Hello Google

Doug Bowman is without a doubt an extraordinary designer. Doug and I were "peers" in Google's User Experience organization before his departure last week. I say "peers" in quotes because, while technically we were peers in that we reported to the same director, my capabilities and talent pale in comparison. It was certainly an honor to be within the same team as Doug and to benefit from the fruits of his work. We will miss him and his contributions dearly.

Doug's recent article about his departure from Google contains many truths. Of course Google is a company run by engineers. Yes many design decisions are driven by data. But Doug's description of how design is viewed at Google is an oversimplification.

While there are many teams within Google that view design process as a problem in logic requiring data to solve, there are others that do not. While there are many Googlers who view designers as people who tinker with link color and border widths, many do not. Doug's experience was unfortunately clouded by the teams and executives he was asked to work with.

My experience has been different.

I oversee the work of a team of designers focused on Google's advertiser and publisher products - known within Google as simply "Ads". As Doug mentioned, the talent and intelligence of designers at Google is incredible and the Ads team is no exception. To highlight a few: Google Analytics' Doug van der Molen is a brilliant design leader with remarkable vision and entrepreneurial spirit. Feedburner's Matt Shobe - who now applies his talents to new publisher products - breathes life into his products by injecting them with personality. And Ad Planner's Ken Moore has talents that only a select few can truly appreciate.

Within Ads, we don't work on projects which aim to determine the highest monetizing shade of blue. Nor do we focus on tweaking border widths. Rather, we work on complex, large-scale redesigns such as the soon-to-be-announced new AdWords interface. Or major feature upgrades to Google Analytics. Or new product designs for ... well, I can't talk about that just yet.

To design successfully in this environment, we simply must partner closely with product management and engineering. And we do. PMs and engineers understand that designing usable interfaces to support complex workflows for our advertisers and publishers requires something more than opinion and data. It requires skills that only designers can bring to bare. Skills that go beyond color theory and making things look "pretty". Yes we use data to assist in decision-making, but data takes a back seat when teams develop the kinds of design innovations you experience in Google Analytics, the new AdWords UI, and other products delivered by the Ads team.

It's not all perfect of course. There are certainly times when designers are somewhat marginalized, or when engineers or PMs pull rank when a decision has to be made. But these times are rare.

Perhaps what differentiates this team of designers is that we don't expect the rest of the company to bow down to our design wisdom. We earn respect by demonstrating the value of good design through our work day in and day out. By working with our partners, not in spite of them.

Some may give up when faced with an organization less aligned with their discipline than they would like. Some say goodbye. We say otherwise.

We should expect Google to be all out of ideas

There has been somewhat of a debate going on between Matt Cutts and Om Malik around whether Google has any big ideas.  The debate kicked off after Google Tasks for Mobile launched and generated a bit of blogosphere buzz.  Om responded to the buzz with a tweet: I think google has no big ideas. this morning they announced a to-do-list. FGS. Remember the Milk MUCH better.

To be sure, the idea of a to-do list isn't necessarily something one would classify as big.  And yes, there are plenty of great products out there that handle task management in a much more comprehensive and convenient way than Google's late-to-market effort.  Remember the Milk is a brilliant tool.  

This debate seems like a complete waste of time, but I somehow feel compelled to add a perspective to the mix.  

We should expect Google to be all out of ideas.

Why?

Google is a search and advertising company.  As much as we like to personify the brand - "Google does this", "Google thinks that", etc. - it is ultimately a business and the individuals running the business will tend to make decisions that maximize revenue or minimize costs.  It won't always do this, but it will tend to, especially if it's a public company as Google is.  

Once a business comes across an idea that generates a bucketload of revenue, the decision-making process of that company tends to stifle innovation beyond this idea out of fear that these newer ideas will "cannibalize" their cash cow or will take "resources" away from making their cash cow even fatter.  Again this isn't always the case, and this analysis is a simplification, but this "defend against innovation" mentality is baked into the DNA of all businesses and is difficult to avoid.  Google is no exception.  Larry and Sergey identified an opportunity to build a better search engine, and eventually found a brilliant revenue stream in text-based contextual advertising.  That's Google's big idea.  Their teams executed on this idea extremely well, and now the business is swimming in cash.  

Now that they're swimming in cash, we should expect to see Google defend against innovation which may harm their revenue stream.  We should actually expect that Google has no more ideas, or at least very few good ones.  

The fact that individuals push their ideas within the company, get buy-in, and eventually launch - like the Tasks team - makes Google unique and interesting, and is a testament to the perserverence of those individuals.  

But if we're looking to Google to be the one true source of innovation, we're looking in the wrong place.  

"It's no iPhone"

Today's launch of the world's first Google Android powered phone is certainly an exciting event.  The team that has worked on Android has done incredible work, and, while no one knows for sure, the product will more than likely have some degree of success in terms of units sold and revenue generated.

At the core of the Android experience is obviously Google search.  Like Chrome, Android is an attempt by Google to gain wrestle control of the mobile or browser user's search experience from those that currently control the platforms that underpin that experience - carriers, mobile OS developers, browser developers, and other "intermediaries", most notably Microsoft.  Toolbar was a great success in maintaining Google presence in the hearts and minds of many users, and in preventing Microsoft from making it's search experience the default for the majority.  Chrome and Android can be viewed as smart attempts to work this same strategy. 

Unfortunately for the Android team, the most common thing that people will say about the phone is that "it's no iPhone".  It isn't.  The Android user experience is good but can't be described as perfectly elegant at this point.  But it will get better, and great applications will be developed for the phone ... hopefully for Google there'll be one or two killer apps that will make the platform and the phone a must-have at some point.  

But I must say the marketing effort around Android has been abysmal.  The iPhone has set the mobile user experience bar incredibly high, and disparaging comparisons between Android and iPhone are inevitable.  Yet there was limited expectation setting from Google.  Surely there could have been a more appropriate and explicit re-framing of the objectives of Android.  The whole "it's about the platform not the experience" line, as genuine as it is, doesn't really resonate with people that have been spoiled by (or even just heard about) the iPhone experience.  

Who knows what the business impact of this poor marketing effort will be, but I certainly feel for the hard working engineers, designers and others who, after all of their blood, sweat and sleepless nights, will suffer from the "good but not as good as ..." complex.  Let's hope that this kind of feedback will inspire them to create something even greater.

Acquisition complete. Now what?

Someone from the office pointed out this article and discussion by Fred Wilson over at AVC.

Fred talks about an alternative to M&A as an exit strategy for companies, but also discusses the degradation of services following an acquisition: delicious, feedburner, and TACODA being some of the examples.

The value of open platforms

Open platforms like Linux, Google's Android, Open Social, and Facebook seem to have many positive attributes. Arguably, they allow for a community of developers to create a suite of applications and to use the power of that community to rapidly improve on those applications. This generally means good things for users. Users are more likely to be treated to a broad range of choices when a platform is open, and specific niche audiences are more likely to be supported in some way by some small group of developers somewhere. It's generally a feel-good story.

But what happens when the "owner" of that open platform is a commercial enterprise? The experience of Facebook developers Social.IM and FriendVox may be an indication. It seems that in their efforts to use the Facebook platform to develop unique and interesting applications, they ran into a challenging competitor - Facebook. With the launch of Facebook chat, Social.IM and FriendVox and other developers of chat applications for Facebook are pretty much washed up. Any chance of getting additional rounds of funding or selling their business have been dramatically reduced. Why would anyone want to develop on a platform when the platform owner is likely to reproduce your product for its own purposes?

Google's recent launch of App Engine and the silliness of its Campfire rip-off demo will most likely scare a few developers as well. While not an open platform as such, App Engine provides another large company the opportunity to see how others innovate and then replicate that work. While this isn't what happened with the HuddleChat demo, the opportunity is there.

Certainly, there are products out there that have received a huge boost in traffic and revenue by developing on the Facebook platform. But small software startups who are looking to protect their IP should be wary of jumping on the open platform bandwagon.

Zuckerberg pitches the wrong value proposition

In an interview published at GigaOM, Facebook CEO Mark Zuckerberg explains the monetization opportunity that his social network site represents:

People go to a content site to see a specific kind of content and will trust those ads relate somehow to it. On Facebook, people aren’t coming to see content from Facebook; they’re coming to see what other people are sharing, so the most natural analog would be having the ads be information shared among the people. Because so much of our society has some commercial component it seems like there will be a way to both share information and line that up with what advertisers want.

Some amount is happening as advertisers pay to accelerate that distribution of information. The amount they’d be willing to pay is proportional to how much it is accelerated.

So the story is that, on a social network, when enough people are looking at what other people are doing, and the social network blends into that experience ads that relate to what those people are doing, you'll have yourself an effective marketing platform. That seems reasonable, but I doubt that this is where the true value of a social network lies. In fact, I believe that this model is a poor deal for advertisers when compared to what's already out there in the online advertising marketplace.

Consider some of the other online advertising models for comparison.

Search is arguably the most effective. Users of a search engine have an intention that they express in the search box. Both ads and "non-ads" - that is, organic search results - are displayed in response to that intent. Either the ad or the non-ad could be an effective answer to whatever question or problem the intent poses. So there's a good chance that an ad will be selected by the user. For example, if I want to learn about mp3 players, my search produces relevant informational content and commercial content ... either could fulfill my curiosity.

Contextual ads on a content site, like a blog or an online newspaper, can be an effective and relevant information path for users once they've read or partially read the blog or news article. Traditionally, clickthrough rates on such sites are lower than search engine ads, but advertisers can still get good return on ad spend if they are careful in targeting content sites. Back to our mp3 example, if I'm reading about mp3 players, perhaps a review of a specific mp3 player, once I've completed reading that review, mp3-related ads can open a door for me if I'm ready to make a commercial decision.

On a social network site, as Zuckerberg suggests, people are interested in people. There is less of a direct commercial opportunity in this. If I use the mp3 example again, perhaps the best I can hope for as an mp3 player advertiser is to target users who are frequent users of iLike - not exactly a strong indication that they're in the market for an mp3 player. Or perhaps they've set their status to "in the market for an mp3 player" ... right.

So I think Zuckerberg has got it wrong (or maybe he's just not offering up the true value of his platform). There's limited opportunity in the advertising model he references. The bigger opportunity is in brand building. Having personalities, celebrities, brands, and commercial entities live within the social network universe and use that platform to build relationships with other social network users is the way that these platforms will generate huge advertising dollars.

Social networking: In search of a business model

There's an ever-growing chorus of pundits that are questioning the orbit-level valuations of social networking sites, Facebook in particular.

That's not to say that there isn't enormous potential in businesses built around the types of communities that are actively poking and stalking each other on social networking sites -- but the current range of direct advertising-based approaches to monetizing such sites are misplaced.

Google's recent forays - and misfires - in this space are representative of this issue. The search advertising model works great for search, but fails to convert into clicks at the same RPM on MySpace and elsewhere.

And that's because use of a social networking site is fundamentally different to a search experience. Users of social networks are less likely to be searching for products than they are to be searching for their friends and colleagues.

For instance, if I want to find a buddy of mine from high school, I'm probably going to use Facebook. And what I'd consider a "success" in this interaction is ... I find his profile. That's a pretty specific success measure. There's very little chance that an advertisement will help me in this task. I'm going to ignore advertising while going through this flow.

But if I want to find information about a product or about pretty much anything else, I'm going to use Google. And a "success" event in this context could vary widely. It could be that I find an ecommerce site that sells the product, that I find a review site with UGC on the product, or that I find a TV ad for the product on YouTube. And there's every chance that an ad may help me in this task - particularly if the ad is presented by a vendor or site that I trust more than those sites listed at the top of the SERP.

In other words, advertising doesn't help me do what I want to do on a social network. Advertising can actually help me do what I want to do when I'm searching.

Contextual advertising works great for search. Contextual advertising sucks for social networking.

Sure social networks will make money from contextual advertising, absolutely. But RPMs will be strikingly lower relative to traditional search-based contextual advertising.

So is the revenue generating potential of Facebook over-hyped? Doomed even? Not necessarily.

It seems that those marketers who understand the value of brand advertising - of relationship deepening with respect to a brand - will, and already are, drawn to social networks.

Artists in particular are set to benefit. MySpace's focus on music is no accident. People tend to think of their relationship with rock bands, rappers, etc as very personal - taking advantage of that emotional need through a MySpace community is a perfect way to deepen relationships and directly and indirectly lead to sales. Extend this beyond music artists into authors, fashion designers, Apple Computer ... any commercial product or entity about which people are passionate, and you see the opportunity.

Marketers get this. Software engineers struggle to get this. Companies like Google will continue to struggle to monetize social networks at the rates they expect so long as they're run by software engineers.

Business models that allow commercial enterprises to turn social network eyeballs into communities around their product will succeed. The tried and true contextual advertising models won't.