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Future Bits: Google’s Machiavellianism

Remember my "Executive Musical Chairs" comments in previous comments to articles presented here (e.g.Whose on Google, What's on Microsoft, and Nobody's on Yahoo?).  Did you know there was going to be a test?  Make a list of all the top tech execs moves in 2008, and for extra credit, make some predictions for the next round of "chair grabbing"  ahead in 2009.

Previously posted on December 24, 2008

By Saul Hansell 

The New York Times Bits

http://bits.blogs.nytimes.com/2008/12/24/future-bits-googles-machiavellianism/#more-2127

Defining Moment of 2008: Google’s offer to help Yahoo fend off Microsoft’s hostile takeover bid.

Google’s response to Microsoft’s bid for Yahoo may represent one of the most brilliant acts of corporate Machiavellianism in recent history. Two days after the hostile offer was announced, David Drummond, Google’s chief legal officer, wrote a post on Google’s blog opposing the deal and aligning itself with Jerry Yang, Yahoo’s co-founder and chief executive, who wanted to keep the company independent.

Google’s support helped embolden Mr. Yang and encouraged him to play hard-to-get with Microsoft until the software giant withdrew its offer. Google then agreed to help bolster Yahoo’s profits by selling some search advertising for it — a deal that was ultimately scuttled in the face of scrutiny by the Justice Department.

The upshot of all this is that Google continues to gain share in the search market and Internet audience, and all its competitors remain in disarray. Yahoo has lost two tiers of top management. Microsoft just hired one former Yahoo executive to develop yet another Internet strategy. And AOL, which has been negotiating possible combinations with both Microsoft and Yahoo, remains in play, reportedly unloved by Time Warner, its corporate parent.

While Microsoft’s dream of mounting a true challenge to Google’s search dominance is elusive, the market for display advertising remains divided and up for grabs. But it is display advertising that has been hardest hit by the recession.

Defining Question for 2009: Can Google get its act together in display advertising before its rivals do?

Keeping the competition divided has bought Google more time, but it hasn’t won the battle. It is still trying to integrate DoubleClick, the advertising technology firm it bought, and it has yet to explain to the market the advantage of the combination.

Microsoft signs major deal with Dell for Live Search

Wonder which came first - the chicken or the Qu Li?  Methinks that Dell felt they would be in good hands if Microsoft informed them during negotiations that former Yahoo Search guru would be heading up the Search deal.  If the execs at Dell had the inside word on Microsoft's hiring of Qu Li, they kept it close to the vest - no leaks from their camp.  Wonder who else is on Microsoft chief Steve Ballmer's 2008 Xmas shopping list????          Marlene

Previously appeared December 5th, 2008
Posted by Mary Jo Foley
http://blogs.zdnet.com/microsoft/?p=1753

Microsoft and Dell have signed a deal via which Dell will be shipping new PCs with the Live Search toolbar preinstalled, according to sources familiar with the arrangement between the two companies.

Microsoft officials declined to comment on the alleged deal, as did Dell officials. Officials with both companies said they would not comment on “rumors and speculation.”

I wouldn’t put this in the speculation category, myself. My sources say that Microsoft has offered Dell sweet enough terms to entice the PC maker to replace its search-preload deal with Google with a comparable offering from Microsoft.

Well, the tech world has re-invented the game of "musical chairs" --- and in this case, the chair as a symbol does not come close to describing what's at stake here.  Any predictions about other moves that might be in the near future?               Marlene

Boomtown/D: All Things Digital

Posted by Kara Swisher

Previously appeared December 4, 2008

http://kara.allthingsd.com/20081204/microsoft-confirms-qi-lu-hired-as-digital-chief-mcandrews-out/

Former Yahoo tech star Qi Lu (pictured here)  is poised to take on the big job of being Microsoft’s top digital executive, according to several sources inside and outside the company.

The appointment could be announced by Microsoft as early as next Monday. A variety of details is still being ironed out, though, including whether the well-regarded techie Lu will be “paired” with another executive at Microsoft (MSFT) with more general business experience. While Lu has managed large teams while at Yahoo (YHOO) and also huge projects, he does not have advertising sales and media experience that will be a big part of his purview at Microsoft.

In that job, he will be the boss of three strong digital execs at the software giant: Satya Nadella, the SVP who heads engineering for Microsoft’s search, portal and advertising platform group; Yusuf Mehdi, whose online services portfolio includes marketing, online audience business development and product management for MSN and the search properties; and Brian McAndrews, the SVP for the advertiser and publisher solutions group.

That executive partner could be some higher-ranking Microsoft exec or even CEO Steve Ballmer himself.

Elevating McAndrews is also a possibility, as he has also wanted the digital chief job and could decide to leave after not getting it. (He also would not be a bad choice for Yahoo’s new CEO.) McAndrews was the CEO of aQuantive, an ad company bought by Microsoft for $6 billion last year.

Yahoo, Google Revise Deal in Hopes of Approval

Back in September, we posted several articles that followed the Google/Yahooo advertising deal in the making.  Looks like the dust kicked up by the Advertising Groups and the involvement of the Dept of Justice with their hiring of super lawyer Sandy Litvack have changed the game for the two Internet companies.           Marlene

This originally appeared in a posting By Reuters  
2008-11-04

http://www.baselinemag.com/c/a/Search/Yahoo-Google-Revise-Deal-in-Hopes-of-Approval/1/

The two Internet companies have submitted a reworked proposal to the U.S. Department of Justice that shortens their partnership to just two years from 10 years, the source said. The revised deal also caps the percentage of search revenue that Yahoo can collect from Google at no more than 25 percent, and lets Google advertisers opt out of being placed on Yahoo, the source said.

WASHINGTON/SAN FRANCISCO (Reuters) - Yahoo Inc and Google Inc have drastically scaled back the scope of their search advertising deal, a person close to the discussions said on Monday, in a last-ditch effort to win U.S. antitrust approval.

The move comes after Google appeared to be on the verge of walking away from the partnership, which was announced in June to foil Microsoft Corp's takeover attempt of Yahoo. The deal has since drawn scrutiny from U.S. regulators amid a growing chorus of criticism from advertisers.

The two Internet companies have submitted a reworked proposal to the U.S. Department of Justice that shortens their partnership to just two years from 10 years, the source said.

The revised deal also caps the percentage of search revenue that Yahoo can collect from Google at no more than 25 percent, and lets Google advertisers opt out of being placed on Yahoo, the source said.

Yahoo spokeswoman Tracy Schmaler said in an emailed statement the company continues to work with the Justice Department and discussions are ongoing.

Google spokesman Adam Kovacevich declined to discuss the details of the process.

Analysts said the new terms could help the deal get past regulators, but questioned whether such a limited partnership would be financially lucrative to Yahoo, which is a distant No. 2 to Google in the web search market.

Mukul Krishna, digital media global director at consulting firm Frost and Sullivan, described the revised terms as "more of a Band-Aid than the extensive surgery that is needed" for Yahoo.

"This sweetens the deal to go through antitrust red flags and gives (Yahoo CEO) Jerry (Yang) some breathing space, but how much money it would add to Yahoo's top line would be very crucial," Krishna said. "And it doesn't answer the question, what after two years?"

Mark May, an analyst with Needham & Co, said Yahoo's willingness to limit the scope of the deal "tells us that other alternatives are either not available or not attractive at all."

Vint Cerf: Keeping the Internet Healthy - The Last Mile

Part 4 and the conclusion of the interview with Vint Cerf, "Father of the Internet".

In the first part of the interview, Cerf voiced his concern about the idea of trying to centralize everything, and that a Washington appointed "czar" to assume control over technology policy could be compared to the "War on Drugs" or "War on Poverty".  He feels it never quite works, but suggests a cabinet- level person, comparing this to his "evangelist" position at Google, wherein he does not make decisions.  What he does is "lobby like crazy".   Any comments on this premise?   Marlene

By Edward Cone 2008-09-25

http://mobile.cioinsight.com/device/article.php?mid=4&CALL_URL=http://www.cioinsight.com/c/a/Expert-Voices/Vint-Cerf-Keeping-the-Internet-Healthy/

Should government play a role in building out infrastructure or is that best left to the private sector alone?

Cerf: It sometimes takes steps to illustrate the existence of a market to motivate the business sector. In the late 1980s, I asked the Federal Networking Council for permission to put a commercial electronic mail system up on the Internet. My motivation, in part, was to allow commercial traffic to flow on the government-sponsored backbone as a way of demonstrating to the business sector that there might be a market that [businesses] should invest in.

Getting rid of that barrier created an opportunity for commercial Internet service without having to build the backbone. Once that market was demonstrated, it didn’t take long before the government said: Gee, we don’t need our government-sponsored backbone anymore, because everybody can buy commercial service.

With Google unveiling its Android operating system to challenge the iPhone, I’m reminded ofJonathan Zittrain’s thoughts on “generative” technologies, open platforms that allow people to tinker and innovate, versus closed or tightly controlled platforms like the iPhone. What kind of phone are you carrying, and what does it say about you?

Cerf: I use a RIM BlackBerry. I’m anticipating the use of an iPhone or something like it. What I’m eager for is a phone that runs the Android operating system, because of the openness of the design. It’s the evolving flexibility of mobile platforms that’s so critical.

One can understand some of the decision-making that went on at Apple when preparing the iPhone.

A closed device has the benefit that people can’t make changes to it that may cause it to stop working.

The counterpoint is that almost every information technology I can think of, as it becomes more useful and competitors arise, leads to demands from users that interoperability is paramount. In the case of the Internet, the TCP/IP protocols turned out to be demanded by the buyers of new equipment, so that they wouldn’t be locked into any particular manufacturer. So standardization has this wonderful benefit of leading to interoperability, and it also creates a platform on top of which new innovations can happen. But there’s this tension between differentiation and interworking that repeats itself over and over again as time goes on.

Vint Cerf: Keeping the Internet Healthy - The Last Mile

The following is the 3rd part of 4 sections from a CIO interview with "The Father Of The Internet". Here he refers to the FCC argument to relax all regulatory strictures, to encourage people to offer broadband services. However, he does not feel that intermodal competition is going to be a solution to the problem we are facing of not having very effective broadband services . 

Hmmmm.  Very interesting.  Where have I heard something about the problems occurring following the relaxing of regulatory restrictions?  Let me think...                                        Marlene

By Edward Cone 2008-09-25

http://mobile.cioinsight.com/device/article.php?mid=4&CALL_URL=http://www.cioinsight.com/c/a/Expert-Voices/Vint-Cerf-Keeping-the-Internet-Healthy/

Part 3

What else should IT executives keep an eye on?

Cerf: One of the most important things CIOs should be asking themselves is, Are we ready for IP version 6?

And if we’re not, why not, and what can we do to fix that? The reason that’s so important is that the Internet cannot continue to grow effectively without the new address space. There are efforts going on to implement that, but it’s absolutely critical that our business sector, the private sector, be prepared for operation of both IPv6 and IPv4. The Internet service providers need to start offering that service. Not very many of them are; they’re claiming they don’t see a market for it. The answer is: We’re going to run out of v4 address space somewhere around 2011, and that’s not very long from now in terms of preparing a fully operational IPv6 system running concurrently with IPv4. So please pay attention to that.

We’ve spoken before about exaggerated claims that the Internet is ready to choke on traffic volume, especially video traffic. Those claims obscure real problems at the edge of the network, the so-called last mile.

Cerf: There is substantial capacity - potential, anyway - in the core of the Net. The edges are at issue, and part of the reason is that there too few competitors providing service. In the United States , the idea that the Internet is choking at the edge of the Net might have some validity. Our delivery capacities are far less than what other countries and other Internet providers have been able to achieve.

Vint Cerf: Keeping the Internet Healthy - A National CTO?

The following is the second part of 4 sections of a CIO interview with "The Father Of The Internet", Vint Cerf.  I find the issues about "bit rot" to be particularly interesting - as we all struggle day to day with figuring out how to access files in different formats.  Any comments?    See part 3 on Friday, October 3, 2008          Marlene

By Edward Cone 2008-09-25

http://mobile.cioinsight.com/device/article.php?mid=4&CALL_URL=http://www.cioinsight.com/c/a/Expert-Voices/Vint-Cerf-Keeping-the-Internet-Healthy/

Part 2

The Obama campaign has talked about naming a national chief technology officer.

Cerf: If there were such a position, whether a CIO position or a CTO, as the Obama campaign refers to it, having that position in the cabinet leads to the question, What does that party actually do? Does that party have a budget? Will the organization formed under this position have authority for certain things and, if so, what will they be?

The worst thing is to have a position where all you can do is say “no,” because if you say “yes,” you can’t afford to pay for anything. That’s a source of frustration for a number of people in the private sector who serve as chief technology officers: If they don’t have budget and staff, it’s very hard to make something happen.

Your advocacy for network neutrality carries some weight, given your role in Internet history. What’s your thinking on the issue?

Cerf: This is more complicated than it looks. The debate was boiled down to bumper stickers for a while, which was not helpful in terms of understanding what the issues are.

Openness to new applications, openness to devices that are compatible - those things are important to us. At Google, we take the view that the providers of Internet access should not take advantage of their access position to interfere with people offering competitive applications to the applications provided by the underlying transport and access provider. We don’t think that’s a good thing from the consumer point of view, and certainly not from the innovative point of view.