $ Customer engine Business products Products $ $ $ $ $ $ Partners Entertain Youtube ment $ The global value of the company relies The global value of the company relies on independent lines of on traffic between network parts products/business units (proprietary or partners) ..……. December 2008 • Everything you always wanted to know about Google… • 24
25. Slide 25: Going further : are Google’s key success factors limited to Google • Our conviction : Every company innovating in the digital industry must address and capitalize on the 6 identified key success factors to perform on digital markets. • Our proposition : faberNovel proposes to align companies strategy, development projects and existing products with these factors to ensure success optimization and market performance. Download our comprehensive White Paper « Google’s key success factors » http://www.fabernovel.com ..……. December 2008 • Everything you always wanted to know about Google… • 25
26. Slide 26: Annex • Definition : network effects • Definition : two-sided market • Pricing of a two-sided market • Glossary • Financial datas • Acknowledgement • Contacts ..……. December 2008 • Everything you always wanted to know about Google… • 26
27. Slide 27: What is a network effect? • A network effect describes how a service becomes more valuable to its users as more people use that same service Phone’s utility is limited if The utility for a user According to Metcalfe’s the network is composed raises if the network law, the utility(U) of a of 2 users broadens network is proportional to the square of the number (n) of its users U ? k*n2 Network effects creates critical masses of users. They represent significant barriers to entry for competitors. ..……. December 2008 • Everything you always wanted to know about Google… • 27
28. Slide 28: What is a two-sided market? • A two sided market consists of a platform allowing 2 groups of clients/providers to interact and which optimizes the revenue distribution among these groups with the objective of maximizing market sizes. Exemple of the video game market Crossed network effects Internal Price A Price B network Side A Side B effects Developers Consumers Network effects in action Internal effects Crossed effects • A potential market for a • Utility to a new developer developer gets bigger as more increases as the community of consumers enter the said market developers grows (shared knowledge) • The number of games available to the consumer increases with • Utility to a new consumer the number of developers increases as the community of working on the platform consumers grows (secondhand market) ..……. December 2008 • Everything you always wanted to know about Google… • 28
29. Slide 29: Pricing of a two-sided market Price A > 0 Price A < 0 Side A Platform1 Face A Platform1 • The platform may charge a side • … or subsidize a side • Example 1 : Apple Appstore charges • Example 3 : Google Android finances developers by taking a revenue share developers through a contest on sold applications • Example 4 : Youtube finances video • Example 2 : Microsoft makes content providers consumers pay for video games Who should you be charging? Who should be subsidized? The platform must subsidize the groupe that is most price-sensitive and charge the group that is most sensitive to the other group’s size. 1 Provided the sum of price A + price B is a fixed figure, a platform financing a group automatically charges the other group and vice versa ..……. December 2008 • Everything you always wanted to know about Google… • 29
30. Slide 30: Financial data (1/2) Revenues and Net margin (M$) Revenue distribution/activity (B$) 439 1466 3189 6139 10604 16594 Total 16,6 Revenues 0,2 1% CAGR Revenues 02-07 : 107% Net CAGR Net margin 02-07 : 112% Licences and other 5,8 34% margin revenus Partner websites (AdSense) 10,6 4203 3077 Google web sites 1465 65% 100 106 399 CA 2007 2002 2003 2004 2005 2006 2007 Net margin’s growth outperform Most of Google’s revenues still revenues’ growth come from its own websites 78% 79% 85% 2005 2006 2007 Advertising revenue share to partner web sites is increasing2 and is the highest of the market ..……. Source: Google financial tables 2007 2 : calculated as Traffic Acquisition Cost/Google Network web sites revenues December 2008 • Everything you always wanted to know about Google… • 30
31. Slide 31: Financial data (2/2) Advertising revenues Turnover Traffic acquisition costs R&D investments 6139 10604 16594 16,4 10,5 30,1% 599 1229 2120 34,9% 6,1 31,5% 9,0% 11,0% 12,0% 2,1 3,3 4,9 2005 2006 2007 2005 2006 2007 Controlled traffic acquisition costs High R&D investments 34,9% of advertising revenus in 2005 vs 30,1% in 2007 +88%/year between 2005 and 2007 + 26% 1,9 2,4 2005 2006 Data center costs are under control In Billion $ : +26% 2006/2007 (vs +72% revenues) ..……. Source: rapport annuel Google 2007 December 2008 • Everything you always wanted to know about Google… • 31
32. Slide 32: Glossary • API : application programming interface. Standardized programming protocol allowing applications to communicate • Internet Backbone : main trunk connections of the Internet, made up of a large collection of interconnected high-capacity data routes and core routers that carry data across the countries and continents • Crowd sourcing : act of outsourcing a task to users • Data center : facility used to house computer systems and associated components • O.S. : operating system • Overlay ad : clickable text advertising displayed on a video • Scalability: property of a process, which indicates its ability to handle growing amounts of work easily • Search Engine Optimization : process of improving the volume and quality of traffic to a web site from search engines via natural search results (as opposed to paid search results) • Speech To Text : technology converting spoken words to machine-readable input such as text • Walled Garden : closed or exclusive set of information services provided for users by a network or portal ..……. December 2008 • Everything you always wanted to know about Google… • 32
33. Slide 33: Acknowledgements To faberNovel contributors : • Amaury de Buchet, VP Consulting • Cyril Vart, VP Strategy & Development • Alexis Arquié, Junior Project Analyst • Mounir Fassouane, Junior Project Analyst To the bloggers : • Olivier Ertzscheid from affordance.typepad.com/ • Google Operating System : googlesystem.blogspot.com/ • Richard MacManus from readwriteweb.com/ • Techcrunch.com & Mobilecrunch.com/ • Frédéric Cavazza from fredcavazza.net/ ..……. December 2008 • Everything you always wanted to know about Google… • 33
34. Slide 34: Stéphane Distinguin Founder and CEO stephane.distinguin@fabernovel.com Cyril Vart VP Strategy & Development cyril.vart@fabernovel.com Pierre Fremaux Project Analyst pierre.fremaux@fabernovel.com Matthieu Lecomte Junior Project Analyst matthieu.lecomte@fabernovel.com Tél. : +33142722004 ..……. December 2008 • Everything you always wanted to know about Google… • 34

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In this article, you
’ll find 23 excellent, print-ready cheat sheets for HTML/HTML, CSS, and JavaScript (including MooTools and jQuery).

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Sergey Brin/Larry Page (Google founders)

The two people most likely to carry on Bill Gates’ legacy also happen to be his biggest nemeses. Google founders Sergey Brin and Larry Page are already nerdy, brainy billionaires and are taking on Microsoft on multiple fronts—from search to online applications. And, in fact, when it comes to making money on the Web, it is Microsoft that is trying to catch up to Google.

Just like Windows is the starting point for everything people do on their PCs, for many people Google’s search engine is the starting point for everything they do on the Web. Brin and Page are building on top of that with online applications and other products aimed directly at Microsoft’s other businesses such as Gmail (Outlook), Google Docs (Office), and Android (Windows Mobile).

Jeff Bezos (Amazon founder and CEO)

Jeff Bezos, one of Seattle’s other billionaires, is best known for bringing shopping online with Amazon.com. But over the past few years, Bezos has started selling something besides books and digital cameras. In his eyes Amazon.com is just a massive Web application that sits in the cloud.

He is now offering Amazon’s “cloud computing” infrastructure to other companies that don’t want to have to build their own data centers to store data or run a Web applications. Through a series of “Web services,” companies can buy data storage, compute cycles, and database access from Amazon, and pay only for what they use. In this way, Bezos is helping to define the next era of Web-scale computing.

Mark Zuckerberg (Facebook founder and CEO)

If there is one person who reminds people the most of the young Bill Gates, it is Facebook founder Mark Zuckerberg. The 24-year old is a Harvard drop-out (like Gates) and is building his company with the focus and singular vision of making it the operating system for social applications.

The rise and success of Facebook is largely due to the fact that it is a platform for Web applications created by other developers (just as Windows is a platform for PC applications). And Zuckerberg has created a mini-economy around Facebook. Maybe these similarities are what convinced Microsoft to invest $240 million in Facebook last fall.

Marc Benioff (Salesforce founder and CEO)
Just like consumer applications, enterprise software is moving to the Web as well. One of the first entrepreneurs to capitalize on this shift is Marc Benioff. His company, Salesforce.com, began by selling browser-based customer relationship management (CRM) software as a subscription service over the Web.

Taking a page from the Bill Gates playbook, he’s extended his pay-by-the-drink concept to other areas of enterprise software and opened up Salesforce.com as platform for other companies to build and distribute their own Web-based software.

Max Levchin (Slide founder and CEO)

A Ukrainian-born programmer, Max Levchin started his career as the co-founder and CTO of PayPal, which was sold to eBay for $1.5 billion in 2002. Two years later he founded Slide, which pioneered a new type of software known as a widget. Slide’s widgets typically draw data from the Web and are geared towards self-expression. They can appear on your desktop or added to other Websites such as Facebook.

Slide’s Facebook applications, which include FunWall and SuperPoke, boast more active users than any other company’s. In January, Levchin raised $50 million for Slide, giving the company a valuation of half a billion dollars.

Kevin Rose (Digg founder)

If software is becoming social, there is no better example than Digg. The popular news site attracts 15 million visitors a month, according to comScore. Digg relies entirely on its readers to submit headlines and links to articles, and vote them to the homepage.

Digg is the brainchild of founder Kevin Rose, who has mastered the art of teasing wisdom from the crowd. It is not so much about the underlying algorithms that power Digg as it is about setting the right conditions to give people the incentive to contribute.

Evan Williams (Twitter)

The Web at its core is a communications medium, and Evan Williams keeps coming up with new ways to for people to communicate over it. He founded Blogger, one of the original and largest Web-based blogging services, which he sold to Google in 2003. More recently he co-founded Twitter, a micro-blogging service that lets people broadcast short text messages of no more than 140 characters.

By limiting the length of the messages, Twitter effectively lowers the barriers to communicating. After all, it is much easier to send a Tweet than to write an entire blog post.

The service is growing so fast that it is hitting serious scaling issues and if often down. But the company raised $15 million to help solve those issues. One of the investors: Jeff Bezos

Stewart Butterfield/Caterina Fake (Flickr founders)

Husband-and-wife team Stewart Butterfield and Caterina Fake created the most successful photo-sharing site on the Web with Flickr. By default, every photo uploaded to the site is public to encourage sharing and can easily be displayed on other sites as well. Flickr shows what can happen when you take personal media and put it online. Instead of being forgotten in a shoebox, a photo you took two years ago can be discovered and enjoyed by someone halfway around the world.

After it was purchased by Yahoo in 2005 for an estimated $35 million, Butterfield and Fake stayed on. The service kept growing and eventually replaced Yahoo Photos. It now attracts 54 million visitors a month worldwide, according to comScore. Both recently departed Yahoo, which is undergoing management turmoil, but keep an eye on them to see what they do next.

Paul Buchheit and Bret Taylor (FriendFeed founders)

On the Web, it can be hard to keep track all the information and services that are available. FriendFeed, a startup that launched publicly earlier this year, helps you manage the information overload by pulling together the online activities of all your friends in one place. You can see all of your friends’ blog posts, Twitters, Flickr photos, stories they vote up on Digg, and YouTube videos they like, among other things, all in one feed. This turns out to be an effective, and addictive, information filter.

Two of FriendFeed’s co-founders are ex-Googlers Paul Buchheit and BretTaylor. Buchheit was the 23rd employee at Google, where he created Gmail and implemented many of its innovative features. He developed the original prototype of Google AdSense, and was responsible for Google’s famous “Don’t be evil” motto. Taylor led the development of Google Maps and Google Local.

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lol

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There are the books you read, and then there are the books that change your life. We can all look back on the books that have shaped our perspective on politics, religion, money and love. Some will even become a source of inspiration for the rest of your life. From a seemingly infinite list of books of anecdotal or literal merit, we have narrowed..

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As a web developer, if you
’re to be successful, you have to have a constant yearning for learning new things. Here’s 20 websites that have broadened my knowledge, expanded my skill set, and improved the quality and efficiency of my web development projects.

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1. Set the theme. “There is something in the air today.” With those words, Jobs opened Macworld. By doing so, he set the theme for his presentation and hinted at the key product announcement—the ultrathin MacBook Air laptop. Every presentation needs a theme, but you don’t have to deliver it at the start. Last year, Jobs delivered the theme about 20 minutes into his presentation: “Today Apple reinvents the phone.” Once you identify your theme, make sure you deliver it several times throughout your presentation.

2. Demonstrate enthusiasm. Jobs shows his passion for computer design. During his presentation he used words like “extraordinary,” “amazing,” and “cool.” When demonstrating a new location feature for the iPhone, Jobs said, “It works pretty doggone well.” Most speakers have room to add some flair to their presentations. Remember, your audience wants to be wowed, not put to sleep. Next time you’re crafting or delivering a presentation, think about injecting your own personality into it. If you think a particular feature of your product is “awesome,” say it. Most speakers get into presentation mode and feel as though they have to strip the talk of any fun. If you are not enthusiastic about your own products or services, how do you expect your audience to be?

3. Provide an outline. Jobs outlined the presentation by saying, “There are four things I want to talk about today. So let’s get started…” Jobs followed his outline by verbally opening and closing each of the four sections and making clear transitions in between. For example, after revealing several new iPhone features, he said, “The iPhone is not standing still. We keep making it better and better and better. That was the second thing I wanted to talk about today. No. 3 is about iTunes.” Make lists and provide your audience with guideposts along the way.

4. Make numbers meaningful. When Jobs announced that Apple had sold 4 million iPhones to date, he didn’t simply leave the number out of context. Instead, he put it in perspective by adding, “That’s 20,000 iPhones every day, on average.” Jobs went on to say, “What does that mean to the overall market?” Jobs detailed the breakdown of the U.S smartphone market and Apple’s share of it to demonstrate just how impressive the number actually is. Jobs also pointed out that Apple’s market share equals the share of its top three competitors combined. Numbers don’t mean much unless they are placed in context. Connect the dots for your listeners.

5. Try for an unforgettable moment. This is the moment in your presentation that everyone will be talking about. Every Steve Jobs presentation builds up to one big scene. In this year’s Macworld keynote, it was the announcement of MacBook Air. To demonstrate just how thin it is, Jobs said it would fit in an envelope. Jobs drew cheers by opening a manila interoffice envelope and holding the laptop for everyone to see. What is the one memorable moment of your presentation? Identify it ahead of time and build up to it.

6. Create visual slides. While most speakers fill their slides with data, text, and charts, Jobs does the opposite. There is very little text on a Steve Jobs slide. Most of the slides simply show one image. For example, his phrase “The first thing I want to talk to you about today…” was accompanied by a slide with the numeral 1. That’s it. Just the number. When Jobs discussed a specific product like the iPhone, the audience saw a slide with an image of the product. When text was introduced, it was often revealed as short sentences (three or four words) to the right of the image. Sometimes, there were no images at all on the slide but a sentence that Jobs had delivered such as “There is something in the air.” There is a trend in public speaking to paint a picture for audiences by creating more visual graphics. Inspiring presenters are short on bullet points and big on graphics.

7. Give ‘em a show. A Jobs presentation has ebbs and flows, themes and transitions. Since he’s giving his audience a show instead of simply delivering information, Jobs includes video clips, demonstrations, and guests he shares the stage with. In his latest keynote, the audience heard from Jim Gianopulos, CEO and chairman of Fox Filmed Entertainment, and Paul Otellini, CEO of Intel ((INTC). Enhance your presentations by incorporating multimedia, product demonstrations, or giving others the chance to say a few words.

8. Don’t sweat the small stuff. Despite your best preparation, something might go wrong as it did during the keynote. Jobs was about to show some photographs from a live Web site, and the screen went black while Jobs waited for the image to appear. It never did. Jobs smiled and said, “Well, I guess Flickr isn’t serving up the photos today.” He then recapped the new features he had just introduced. That’s it. It was no big deal. I have seen presenters get flustered over minor glitches. Don’t sweat minor mishaps. Have fun. Few will remember a glitch unless you call attention to it.

9. Sell the benefit. While most presenters promote product features, Jobs sells benefits. When introducing iTunes movie rentals, Jobs said, “We think there is a better way to deliver movie content to our customers.” Jobs explained the benefit by saying, “We’ve never offered a rental model in music because people want to own their music. You listen to your favorite song thousands of times in your life. But most of us watch movies once, maybe a few times. And renting is a great way to do it. It’s less expensive, doesn’t take up space on our hard drive…” Your listeners are always asking themselves, “What’s in it for me?” Answer the question. Don’t make them guess. Clearly state the benefit of every service, feature, or product.

10. Rehearse, rehearse, rehearse. Steve Jobs cannot pull off an intricate presentation with video clips, demonstrations, and outside speakers without hours of rehearsal. I have spoken to people within Apple who tell me that Jobs rehearses the entire presentation aloud for many hours. Nothing is taken for granted. You can see he rehearsed the Macworld presentation because his words were often perfectly synchronized with the images and text on the slides. When Jobs was showing examples of the films that are available on the new iTunes movie rental service, one poster of a particular film appeared at the exact moment he began to talk about it. The entire presentation was coordinated. A Steve Jobs presentation looks effortless because it is well-rehearsed.

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A list of common mistakes with e-commerce shopping cart design were identified in a previous issue of Usability News. This article revisits that list and reviews how 500 of the top Internet retail sites of today implemented their shopping cart design.

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“That said… It can still get better. Online shopping is in, if not infancy, at least a toddler stage. The advances that brought us here have made the process simpler and easier than ever, but some sites still haven’t caught on.”

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Create an instant bar graph in each cell of an Excel spreadsheet. Reminds me of something Edward Tufte would recommend for information communication.

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So many students feel lost it when it comes to effective study and research techniques, especially when it comes to the dreaded term paper. These tips can help you pound out a better paper in a shorter amount of time.

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It has been almost two years since I left the footstep of college, and the time since then has been blissfully wonderful.  With a mixture of black and white, I have made numerous ambiguously decisive choices.  A quick glance at the rear view mirror, I can reflect back on the fading roads behind, and realize all generosity and kindness I have received.  As some of my close friends and family know, January 2007 will be a new starting point for me.  I am miles and miles away from GSU, and with every step, I am determined to make progress.

Below is a snapshot of roadblocks and pitfalls some have made as Business Analyst.

• Misguided or unimaginative analysis, such as its alleged recommendation in 1983 to AT&T that cellular phones would be a niche market
• Lack of coordination among multiple engagement teams working with one client
• Lack of originality in coming up with ideas; restating the obvious with business jargon
• Groupthink, as its consultants strive under time pressure to converge on a unified set of findings and recommendations
• Hubris or arrogance toward executives, in particular underestimating the difficulty of implementing recommendations
• Emphasis on “current thinking” that may amount to little more than forcing the latest business theories on clients without taking a longer-term view
• Emphasis on shareholder value, often at the price of investment and long-term strategy. For example, this may have doomed the British railway company Railtrack, which collapsed after a series of accidents, allegedly after following McKinsey’s advice to reduce spending on infrastructure and return cash to shareholders instead
• Concern that it aims to become an expensive permanent presence with clients, rather than focusing on solving a clear set of problems, thereby functioning as a substitute for proper leadership and organization. This is an increasing concern in the public sector, where McKinsey has become involved with agencies such as the British National Health Service

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Project Management (and life) Wisdom straight from a project managers.

Leadership

1. Keep your approach friendly: People are not looking to make friends at work, but refraining from114689384_cfc52799ed an aggressive approach towards your employees is a good idea. The whip – your – team – into – submission approach worked with the “Pyramids of Giza” project – but it is outdated now. The days when you could bully and scare the s*** out of your team are over. Be diplomatic and assertive, instead.

2. When taking on a new project/responsibility at work, convey to your management the extent of authority you need in order to effectively execute your project. Ensure that you have the authority that you need before you start work on your project.

3. Being people-oriented does not mean that you cannot be task-oriented (and vice-versa).

4. One-to-one: Meet regularly with your team members on a one-on-one basis. When you apply this principle to your kids, it makes each of them feel special.

5. Nobody appreciates a micro-manager: Don’t sit on the heads of your team members.

6. Giving autonomy does not mean not keeping track of progress.

7. Learn how to manage people (more difficult than it sounds, believe you me!), and the rest of your job will that much easier to execute.

8. As a leader, you should have the ability to bind the team together and give them a sense of “we’re in this together.” For instance, as the head of your family, you can promote bonding by setting aside time for family board games, story-telling sessions, family picnics, family prayers and the like.

9. Stay visible – As a leader, you need to be visible in good times, as well as when there are problems to address.

10. Your reputation depends on your perceived credibility and integrity: A very basic item for leaders is to ensure that promises made are promises kept. If action is committed, it must be performed.

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Savvy Web marketers realize that consumers turn to the Web to shop and to learn about companies, which is forcing them to market beyond just the company website.

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“As more bogus sites put up more Adsense, and then try to game Google, does it increasingly hurt Google not just from advertisers getting pissed off at worthless clicks, but also worsen Google’s organic search results?”

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Marcelo Magnasco, professor and head of the Mathematical Physics Laboratory at Rockefeller University, has published a paper that may prove to be a sound-analysis breakthrough, featuring a mathematical method or �algorithm� that�s far more nuanced at transforming sound into a visual representation than current methods.

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Ten new tech products Google should develop. Based on existing technology. Screenshots included!

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Instead of being cowed by activists, scientists should trumpet the virtues of animal testing.

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“Undaunted, we assembled a panel of 30 respected game theorists around the world, and we sent them a survey asking, “Can you think of any examples of real, live companies that have consciously applied game-theoretical concepts to a real business problem?” The response was . . . a deafening chorus of head scratching.”

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