Image by ifindkarma via FlickrThis is Google getting offline. That is a big jump. I hear GroupOn has a salesforce. Google has not had that. This is Google now getting high touch. High tech is no longer enough. Online only is no longer enough.
Google went offline before it went into hardware. That's significant. A company like Google getting offline also shows how mainstream the web has become. The term In Real Life no longer applies. What do you mean in real life? The web is as real as it gets.
Wall Street Journal: New York's Tech Start-Up Scene Comes Of Age: over the last decade, New York has been building a real tech center, where software, media, and ad-related startups are thriving, a venture capital community is growing and serial entrepreneurs are as commonplace as they are in Silicon Valley. ...... a general feeling here, a buzz, that there is momentum here ...... "As one of the most successful financial exits from the dot-com era, DoubleClick made people in Silicon Valley realize that there may still be some fire coming out of New York" ...... "Back then it was a gold rush mentality," he said of the late 1990s. "Now it's building a business." ...... the New York region ranks number four in total venture capital investment, after Silicon Valley, Los Angeles and Boston. ...... in terms of funding for software companies, New York ranked only second to Silicon Valley for venture capital funding in the second quarter ..... One New York startup that is well-known in Silicon Valley is Foursquare ..... "New York is a challenging city to build location-based services for because of its density, so once they built a product that could work well in New York City, they figured it would work well in other, smaller cities as well." ..... Fred Wilson of Union Square Ventures is now seen as a veteran among New York venture capitalists ..... there are now more angel investors and startup incubators in New York. Venture capitalists are also now more willing to provide seed funding than they had in the past. .... No one calls New York "Silicon Alley" anymore. "Now we just call it New York," Ms. Halper said. "The industry in New York has finally come of age."
I am waiting for two things. I am waiting for the Great Recession to get completely over and done with. And you will know that has happened when Facebook goes IPO. Facebook is waiting for the recession to completely end before it will file. And I am waiting for a tech company in town to go IPO. I think that company right now is looking like FourSquare. But I need to be hush hush about it because I am superstitious. An IPO is such a big deal. And it is not a given.
A few IPOs and New York City will have finally arrived on the tech scene in a way I would like. The DoubleClick exit was grand, but it was no IPO. I have a feeling once we see our first IPO, we will see a string of them.
And I am fervently hoping a tech revival in this city is not just about dot coms and software. I hope this city makes strides also in other emerging tech sectors like clean tech and bio tech and nano.
A lot of smart people who go to top colleges in this country end up in this city. It is that allure of New York City. It is that magic. So far this city has not made the best use of all that talent. This city has needed a painful recession to shake off the Wall Street suction pump and to release talent into more meaningful sectors like emerging tech.
Slowly but surely it is happening though. This city is going bonkers.
New York City has a huge advantage over Silicon Valley. That is that Silicon Valley by now is like this big, old, mature company. New York City - the city - is a startup. That cultural advantage is priceless.
Google's advertising business was an after thought for Google. It was not hatched by the two founders and it was at first doubted by the CEO. But Google mints close to 98% of its money from that advertising business. Google invented a new ad platform and has never looked back since. That revenue stream has allowed it to go for a once in a decade IPO, has allowed it to engage in big and bold experiments. That revenue stream has been Google's lifeblood. That ad platform is as simple as search, or at least simple looking.
Google experimented in the traditional online search ad space and found a fit, a great fit. More recently it has experimented with radio and TV with mixed results. Its most recent push been into mobile. It has worked hard on its mobile OS - Android - so as not to charge for that OS, but to serve even more ads on mobile phones. I am a huge fan of ad supported services. It is more egalitarian than charging. Imagine if Google were to charge a few cents per search. You can't.
Google is a big company that retains the spirit of a startup. It looks hungrily at new spaces. It has laid down most of the groundwork for mobile. Right now it is looking squarely at audio and video for the web medium. It is no revelation that it will look to populate those spaces with its lucrative ads. It is not at all a given that it will succeed as wildly and totally as it has in the traditional web space, but there are few people who doubt it will keep iterating until it finds a good fit.
The benefit for the consumer? Services they traditionally paid for will go free. What's there to complain?
Advertising by Google Google's risky advertising business| ZDNet May 2007 Google Is an Advertising Company August 2005 For all the speculation that Google’s goal is a “web OS” that supplants Windows as the lowest-common denominator platform for getting on the Internet, and for all the talk that Microsoft (and, in particular, Bill Gates) sees Google as a serious threat to their monopoly-powered golden-egg-laying geese, I just don’t see how Google is building a platform for developers that even vaguely competes with Windows. ....... “Follow the money” is as good a way as any to define a company: the point of business is to profit. This is why Apple is not, and has never been, a software company: their profits come from hardware sales — computers, and, now, iPods. Microsoft is a software company: their profits — billions of dollars every quarter — come almost solely from software. ..... Judged by their profits, Google is an advertising company. They don’t profit from search, they don’t profit from software. They profit by selling ads. ..... Google’s software is just an excuse to show ads. Google’s search results and apps like Gmail serve the same purpose as the editorial content in magazines and newspaper. Updated: Android's Secret Sauce? Google's Advertising Rev-Share Deals With Carriers March 2010 it is sharing advertising revenues with carrier and handset partners, but clarified that it is limited to search and does not extend to other applications, like YouTube or Maps ..... this is good news for carriers, which have been looking for new revenue sources that could help pay for the next generation of networks that will cost billions. ..... mobile advertising is set to take off. Google has agreed to pay $750 million for the mobile ad networkAdMob. ...... give away the operating system and make money on advertising ....... Kyocera, which hasn’t made a smartphone in six years, came out of retirement to make its first Android device, a low-end phone that could easily be free with carrier subsidies. ... Google could ship roughly 22 million phones this year. AdWords - Wikipedia, the free encyclopedia AdWords is Google's flagship advertising product and main source of revenue. Google's total advertising revenues were USD$21 billion in 2008 ...... The original idea was invented by Bill Gross from Idealab who, in turn, borrowed it from yellow pages. Google AdWords: A Brief History Of Online Advertising Innovation Google’s search advertising model ...... was iterated, and many of the key concepts were borrowed ..... a few key market-defying decisions, and one stunning insight, made it all work ...... Advertising first appeared on Google.com in January 2000 ..... text ads were sold by a sales rep on a CPM basis. (Yes, that’s right, there was no pay-per-click, no self-serve, no bidding.) ...... based on its initial lack of success with advertising, Google had planned to give its inventory over to DoubleClick, the largest banner ad business of the time....... then the bubble burst in Spring 2000, and the online ad banner market crashed....... Google introduced a self-serve model for buying text ads — they got the idea from GoTo.com ..... October 2000, Google introduced AdWords ... “Have a credit card and 5 minutes? Get your ad on Google today.” ...... In 2001, Google’s ad revenue was on pace to hit $85 million, but was outpaced by Overture (the renamed GoTo), which earned $288 million in ad revenue selling pay-per-click ads on an auction basis....... February 2002, Google introduced a new version of AdWords ....... introduced a breathtaking innovation. ...... introduced clickthrough rate, as a measure of the ad’s relevance, into the ranking algorithm. So if an ad with a lower bid per click got clicked more often, it would rank higher....... a lower bid ad with more clicks generated more revenue than a higher bid ad with fewer clicks....... Google had two moments of pure brilliance. ....first was PageRank.... second was introducing relevance into the pay-per-click auction model...... Google didn’t invent search or auction-based pay-per-click advertising — their innovation was perfecting it...... Nobody at the time thought there was anything wrong with Overture’s model — it was making lots of money...... Nobody at the time thought search was a business
Google Predicts Mobile Ad Surge as AdMob Deal Closes , giving the search giant pole position in the emerging wireless advertising space..... the FTC commissioners unanimously voted to close the investigation. ...... its innovation in new ad formats, such as units placed within third-party applications. .... search remains the order of the day for mobile marketers. ..... In the past two years, Google has seen a more than fivefold increase in its mobile search queries, and it's only picking up steam ..... Innovations such as the click-to-call feature found in many mobile search ads make the format more compelling for users, who often use their smartphones to search for local businesses while on the go. ...... as smartphones take on more of the functions of notebooks and desktops ...... mobile ad revenues will eventually eclipse ad sales from the traditional Web on the company's balance sheet. How Much Is Google Worth to N.Y.? Company Says $6 Billion New York the second-biggest state for Google-driven economic activity, trailing only California, where the company estimates it generated $14 billion in 2009. .... “for every dollar [spent] on Google advertising, an advertiser earns back $2.” ..... the clicks on free searches for businesses in the state, which Google computes are 70% as valuable as clicks on paid search ads. .... the evolution of the “I Love New York” tourism campaign. Five years ago, he said, the state’s effort to lure tourists relied primarily on a toll-free number and brochures. ..... Since adopting AdWords as the cornerstone of its digital presence, the tourism campaign netted 17% of its online traffic through the Google program last year. Davidson credited some $50 million in additional tourism revenue to Google. Google says it helps generate $54 billion for businesses and nonprofits Google is emphasizing its role in creating jobs and economic development to counter a growing perception on Capitol Hill that it abuses its dominant position in online advertising. ...... "Google is rolling out a marketing campaign to get people to look at them in a more balanced and positive way so they don't get pounded by politicians." .... businesses get five clicks on their search results for every one click on their ads. Based on that, the company calculates that businesses get $8 in profit for every $1 they spend on AdWords. Google Says It Generates $54 Billion for U.S. Economy The Internet’s share of overall advertising spending is forecast to rise to 17 percent in 2012 from 13 percent last year
“Those are Botanicalls. When they need to be watered, they send you a message on Twitter that says, ‘Water me, please.’ I have it hooked up with one of my plants at home.”
“There was a girl who had a project that was just three robots following each other around. I said, ‘I need to be here playing with this stuff. This is where I belong.’ ”
“See that foosball table? That was my first project at ITP. I put sensors in the goals. When you started playing, you swiped your NYU I.D. on the table and your stats got shown on the screens behind it. If you scored a goal, it would show.”
“I wanted to make the foosball table smarter. My professor”—Internet-culture guru Clay Shirky—“said to go analyze a source of social data. I had all the data from the foosball table, and I started thinking, What do friendship circles look like? Who are the outliers? Who doesn’t connect to other folks? I was trying to wrap my head around it. To make a foosball table smarter isn’t that different from ‘Let’s make a city smarter.’ ”
“It was just after their IPO. The New York office had just opened. A couple weeks into it, we were like, ‘Where are those engineers?’ We were hoping to have more of a team, but it was hard to get engineers.”
“The stuff is, first and foremost, meant for our friends. The same thing happened with Dodgeball. We were just building tools that were making New York more efficient for twenty of our closest friends. A lot of the ideas we shoot within Foursquare are also themes that I think already existed in Dodgeball. We’re just bringing them back to life in new ways, with smarter phones. At the time, Dodgeball was a New York application. It was meant for people to start off with 25 friends who could easily jump to five places in one night, which is definitely an urban type of experience. Foursquare has been changed so that it rewards a one-player experience—it gets more interesting as you add friends to it, but it’s definitely a better one-player experience. And it’s designed to work in New York, and then we kind of tweak it so it works everywhere else. I think it works best in really dense urban areas. New York’s been critiqued for a long time,” he continues. “The critique is that you can’t do stuff like this here, but I think part of the reason that our product is interesting and special is because it came out of New York. It was designed to solve problems in that context, and those solutions tend to work in other parts of the world pretty well. I think the product is better because we’re based here.”
“Usually what will happen is a user becomes the mayor somewhere and asks the manager, ‘What do I get for free?’ ” says Crowley. “The manager at first is usually like, ‘What are you talking about?’ They’ve never heard of Foursquare. Eventually, the manager will break down. It’s an opportunity for us to start turning users not just into evangelists but also salespeople. So the venues win—anytime someone checks in, it’s like a mini-ad. With the stats tools, you can find out who the most valuable users are to local businesses, like who’s sending their check-ins to Twitter. Maybe the owner wants to reach out to that person.”
“We have all these companies calling us, and it’s a little bit problematic—we have so much inbound business development that we can’t capture it all. Foursquare could eventually turn into not just an app that tells you how many bars your friends went to the night before but a more ambitious project about social relations. You build a game of it. The first person to do ten crazy things wins. It expands it beyond consumption. Maybe you get badges for meeting people or bringing people together.” So on Foursquare, based on the bands you saw in one week, maybe you met more people, and so maybe your happiness and your productivity is higher. So check-in is just the first part of this story.”
“There’s enough of a unique user experience within Foursquare that I don’t think someone can come along and replace it. It’s a different type of sharing. When Facebook changed its status updates, it didn’t kill Twitter. It might make us a little more focused.”
“We’re trying to figure out what the best thing is for us going forward. We’re raising financing and meeting with tons of different companies. Don’t read into it too much. It’s a business that can be a real business.”
“We could make it work as a stand-alone business, or it might turn out that there are other companies that would find us valuable. The future is rosy.”
Fred Wilson
“They’ve taken the Silicon Valley culture and infected hundreds of engineers with it, and those engineers are not likely to want to go work for Morgan Stanley or Goldman Sachs. It’s not in their DNA. That’s not what they’re going to do. They’re more likely to go into one of our start-ups.”
“I think it’s partially the Wall Street mentality. This is a very merchant town, a very commercial town. My partners and I make a decent living, but we manage $275 million. I have friends who are my same age who are partners at Goldman Sachs, or who are running their own hedge funds, who make ten to a hundred times more money than I make. I’m not upset about it, because I love what I do. But in New York, it’s about making money.”
“We have a two-year program here, and we try like hell to hire women into that program. We tell the world we’ve got this opening, and anybody who’s interested can apply, and it’s 90 percent men who even bother to apply. I mean, I don’t know what the problem is.”
Scott Heiferman
“Start-up culture is about really changing the world. I know that’s a cliché. But Si Newhouse never wanted to change the world.”
“Here we were schlepping around, protecting the power of gatekeepers and publishers and Barry Diller. Fuck that. We really have to look at ourselves—the Internet is reinventing and rejiggering everything. We need to see ourselves as making a new New York.”
“In Silicon Valley, when an Apple or a Google happens, it inspires tons of people to not just be entrepreneurs or founders of start-ups. It encourages people to just work in the industry because they know if you’re an engineer for a company that does really well, then you do well. New York does not have its great success stories that become the stuff of legend and lore and myth.”
“Madison Avenue ain’t gonna be the heart of New York anymore. Wall Street’s not going to be the heart of New York anymore. Media’s not going to be the heart of New York anymore. New York is actually really hot. We’re inventing the shit that the world is using! This is a first. The fact is that New York didn’t create any great companies in the first tech boom. The closest thing was DoubleClick—but that was about making what old advertisers need.”
Image by ifindkarma via FlickrThis is Google getting offline. That is a big jump. I hear GroupOn has a salesforce. Google has not had that. This is Google now getting high touch. High tech is no longer enough. Online only is no longer enough. 
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