There is an important equation for the competition between Google and Facebook.
Google and Facebook are both enormous companies, both are Internet companies, and both are at their core, fueled by competitiveness and greed. Sure Google has that “Don’t be evil” philosophy that was their corporate value at one point. I think Google abandoned that when they joined Verizon in the destruction of net neutrality.
But that is not the issue here.
The issue is a string of Tombstones the people erect at Google’s feet, as if Facebook has vanquished it at something. These are ironic and irrelevant tombstones, and thoroughly inaccurate and deceptive. Adam Rifkin wrote a good one yesterday on ”Why Google has no Game.” His main point was that Google doesn’t really get social engagement. His underlying idea is that social engagement is a sort of be-all-end-all of internet value.
My initial reaction was that he was wrong. I read comments on his blog like this one: “if Facebook shut down today it would not impact on my life in any tangible way. However, if Google shut down, I’d be in deep trouble!” (attributed to Kullar)
I agree with that, and would take it a few steps further.
For me – I would miss neither, but by a narrow margin, I would miss Google more, and here’s why. Google does things with the Internet, on the Internet, to the Internet and for the Internet. Facebook wants to be its own “internet.” That strategy didn’t work for AOL. Facebook is inherently more profitable than AOL because Facebook tries to be its own “internet” without the costs that AOL had in creating its own content. But that is a moot comparison because AOL isn’t AOL anymore. A better question to ask is whether Facebook more profitable than Google. Is it? No. absolutely not and it is not even close.
Why is Google more profitable? Facebook screams “We have 500 million users.” but users don’t translate directly to profitability. Google is more profiable because it is just inherently more valuable. Why? Because Google has enormous data on what people DO, around what people WANT, and around what ultimately inspires people to ACT – essentially Google knows who, what, where, when and to some extent, why people want, what they want, what they do about it, and what causes or inspires them to act – across the entire scope of the Internet. (not just Facebook’s 500 million members – but the ENTIRE internet) Facebook only has data around what people SAY on Facebook. I think Google’s data is inherently more valuable, more relevant, and I think it will only sap their energy if they chase Facebook. I don’t see any benefit for them. Where is the profitability in chasing Facebook? Particularly when Facebook is a mastadon, big, plundering, and at some point, Facebook’s sub-glacial pace and lack of creativity and profitability will doom it to extinction. Google has all that data, and as the icing on their profitability cake, they really know how to monetize their data.
I think it is all about money. Follow the money, the revenue and profits. In that regard, Facebook is not really any competition for Google at all. People have been surprised by estimates that Facebook’s 2010 revenue could be as high as $1.2b. This is so surprising because Facebook’s 2009 revenue was estimated at $800m. ON that view, Facebook has increased income by 50% year to year. That seems great, but there are two critical issues with those numbers. One is that Facebook’s numbers are unaudited. It is a privately owned company, so there’s really no hard firm way to know if those revenue numbers are accurate. The second and more important problem with those numbers is that they are only stating REVENUE… not Profits, not Income.
How does that compare to Google? A quick glance at Google’s AUDITED and reported numbers shows that Google’s Q2 revenue was 6.8b – their revenue for 2009 was $23.6b
Google’s net income was >$6.5b in 2009. That is INCOME. Profit. That is actual money that they made. Here’s another interesting statistic.
Google’s Q1 and Q2 revenue last year was about $5.5b each quarter.
Google’s Q1 and Q2 revenue THIS year was about 6.8b each quarter.
To put this in another perspective -> Google’s QUARTERLY INCREASE in revenue this year over last year is about $1.3b. To emphasize, that is the INCREASE PER QUARTER, and it exceeds Facebook’s annual revenue estimates.
Google is chugging along at a roughly 28% profit rate. Again, since Facebook is privately owned, nobody really knows if Facebook has ANY profit, or what their profit rate might be.
So – what is the Google vs Facebook equation? $ = G > F. It is that simple.
August 26th, 2010
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I read an interesting article at Computerworld this morning: “Ready for 2020? Advice for every career stage.“
It discussed the differences between different ages of technology worker, and the different interests and abilities. I thought the article had an interesting conclusion: that different workers had different challenges to face. It went on and on about how recent graduates don’t have experience and certifications, and how cell phones are more important, etc. That is obvious. Another article I read recently in Think Big Be Big showed that mobile DATA traffic exceeded cell phone PHONE/VOICE transmission traffic every month in 2009.
It is a wired world and I recognize the differences in the newest texting generation, but I completely disagree with the conclusion of the article.
Since I started working with technology around 1982, there has been a constant drumbeat of change. Every piece of technology impacts business. Someone needs to communicate it. It changes constantly. The points where technology creates advantages moves instantly and frequently. Those change elements are constant.
The offshoot is that technology professionals have to keep a relevant skillset, develop skills for whatever is coming next, understand when, where, why and how “their” technology provides value, and understand how to communicate all of that. That means that with a common set of skills, technology professionals can be unemployment proof. These skills are the ones that provide value no matter what the flavor of the month is.
Here are 7 skills that will help unemployment-proof a technology professional:
1) A love of learning and willingness to learn.
2) An understanding of the impact that technology and business have on each other.
3) A willing acceptance of change in all its forms.
4) An ability to communicate and translate business and technology.
5) A professional willingness to do what needs to be done, when it needs to be done.
6) An ability to demonstrate and showcase your skills.
7) An ability to learn from mistakes and use that learning to prevent new ones.
If you have these, your personal professional competitive advantage will ensure you are constantly employable and constantly employed. I’m not saying that a short sighted company won’t downsize you. I’m just making the point that with this skillset, you will have other companies ready and eager to onboard you if that happens. You will provide value across the technology and business spectrum. That’s a formula for unemployment proofing.
Can you think of other things? Do you disagree? Let me know
August 23rd, 2010
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There’s an old Meilink Safe in my basement. It is a fire-resistant, high-security safe. It hasn’t been opened since sometime before 1992. I have no idea what is in it. It could have anything in it… I’ve
tilted it from side to side, and heard something inside it that could be coins. I suspect there may be something of value in it, but I really don’t know. My curiousity is lit.
There are two ways to get in a safe, destructive and non-destructive. The destructive method would probably involve contacting a local locksmith or safe technician to come by and drill a hole in it, insert a scope, and manually align the combination, and pop the safe open. If I were to choose to do that, the safe might be repairable, but would no longer be very fire resistant. It would lose some of its value as a safe. I like the safe and I like the idea of having a safe in the basement. I would like to use the safe, as a safe. I think it would be a shame to open it using destructive methods. I’m not going to do it this way.
SO – the non-destructive way to open a safe like this involves manipulating the safe’s combination until it opens. I have three options: I could pay a local locksmith or safe technician to do it. I could contact Meilink provide proof of ownership, the serial number, and for a fee they would give me the original factory combination which may still work. The third way is – I could do it myself. I’ve decided to do it myself. I really like the idea of a challenge and I want to learn something new. It isn’t going to be easy, but in addition to having the safe, and having access, I will get to learn something.
I’ve watched the Mythbusters attempt to pick the combination lock on a Meilink safe. Within their artificial time limit, they could not open it non-destructively. They resorted to drilling the safe. Meilink liked that video so much, they linked to it from their website. In that video, they were working on a time-schedule. I have more time to crack my safe. I’ve read MANY books and papers on cracking safes – manipulating safes. I’ve read about lock construction – about how turning the dial turns the wheels, how the mechanisms are made, etc. My career, broadly speaking, is computers, and Matt Blaze’s “Safecracking for the computer scientist” could have been written for ME, personally. Leonard Gallion’s “How Mechanical Safes Work” was useful too. I’ve probably watched 50 videos on YouTube. (As an unrelated side note, for someone visual like me, YouTube is a FANTASTIC way to learn almost anything.) And I registered on a lockpicking website.
So – what have I learned? Beyond the secrecy of the locksmith profession – a sort of extra layer of security through obscurity, I have learned that persisting with the “learn how to crack a safe” approach, is going to be EXTREMELY challenging. Why is that?
Ultimately, safes are designed to be … safe. They are designed to keep people out. With a 100-number dial, there could be either 3 or 4 numbers. Theoretically – if there are 3 numbers, that 
means there are 1 million possible combinations. 4 numbers means there are something on the order of 100 million combinations. I say theoretically, because in reality, there will be less, because some numbers cannot be used, and there may be some play, slush, or inexactness requirements of the combination numbers. (In locksmith terms, a dialing tolerance.) Dialing tolerance is my GOOD FRIEND because a larger tolerance means there are fewer possible combinations. Assuming a “1″ number of dialing tolerence, and a combination of 25-50-25-50, it is entirely possible that 24-49-24-49, 25-50-25-50, 26-51-26-51, or any combination of (24-26)(49-51)(24-26)(49-51) would open the safe. It may not seem like much, but that sort of slush could reduce 1 million combinations to somewhere between 64,000 and 300,763. Some of the numbers on the wheel cannot be used – there are places that can ONLY be used for setting a new combination, and other places that can ONLY be used for opening the lock. If those places account for 20% of the wheel’s number, that lowers the total combination possibilities to something between 51,200 – 242,406. That’s better than 1 million, but still would be exhaustive to manually dial. It gets better than that because some lock makers don’t want safe owners to set “bad” combinations. They don’t want you to set your combination, for instance, to 2-4-6-8, or 50-49-48-47… To quote from Matt Blaze’s paper,
“A typical example is Sargent and Greenleaf[Cos01], which recommends for its three-number locks the combination as a whole not consist of a monotonically increasing or decreasing series, that adjacent numbers differ by at least ten graduations,and that 25% of the dial be avoided for the final number (although the mechanism itself on S&G locks requires avoiding only 6% of the dial). Acceptable combinations under these recommendations comprise less than 50% of the usable combination keyspace.”
This leaves only 22,330 combinations. That’s quite an improvement from 1 million, but I am not going to map out 22 thousand combinations and try them all. It is more valuable, I think, to understand the premise, than to do a brute-force type of attack.
I’ve learned that almost all Meilink safes of this vintage were made with either a Yale or a Sargent & Greenleaf lock. It would be great to know what TYPE of lock mechanism it has, – because knowing the model or type of lock would help me narrow whether it was a 3 or 4 number combination. Unfortunately, the combination lock mechanism doesn’t seem to be a Yale, and does not seem to be S&G either.
I’ve manipulated the lock many dozens of times, spinning it slowly, rapidly, listening, feeling, and noting clicks, sticks, clanks, and all sorts of actual and false points at which it seems there may be something happening. There are about 20 of those. I’ve recorded those numbers in spreadsheets, and developed a mathematical way to extrapolate all possible combinations from the group of numbers that seems to make noise or feeling differences in the turning of the dial.
Assuming I’ve felt and/or heard the right points – I have a list of numbers. My quest has begun.
What kind of quests do you plan this year? How are you approaching your personal quest? Are you taking a destructive or a non-destructive path? Are you paying for results, or working for results, or some combination? Do you have a safe in your basement? Do you have a potential treasure waiting to be unlocked and discovered? How are you gaining knowledge?
January 13th, 2010
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I originally called this “Higher bars, Changing Times, and how BusinessWeek misses the point of the Big Shift.” I still think that BusinessWeek misses the point but I think the requirement for changing metrics is more important.
John Hagel III, John Seely Brown and Lang Davison wrote a wonderful paper: The Big Shift: Why it Matters. You can read it here. I highly recommend it. It is insightful analysis and clear original thought. That is too rare.
Late last night I read a brief description of the Big Shift paper on page 10 of the November 23, 2009 BusinessWeek. (although I could not find the article on BW’s site) I was struck by the conclusions drawn from the “Return on Assets” chart, which BusinessWeek pulled and perhaps distorted slightly from page 12 of the 24 page “bigshiftwhyitmatters.pdf” BusinessWeek suggested that the report, and in particular the findings on Return on Assets (ROA) “provides fodder for those, like BusinessWeek’s Michael Mandel, who argue that the woes of the US Economy extend(s) beyond the financial sector and began showing up well before the housing bubble”
That small chart is such a minor part of the report. (I reproduced it here from and with credit to their paper) – The paper is delightfully brilliant, but I immediately thought that the pessimistic BusinessWeek conclusion that I quoted above was mistaken, perhaps even backwards. I think that changing
Chart from "The Big Shift"
times, and inflation, when combined with the paper’s ROA chart, suggest that our economy is very strong – amazingly strong, and extraordinarily robust and resilient.
My three points:
1) The rate of inflation is not trivial given a chart that goes back to 1965, and economy of scale has fundamentally shifted due to technology, and the rest of our ever-changing world.
Adjusting for the rate of inflation wouldn’t necessarily make the Return on Assets chart look more flat – but considering an actual company, its asset value and returns, AND its changing requirements might lead to a different conclusion.
The Bureau of Labor Statistics’ inflation calculator: http://www.bls.gov/data/inflation_calculator.htm shows that over the time of that
chart, $1000 of 1965 dollars equates to something like $6835.02 of 2008 dollars. Excluding the recessionary pops in the tech bubble in 01-02 and the pop in the housing bubble in 08-09… ROA looks like it is gone from just under 5% to about 2%. Regardless of the consumer price index or the perhaps more appropriate producer price index, a percentage is a percentage – but consider a fictitious company that is making 5% ROA in 1965 with $1,000,000,000 of assets. Thats a return of $50,000,000. Adjusting for inflation using the consumer price index suggests a company with $6,835,020,000 in assets in 2008. That company would have a return of $341,751,000 with a 5% ROA – but only a return of $136,700,400. Is that a decline from 5% ROA? Is it a decline from $50m to $136m? (when adjusted for inflation)
2) Given the advances and changes in regulations and particularly in technology – which are CLEARLY covered in the Big Shift paper – the bar is simply set higher, everywhere. Any company has higher requirements to earn sales – to get returns – to exist. Enormous Seismic changes in business have emerged and been adopted across the entire economy. These changes initially provide competitive advantages to companies, but many are now essentially baseline requirements for doing business. These changes don’t happen without extraordinary increases in total assets.
Take any company from 1965 – say a bank. In 1965, a bank had costs for buildings, technology, people, marketing, and processes. All of those fixed costs are now an enormous order of magnitude larger than they would have been in 1965. That bank has to be equipped, staffed, and technologically able to meet customer’s expectations in 1965 and today, but those expectations and regulatory requirements and competitive forces are orders of magnitude both greater and more complex. In 1965, for example, checks written on the account of one bank, cashed at another bank might ordinarily take 5- 10 days to clear. Today the float is almost always less than 24 hours, and in some cases, can be only seconds. In 1965, there were no ATM’s, online banking, online bill payment, online monthly statements. There was no Sarbanes Oxley. There were very different legal and practical considerations for interstate and truly national banks. A bank with $6b in assets, today, has vastly different requirements – and it must staff to meet those requirements. So – if you look at that bank today, and say that it only has a 2% return on assets, that suggests a return of $136,700,400, in a world in which they have legal requirements that may include, say, keeping 7 years of electronic statements that can be accessed online instantly by their customers – and customer expectations that require them to have a thousand ATM’s, an online banking platform that is secure, scalable, and approaches or exceeds 99.99% availability.
This comparison extends across industries – I picked banking because I know it more intimately. (disclaimer: Since leaving Deloitte in 1999 as the Corporate Internet Technology Manager I’ve worked on Internet, Intranet and online banking elements for 3 banks via merger and acquisition.) Pick any other industry or business concern – and change has been enormous. In medicine, for example, in 1965, there was no HIPAA, no mail order pharmacies, no HMO’s, no outsourcing, no offshoring, etc. Hollywood didn’t have digital piracy, digital movie transmission, Redbox, and a cluster of cable companies waiting to first run their movies. The music industry had payola but no MP3′s or internet. Every industry has global competitive forces, global competition for talent and complete shifts. Pick almost any industry, and there are simply higher bars and different bars that companies must clear to succeed. Those higher requirements have resulted in larger asset requirements, but meeting those requirements, to me doesn’t really equate to lower efficiency. It is a maintenance of Return on Assets regardless of changes.
That’s critically important.
Rather than the gloomy BusinessWeek (Michael Mandel) type-suggestion that your chart reflects underlying woes that exist in our economy – I would argue that given the changes in the economy, in customer expectations, and in government regulations, it is amazing that companies manage to meet those expectations and requirements and yet have only declined from 5% ROA to 2%. From the other perspective – the 2% ROA is delivered while meeting significantly larger competitive, organizational, regulatory requirements in essentially every business that still exists.
3) Companies have invested in knowledge assets that cannot be tracked on balance sheets. This is nothing new, but knowledge assets are a larger percentage of total
Growing Knowledge Assets
assets – and perhaps that means that ultimately ROA percentages have dropped even more than suggested. The Big Shift addresses this knowledge requirement (see chart) but more importantly than mentioning it is – how can we quantify it?
Those steeper requirements – higher bars – greater requirements – are not a symptom of an economy in woes – they are merely a reflection of changing times. Across the economy, companies meet those requirements, grow, expand, and produce, and continue to return on assets…amazingly. Distilling it to Return on Assets can be justified, but conclusions from that distillation can’t assume “other things being equal” because the current return is based on the higher bars that changing times require.
To quote The Big Shift
“The answer is not to find ways to squeeze creative talent and customers in a zero sum battle to capture more of the existing pie, but rather, as we will see, to discover new ways of organizing and operating to more effectively create and capture new value.”
Michael Mandel writes in BusinessWeek (link here) that he “told Hagel that he didn’t want to write about his “big shift” until (he) saw industry data, so (he) could understand which industries were driving the corporate performance decline”
Does Mr. Mandel start with the premise that there is a corporate performance decline – wanting only evidence to support that premise? I can’t tell. If declining ROA equates to declining corporate performance, he is right. I think the world has changed too much since 1965
Perhaps the big shift is also a big shift in the way that we should evaluate corporate performance metrics, and in how we define success. Should we have more capable methods for tracking knowledge assets? That will be frightening for some executives because it might entail that a company that has significantly outsourced and offshored has significantly less assets (essentially that it has lost significant assets) when compared with a similar company that has outsourced less or not at all…
What metrics could be developed to track the value of knowledge assets? should those assets be monitored, and valued in ways similar to other business assets?
To me, it is obvious that there are higher bars and changing times. The Big Shift that John Seely Brown, Lang Davison, and John Hagel III write about – is a shift that may require changing metrics – at the very least. This Big Shift brings Big Questions… and I believe the answers will be essential because the shift reflects a clear paradigm shift.
What do you think? Am I right? Am I missing the point?
November 18th, 2009
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Eweek has an interesting article – “Outsourcing Myths have no Grounds, Says Deloitte CIO”
Deloitte’s CIO does his best to debunk various offshoring myths. The first myth that he debunks is that “Offshoring… has not been successful.” his response is:
“That’s absolutely not true,” Quinlan said. “We’re seeing significant upticking in global offshoring activity.” With the maturation of the offshoring market, there has been an accompanying decrease in the hype and media attention devoted to the process; but nonetheless offshore continues to grow in scale and complexity.
So – what does “success” mean? If defining “success” means that there has been growth in terms of increased usage – then Offshoring has absolutely been successful. Mr. Quinlan doesn’t say that it produces results, improvements, increased efficiencies. He doesnt say that offshoring lowers costs for equivalent results, or increases results for a like cost… If success is to be defined as using offshoring to accomplish something at a lower cost, then there’s not any evidence that offshoring has ever been a success.
Another myth that Deloitte’s CIO debunks is that: 
“Outsourcing is Bad for the U.S. Economy”
“There are different points of view on this,” Quinlan conceded about the outsourcing debate’s traditional third rail. “Like many religious arguments, perhaps, the issue is really about what’s going to happen; and we see the trend of regional centers and global centers really continue.” By citing the opening of outsourcing centers in the U.S. as well as places such as India and China, Quinlan seemed to suggest that companies would avoid any political fallout from their outsourcing policies by distributing the work within the U.S. in addition to overseas.”
Quinlan presented a list of “lessons learned” about the steps needed to successfully outsource a company’s operations:
* Focus on gaining leadership support
* Create a blueprint
* Make off-shoring someone’s full-time responsibility
* Combat the change management challenge and communicate
* Create an employer-of-choice destination
* Don’t underestimate the complexities
* Learn from others
* Invest in process excellence
* Focus on quality
* Have fun
Interestingly – these things are missing from his list:
* Create a baseline of processes & services
* Ensure offshored/outsourced processes & services are measured
* Document and evaluate any improvements
* Document and evaulate any declines
Companies that care about things, measure them. Companies that don’t care, don’t measure. My point is that without an objective, base-lined measurement of offshoring in terms of successes and failures, there can be no way to determine if offshoring is ever really successful. If Mr. Quinlan says that any increase in offshoring equates to success – well, he has sort of defined success as almost ANYTHING.
Is that success? Really? Does that merit any leadership, management, executive or boardroom buy-in? Is it success that merits any reproduction? Is it anything beyond an organized drain on resources and talent?
I’d submit that the biggest Offshoring Myth is the one that wasn’t debunked.
The biggest Offshoring Myth is that Offshoring “Works.”
Considering Mr. Quinlan’s approach – perhaps that is a myth that other people will need to debunk.
So – how can that be debunked? Is it a myth? I would be amazed if any company could
People measure things that are important...
really debunk that. I don’t think it is a myth. I think Offshoring fails because offshored processes, deliverables and costs are almost never measured objectively. I think Offshoring fails because offshoring projects define success as “the expansion of offshoring” rather than as the “delivery of improved services, products, projects, or results for the same or less cost.” I think offshoring fails because the jobs lost to offshoring result in incredible losses for our country, our future, our tax base, and for things that are much harder to quantify.
Many current CIOs’ careers started with work on help-desks, as developers, engineers, architects, project managers, administrators, and ground-level technologists. Offshoring success is a myth because offshoring positions like the one’s that current CIOs they once filled will mean that the pipeline of future leadership will evaporate, replaced by a pipeline of leaders who define success without regard to results and deliverables.
Could you debunk the biggest Offshoring Myth? What do you think?
November 16th, 2009
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Google is a wonderful company – an advertising company wrapped in a search engine, surrounded by androids, covered in chrome and steeped in mysterious enigmas. It is also facing the stiffest competition it will ever see, and it might not even yet realize that Bing, like the Borg, will assimilate. I don’t think it is too bold to suggest that Google’s days may be numbered.
I predict that Bing’s percentage of the search-o-sphere will more than double in the next 12 months, growing from about 20% to well over 40%. I further predict that Google’s percentage of search will see a similar decline. I think it is somewhat inevitable, and I will explain why.
First a bit of background: I’m not a great lover of Microsoft technology, but I completed my MCSE in 1997 and have been continuously employed since then working on an assortment of large and small websites - and at least 80% of them were running some form of Microsoft’s Internet Information Server (IIS). I’ve technically edited of books on IIS and windows. I have considerable experience and expertise with Windows technology. I’ve also optimized websites for search engines, as a marketing tool, since 1998. This gives me a unique perspective.
Yesterday, I installed Windows 7 on one of my laptops. It took about two hours or so, and the install worked extremely well. I was surprised, maybe shocked how well it worked! HP had NO windows 7 drivers on its website for my secondary laptop, a 2-3 year old HP DV6449 with 2g of memory and a 1.8g dual core AMD cpu. I pressed on with the install. It was as close to flawless as any operating system install I’ve done. Ever.
- As a side note, I was impressed with PC World’s upgrade checklist and Lincoln Spector’s upgrade guide. (Thank you Lincoln Spector!) I also used their netbook idea to put the OS on a USB key to speed the install. Very cool - as another side note – given the prices that USB keys have been falling to, I think it might be cost-effective and user-friendly for more software makers to provide more upgrades on USB keys.
But I digress too much. This is a story about Bing’s upcoming search engine growth – and perhaps leadership.
Yesterday, interestingly, Microsoft posted on their Bing blog that they would be bringing real time twitter and facebook results to their searches. That is huge because companies and people use blogs, microblogs, and social media to drive traffic, to optimize search engine results, to find traffic. Social media is a necessary part of any company’s comprehensive marketing plan. (You might say that Microsoft used their own blog to make a product announcement that might have been in a press release in decades past.
SO here is the interesting thing – Microsoft’s Windows 7 comes with Internet Explorer 8 as a standard browser. It is a smooth, clean browser, and has a search window built into the top right hand corner. With that search window, you can add in a few dozen different search engines. With that search window, there’s no real reason to initially go to the websites google.com, bing.com, ask.com, yahoo.com or any other search engine website. The built in search window is convenient, easy to use, and completely functional. The default search engine for that built in search window, of course, is Bing. It is possible to add other search tools, even other browsers – and that is where Microsoft has installed a bit of genius. I will come back to that.
This morning Steve Ballmer on NBC’s Today Show said that Windows is installed on 9 out of 10 PCs. By saying that, he essentially lumped Apple, Linux and other operating systems together. He also lumped Windows XP, Windows Vista and other windows PC’s into a “windows” box. From his perspective, that seems pretty accurate. It is also potentially deadly for Google, because XP is very old and Vista is very troublesome. Hundreds of Millions of PCs will eventually run in Windows 7. It is a sound operating system. I think that is going to be very good for Microsoft from an O/S profit perspective and I think it is going to be extraordinary from a search perspective.
Let me get back to the “bing as default” and where these numbers go. Say Microsoft has 90% of the O/S market, and over the next two years succeeds in getting 80% of those PC’s upgraded to Windows 7. I think those numbers are suspect, but they could easily be too short as too long. My point is that it would be a fair to suggest that 72% of PCs, two years from now, will run Windows 7.
Nearly all of those PC’s will have Bing installed as a default search engine in their default browser. Well – what does that look like? 
It looks like this.
There’s a search engine, it is right there, easy to use, installed by default, it will return social media results, it will give Microsoft the same sort of data that has made Google such an unstoppable force. It will also bleed traffic from Google, and it will bleed data from Google going forward.
I think it is pretty inevitable to say that Bing will double in use. I think it might be fair to ask if it will triple or quadruple.
I wanted to add Google back in to my search bar, not because I love Google, or because I hate Microsoft, but because Google is relevant. Google is essential. Google is unique in many ways, and I think at this time, it is somewhat superior to Bing. So – what happens when an average Windows 7 user tries to add Google to a browser? The “Find More Providers…” button seems to be the place to go. That takes a person to a windows add-in site. That add-in site offers search engine providers that can be added to IE 8.
There are DOZENS of providers – many of them very useful – the New York Times, Wikipedia, Amazon, Ask.com, Yahoo, Ebay, Yahoo Maps, New Egg, and even Google. But it is very time-consuming to find Google, not very intuitive, and not very easy. If you pick “Most Popular Providers,” Google is on the second page. I’m not faulting Microsoft, Windows 7, IE 8, or Bing.
I’m just saying that there will be perhaps 72% of computers running a new operating system, Bing will be the default search provider on IE 8, which will be the default browser, and adding Google isn’t very easy.
People aren’t necessarily lemmings, and Bing isn’t necessarily a cliff – but the path of least resistance is an extraordinarily popular path – and that path will soon be Bing for an ENORMOUS number of people and companies. Let me be clear – this is not just about the people and their personal computers. Thousands of corporations have standardized desktop platforms running a somewhat antiquated Windows XP. They WILL move to Windows 7 in the next few years. One of the last things corporate technology executives want is for individual users to be able to customize software. For those executives, preventing user-customization is extremely smart from both cost and security perspectives. Those computer’s browsers probably will be somewhat locked-down. So – a huge number of people will have Windows 7 with IE 8, and Bing at work, and at home.
These are people who, in large numbers, switched from Yahoo to Google some time ago. They will switch from Google to Bing. Bing, like the fictional Borg, will assimilate millions of people, but for real. This is huge for many industries, many businesses. If Bing can scale, and if it can provide reasonably good results, Google may be in enormous danger.
October 22nd, 2009
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I was reading Joe Waters’ intelligent blog earlier today. He has a post titled “How My NonProfit plans to use social media” His post was very interesting because it talked about strategy without numbers.
His thoughts on strategy were really good – but numbers can convert people to a strategy that otherwise might not make sense. I think social media provides benefits that cannot be gotten elsewhere, at a minimal cost that is extremely hard to equal with other. The difficult question is “How does that get quantified?”
I’ve thought back to points that I made more than a dozen years ago for “what a website could do for a company.” Some of the most powerful numbers I used back then to support my strategy points were from Dell. Here are some:
1) Things you put on a website – are there 24/7/365 so essentially, they provide billable services that far exceed the time put into them.
2) By mid 1998- Dell’s internet sales exceeded $6 million per day.
3) By 2000, online sales had topped $50 million per day and 840 million page requests per quarter.
How does that relate to social media? There are parallels between those early internet days, and social media as it sits today. Because of the open API and available tools, its pretty easy to show twitter growth for some companies. Here are some numbers:
1) In December 2008, DellOutlet attributed $1m of sales DIRECTLY to their Twitter presence.
2) As of June, 2009, DellOutlet attributed $3m of sales DIRECTLY to their Twitter presence.
3) In February 2009, Dell had 15,000 followers.
4) As of September 15th, they have more than 1.1 million followers.
5) From opening the DellOutlet account in 2007 to September 15th, they’ve made 685 updates.
Why are those powerful numbers? That averages less than one update every day. Each of those updates are 140 characters or less and likely took less than 10 minutes to make. (not counting the custom URLs and coupon codes that were made to track sales)
Here is an equation that gives numbers to support social media strategy:
6850 minutes of employee time (app 114 hours) + website costs
=
$3m in directly tracked revenue + goodwill + customer responsiveness + voice of the customer input + 1.1m followers/fans/potential customers + 1.1m instant viewers of any advertisement posted for the Dell Outlet. (as of 9/15/09)
That is 1.1 million people who are likely receptive to products, services, and Dells message because Dell connected with them in a method of their choosing. $3m of revenue and 1.1m customers is most certainly an extremely small percentage of sales for Dell, but it is significant that they built that micro-blogging micro-channel with such micro-efforts.
Do you know of other numbers to drive social media strategy?
September 15th, 2009
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For August 27, 2009, The Harvard Biz Management Tip of the day is: Think Green to Fight the Next Recession ( http://bit.ly/3bBoPm ). The tip’s premise and points are admirable. Harvard Biz is right to highlight Honda Insight and Toyota Prius sales as delightful during our challenging economic times. Harvard Biz is also correct that “many companies are launching environmentally friendly products, and being innovative in ways to creatively shrink resource usage.” I think they should at least briefly explain WHY it is important to think green to fight the next recession and I think it is important to consider how thinking green could help end the current recession. Explanations of the business benefits that come from environmental motivations originate in business lessons that from 1849 and 1973. Harvard Biz should have emphasized both the corporate and consumer benefits of energy conservation. Harvard Biz was right in suggesting that businesses “use a green lens in selecting products for the future” but they could and should have emphasized the enormous “why.” Selling hybrid cars doesn’t produce such fantastic sales simply because the product appeals to consumers’ altruistic nature – although that is an important component. It produces sales because it helps the consumer lower their costs. Trading a gas guzzler for a car that can get 40 or 50 miles per gallon enables consumers; it gives them a significant tool to help conserve money that would have otherwise poured out of their possession – through their tank to oil companies and foreign oil producers. Selling hybrids helps consumers save their hard earned gold. The business side of the green lens shows a company selling hybrids as the 21st century version of the 1849 mining supply company. The miners demand for pans, supplies, and ways to get their gold may have exceeded the gold they found. Selling efficient products benefits the consumers who want to pan for the gold to be found in environmental responsibility. Lowering costs is such a powerful incentive for consumers – and companies gain advantages by offering those products. Beyond selling environmentally friendly products (that help customers lower their costs) the simple practice of lowering costs is powerful for companies too. The Harvard Biz green tip would have been a great business management tip in the 1970’s because of the 1973 oil crisis and the 1979 energy crisis. Energy costs have certainly been soaring for a long time. Focus on energy savings could have helped companies survive and thrive through the recession of the early 1980s. (regardless of the Fed’s contractionary monetary policy.) The focus on those energy savings would have been important then – and is more important than ever now – because energy savings equate to cost reduction.
Internal corporate energy savings help simultaneously increase productivity and return on investment in the same ways that producing energy efficiency for customers can help them reduce costs. Increasing efficiency is a win-win for everyone involved. That is a more important business tip that Harvard Biz missed. Here’s an important corollary: Energy savings enable cost reduction without any related headcount reduction. Hiring will be critical in ending the current recession. A company might look at energy efficiency and savings as a method for lowering costs – but if hundreds or thousands of companies start reducing energy consumption while retaining or increasing employment. Harvard Biz suggests that could help companies during the next recession. Those lessons could have a significant impact – and contribute significantly to ending current recession.
August 27th, 2009
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When management fails, your work matters more – for you and for others!
So there is a good question posted – and some thoughts on the topic here. http://cuberules.com/?p=3327
If management sucks, does your work still matter? The point of the article was that your work matters in some ways because even if your managers and executives are terrible, your work serves as a resume going forward. The point of the article is that stellar work during difficult times serves as evidence that you perform well regardless of obstacles. That can lead to future performance. The example given was Motorola’s CEO who held that philosophy. The article did not specify which of Motorola’s current Co-CEO’s, but it isn’t so relevant. There are countless other examples. Let me offer this one - a star professional athlete on an underperforming team is working for his or her team. The athlete puts in practice time, cares for teammates, and performs on the field or court. Every game, every event is in-effect an audition for another team that can bid for his or her services. In some sports, there is a “contract year bounce” in performance in the year before an athlete becomes a free agent. So – from a selfish me-first perspective, performance matters regardless of management quality.
Is that the only reason? Is that the best reason? No. It is not the only reason, and it is absolutely not the best reason.
There is another more important reason why your work does matter and in my opinion, matters even more during times of management weakness and failure. I think that work during those times matters more because good people can produce good performance that can overcome leadership failures.
You can call that managing up. You can call it overcoming obstacles or you can call it whatever you want. A captain can fly a dying plane into a river but every employee on that plane is responsible for getting the passengers out safely. A captain can make sure a ship is in a good shipping lane, but every officer and sailor on the ship matters. It is the sailor on lookout who has to see the icebergs, who has to decide that they pose risk, and who has to communicate that in a way that results in a new direction for the ship to sail. The best reason is that management failures do not necessarily mean organizational failures.
Management failure has more impact and particularly important in smaller organizations, and in top-down hierarchies. Performance is important, beyond the self-first perspective, because it matters to everyone. In a corporate environment, everyone’s performance makes a difference in increasing value. That value is delivered to customers, shareholders, owners, and fellow employees.
Consider the financial services meltdown during 2008. Bear Stearn’s CEO may have known about the asset based securities that the company was involved in, but the CEO at Bear Stearns did not compute the risk of the asset backed securities. Those securities were probably at the root of the destruction of value. That value destruction hurt the shareholders, customers and employees of Bear Stearns, and it was a significant event in the meltdown of the entire financial sector. How bad was it?
“on March 16, 2008, Bear Stearns signed a merger agreement with JP Morgan Chase in a stock swap worth $2 a share … (the) sale price represented a staggering loss as its stock had traded at $172 a share as late as January 2007, and $93 a share as late as February 2008.” http://en.wikipedia.org/wiki/Bear_Stearns
Employees should have understood the risk of those asset backed securities. They should have communicated that risk. They should have taken a part in redirecting the course that their ship was taking. Someone had to make a knowing decision that those risks were an iceberg that they were going to sail into. In titanic terms, sailing that direction promised good returns, and increased risks. Ultimately, the financial ruins caused by that iceberg were devastating to customers, leaders, employees, shareholders, and everyone. Should the CEO have picked a different course for his corporate ship? Absolutely. That’s a simple call. Did the employees see the potential risk? Evidence suggests they did. So what mattered?
Employee performance matters!
It matters to the employee who performs because of all those intangible me-first things like salary, bonuses, and accolades – and employee performance matters more to everyone else. In a corporate environment, employee performance matters more when leadership fails because employees can help a poorly managed organization avoid the risks that could damage or destroy the organization, the shareholders, the employees and the customers.
August 23rd, 2009
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Harvard business, like everyone else, is trying to find value, to find competitive advantage in all things green. They have an online section that covers enough topics to make it very very worthwhile.
Dreamhost already has competitive advantage in its hosting. If nothing else, they get it from the “trust and confidence” accorded to companies that find the “relationship between eco-orientation and company performance.” They also get it from customers and potential customers. Customers find the eco-orientation as a point for retention. Potential customers see it as a simple way to make a difference.
These two principles, building better retention with current customers and providing potential customers reasons to choose a company – these principles drive economic decisions. They are worthy goals and admirable accomplishments.
Replicating that would require various focus areas:
1) Committment – is there sufficient executive and leadership committment to do it properly?
2) Segmentation – what pieces of the business can be greened in a cost-effective manner?
3) Timing – when can it be done, when should it be done.
4) Benefits – how can benefits be smart? (i.e. specific, measurable attainable, relevant, timely)
5) A stream of continuous improvement, a philosophy of continuous involvement.
How can a company do that?
The key is finding money and environmental syngergy. Find ways in which business objectives and environmental objectives align, and ways in which they can be encouraged or forced to align.
The key is the same as any other accomplishment – it is simply in deciding to do it, planning to do it, doing it, and monitoring how it is done.
June 24th, 2009
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