A Betterfly Personal Local Search Idea for Yahoo! or Google

It rarely write about private companies other than Facebook but an intriguing company named Betterfly (http://betterfly.com) caught my attention, specifically for how it addresses local personal search and how Google, Yahoo!, and AOL could benefit from having this company within their fold.

Betterfly is a New York City based local search engine that promises to match consumers seeking for what they term Betterists, - teachers, tutors, coaches, trainers, or anyone else who offers a service that helps others learn.

The company's press release states that it is the first of its kind search engine to exclude companies in the search results, but rather present individuals skilled in a particular service. Like other e-commerce and advertising sites, Betterfly, allows clients of the Betterists to leave reviews. But unlike other sites, the Betterists must first verify that the person seeking to leave a review was indeed a client. This was designed to prevent third parties from leaving negative or positive reviews and potentially skew the review and ratings system. The bias here is that the Betterist who knows that a client will leave a negative review can simply state that they never serviced the client. More work needed there.

Nonetheless, I think the idea is unique and the search engines like Google, Yahoo, and Microsoft could benefit from Betterfly's model to serve more personalized local search results. The site offers an alternative and frankly a step up to Craigslist in that it allows the Betterists to host a webpage page with their qualifications, it has reviews, and the interface is much more user friendly.

Betterfly also facilitates the transaction with the calendar service, a feature absent from Craigslist.

Google and Yahoo! should take a look at Betterfly as a way to enhance and offer a better search result set.


Read More!

YouTube should become a subscription channel

With the news from the New York Post that Google is looking to hire an Investment Banker with contacts in Hollywood to help sign content deals I could not help but think further that Google should become a subscription streaming channel. Couple that with speculation that Google is schedule to launch Smart TV with Sony, the concept thickens.


This is a logical end to what has been an ordeal to figure out how to effectively monetize the site. The Post also states that Google may buy a film library. Makes sense in that it can have exclusive access to the films and bypass troubles signing content deals with other studios. MGM comes to mind.

Ultimately I think Google could charge a $5 to $10 monthly fee for streaming movies and TV shows and the company could take that further and seek to become a channel. That off course rest with the idea of getting carriage on the cable, satellite, and telcos. But using Epix as a guide I believe YouTube can accomplish that.







Read More!

Google and Intel teaming with Sony to develop Google TV

Citing sources with knowledge of the project, the Times reports that Google and Intel have teamed with Sony to develop Google TV, which will bring the Web into the living room through a new generation of televisions and set-top boxes. The partners reportedly envision technology that will make it as easy for TV users to navigate Web applications. Google intends to open the Android-based platform to developers. The companies are said to have selected Logitech (LOGI) to develop a remote with a tiny keyboard. The project has been under way for several months. From the New York Times. Read More!

Implications of Google's 14% Y/Y Decline in CPC Pricing

Google revealed in its 10K that CPC pricing declined 14% YoY compared to Street back of the envelope estimates of a 10% YoY decline. Google attributed the decline to FX impacts as well as advertisers lowering bids on keywords due to the economy.

It is difficult to quantify which of the two had a greater impact on the CPC growth rate, however, the latter of the two is more important and has a direct impact on Google’s business model.

From Google: “ we believe advertisers managed their advertising costs in response to the general economic downturn….Specifically, we believe that as a result of the general economic downturn, advertisers, in aggregate, have lowered their bids for keywords in response to a decrease in the sales they are able to make per paid click”

Key here is whether this is a cyclical or secular change. If it is cyclical, then this is a positive for Google as advertisers will likely adjust pricing upward as/if the economy recovers. If this is a secular change then this adjustment to Google’s model is a negative and will impact Google’s growth multiple leading to a decline in the stock’s valuation.

Initially, I was inclined to write-off the 14% YoY decline as a cyclical event and nothing more. Supporting this is commentary coming out of Time Warner and New York Times’ (About Group) earnings conference calls that CPC pricing on their respective search businesses actually increased YoY. This was surprising to me given that both Google and Yahoo! reported CPC declines in 1Q09.

Nonetheless, what gives me pause is the precedent secular decline in other ad mediums, namely radio and newspapers. Pricing for those two mediums will likely never recover.

In Google’s case, a permanent deflationary scenario in pricing cannot be ruled out, I believe. My Google model and several other Google models on Wall Street have CPC pricing rebounding in 2010. That assumption, I admit, can turn out to be wrong. Given that volume (search queries) has turned out to be relatively resilient in this recession and that Google owns the volume game now, pricing is the one metric I believe should get more scrutiny.
Read More!

Google Making Progress With Deep Web Content

In an article in Computer World, Alfred Spector, Google’s VP of research, states that Google has developed technologies that enable the Google crawler to get content hidden behind passwords and user names.

This was in response to the following question:

Do you have plans to go after that huge body of information on the Internet that is not currently searched?


His answer:

“There is stuff on the Web, the so-called Deep Web, that is only “materialized” when a particular query is given by filling fields in a form. Since crawlers only follow HTML links, they cannot get to that “hidden” content. We have developed technologies to enable the Google crawler to get content behind forms and therefore expose it to our users. In general, this kind of Deep Web tends to be tabular in nature. It covers a very broad set of topics. It’s a challenge, but we’ve made progress.”

Several companies are currently developing technologies to access what is known as the Deep Web. We profiled Deep Peep recently. Google’s purchase of Transformics is helping them compete in what will be an important aspect of online search.
Read More!

Ballmer Will Wait Until Bartz Comes Calling

So it turns out that a few investors were incorrect in that Microsoft was going to make a move for Yahoo's search business ahead of the appointment of a new CEO. So now I believe that in choosing Carol Bartz as Yahoo's new CEO, a transaction with Microsoft will be pushed back several months.

I have said in the past that a transaction is not imminent, despite the rampant speculation in the press. See old write-ups here, here, and here. But I also believe that Microsoft has no choice but to acquire Yahoo if they are serious about having a meaningful presence in online advertising. Microsoft cannot, in my view, close the 3% to 60% gap it has with Google on global search share by organic means. They need to acquire Yahoo if they are serious about online advertising. There is currently a market demand shift to performance based advertising, of which, search is the dominant form. Thus, search is likely to become a much more significant component of online advertising over the next few years.

Now back to Carol Bartz. Her successful history at Autodesk will no doubt be an asset to Yahoo in helping bring about a cogent strategic focus, cost discipline, and organizational control, which had been quite loose over the years.

But her challenges are enormous. Sure Yahoo is one of the leading Internet assets in the world, is number one in display advertising, a solid number two in search, has a strong balance sheet and has significant off-balance sheet assets. However, Yahoo has a struggling display business that is facing enormous headwinds due to the recession, the search business continues to lose share to Google, and the paid content business is largely irrelevant and a slow grower at best. Think about it. Which one of Yahoo's three core business are you willing to hang your hat on?

Other than hopes of an acquisition, there is no clear reason to own Yahoo's shares. However, I still believe that it make sense to put personal money into Yahoo and just sit and wait for an action with Microsoft.

Wall Street appeared to applaud the hiring mainly because it removes an overhang and not because they believe Bartz will do something magical to turn this business around. She appeared overly confident on the conference call with analysts but she will soon come to realize that she is in over her head. Internet businesses are vastly different than software businesses. Ask Microsoft.

This brings me to my final point on the MicroHOO issue. A transaction will occur when Bartz realizes that there is nothing that Yahoo could do to improve its competitive position. Market dynamics are too unfavorable for Yahoo. She will then pick up the phone and call Ballmer and ask to be acquired. Ballmer knows this and is willing to wait it out. End of story.

But for now the saga continues.
Read More!

Can A Monkey Run The State of California?

The Wall Street journal is reporting that Meg Whitman, former CEO of eBay, is mulling a run for governor of the state of California. They are drawing this conclusion after Ms. Whitman withdrew from the boards of eBay, P&G, and Dreamworks.

Hopefully, not many eBay sellers reside in California else her chances will be severely diminished. But seriously, her opponents will likely look to her leadership of eBay to form assessments about her potential to lead the state. Surely, Meg (as she is referred to in the Internet community) led eBay to one of the most influential new economy companies. However, she then failed to foresee the difficulties the company currently faces and did not implement strategies that would have saved the company from its structural problems. How much opponents will point to her lack of vision is yet to be seen, if indeed she does run. I wish her well if she runs but I can already foresee the level of discontent from the eBay seller community. Safe to say that she likely won't get their votes. Next up is Eric Schmidt, CEO of Google, and his political aspirations (see my previous write-up on that here).

P.S. - The title referred to a comment Meg made, "A Monkey Can Run This Train", when eBay's auction business was experiencing significant growth.

From The Wall Street Journal:
Meg Whitman stepped down from the boards of Procter & Gamble Co., eBay Inc. and Dreamworks Animation SKG Inc. effective Dec. 31, her spokesman said.

The move is another signal that Whitman is seriously considering a run for governor of California, a person familiar with the matter said, adding that an announcement could come in the next four to six weeks.

Whitman’s spokesman, Henry Gomez, declined to comment on her political ambitions, saying she stepped down “for personal reasons.”

A P&G spokesman said, “We deeply valued the contribution Meg made to our board over the last five years.” EBay and Dreamworks couldn’t be reached for comment. . Read More!