If this speech was just to give assurance to American people then yeah nice try. There were several important themes which were missing from his speech:

How environmental policies will shape American economy in next 4 to 8 years?
How science and technology investment (with policy and tax incentives) will create competitive education system?
How America will lead in creating global trade and economic structure? Which will be win-win for all participating countries.

Blogged with MessageDance using Gmail

There are tons of literature on why companies go for M&A, this old dot-com era HBS paper outlines leading motivations. If you play these motivations on RPV (resources-processes-values) framework then long term answers can be found. I guess it’s easy to place bets on long term (short term has higher emotional element!). So what are the possible long term trends here -

Enterprise and consumer market separation is not that straight forward anymore. Market has to be redefined, before any competitive barrier strategy can go into implementation. Somewhere down the road enterprise architecture will overlap with cloud computing architecture, and that’s where massive value shift will happen. Or is it already happening?

Media sector has emerged as the net technology play. You cannot think of having any media entity without first figuring out the technical blueprint. Is Google a technology company or a media company?

Battle for developer platform will move to mobile and media verticals.

These three trends are the reason why Microsoft is going after Yahoo. Yahoo gives them traffic, media expertise and good properties to extend into developer market. Google is smart and they are scared now. Timing is not good for them.

Scoble has a well thought out post on this same topic. I like his analysis but I think he is giving too much credit to Google. He writes:

Google doesn’t mind this deal going through at all. Google knows they will be able to outrun a “Microhoo.”

I don’t think that is true. Google’s biggest currency is their stock option. With Microsoft going after Google’s fat margins, they run the risk of spending time to “manage” stock price fluctuations. That will hurt their culture and that will be a huge damage.

Scoble’s point about email is off the mark. Email is still the killer app. His point -

Email is not where the money is. Google knows this. So, who cares that Microsoft and Yahoo have a monopoly there? There’s only one way to make money with the 600 million who are on either Microsoft’s Hotmail or Yahoo’s email: get them to join other services where there ARE ways to make money. Danny Sullivan told me that this deal is all about search. He’s right. But you gotta be able to get those 600 million people to not just use your email, but come over and use your search. Google is trying to slow down these teams from doing that. But Google knows that even if Microsoft and Yahoo join email and do a pretty decent job of integrating search into there that Google will still see more growth in both email and search than Microsoft and Yahoo together will see. Why? Have you compared Google’s offerings to the others? I have (I am a Hotmail user). Even though I am locked into Hotmail cause my email address is all over the Web I’d rather be on Gmail and Google’s offerings are better integrated and better designed.

There are several trends making email a factor in the Microsoft/Yahoo transaction-

There is still a very strong motivation to start daily information consumption cycle with email (yes sometimes before morning leak!). Any idea how much money Google makes every time you open Gmail? Nobody wakes up in the morning to go and hit Google for search. There is no motivation there. Email brings motivation.

Also users read their email slowly (read more attention to whatever ad you might have on sidebars) , whereas on search pages/content sites we all become scroll monkeys. This is an important distinction and will become important as marketers draw user attention graph and place their budget accordingly.

Without email, there will be less motivation for making search queries. Same as first point. If my motivation and context is not overlapping, I will generate less queries. Less search queries for Google means bad news.

As I said in the beginning, big companies are complex and things they do are more complex.

There will be lot of point counter point between Google and Microsoft. I am keeping my eye on two things here - how this will play out on Google stock and also impact on the overall startup funding climate.

In a recent research note, analysts at Goldman Sachs said they believed these loans pushed California home prices to levels 35% to 40% higher than justified by other fundamentals. “We expect home prices to return to normalized levels,” wrote James Fotheringham and his colleagues at Goldman.

If Goldman is right, the typical home-owning household in California has about $200,000 less in home equity than it thought it had. Instead of living in a home that’s worth $589,000, it’s probably worth $380,000.

Either his clients are going to place some wrong bets or we are going to see tough times in California.

Google explains the difference between a news article and a comment:

Compare this with today’s Forum discussion (look for “Illegal Worker Crackdown” on this page). I am sure Google has good intentions here but they are trivializing a very very complex issue and randomly offering voice to whoever approaches them. As a big and responsible organization they need to publish guidelines for accepting comments and not just be random, like the way they are in approving adsense account. Stakes are higher here.

News trustworthiness is a key driver for ensuring fair functioning of democratic processes. Google is  tampering with it without properly disclosing the formula. Comments are opinions and opinions make editorials. Does this mean Google is now getting into editorial business?

My fear is this - there is no proper check there to stop people from saying - “this got to be true because it was there on Google news!”

Update: Mathew Ingram has a very interesting take on the Google announcement that they will now source original stories from the wires directly. He quotes a rather chilling commentory from Reuters:

Because of Google’s campaign to simultaneously reduce duplicate articles, the original wire service article is likely to be featured in Google News instead of versions of the same article from newspaper customers, sapping ad revenue to those newspapers.

Google’s attempt to reduce duplicate article reads like an extention of their core search quality initiative. If implemented correctly, this will result in more casualty for the mainstream media.

I doubt if on this particular issue, readers are going to shed any tears.

Thankfully we have smart folks like Roubini to convert all that CNBC-breathlessness into layman language -

First, you take a bunch of shaky and risky subprime mortgages and repackage them into residential mortgage backed securities (RMBS); then you repackage these RMBS in different (equity, mezzanine, senior) tranches of cash CDOs that receive a misleading investment grade rating by the credit rating agencies; then you create synthetic CDOs out of the same underlying RMBS; then you create CDOs of CDOs (or squared CDOs) out of these CDOs; and then you create CDOs of CDOs of CDOs (or cubed CDOs) out of the same murky securities; then you stuff some of these RMBS and CDO tranches into SIV (structured investment vehicles) or into ABCP (Asset Backed Commercial Paper) or into money market funds. Then no wonder that eventually people panic and run - as they did yesterday – on an apparently “safe” money market fund such as Sentinel. That “toxic waste” of unpriceable and uncertain junk and zombie corpses is now emerging in the most unlikely places in the financial markets.

Reason , why I failed to convincingly explain to my wife, was that I was using two cows theory and finished with a statement that these spreadsheet-ninjas are really trying to get milk out of bunch of bulls.

Google News is exactly  doing that by allowing news actors to chime in with their comments NOT ON THEIR original news site but on Google website. Why not just give them blogspot account in real time (something along claim your blog - in line with the emerging claim your profile scandal started by profile search companies) and link it to news site.

From technology innovation point of view this new Google hack sounds exciting but looks like their approach is all old fashioned submit-review-approval/rejection. I am scratching my head as to does Google know what they are getting into or this is just a ploy to beat all mainstream media to complete submission in some weird deal making stunt.

TechCrunch echoing a great point made by Gabe on why Google is not being open in sharing  crawled data with other websites. Their grandiose claim to openness and this particular practice is definitely not in sync.

Though this whole development begs a different kind of discussion. Why are newspaper organizations not doing these kinds of hacks? It’s high time they get out of newspaper publishing mode. Go beyond comments, trackbacks etc and develop next generation linking and news authenticity tools. Start hacking into news communication business.

Communication is multi-directional and also works in listening mode whereas publishing is just sitting high and dispensing punditry.

News organizations have to create more pubmunication tools.

While we’re one of the biggest services on the web, we need to develop scalable, data-driven open platforms and infrastructure to easily bring in new customers, consumers and publishers. That is why I am taking a fresh look.

The good news is we’re starting with some awesome assets. We have half a billion of consumers in our network who have several trillion dollars in buying power; hundreds of thousands of advertisers with tens of billions in total marketing budgets to invest in order to capture the attention and dollars of our consumers; and, an important and growing network of publishers and developers who are after both consumers’ attention and marketers’ ad dollars.

So to successfully exploit our ecosystem, Yahoo! is going to take advantage of three core strategic principles: insights, openness, and being a partner of choice. That, we believe, will differentiate us from our competitors and help accelerate the development of our marketplace

Facebook model has been analyzed by nearly everybody and there is no reason why Yahoo cannot just copy the same model and provide deep live-in-my-house type of opportunity for application developers. Infact they can go one step further by opening their Yahoo Hosting division to application developers. They should seriously disrupt this model by providing free hosting. Complete hosting free of charge for application developers. Do Facebook on facebook. Added bonus, give access to Yahoo identity system and social tools. Offcourse with major caveat attached - no Adsense allowed!

Also they already have Pipes. They just need to stretch it further inside. (metaphorically speaking). Their social portfolio is pretty strong as well - Bookmarks (Delicious), photo(Flickr), event(Upcoming), and blog community (MyBlogLog). Though they are all stale now but collectively they hold tremendous opportunities. They can do friend-of-a-friend in N-number of ways.

One gets the impression that if they are willing to take Wall Street heat for couple of more years and allow their engineers to run the ship, opportunities are endless.

If “advertising is a very democratic and effective way to participate in a public dialogue” then who pays for this dialog? I can’t believe company like Google has people who have such naive understanding of how things work in public policy arena.

Advertising is an effective medium and that’s why health care industry is so messed up that they invest more money in Madison Avenue projects and government lobbying. We need less of that and not more. Spend more money on Google health and less on Adsense. That’s no-brainer.

Update: Missy Krasner had made a well reasoned defense of the faux-pas. I think people think of Google as a different kind of company and tend to assume that most of the time Google will fight a good fight. So I was bit surprised to read their stand on Sicko. But in the end this whole episode turned out to be a one small incident of careless blog post.

Technorati Tags: sicko

Jerry Yang has stepped in to fill in Semel’s place. To me this is a great news as Yahoo will now have geek at the top and a founder who can afford to go heavy on the vision. They need that. This move will help them in recruitment as well.

All the talk about Yahoo needing a partner and selling out doesn’t really make  sense to me. Why is everybody so breathless about Yahoo’s future. After all company is growing, with revenue up, stock is not that bad and if you imagine a world without Google then their execution wasn’t that bad.  They are not the only company suddenly looking clueless when compared against Google.

Lets check some basics here.

Jerry Yang is 38
Internet market is still in its infancy
Google hasn’t screwed up yet - They will eventually - Its a Newtonian thing !

We need counter to Google and thats not just in terms of search engine and technology. Yahoo brings cultural counter weight as well. People like Yahoo. For all you know this may be a time to go bullish on Yahoo.

(pic courtesy laughing squid)

Something along the lines of Critical Mass. Sounds fun.