Google is to build a gigantic campus in The Silicone Valley

‘Silicone’ Valley - that would be the San Fernando Valley where all the porn stars hang out, I guess.

Number of households in US: 101 million.

Local Services market value: $600 billion annual.

Household services: $180 billion annual.

Amount spent on local offline advertising by contracting and real estate businesses: $25 billion annual.

Dotcom investment in 10 online services during boom: $250 million [they were keen but too early]

Amount spent on advertising local services to households: anywhere between $50 -$90 billion annual [this is the biggest untapped revenue opportunity for search]

Largest category of services posting on Craigslist (taken by looking at a sample 2 days of postings): Sex services, 40% [i.e. Craiglist not a player yet, outside of jobs and real estate]

Largest category of Yellow pages advertiser: Attorneys, $856 million in 2001.

Largest single event resulting in Yellow Pages use: eldest daughter gets married [personalized search and user profiles will be important]

Number of Overture searches that explicitly have a city in the search: 4%

Number of Overture searches that have a term such as ‘lawyer’ or ‘doctor’: 8-11%

Years that Dex (the largest online version of offline Yellow Pages) have had search: 1 [the existing Yellow Pages providers are incumbents]

US Yellow pages advertising revenue: $13 billion annual
Local advertising budget in US: $22 billion

Total size of paid search marketplace: < $10 billion annual [i.e. less than existing Yellow Pages market]

This is why the battleground for search will be over Yellow Pages. It is now clear what the product will look like, and maps will play a big part.

Google ups ante in mapping rivalry | CNET News.com

Tom Foremski on what would happen if someone created a treasure hunt with a large cash prize awarded to a single click of an unpublicised adwords ad. A subsequent clicking frenzy could drain advertisers’ accounts, prompting them to ask for a refund.

This hypothetical idea is part of a more serious problem - pay-per-perfomance advertising is open to fraud - when you click something, money drains out of an account - this doesn’t happen with TV, print or radio ads. See Adbombing.

In the same way that companies like Paypal spent a considerable proportion of their resources dealing with fraud, so will Google.

If Google succeeds then its anti-fraud measures will be a competitive edge. If it fails there will be a problem.

The moral to all this is that Google’s business model landed on their laps via Scott Banister at Idealab, it is a new model and its weaknesses are not yet exposed, let alone tested.

Given the risk (and the fact that the existing behemoths like Ebay are beginning to plateau earlier than thought) a price/earnings ratio of half its current level of 140 would seem optimistic.

Google News has been in ‘Beta’ for nearly two and a half years.

Several million beta testers a day for nearly a thousand days, i.e. more than a billion (non unique) beta testers.

That’s quite some QA.
I wonder if this is a record?

Google launches news service - Computerworld

News search has one feature that is still lacking in search engines: sort by date. This is something which will eventually be a core requirement, and the search engines seem to be asleep at the wheel.

Most search engines sort by relevance, but for subjects which change rapidly such as technology, freshness is an important component of relevance.

Having just searched for some software on Google I realized that the top results were 4 years old and useless.

It is not technically difficult to create date ordering, but it is computationally expensive and requires comparisons as documents are crawled. There is, however, one area where searching by date is already there: weblog searching.

The model where content sites ping a server when there are updates soves the date problem cheaply and increases overall relevancy. The ping model is as different from the way search engines currently work, as push is to pull.

This is another compelling reason why the search engines will be caught off guard if they do not pay attention to weblog style publishing and ping servers, not just as an additional feature, but a component that is core to what they do.

It sounds like a very magnanimous thing for Google to do - to build a virtual library of Alexandria, but there is a solid business reason as well.

One of the simplest ways to game Google is to scan out of copyright books, rare ones ideally, boost Pagerank by buying hard links, and serve Adsense against the results. This is commonly done currently, with specialist Dictionaries.

However, Pagerank only really works if you have original content, i.e. stuff that is not already on the web; slapping up a copy of the works of Shakespeare won’t do. If Google scans out of copyright books, and serves them up itself, then attempts to trick Google into handing out Adsense revenue without generating any content will not work.

Google adds major libraries to its database

With desktop search Google now has an application that makes it much more likely that you will continue to use their search engine.

They have created a switching cost - after spending several hours indexing your drive, you are less likely to switch to a different service.

Although there is a lot of hoo hah about desktop search, its still amazing that it took till 2004 for searching your own machine to become a mainstream app, when you have been able to search thousands of other computers around the world, within an instant, since the last millennium.

Expect Microsoft to counter aggressively, their business is built around owning the command line or desktop and they will likely build in indexing out of the box, meaning that Google desktop users will end up with two or more indexes.

Whatever Microsoft do, Google have shown the way forward, their desktop search makes your desktop just one more search tab. It brings your desktop to the web rather than the web to the desktop and this seems like a much more logical UI experience.

Google’s attempt at an auction could break a piece of the cronyism that has plagued corporate America and has caused huge failures from the demise of Enron to the collapse of the technology bubble. Middle men creaming large fees for little value-add and dolling them out to friends is not a good thing regardless of whether you are a free market evangelist or not. This is why I am so surprised that people like Dan Gillmor are choosing to attack Google’s offering. Google’s offer price is an attempt to derive price from real demand, not what generates profits for middle men. This benefits small investors in the long term.

Why aren’t Google’s PR team on the offensive over this!

“If Google’s offering works…then this IPO would legitimize an alternative to the traditional IPO that will diminish the power of Wall Street investment banks. Other companies, companies with lower profiles than Google, will have a new alternative for raising money. Wall Street doesn’t even like to think about that possibility.”

“If, on the other hand, Google’s IPO fails — if not enough investors bid, or if the price is too low, or if the IPO sinks, leaving hordes of angry individual investors and the company with egg on its face — then the auction model will go back on the shelf and Wall Street investment banking will go back to business as usual.”

MSN Money - Jubak’s Journal

Digital Deliverance: From More Than 7,000 Sources, Just a Dozen Account for Most Google News Stories?

Via Anil
MSN launches Newsbot, Microsoft’s answer to Google news.

If you look at the URLs as you mouse over them - its all powered by Moreover..