Alliance Blog Reviews

Google has again shaken the Internet tree in a way that will raise more than a few eyebrows. In a nutshell, Google is reassessing its working relationship with the world’s largest potential market, China, as a result of recent security breaches. How this plays out over time could have significant impact on how China and the world get along economically. Google’s official blog gives an overview in the first paragraph of the post that is both informative and scary. Like many other well-known organizations, we face cyber attacks of varying degrees on a regular basis. In mid-December, we detected a highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property from Google. However, it soon became clear that what at first appeared to be solely a security incident–albeit a significant one–was something quite different. How it was different is that the targets of much of security breach were Chinese activists (read: people who prefer freedom over censorship) who had Gmail accounts. A quick summary of the main points of this new approach to China from Google is summed up like this. It wasn’t just Google who was targeted and hit. There were 20 other US companies and they are apparently in the process of sorting this out themselves. Google states: “We have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists. Based on our investigation to date we believe their attack did not achieve that objective. Only two Gmail accounts appear to have been accessed, and that activity was limited to account information (such as the date the account was created) and subject line, rather than the content of emails themselves. “ There was routine third party access of Gmail accounts of human rights activists related to China who are based in China, US and Europe. This access is likely due to malware and phishing scams. Google then recommends for folks to be up to date on their security for their computers and is careful to “play nice” with China by saying In the last two decades, China’s economic reform programs and its citizens’ entrepreneurial flair have lifted hundreds of millions of Chinese people out of poverty. Indeed, this great nation is at the heart of much economic progress and development in the world today. They also point out that when they entered the Chinese market in 2006 they were doing it with a watchful eye. So what’s the result of this? These attacks and the surveillance they have uncovered–combined with the attempts over the past year to further limit free speech on the web–have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China. The decision to review our business operations in China has been incredibly hard, and we know that it will have potentially far-reaching consequences. We want to make clear that this move was driven by our executives in the United States, without the knowledge or involvement of our employees in China who have worked incredibly hard to make Google.cn the success it is today. We are committed to working responsibly to resolve the very difficult issues raised. So Google makes a stand that says they are not going to censor their results and if there is no way to reconcile then they may need to move on. While the Chinese people are clearly in favor of Baidu as their engine of choice , if Google were to say that they will not do business in China what kind of pressure does that place on other companies to possibly isolate the biggest and fastest developing market in the world? This could get interesting.

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Google and China: Maybe They Can’t Get Along

Two weeks ago, it looked like Google might have been . . . well, fibbing. Back in June, the search engine announced that they would no longer redistribute “link juice” around nofollowed links , effectively deprecating the practice of PageRank sculpting. But late last month, it looked like the technique was still effective when SEOmoz published some research to that effect. Not so much, it turns out. Today, Mozzer Danny Dover revisits the tests he used in the original post and shows that the results were, in fact, inconclusive . The short reason is that the test didn’t include enough data to be statistically significant. He’d have to repeat the test with 168 domains (instead of the 20 he used) to assure that the results were meaningful and not merely a fluke. Apparently, there’s been some backlash against Danny and SEOmoz for their innaccurate information. Danny didn’t realize his error until Darren Slatten corrected him in the comments two days after the post had gone live. Naturally, it was too late to unring the bell—and a number of people were very upset that SEOmoz would post something misleading or outright wrong. In his correction post, Danny points out that this is just another example of the power of the Internet. I think it’s good that Danny did more than just update the old post, also publishing a new post to correct the misinformation (and apologize). Two weeks after the correction is fairly quick to reanalyze the data, though it’s possible he could have acted even faster. This is also a microstudy on reputation management and transparency, something we’re a little passionate about around here. As a reminder, back in August, Matt Cutts told SEOmoz that it’d be okay to keep nofollow links in place, though when building new sites or redesignin old ones, PageRank sculpting shouldn’t be a consideration. What do you think? Did everyone handle this situation well?

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Google Didn’t Lie After All

Maybe you can have too much of a good thing. As the Internet allows advertisers to slice and dice large segments of desirable markets into thinner, more defined slices it also creates something that is much less desirable: smaller profits. How is that you say? How is it possible to make less on my advertising spend when I am advertising directly to the group that most needs or wants my products? Well, it’s simple supply and demand. While you are targeting a much more defined market you are not going to be alone in that quest to advertiser to just the people that will buy. Remember those pesky competitors? They want those people too because their claim is that they are better than you. Now you are going to find a price war that drives up costs for advertising and makes customer acquisition costs rise which in turn hurt the bottom line. So maybe there is too much of a good thing after all. MediaPost tells about a study performed by the MIT School of Management that has looked at this in detail Professor Alessandro Bonatti, working with Yale University economics professor Dirk Bergemann on this research, says “… newspapers have a very limited ability to target audiences… specialized magazines can do better… Google has a very good ability to target who’s browsing each page… (though) online advertising has the potential to drive out traditional advertising, it does not necessarily follow that online advertisers will make more money… ” Bonatti continues, “…as technology keeps improving, more and more web sites can sell very narrow products to very specialized audiences… with lots of people targeting the same audience the profits to be made through specialized advertising become more and more spread out… instead of competing for one large pool… you will have price war in each targeted segment as the slice gets more and more narrow.” Bonatti concludes that, “… the better the technology, the lower the profits for advertisers… “ Not the news that advertisers want to hear but it sure is music to the ears of the niche ad networks that attract these more narrowly defined groups. Advertising price war? We’re in! Woo-hoo! Different verticals are responding more rapidly and it also is dependent on just how far CPM’s fell during this downturn / recession / economic morass. Real estate is seeing an increase in CPM’s jumping 17% from Q2 to Q3 of last year while foodies are driving that category up almost 91% in the same period. Here is a chart from Adify Vertical Gauge for you to gloss over and wonder what it really means. So be careful what you wish for advertisers. Sure it’s great to advertise as close to the buyer as you can but you’re not the only one with that strategy. Let’s hope you are the one with the deeper pockets at least.

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For Ads the More Targeted May Mean Less Profitable

It’s hard to believe that it’s already been almost one year that Carol Bartz has taken the top position at Yahoo! She officially celebrates the one-year mark next week but is taking a look back at what was probably a whirlwind event no matter how much experience she brought to the table. Bloomberg reports that Bartz recently gave herself an interesting grade for her performance for the year: a B-. Why is that interesting? It’s interesting to me because it seems to be pretty honest. It’s saying “Hey, I did OK and everything is OK but there is room for improvement.” I appreciate the honesty because she places herself precariously close to a C grade, which is just average. So what were Ms. Bartz’s own words? Carol Bartz gives herself a B-minus in her first year as chief executive officer of Yahoo! Inc., saying she could have moved faster to reorganize the company and strike a Web-search agreement with Microsoft Corp. “It was a little tougher internally than I think I had anticipated,” Bartz, 61, said in an interview at Yahoo’s headquarters in Sunnyvale, California. “I did move fast, but this is a big job.” The Bloomberg article paints the picture of Bartz being dealt a ‘tough hand’ (does this writer also cover politics for them?) which can be perceived as the truth, an excuse or a combination of the two. You’ll have to make the call on that one. Her year though started with a lot of work to clean up that ‘tough hand’ which did include dismal economic conditions overall. After becoming CEO, Bartz cut her staff by 5 percent, shuttered underperforming businesses such as the GeoCities Web- hosting site and installed her own management team. Then she broke out the big pen for “boat loads” of fun in the Microsoft, bingahoo, Ya-bingaroo or (insert favorite name here) deal in July, which began the end of the era of Yahoo as a search engine. A partnership with Facebook was thrown in for good measure as well. Now the company is concentrating on its strengths and trying to reclaim its identity in a manner of speaking. The company also has been hiring people for sales and engineering, tapping into the savings generated by its cost- cutting efforts. “A very good company kind of got buried,” Bartz said. “It is coming out.” Last year also saw some pretty dismal financial performance but Bartz is unapologetic which comes as no surprise. Despite these numbers the stock was up 38% for the year. Go figure. Yahoo’s sales have fallen for four straight quarters, and its stock trailed the Nasdaq Composite Index in the past year. “We came out of one of the worst climates ever,” Bartz said. “And if you look at growth of Fortune 500 companies, only being down 12 or 15 percent is damn good. I’m not going to apologize for our growth.” Funny how being down 12-15 percent can be spun into a sentence that implies growth where there was none. Anyway, now that the strains of “Auld Lang Syne” are fading fast, what does Bartz say is ahead for Yahoo? Bartz said she plans to do more acquisitions this year, probably of less than $1 billion apiece. Potential targets include overseas companies and data-analytics businesses that help advertisers assess their results, she said. Bartz said the company continues to improve its products, such as its home page and e-mail service, though she didn’t give specifics. Last year, Yahoo unveiled a new version of the home page, the site’s first major upgrade since 2006. Yahoo is likely going to need to make some serious noise in the upcoming months to be heard above the din that is being made by Google and all the others in the Internet space. What do you think the upcoming year(s) have in store for them?

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Yahoo CEO Carol Bartz Gives Herself A Grade for Her First Year

Tweets appear to be a pretty powerful 140 characters in some areas these days. In fact, based on this story there may be a whole new slice of the legal industry that can be created. Imagine the TV ad at 2 am “Has someone tweeted something about you that isn’t true? Have you suffered damage to your life in general because of a Twitter user with a mean streak? The Law Offices of Twit, Tweet and Twote can help you get your good name back one character at a time.” I just got a shiver up my spine just thinking about that as reality but in this new world order you never know. I bring this up because it appears that some people are not taking tweets lying down and taking legal action regarding comments. This is not the same as the imitator accounts suits that cropped up last year. This one (unfortunately) involves Kim Kardashian and a diet doctor (I am going to let you insert your own comments here because I don’t want to get sued but it’s so tempting). Media Post reports The doctor behind the Cookie Diet has sued celebrity Kim Kardashian for allegedly defaming him in on Twitter. The reality TV star allegedly tweeted in October that Dr. Sanford Siegal was “falsely promoting” that she was on the cookie diet. “Not true! I would never do this unhealthy diet! I do QuickTrim!,” she allegedly said via Twitter. “If this Dr. Siegal is lying about me being on this diet, what else are they lying about? Not cool!” In a lawsuit filed last week in state court in Florida, Siegal alleges that these statements are false and defamatory. The diet doctor also alleges that Kardashian — who reportedly earns $10,000 per tweet as an endorser — was on QuickTrim’s payroll at the time. This dust up occurred when the doctor linked to an article about his diet that claimed Ms. Kardashian was using his diet. A cease and desist ensued and the doctor took the link down. Here’s where the ‘pay per tweet’ issue takes center stage in light of recent FCC rules that have gone into effect. Regardless of whether Siegal can prove libel, the allegations in the case highlight some of the issues the Federal Trade Commission aimed to address with its new blogger rules. The FTC’s new guides, which took effect Dec. 1 (after the alleged Kardashian tweets), state that bloggers should disclose all material connections between themselves and companies whose products they write about. Kardashian allegedly touted QuickTrim while disparaging the Cookie Diet without disclosing that QuickTrim was paying her, according to Siegal’s lawsuit. So what’s the law here? You have Kardashian allegedly making money on a tweet but not making note of it. Do the new disclosure rules apply to ‘micro-bloggers’ as well as bloggers? Was the doctor legally responsible for linking to a third party article that was believed to be untrue? Apparently there is no clarity around this because different government agencies may see each situation differently. Some government agencies might view that link as an endorsement of the article’s content, said Eric Goldman, director of the High Tech Law Center at Santa Clara. In late 2008, the Securities and Exchange Commission said in proposed new guidance that companies could be liable for fraud if they link to material created by other publishers that contains false information — even though the federal Communications Decency Act says sites are immune from liability for material created by third parties. Despite the SEC guidance, Goldman says it’s not at all clear that either courts or government agencies would view the links to news articles on CookieDiet.com as problematic. “We don’t know the answer to the simple question: Are you endorsing content by linking to it?” So who will win on this one? We may never know. The laws and more importantly their enforcement are so new there is going to be some rough sledding ahead for some social media folks. These matters of law will take time to develop like all other Internet law has. With the economy still stumbling along and the litigious nature of our current society many might start looking for social media opportunities to hit the legal judgment lottery. As a result there may be a run on these kinds of things. While it will be interesting to watch this may serve as a cautionary event for many in the new world order of the blogosphere and micro-blogsphere alike. Or it may turn out to be a non-event. Your take?

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Social Media Lawsuits: Another 2010 Trend?

Google declined to go for the fake out as they unveiled the expected Nexus One today at their Android event . First spotted after employees received free phones last month , the Nexus has already created a media frenzy as the “real” Google phone—one that will be sold by Google through their web store (though manufactured, like so many other Android headsets, by HTC). So today is the formal announcement of the phone, along with the full rundown of the technical specs (available below). Search Engine Land , Read Write Web and many others are liveblogging the event, which features Google, Android and HTC engineers presenting not only the phone but an update on the progress and history of the OS. But we’ve been following Android for over two years now , so we’ll just stick to the Nexus news. Google has decided that their phone is so smart, it can’t even qualify as a “smartphone”—they call it a “superphone.” (Buzzwords FTW!) And for the low, low price of $529, one can be yours today. (Free engraving!) As per the rumor, the phone is available unlocked with no data plan included; T-mobile is the premiere partner for $80/month, but they’re not available just yet. Verizon and Vodafone are slated to join in spring. In the store you can have two lines of custom engraving added to the back of the phone (for free), and naturally checkout is through Google Checkout. The phone itself is pretty slick—with a fast enough processor and enough memory to run the “live wallpaper” and other apps in the background, multiple apps simultaneously and get some pretty good-looking graphics (if you’ve seen the Engadget video ). However, it’s not the game changer that the iPhone was. Processor: 1GHz Qualcomm Snapdragon processor 3.7″ AMOLED display Trackball at bottom which pulses and uses multicolor lights to notify of new calls and messages Light and proximity sensors (automatically dim backlight, etc.) 11.5mm (

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Google Premieres Nexus (Big Surprise)

It appears that not just the Year of Mobile is being christened this January but new competitive lines are being drawn as well between Internet giants Google and Apple. Yes, it’s time to officially deem Apple an Internet company in my opinion but you are always free to disagree. According to All Things Digital Apple is preparing to announce a purchase that virtually mirrors the acquisition made of AdMob by Google. Apple is ready to buy Quattro Wireless for $275 million. Apple had been in the mix for the AdMob deal but Google won that one. So as a result Apple and Quattro’s ad platform will be getting geared up to fight out the looming iPhone v. Droid device conflagration (great ‘over-the-top’ word, huh?) that could shape the future of how many people acquire information from the Internet. Quattro was already ID’d as a potential win as evidenced by investment and there are more players out there says All Things D: Waltham, Mass.-based Quattro has raised close to $30 million from two main venture investors–Highland Capital Partners and Globespan Capital Partners. Founded several years ago, its clients include Ford (F), Disney (DIS) and the National Football League. Competitors in the space are many still, despite these big acquisitions, including Millenial Media and Jumptap, both of which are now clearly in play to other players from telcoms to other device makers to big Internet companies. So get ready for the battle that lies ahead. Who are you putting your money on?

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2010: The Year of Google v. Apple?