virtualeconomics

How social search tore aside Google's curtain

There is a growing feeling that Google's search doesn't really work any more - that, not to put too fine a point on it, compared to ten or five or even two years ago Google sucks. Like Arrington, when I used Google for the first time back in 2000 it seemed like magic and I eulogised to others just as if I was sharing a magic trick with them. If two people who knew the Google secret discovered they were talking to one who didn't they shared a happy smile. It was really that good and that impressive and to this day I remember the first ever search my colleague Brendan encouraged me to carry out - "how many turkeys does Bernard Mathews have?" - and the first result - a page from his company's website telling me he had about 13 million of the things. Magic.

Today, what once was magic just looks like a list of content farms, links to Google's own commercial sub-sites and whoever has spent the most on SEO. (They used to be cool but now they're too commercial? Well, maybe sometimes the cliche is true.)

Three things have changed at Google since the days their search results seemed like magic. Two are very well known.

Big Society might almost be a good idea if he meant it

Whenever I see the phrase "Big Society" I am reminded of Andrew Martin's wonderful political satire Bilton. In it a new Prime Minister embarks on a transparently meaningless crusade for "Social Dynamism", which comes unstuck for the empty soundbite it is when an interviewer asks him on live TV whether trees are socially dynamic. (Martin's fictional PM answered "sometimes". Our own would presumably go for a simple "no", since he's selling them off).

Apparently in Whitehall the Big Society is still a big deal. David Cameron even took the time to write another article defending it at the weekend. Outside the exclusion zone, they might as well have called it social dynamism for all the seriousness with which it is regarded.

All the news that's useful to print

There was an interest rate announcement today from the Bank of England's Monetary Policy Committee. They voted to keep interest rates at 0.5%.

I know because I read it on Twitter. And -here'd the important bit - that headline is all I had to read.

In most media, interest rate announcements make for an article or a news story. They spin it out, because the format they have available, indeed all they know how to do, requires each story to be just that. A story, with a bit of context and analysis and speculation for what it will mean in the future. So the newspaper journalist will tell us a bit about how Gordon made the MPC politically independent and the TV newsreader will point out what it means for mortgage rates, probably with a talking head (or two, for "balance") discussing whether it's good or bad.

But interest rate announcements are precisely the sort of news where absolutely everything relevant can be conveyed in a sentence.

Bad news for the music business is bad news for everyone

Bad news for the music business is bad news for everyone. Earlier today Charles Arthur identified three bits of bad news for the industry, and I'm going to talk about three more and what it all means for music listeners.

Charles points to Warner Music's poor results, Fred Wilson's weary resort to piracy in the face of the industry's refusal to sell him the album he wanted, and research from Forrester showing music's shift to digital is at best in its early stages.

On top of all that, we also have today's ruling against (now defunct) ACS:Law finding that "if all that is proven is a single download then all that has been lost is one sale...." (more in PC Pro, which has absolutely led on this story); we have the takeover of EMI itself by the bankers at Citigroup; and, in a story now a month old, we have HMV's inability to sell CDs even when the pre-Xmas snowpocalypse brought to a near standstill the postal system on which its online competitors rely. Online, offline, everywhere, changing habits and the shift to digital is hammering the commercial prospects for music.

In the broader historical and technological context the collapse of the music industry's commercial model isn't really a big surprise.

On football and competition

A recent European ruling apparently makes it likely that the football league will be prevented from selling rights on a territory by territory basis - a Portsmouth landlady has been buying the games for less than £1,000 from Greece instead of the £7,000 asked by Sky Sports, and initial opinion from European legal experts is that she is fully entitled to.

Apologists for the billionaires who own the big clubs and the millionaires who play for them will claim that the loss by the clubs of their current three billion odd pounds in territorial TV revenues will adversely affect the quality of football played.

Which is palpable nonsense.

Six signs of a new net bubble

I've been thinking about the new Internet bubble for a while: today I saw what, for me, clinched it that the bubble is back. Here, in order, are the six signs that we're in a new net bubble.

(1) Hugely improbable specialist etailers like iwantadoor.com advertising (indeed sponsoring) prime-time TV shows. When I saw them appear in the sponsorship slot tonight I immediately knew I was looking at the next Pets.com. That's not a happy connection for any company and it's not a happy moment for our market. 

(2) Massive valuations placed on stocks that have never returned a profit. Demand Media (even with all its weird accounting) still wasn't making a profit when it got listed at $2bn. HuffPo just got bought as it went into marginal profitability. People are spending billions to own businesses that have yet to return a penny. That's not healthy, rational investing. That's dumb money hitching itself to a rising bandwagon (yes, I just said "rising bandwagon") and hoping to offload the shares before it falls. 

AOL's big bet that advertisers will get a bit (but not a lot) smarter

So AOL buys HuffPo for $315m, valuing (as Chris Tolles points out) their 26m ComScore users at $12 each. We're not (yet) in the Broadcast.com league but it's still an excitingly bubbly valuation at ten times 2010 revenues, five times even management's own 2011 revenue forecast and god knows what multiple of the presumably nominal profitability they claim the site achieved in the fifth year since it launched.

AOL is betting the farm on monetising professionally-created content via display advertising. That's a big bet, but of course for AOL it's not a new one - acquiring HuffPo is simply a continuation of the strategy that AOL has been pursuing since it parted company with Time Warner. Engadget, Politics Daily, Techcrunch and especially Patch are all long bets on paying writers and then serving display ads over the results, and if that's the strategy this is a smart push for more of the same.

You know what's not cool? Stealing seventy billion dollars

It turns out that, as Egypt continues to fight to kick Mubarak out, that he and his family have somehow stashed $70 billion (that's right, with a "b") in banks across the world.

I'm sure you've noticed over the past ten years that trying to get your bank to give you your own money has become more and more complicated and onerous. "Money laundering" regulations apparently require financial institutions to pester us for utility bills, passports and the answers to immemorable security questions before we can see, let alone withdraw, our own cash.

Well, here's a modest proposal. Mubarak has stolen about $70 billion from a country that is about to kick him out. If these international agreements on money-laundering and identity checks are good for anything at all, can we use them to make sure he gives it back? Or, if not, admit that the whole thing is pointless and stop wasting everyone's time with them?

Eat me

Chocolate bars are shrinking but the prices staying the same? Reminds me of a pet annoyance - snack sizes in train stations. Take - by way of example - Leeds station in Yorkshire. There's two W H Smiths, a Whistle Stop and a Journey's Friend all selling basically the same stuff - papers, magazines, chocolates, crisps and drinks. Every single one of them sells soft drinks only in bottles, never in the smaller cans, and only "grab size" (ie sodding massive) bags of crisps. Same in Kings Cross, same in Euston, same in Newcastle. No matter how many outlets in a UK station nominally "compete" with each other to sell snacks for the journey they somehow all end up selling the largest, most expensive - and incidentally therefore most fattening - size of crisps and drinks to their captive audience. Try to buy a can (not a bottle) of coke in any train station and see. It's almost like it's a conspiracy.

Everything useful I know about The Daily

Everything that's not about the Egyptian revolution today has been about the launch of the Daily. Here's everything I know about it, which I suspect is a fair summary of what anyone outside News Corp itself knows about it.

News organisations need to experiment with new digital ideas. This is one, and it seems to have proper funding an impressive talent pool. Good.

News Corp hasn't achieved any sustainable successes in digital, but then again a lot of the plays they've made have been into fickle, hit-and-miss spaces where they've lost out to world-class competition. News Corp is pretty good at (a certain type of) news though and could make something work here.

No-one knows yet what the take-up will be. If News Corp's statements about the take-up of the paid Times website are anything to go by we'll have to work out actual take-up for ourselves a few months down the line, but until there's some numbers to look at I'm just going to go ahead and admit that I don't know how many people will buy it. And neither does anyone else.