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Industry News - Wednesday, June 18
By David Sumner-Smith | June 18, 2008
Mark Cuban: Hulu revenues will surpass YouTube’s in 2009
Don’t Automatically Dismiss The Content Network!
Yahoo says mobile search service reaches 600 million
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Flickr Founders Leave Yahoo!
by Brian Caulfield
Flickr co-founders Caterina Fake and Stewart Butterfield are the latest high-profile employees to leave Yahoo!. The husband-and-wife team is heading for the exit on the heels of Jeff Weiner, an executive vice president of the company’s highest-profile Web properties. Weiner will become entrepreneur in residence for venture capital firms Greylock Partners and Accel Partners, the two firms announced Monday.The departures are not exactly a vote of confidence in Yahoo! (nasdaq: YHOO - news - people ) Chief Executive Jerry Yang, who will mark a year in that role on Wednesday. The Yahoo! co-founder took over the top job after the departure of Terry Semel.The departures of Fake and Butterfield, reported by the blog TechCrunch on Tuesday, come after Yahoo! said last week that its months-long talks with Microsoft (nasdaq: MSFT - news - people ) had “concluded.” Instead of being acquired in part or in whole by Microsoft, Yahoo! struck a search advertising deal with rival Google (nasdaq: GOOG - news - people ). Since then Yahoo!’s stock has fallen 12% to $23.13.The executive losses are a blow for Yahoo!. The portal’s acquisition of the photo-sharing site Flickr was hailed by some as a sign that it could freshen up its business model by tapping into the wave of Web-friendly start-ups that emerged in the wake of the 2001 tech bust.
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Mark Cuban: Hulu revenues will surpass YouTube’s in 2009
Posted by Greg Sandoval Mark Cuban sounds almost giddy in a blog about Google CEO Eric Schmidt’s acknowledgment that the company hasn’t figured out how to make YouTube profitable.Cuban, the founder of Broadcast.com and owner of high-def cable channel HDNet all but said “I told you so.”
“It is coming up on two years (since I posted) my declaration that only a moron would buy YouTube,” Cuban wrote, “and that Google was crazy for actually going through with it…YouTube has become the poster child for the old saying “we are losing money on every sale, but we will make it up in volume.”
Cuban, a copyright owner and YouTube critic, brings his own baggage to the YouTube debate. But what’s interesting about his post is that he traces YouTube’s trouble to Hulu, the video portal from NBC Universal and News Corp.
While conceding that YouTube has a vastly bigger audience, Cuban argues that Hulu is “stomping” YouTube in two important metrics: revenue per video and revenue per user.“Hulu has one huge advantage over YouTube,” Cuban wrote. “It has the right to sell advertising in and around every single video on its site. It can package and sell any way that might make its customers happy. YouTube on the other hand, has that right for only the small percentage of the videos on its site (where) it has a licensing deal.”Cuban predicted that by next year, Hulu will outpace YouTube in total revenues.How much revenue does Hulu have to generate to do that?A report from Bear Stearns estimates that YouTube will see $90 million in revenues this year. Om Malik over at GigaOm says YouTube sales will come in closer to $125 million, according to his unidentified sources. Last year, YouTube made around $80 million, Malik wrote. That means, according to Malik’s sources, YouTube revenues grew about 50 percent.For the sake of argument, say Malik’s sources are right and the company will see $125 million this year and grow 50 percent again in 2009. In such a scenario, Hulu would have to book somewhere around $200 million in its second full year in business for Cuban to be right.Hulu hasn’t released any hard financial data but that’s still a lot of money for a company that will only be in its second full year of operation.I wonder where Cuban sees all the other competitors, such as Apple, Netflix, cable companies, and all the other competitors offering video entertainment, fitting into his calculations.
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Don’t Automatically Dismiss The Content Network!
by Eric Enge
If you are like me, when you implement PPC campaigns one of the mental notes you have in your checklist is to go into the Campaign Settings for each campaign and prevent your ads from running on the content network. It turns out that this might be a mistake.At the recent SMX Advanced event in Seattle I sat in on the Amazing New PPC Tactics panel. It was a good panel overall, but the one thing I wanted to highlight was the presentation by David Szetela of Clix Marketing, as David explained how to do content match marketing effectively.Understanding the problemThe problem stems from the way that the search engines decide on which sites to run your content match ad. Basically, the only clues that the search engine has is the list of keywords you provided. What would be wrong with that you might ask? Let’s illustrate with an example.Let’s say you are selling a variety of widgets, and that these widgets can be used in your kitchen, on boats, in your workshop at home, and also has applications in industrial machine shops. You might create a list of keywords that looks something like this:kitchen widget
boat widget
workshop widget
machine shop widget
These are the keywords that the search engine will then use to try and match your content match campaign up with web sites for placing your ads. With the above list you might end up on sites about kitchens, boats, workshops, and machine shops. The reason this happens is that the search engine takes the keyword set and looks for sites that have similar words on their pages. This is significantly different than the way the keywords operate in search. In search, the search engine is trying to match you up with a user’s search query—with an average of only about 2.3 words per query. Not a lot of data to match up with, and usually pretty focused on nature. As a result, with search campaigns, there is a tendency to create as large a keyword list as possible, to cover a lot of potential ground.This may work in search, but in the content match world you can rapidly get into trouble. In our example above, you may not want to be on sites about kitchen design, or boat vacations, etc. Worse still you may not want to be on a site about travel, that happens to have a few pages about cruises you can take (e.g. if your widget helps people repair boat engines this would not be a match).The solutionIt turns out that I have always had that first step right. Turn off content match in your traditional campaign. It’s just going to be very tough to do well with it. Then, create a new campaign, and turn off “Google Search” and “Search Network” in your campaign settings, and create a campaign which is only for content match. This is the second step.For the third step, create a custom set of keywords just for your content match campaign. These keywords will be significanly different from your search keyword set. Here’s some of what David recommended we do to pick out the keyword set: 1. Pick out a few sites that are strong examples of where you would like your ad to run 2. Do an analysis of the types of phrases that appear on these sites (whis is what the search engine will do) 3. Consider going further and entering some of those phrases in the search engines to discover a few other sites you would be interested in being on, and expand the analysis 4. Limit the list of keywords to something between 15 and 30 keywordsWith this approach you will be significantly closer to targeting your content match campaign. Better still, since many people simply turn this feature off, and most others use their search keywords, you will hvae a better optimized campaign, and a significant competitive advantage. David offers many other Content Match Optimization tips on his site.Eric Enge is the president of Stone Temple Consulting, an SEO consultancy outside of Boston. Eric is also co-founder of Moving Traffic Inc., the publisher of Custom Search Guide.
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Yahoo says mobile search service reaches 600 million
(Reporting by Yvonne Cheong)
SINGAPORE (Reuters) - Internet media firm Yahoo Inc said on Tuesday that its mobile search service will be offered by six more telecom companies in Asia.It now has 60 such partnerships worldwide, including with Mahanagar Telephon Nigam (MTNL) in India, Hong CSL Limited, Smart Communications and Digital Mobile Phlis (Sun Cellular) in the Philippines and Vibo Telecom in Taiwan. “We are now able to reach 600 million subscribers,” David Ko, Asia managing director and vice president of Yahoo’s mobile division, told reporters at a media briefing.“This creates the scale to make mobile advertising attractive.” He said the mobile advertising market is expected to rise to $16.2 billion in 2011 up from $1.5 billion in 2006 and that Yahoo “would obviously love to take a large chunk of that pie”.
+++++++++++++++++++++++++ Gunning for Google in Search
by Catherine Holahan
Why is Google (GOOG) still looking over its shoulder? The search giant has just locked up a deal with Yahoo! (YHOO) to run search-related text ads on its closest competitor’s American and Canadian sites. That leaves Microsoft (MSFT) as Google’s largest rival, with just 6% of all U.S. searches performed on its site. Google lays claim to 68% of U.S. searches and Yahoo has a 20% share, according to a June 10 report by research firm Hitwise. Yet, Google isn’t relaxing. “We have to be on our toes all the time,” says Udi Manber, head of Google’s search quality team. “It is absolutely the case that a new technology can come along.” Manber knows an army of would-be competitors still live to fight another day. They have their eyes on the search advertising market, projected to reach $25.8 billion this year and $51 billion by 2012, according to research firm eMarketer. And they are dedicating significant money and manpower to developing innovations that could change the balance of power in search within the next 10 years. “Search can actually get better than it is today,” says Brad Goldberg, Microsoft’s general manager of Live Search. “We look at search as a long-term bet.” Search technology (even Google’s) is still in its infancy. The form of online search familiar to most Web surfers still relies on relatively simple pattern matching: marrying query terms to words on Web pages and then ranking those results based on factors such as the frequency of a query’s appearance and the number of links to a particular results page. In the future, the underlying technology behind search will almost certainly change. Search sites will implement upcoming technologies that understand human language and, in essence, read pages for answers to queries. They will adopt next-generation voice-, image-, and face-recognition software capable of better identifying multimedia content. They will incorporate systems yet to be conceived. The result, many experts say, will be Web searches that return more answers and media, and fewer blue links. “Someone could come along and out-innovate Google,” says Heather Dougherty, research director at Hitwise.
Semantic Search
One group that believes it has the key to outsearching Goliath is the so-called “semantic search” companies (BusinessWeek, 7/9/07). These companies, including Powerset and Cognition Technologies, use systems that understand the structure of the English language and the definitions of words to retrieve search results. For example, in a semantic search engine, a query asking “which tennis players beat Andre Agassi?” would return a series of tennis champion names who “beat,” “defeated,” and “bested” Agassi. Powerset’s first link in response to just such a query is a Pete Sampras page. Google, however, doesn’t answer the query right. It links to a page on tennis-heroes.net listing the players Andre Agassi beat. “We are going to be looking back five or 10 years from now at the way we are doing search today and it is going to seem primitive,” says Barney Pell, Powerset’s co-founder and chief technology officer. The technology behind semantic search engines has been in development for more than 30 years and is just now coming online in a form that consumers can use. In May, Powerset launched a version of its product that only searches through articles in online encyclopedia Wikipedia. Cognition launched a version of its search engine a year ago that searched through legal, health, and wiki documents.
Incorporating New Technologies
Both Google and Microsoft are incorporating some aspects of the technology in their search engines. But while the small, venture-funded firms have little traction in comparison, they believe they have the edge in the long term. “This is not easy,” says Scott Jarus, CEO of Cognition Technologies. “It took us 10-plus years to develop the underlying technology.” Of course, should semantic technologies prove to be truly game-changing, there’s nothing stopping Microsoft or Google from buying one of these small firms. Google generates around a billion in free cash flow per quarter. Microsoft does, too, and with its deal with Yahoo looking dead, the software giant has a spare $46 billion lying around. In fact, Jarus sees the future of semantic search as becoming incorporated into the big search engines, likely through acquisition. “I think what eventually happens is semantic search gets bolted into the general-purpose search,” says Jarus. What Microsoft or Google cannot simply buy is the open-source search effort led by Wikipedia co-founder Jimmy Wales. Known as Wikia Search (BusinessWeek.com, 1/7/08), the engine incorporates community input with open-source computer programs. The goal, says Wales, is to eventually have a product that rivals whatever Google can develop—using a combination of algorithmic results ranked, in part, with the help of users—but be easily incorporated by large sites across the Web, making Web search ubiquitous rather than largely confined to single sites. “We think it is going to take a while,” says Wales. “But, if we are successful, search will become a utility service that everybody offers rather than a single dominant player.”
Microsoft’s Specialized Effort
Microsoft is taking another tactic to chip away at Google’s supremacy: specialization. The company has recently focused its efforts on shopping search, launching a Live Search cashback product (BusinessWeek.com, 5/21/08) that gives users rebates on items they buy when searching on the site. Microsoft only charges participating advertisers when users make purchases, largely eliminating the barrier for Web marketers to try the service since they are, in essence, only paying for sales. “Our goal is to make Live Search the most rewarding commercial search destination on the Web,” said Microsoft founder Bill Gates in a statement. If Microsoft is successful, it will gain a share of the most lucrative queries on the Web because searches clearly tied to commerce often command the highest prices, says Microsoft’s Goldberg. So, for example, a search for “iPhone accessories” may command more than a query for “who was the 23rd President?” “Commerce queries are about 30% to 40% of all queries, but they are a higher part of the revenue,” says Goldberg. Microsoft could use a shopping success to encourage users and advertisers to try other specialized search sites focusing on areas such as entertainment, navigation and local search, and research. “We believe that search will become more and more task-centric,” says Goldberg. “The experience will look dramatically different than it does today and it will be customized around the tasks that users are trying to complete online.”
Google’s Search Relevance
Maybe. The success of Google’s universal search product challenges the wisdom of Microsoft’s specialized approach. Though topic-specific search engines have had some success in particular categories such as health, travel, local search, and shopping, none have come near the popularity of Google’s one-site-fits-all offering. “We want to be very easy and very fast,” says Google’s Manber. Aside from the health space, Google’s category-specific search features are all behind the scenes. Consumers see one central site. Google won’t cede its lead in search without a fight. The company sees search as central to everything it does and has “hundreds and hundreds” of engineers dedicated to improving its search relevance and product, says Manber. Google also has the strength of its brand name that can keep people going to its engine, even if there is a product out there capable of providing slightly more relevant results. Still, brand name and money aren’t enough to keep a new, innovative company from supplanting a leader. Just ask Yahoo. Holahan is a writer for BusinessWeek.com in New York.
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