Replies to post #4057 on Alphabet Inc (GOOG)

[SeriousMoney]

Will search keep Google on the throne?
News.com, By Elinor Mills
Story last modified Wed May 10 12:12:55 PDT 2006

MOUNTAIN VIEW, Calif.-- Unlike rivals Yahoo and Microsoft, Google is focused on core search and thus will be the main infrastructure provider for Web services and information going forward, Google Chief Executive Eric Schmidt said Wednesday.

"It's obvious things are going to be more competitive in the future," he said during the company's annual press day. "This competition is healthy for end users." But "none of the other competitors is emphasizing" search.

Just as pre-Web commerce was propelled after highways were built, information services and commerce are being expanded by the growth of Web search, he said. "Search is really the unified solution to that. We're really at the beginning of this whole new phase."

"The winners will be the fastest innovators who partner most broadly," Schmidt said, noting that Google has strong partnerships with eBay and AOL.

Schmidt talked about the moment he understood the significance of Web search. "Everybody has an 'aha' moment," he said. "There is a magical moment when you type something into Google and you go, 'Wow! That's amazing. I learned something, something obscure.'"

Schmidt's 'aha' moment

Schmidt said he travels the world with Google Earth, the company's mapping program that offers satellite imagery and a fly-by navigation interface. "Google Earth is a new way to travel," he said, adding that he discovered he could climb Mt. Everest "from the comfort of my office. It was my 'aha' moment. Not yours.'"

Schmidt also posed a question to Google: "How long will I live?" He wasn't happy with the answer: "age 67." Still, "this is what Google is useful for," Schmidt said. "It really does change the way you organize your life."

The expansion of search infrastructure and search-based Web commerce will only speed up now that networks are 100 times faster than they were 10 years ago, there are broadband handhelds, the "Wintel" platform is being replaced by Web services, the ad business model has been proven and growth internationally is surging, he said.

Google, meanwhile, is "willing to buy small companies, not necessarily large companies, to fulfill this technology," Schmidt said.

In the end, the users will dictate the direction of search and Internet services, he said.

"I would propose the first rule of the Internet, most humbly: People have a lot to say," he said, pointing to the popularity of user-created wikis. There will be a "transition from learned information to learning information, and curiosity will be how you establish your expertise."

In five years, Google will have built "the product I've always wanted to build--we call it 'serendipity,'" he said, adding that it will "tell me what I should be typing."

Also coming in the future: simultaneous translation in the major languages and the ability to take a picture on a mobile phone and use OCR (optical character recognition) to find out what it's a picture of, he added.

"We have literally just begun on the potential of this unification," he said.

http://news.com.com/Schmidt+says+Googles+focus+on+search+will+trump+rivals/2100-1032_3-6070774.html

[SeriousMoney]

Google CEO sees blue skies of "limitless growth"
Wed May 10, 2006 8:18 PM ET
By Eric Auchard

MOUNTAIN VIEW, California (Reuters) - Google Inc. <GOOG.O>, facing mounting competition in the Internet search advertising market from Microsoft Corp. <MSFT.O> and Yahoo Inc. <YHOO.O>, expects that rivalry to drive up prices and increase its revenue, Chief Executive Eric Schmidt said on Wednesday.

"There is a surprising, if not bizarre (fact that) more competition in auctions can actually produce more revenue, rather than less," Schmidt said at a press briefing at Google's Mountain View, Calif., headquarters.

Schmidt also suggested that in the long run, allowing people to search the Web via mobile phones could be as big a business as its computer Web search business, which last year generated around $6 billion in revenue.

Google is the leader in Web searching, with 60 percent of the global market. It derives virtually all of its revenue from selling text advertisements alongside search query results.

More competition "can in fact cause prices to rise," Schmidt said, adding that this would benefit not just Google but other players as well.

He singled out Microsoft and Yahoo, which in recent weeks have introduced major upgrades to their search technology that will be available later this year.

"There is room for (Microsoft and Yahoo) and more to succeed," he said.

Google's competitive advantage is that the overwhelming focus of its business is on search, he said.

Regarding mobile phone searches, Schmidt said, "As people do more searches, it should balance out" with computer-based searches, but he ruled out speculation that Google may be looking to become a reseller of wireless telephone services.

"No, we are busy," he said bluntly.

Schmidt said Google appears to be benefiting from a "limitless growth model" that shows no signs of ending.

"If this all comes together it will work as a continuous cycle," Schmidt said, noting that more users, more advertisers, and more content will serve to create further demand.

Schmidt said the revolution in advertising that allows Web sites to generate revenue simply by driving traffic to their sites "seems to be turning power relationships on their head." Users are in control of the information they search for, he said, and this is turning economic relationships around.

Executives introduced several new products, including an upgrade of Google Desktop that stitches together computer applications from Google and independent providers.

The company also plans to offer Google Notebook, a simple text and graphics editor that allows users to write or copy information as they search.

It introduced Google Co-op, a way for users to tag, or categorize, information, and a trial product, Google Trends, which allows any user to search for patterns in Google's search database.

Asked whether the Google Desktop platform represents a new level of competition with Microsoft, Schmidt reiterated that the company was not seeking to replace the Windows desktop.

"The cornerstone of our strategy is to solve new problems," he said, adding that advertising and its resulting cash flows give Google the luxury to innovate over time.

However, co-founder and president Sergey Brin underscored the enmity between Google and Microsoft.

"We just certainly see the history of Microsoft behaving anti-competitively, not playing fair (and being) a convicted monopolist," Brin said.

Google executives said billions of dollars of stock sold by the senior executive team over the past year were all part of an ordered selling plan that the company had disclosed in 2004.

Brin said he had sold 20 percent of his original holdings but planned to hang on to the remaining 80 percent. "The vast majority I intend to keep forever," he declared.

Google shares fell $5.82, or 1.4 percent, to close at $402.98 on Nasdaq.

http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-05-11T001800Z_01_N104...

[SeriousMoney]

Google's Sticky Little Fingers
By Rick Aristotle Munarriz (TMFBreakerRick)
May 11, 2006

Don't you ever go thinking that Google (Nasdaq: GOOG) is content with its primo position in search. After recent public announcements by Yahoo! (Nasdaq: YHOO) and Microsoft (Nasdaq: MSFT) proclaiming their progress in paid search and search engine technology, the top dog is ready to bite back. On Wednesday afternoon, the company that already controls 49% of the domestic search market introduced three new technologies to keep its rivals in check.

First, Google Co-Op allows participants to single out relevant Web pages in specialized areas. Users can then subscribe to specific taggers to receive their tailored site suggestions. With the recent popularity of tagging sites aiding in democratizing the Internet, this ramps up the personality aspect by allowing surfers to pick specific sources that they may trust to lead them somewhere useful.

Second, we have Google Notebook, which rolls out next week. This is a browser tool that allows users to clip chunks of other pages and preserve the clipping to view later.

And finally, there's Google Desktop 4, the latest incarnation of the company's suite of desktop-based applications. Those who download the software can incorporate plug-in gadgets like weather globes, Google Calendar, and other apps to launch from their desktop screen.

Clearly, items like Notebook and Desktop are aiming right at Inside Value pick Microsoft's jugular. Google's success in monetizing searches has the company coming up with as many ways as possible to pry deeper into the computing experience and create even more ad-serving opportunities.

Google's been busy. It has also introduced Google Trends, where visitors can gauge the popularity of any search term over the past two years and cities or regions that are searching for those keywords the most often.

Not all of the new offerings are unique to Google, but they all bear checking out because of the huge Internet audience that the search king commands. The company doesn't need all of the introductions to be hits, either. If just one or two prove to be sticky successes, it will push the Google experience further into the online realm.

Yep. Just when you thought that Google couldn't get any bigger, it grows a few more appendages.

http://www.fool.com/News/mft/2006/mft06051105.htm?source=eptyholnk303100&logvisit=y&npu=y

[SeriousMoney]

Google's Desktop Offensive
BusinessWeek, News Analysis
By Burt Helm, MAY 11, 2006

The Internet giant is fighting Microsoft's advances into search with a host of tools that move it deeper into Redmond territory.

No doubt about it, rivals are lining up in a bid to knock Google (GOOG ) from its perch atop of the Internet-search heap. Chief among them is Microsoft (MSFT ), which this month plans to take public its first search-advertising network, a tool it hopes will help it generate more revenue from the booming Net-advertising market. It's just one of many recent moves by Microsoft, the world's No. 1 software maker, onto Google's turf.

Google's not taking it lying down. On May 10 Google announced several new services aimed at moving it further into the heart of Microsoft territory: the computer desktop. For starters, it unveiled a new version of Google Desktop, which in addition to letting users search their own hard drives will now give them "Gadgets" -- small applications that sit on the desktop to provide everything from news and weather to entertaining animations.

Also in the lineup: Google Notebook, a Web-based note-taking program; Google Co-Op, an enhancement to the search engine that lets users annotate search results; and Google Trends, which lets users chart the frequency of specific searches over time. Google touted the new wares at a series of presentations for the media at its headquarters in Mountain View, Calif.

Desktop and the other tools fit with Google's dual strategies of getting its brand in front of computer users in as many ways as possible, and at the same time creating ways for advertisers to get their message to specific audiences. "The key for them is to continue to leverage search, and then use their position there to garner success in other areas," says Scott Kessler, an analyst with Standard & Poor's.

PERSISTENT PRESENCE. That two-pronged approach is key to success against competitors like Microsoft. The software maker uses its dominant Internet Explorer Web browser and Windows operating system to direct users to its other businesses and swipe at competitors' market share. Microsoft's attention these days is focused on growing online ad revenue with products like adCenter (see BW Online, 5/8/06, "The Counterattack on Google").

Google clearly recognizes Microsoft's threat. In recent weeks, Google complained to antitrust regulators that Microsoft will unfairly employ the next version of Internet Explorer to guide users to search via Microsoft's MSN.

By developing new ways to get Google in front of Web surfers, the company scores a better chance of directing people to its own search engine. Though developers will be able to develop their own Gadgets for the service, several of the new gadget features will be shortcuts to other Google products. The Google Desktop program will also still put the standard Google search bar on the desktop as well. The Notebook program will let users save links, images, and Web sites of interest, and act as a companion to users wherever they surf.

NICHE ITCH. Google will also use the new tools to provide more relevant -- and therefore more lucrative -- advertisements. The desktop program will still scan the user's entire hard drive as well, letting the user search and find information while also giving Google the chance to do an even better job of targeting ads.

Google Co-op, which launched with special annotated search engines in the health and city-guide categories, will also provide an opportunity for Google to create specialized areas of search. If it succeeds in making itself a destination for search in various niche categories, Google could command higher rates from advertisers looking to target specific groups of users. "Specialized search is very important," for attracting and keeping users, says Danny Sullivan, editor of trade site Search Engine Watch. "People want to tune into more specific content the way they want to tune into more specific channels on televisions."

Of course, while Google has long been the master of profiting from targeted ads next to search results and on partner Web sites, it's still struggling to burrow into other parts of users' digital lives. Its most popular nonsearch product, Web-based e-mail client Gmail, ranked third behind Yahoo! Mail and MSN's Hotmail, according to Web traffic tracker Hitwise.

But for the millions who spend their days toiling (or playing) in front of a computer, there is going to be a growing number of places to find the Google imprint rather than just in search. And each one makes Microsoft's dominance of the desktop look that much less secure.

http://yahoo.businessweek.com/technology/content/may2006/tc20060511_493243.htm

[SeriousMoney]

Yahoo! Snipes at Microsoft
By Jonathan Berr
TheStreet.com Senior Writer
5/11/2006 1:28 PM EDT

Yahoo! (YHOO:Nasdaq) chief Terry Semel is staying the course even as the most popular site on the Web faces heightened competition from Google (GOOG:Nasdaq) and Microsoft (MSFT:Nasdaq) .

During a breakfast meeting in New York Thursday, Semel emphasized that Yahoo!'s efforts in search have come a long way in a short time. He also argued that Yahoo! had no choice but to provide information to Chinese authorities that some critics say has led to the jailing of dissidents.

Semel used the talk, which was moderated by New Yorker magazine writer Ken Auletta, as a chance to make a few digs at Microsoft's plans to spend huge amounts of money to improve its struggling MSN unit. In addition, he argued that Yahoo! continues to enjoy a competitive advantage over its rivals because of its huge user base.

Though Yahoo! lags behind Google by a wide margin in search, MSN trails them both. The software giant wanted to partner with Yahoo!, something that Semel likened to being asked to give up an arm.

"My impartial advice was to say that you have no chance," he says.

Microsoft ended its relationship with Yahoo! to run its search engine and struck out on its own. The Redmond, Wash., company recently shocked Wall Street when it announced plans to spend $2 billion in fiscal year 2007 to expand beyond the desktop.

The notion of Microsoft buying Yahoo! "never came up," Semel says. Microsoft is reportedly considering such as an acquisition, though Semel cautioned that his employees might not like being under the control of the world's largest software company.

Yahoo! has questioned market research data that shows it losing market share to Google, which has concerned investors. The company entered the search business in 2003 with the $1.6 billion acquisition of Overture, which, at the time, was a sizable bet.

"If we had failed, we would have had serious problems," Semel says.

On China, Semel emphasized that the company is mindful of the worries about dissidents. Yahoo! routinely provides information to governments around the world who subpoena it. The company often doesn't know the identity of particular users.

Yahoo!'s original-content initiatives also came up during the discussion. Earlier this year, Yahoo! scaled back the plans of Lloyd Braun, the former ABC television executive, to develop original video programming because the offerings were too similar to TV shows, Semel says. That change reportedly caused a rift between Semel and Braun that has since been resolved.

"Why should Yahoo! do television?" he said. "We don't have aspirations to have 2,000 creative people working for Yahoo!."

Shares of Yahoo! fell 22 cents to $31.87.

http://www.thestreet.com/_yahoo/tech/internet/10285127.html?cm_ven=YAHOO&cm_cat=FREE&...

[SeriousMoney]

Google, Nokia to Launch Internet Browsing Device
By CASSELL BRYAN-LOW
WSJ.com, May 12, 2006 11:53 a.m.

Google Inc. is teaming up with handset maker Nokia Corp., in a move that could help propel the Internet company into mobile communications.

The companies plan to launch a version of Nokia's hand-held Internet browsing device ready loaded with Google's Google Talk service, which enables users to have voice conversations and exchange instant messages, according to a person familiar with the plans. The device, which relies on short-range technology known as Wi-Fi rather than cellphone networks, isn't a cellphone.

The companies, which plan to announce the partnership on Tuesday, expect the device to go on sale globally and cost about €300, or about $390, the person said. Nokia also is talking to other companies about incorporating their Internet communication software onto the device.

The device is an upgrade to a product Nokia first launched in September called the Nokia 770 Internet Tablet. The device was the Espoo, Finland, company's first mobile device that isn't also a cellphone. Slightly larger than most personal organizers, it has a wide, high-resolution screen intended for easy Web-page browsing. It also plays video and music.

http://online.wsj.com/article/SB114744849380751379.html?mod=yahoo_hs&ru=yahoo

[SeriousMoney]

Google Poses Strong Competition to Mobile Operators and Mobile Search Providers, says visiongain
visiongain - May 10, 2006

Internet search giant Google is set to become a major player in the mobile search market, continuing its current strategy of partnerships with operators and manufacturers, according to a visiongain market research report. The analysts say that with the right VoIP and WiFi strategy, Google poses a growing threat to U.S. mobile operator voice revenues, such as by offering free wireless connections in major U.S. cities supported by location based advertising.

The recently announced dual bid with Earthlink to provide wireless coverage for San Francisco will prove a testing ground for Google to assess whether location based advertising over free wireless is a profitable business model. Google will provide a service with speeds of around 300Kbps for free with locally targeted advertising, an advancement of the company's current successful business strategy, whilst Earthlink will provide 1Mbps access for a monthly fee of $20. If successful, Google will be able to provide access to its free VoIP, email packages as well as internet browsing, amongst other services, to major US areas by 2008.

With sufficient potential to expand operations throughout the U.S. and into Europe, Google could become one of the first Wireless Virtual Network Operators, presenting a significant threat to the traditional voice business of cellular/mobile operators.

"The argument that Wi-Fi and cellular are complimentary rather than competitive depends on who is operating the service," comments report author Adam Walkden. "Google's successful advertising based business model allows the company to offer services for free. If it can convert this business model to include local based advertising to Wi-Fi users, it poses a significant threat to mobile operators.

"By providing free wireless networks, Google can attract new users whilst keeping existing users on Google for longer. Targeting wireless users with local adverts will aid future revenue growth," Warden continues.

Mobile search

The study also evaluates Google's aggressive pursuit of the mobile search market. The company has already partnered with Motorola, Sony Ericsson, BenQ-Siemens, T-Mobile and Vodafone to provide mobile internet search facilities. Google will continue to partner with operators and manufacturers whilst improving its own mobile offering. Many of Google's desktop-based services, such as email, calendar services and local services, are transferable to mobile and will be introduced to Google's mobile package through to 2008.

About the market research study

The 81-page visiongain report, "Google in mobile and wireless: Analysing the impact and assessing the threat of the search giant's market entry" (May 5, 2006) examines Google's current and future strategies in both mobile and wireless. It looks at Google's current activities, particularly in the mobile and wireless industries. The study analyses Google Mobile and the partnerships the company has forged with mobile industry operators and manufacturers for its mobile internet search. The report then analyses Google's future strategies in both mobile and wireless, observing the available options and the best approach for the company to transfer its dominance in desktop-based search to both industries.

http://www.tekrati.com/research/News.asp?id=6960