 Gillmor Gang 07.03.08
from The Gillmor Gang
July 03, 2008
Steve Gillmor and Dan Farber discuss media realignment, Microsoft acquisitions, partisan standards skirmishing, and wherewho Yahoo. Recorded Thursday, July 3, 2008. [music] Steve Gillmor: Hi, this is Steve Gillmor. Welcome to the Gillmor Gang, a special Thursday before the holiday, everybody is getting away. Today s guest is Dan Farber, who s already gotten away. You re in the Pacific Northwest, right? Dan Farber: Not yet. I m not leaving until next week. So I m in the office in San Francisco. In the offices of CBS Interactive in San Francisco, California. Gillmor: Is that what it s called now? Farber: Yes, it is. Gillmor: So you ve renamed CNet? Farber: No. It s just thebrella for 235 Second Street is now CBS Interactive. Gillmor: All right. So what does that mean? Have you had high level discussions with Les Moonves about this? Farber: I wouldn t say high level discussion, but it s simply that now that we re a part of CBS, CNet, TV.com and GameSpot, and all the other properties, we have a part of CBS Interactive along with CBS Sports and The Insider, All Strip, and other properties. Gillmor: And go ahead. Farber: And our offices are kind of the West Coast headquarters of CBS Interactive. Gillmor: So what do you think I mean, seriously, do you think CBS, they don t have a cable network, so are they kind of bypassing cable and going direct to the Internet? Farber: They have some cable spectrum though. Gillmor: Well, they ve got Showtime. They ve got pay channels. Do they have anything like ABC Family, or obviously MSNBC is largest of the networks. Farber: No, they don t have access to do that. But certainly the Internet is a lot of the focus of what s going on right now. Gillmor: So what do you see as the these days before the holiday are always traditionally very slow. What s on your radar right now? Farber: It s been kind of a busy week. We had the announcement about indexing Flash, so that Google and Yahoo have signed up with Adobe to index Flash. Microsoft doesn t want to comment about it at this point. In addition, Powerset was acquired by Microsoft. Gillmor: What s your take on that? Farber: What Powerset has done, it put together a good team of people, using some slick technology, much of which they licensed from Xerox Park and apparently have an exclusive license on it. And basically made a demo tape, which is to take their technology and build it on top of Wikipedia, as well as using things like MetaWeb s FreeBase and other structured data sources to create a natural language, semantically-oriented layer on top of Wikipedia. Which basically proves out there are ways to create better user experiences around search and navigation and discovery of content. So Microsoft looks at that and says, That s really interesting technology. Powerset doesn t have the money to go out and to duplicate what they ve done on Wikipedia for the entire Web, so Microsoft can help out in that way. But it remains to be seen if it can be applied in kind of a grander fashion to other parts of the Web. I m sure it s good for specific parts. But whether all search changes in that way, it remains to be seen. And whether it does anything to put a dent in Google s dominance in the space, I doubt it. Gillmor: It seems kind of ironic that this kind of natural language stuff that Bill Gates has been banging away at for years in Microsoft research, they actually do a deal with an outside company the day that he leaves the company. Farber: I think you could say the same thing about their negotiations with Xobni, which is inbox spelled backwards, where Xobni makes your mail more useable by kind of looking into it, doing some analysis, telling you for example, who are the people that send you the most mail and how to deal with that, and what are the best times to reach people. And I know that Microsoft s been doing research on that for years, Bayesian analysis and things like that. So, you re right, they spent a huge amount on R D and they end up buying little companies that seem to do it a little bit better. Gillmor: So they re going to buy Yahoo piece by piece, instead of the whole company. Farber: I don t think that s the case. I think it s not in place of Yahoo, I think it s in addition to. I suspect that Yahoo and Google were taking a hard look at Powerset as well. Gillmor: It just seems like the building blocks, they re taking the money that they would have spent on Yahoo and applying piecemeal to these smaller companies. I actually think it s a smart idea for Microsoft, given where they have to go. Farber: I think you re right. And people point to they paid around $100 million for it. Well, somebody told me that s 22 minutes or 22 seconds, I can t remember what it is of revenue. So for Microsoft, it s not a big deal. Gillmor: What about the situation in the micro-blogging universe. Are you on the new Twitter clone of the day? Farber: I went to visit it today, based on hearing about it. I m not on it yet. Gillmor: The people in the chat room are discussing the lack of ability to discover people. In other words, there s no index for it. Farber: Yeah. And the feeds are apparently not very good, and so on. So it s an early stage. But the fact that it s open has got people interested. Gillmor: I m actually a little more positive about it than you appear to be. The thing I find interesting about the discovery model, is that it s kind of like the way that Gmail was originally. And also the way I actually started using Twitter in the first place, which was rather than going to some big contacts database, I just basically looked at the people who I was interested in communicating with and then looked at the little pictures of the people that they were talking to, and just built it up that way. And that in fact, is how Identica works as well. Farber: So, we ll see. Gillmor: Ken Shepherdson in the chat room say it ll never support Trac. I wouldn t count on that. Ken evidently has been looking through the source code, to your open point. I just noticed something, I posted it to Twitter. I m seeing Dare Obasanjo who I have a tremendous amount of respect for, over the past he sort of resigned from blogging about Farber: But then he came back. Gillmor: Then he came back, but he seems to be getting more and more shrill in term his very partisan in his comments about various things related to open standards. Today he s attacking, on FriendFeed, he seems to be attacking some of the people behind OAuth and OpenID, for example, as not being real standards. What standards body is involved there? Basically, attacking Google for in his opinion pushing market force standards that haven t got the imprimatur of something more legitimate. And this particular post that he made was Let me see if I can find it. But while I m looking for that, do you have any comments on it? Farber: I found it. You Twittered it. Here s what you did, you Twittered it, but you Twittered it to a FriendFeed feed. Gillmor: That s correct, because this is where it would service. The original post by Dare was: I m amused by the hypocrisy of Google employees criticizing Microsoft for unilaterally proposing web standards. And then he has a link. And then someone named DeWitt Clinton responds. I imagine this is someone in the standards arena inside Google. Huh? We ve been making a very conscious cross-company effort to avoid unilaterally proposing standards for the past few years. See our approach to HTML5, OpenSocial, Gears, etcetera, etcetera. And Dare s response I just found I mean this is a guy who when he originally started blogging at Microsoft was noteworthy because of, first of all, because this guy is a stone-cold brilliant engineer. And his blog posts were noteworthy for opening up to the possibility of the outside world, talking about Google and other players with a great deal of respect. And that was, at the time, certainly not something that went on frequently inside Microsoft. So he s built up this kind of credibility, at least in my eyes. I remember doing a talk at Numdex a few years ago and literally inviting him to come up on stage or from the audience to explain something that he d been promoting from his blog. I just have a tremendous amount of respect for him. So his response to DeWitt Clinton s response is: Google has been pulling unilateral moves with far reaching impact for years from rel=nofollow to OpenSocial. What Google has become savvy at is finding some partners/stooges to stand behind them shortly after their unilateral announcements and call it a standard. I m still waiting for the details on which standards body ratified OAuth and OpenSocial. Farber: This is a complete red herring. And nobody is saying that they re standards. People are saying that these are things we re putting out there. And if people adopt them, great. But I always try to say that they re an ISO standard, like PDF just became. And most of what Microsoft has done as standards has been de facto standards, where they get enough behind them that there s no choice but to grant them official status. Gillmor: Right. This has been going on for years. First of all, the canonical example with Microsoft and IBM ganging up against Sun around the WSI so-called interoperability organization and locking Sun out for about 10 months or even a year under the tutelage of Bob Sutter, who these days is a tremendously affective advocate for open source standards, if you will. But at the time, Microsoft was using this kind of strategy in a very heavy-handed way. So I agree that Dare s perception that Google has gotten good at this, I think that s exactly right. But to call people partners/stooges, it just seems like: Excuse me, but what the fuck? David Recordon responds in the next thing. Actually, I have to say that if this level of dialog with the direct participants continues to develop on FriendFeed, this is going to actually be a useful service. So the next thing that s said is to Dare: OAuth was actually first started by a group of this is David Recordon speaking. Was actually first started by a group of individuals from Twitter and Magnolia and then Chris Messina and myself I was at VeriSign at that point but then moved to Six Apart got involved. From there it grew certainly with the support of Google, but not the other way around. What s going on here? I don t understand why some of these folks are making themselves self-appointed ambassadors/sheriffs in this open standards combat. I think that the reason this is going on bluntly is that it s working and that Microsoft is feeling the pressure of not being able to define these standards aggressively enough. Or they have the same kind of blind-sidedness about having built up such an antipathy over the years with the open crowd that their attempts to try and move into this space are being met with less than enthusiasm. Farber: Yeah, it seems like a bit of a step backward. Gillmor: So what else? Anything else? Or we ll make this a short one. Farber: Well no, I think the big one today is the Google Viacom suit. As you will recall, Viacom is suing Google for not getting its content off of YouTube. So Viacom came back to the judge and asked for all kinds of information: source code, ad code, etcetera. as well as to access to the YouTube data on what videos have been viewed, etcetera. So the judge denied them access to source code and things like that, but did grant them access to YouTube histories, meaning what you watched as an individual and that s a big problem. That s a big no-no, in fact. And Google has since put out a statement this morning saying that they hope that the court would allow them to anonymize the data so that the individual data is not used. Now this is all despite the fact that the court has said that the data cannot be used to go prosecute any individual for violation of copyright. But just the fact that YouTube, which in its privacy statement notes that it collects your history and it keeps it and so on and so forth, that the court would allow these lawyers and people to go look at it when all they want to do is have some proof that Viacom content has been put up on YouTube without its consent. They don t need to look at cookies and IP addresses and logins to do that. Gillmor: They re using discovery as a weapon, basically. Farber: Yeah, but just not the right way to go about it. Gillmor: Well, what is the right way to go about it? Farber: The right way to go about it is to allow Google to anonymize all the data so that they get what they want, which is visibility into whether and what of their videos have been used without their consent. And that s it. Because they just want to prove the point there. Gillmor: Well, what is anonymized in data? What does that entail? Farber: Well, it would entail taking away any individual histories and just doing it as a collection. Gillmor: Well, if most people are coming in over Comcast, for example, every bit of their history although not tied to their IP address but every bit of their behavior has been recorded and then released and sold and then resold to data marts for $0.40 a user a month. So why doesn t the government or Viacom just go and buy some of that data and look at it? They don t need to get permission from anybody. Farber: Well, they do. They can t requisition Comcast data. Gillmor: Comcast is selling it on the open market. Has been for years. Farber: Are they? But what are they selling, though? What specifically are they selling? Are they selling your personal viewing history? I don t think so. Gillmor: Absolutely. The complete data stream of your clicks. If you re on Comcast broadband, which I am, they have a complete record of every click I make. And they re selling it. Farber: And what do they do with that data? Gillmor: They re selling it, $0.40 per month per user. Farber: But what are they selling? They might have the record, but what are they selling? They re not selling your click stream. They re not giving advertisers a complete list of every site that you ve gone to. Gillmor: Absolutely wrong. They are in fact doing so. And they ve been doing it for I don t know how long they ve been doing it for. But I have it on videotape. As a matter of fact Farber: Selling your individual, your personal clickstream to Gillmor: If you re a Comcast user, your clickstream is available and has been sold for $0.40 per user per month in the open data market. Farber: And what are they giving out to these people who are acquiring this data? What specifically? What do you mean by their clickstream? Gillmor: All of the addresses, everything that you do, every URL that you travel to is recorded and is made available. That data, it s your complete clickstream history. It s not tied to your identity. Farber: Well, that s what I m saying. So it s anonymized? Gillmor: It is anonymized, but my point would be that Viacom does not need to get permission from Google. They can just take this data from Comcast and use it as evidence of what they re trying to prove. The question is, why is Comcast allowed to do this? And according to the people who were discussing this, the terms of service of their service does not prohibit them from doing this. So basically, we ve already given up our rights to privacy. I mean the AOL exploit several years ago, those things were not tied, they were so-called anonymized. But as the woman with the dog on the cover of the New York Times found out, when she searched for certain information about health spas I forget what the details were Farber: Yeah, I remember that. Gillmor: Yeah, it allowed them to be able to track her down. These searches, they re resting on strings that are entered into URL addresses, correct? So the search history is also visible. Farber: Well, it s not a good thing. Do something about it. Gillmor: Well, we re trying to right here. So I guess that comes down to: any other big news that s on the horizon that you re excited about? Farber: Well, I m not excited about it. But there s the ongoing soap opera of Yahoo and Microsoft and NewsCorp and AOL Time/Warner and I don t know who else. Gillmor: And so do you think that Microsoft is still in the game for Yahoo? Farber: I think they re still in the game to carve out search. Gillmor: So you think that Microsoft is going to catch up? You ve already expressed just a few minutes ago that there s no way they re going to catch up. Farber: You don t have to necessarily catch up, do you? You have to put up a good fight. But let s say that you owned 30% or 35-40% of the search market. That s not a bad thing compared to owning 10%. Gillmor: And you think they re going to get there? Farber: Well, if you combine Yahoo and Microsoft, that s around 30%. Gillmor: But that would require them combining Microsoft and Yahoo, which doesn t appear to be happening. Farber: I m just talking about the search business, not combining the whole company. Gillmor: Do you think that Jerry Yang will be in office in six months? Farber: I m rather doubtful. I think the challenge for Jerry Yang is. is there a way that he can get out of the job and save some face? Gillmor: And who would take over? Sue Decker? Farber: Could be Sue or maybe there s someone else that ll come in. Who knows? Gillmor: From the outside? Farber: But right now their trying to do the right thing, get things in order. They ve re-orged. Gillmor: What exactly does Yahoo do? Farber: What does Yahoo do? Well, they re in multiple businesses, but I think essentially they re much more of a media content site than a search site. And they have leading email, leading photo, Yahoo Answers is very big, so on and so forth. So they have a lot of very lucrative properties that generate billions of dollars in revenue and a lot of profit. But it s just not the highly efficient and super lucrative search business. Gillmor: Why is that? Farber: Anytime you get compared to Google, you re not going to look good, including Microsoft. And I keep telling this one: In the last quarter, Microsoft did $14.5 billion in revenue across a wide number of different product divisions, with less than a billion dollars coming from its Internet business, which includes some search. Google did $5.19 billion, about one-third of what Microsoft did overall, just selling mostly text ads. Gillmor: So you re saying that they re in better shape than Microsoft is? Farber: I m not saying they re in better shape. I m just saying that their search business is like printing money. And it s funding a lot of other development that s allowing Google to get into other spaces. And if they can get the display business and do better in the display business, that s another huge win. And by developing their brand and those businesses, they can develop a channel for their other products such as their so-called Google Office, Google Docs, spreadsheets, etcetera. Gillmor: Ken in the chat room talks about Zimbra as being a Microsoft Office killer. Do you believe that? Farber: Well, there s no such thing as a Microsoft Office killer. I think he s talking about an Outlook killer. And they did develop some word processing and spreadsheet capabilities, which they re not emphasizing at all. But here s a case where Yahoo acquired Zimbra for $350 million. Most of the business that Zimbra does is in OEMing, providing a mail solution for ISPs and universities. And the software that Zimbra developed is superior to Yahoo Mail, for example. And superior to most of the mail systems out there in terms of its functionality and being able to do offline and the Zimlets, which are really this great master feature that s built in. But here s the situation. You pay $350 million for that and it does a little bit of a business on the side. But it s not integrated or replacing Yahoo Mail to provide a much superior mail service, because you have different groups within Yahoo. And they re afraid of changing the user experience. They ve got 240 or 250 million Yahoo Mail users. Well, if you give them Zimbra are they going to freak out and go to Google? So they re really challenged by that. But Zimbra is part of the new fabric or the rewiring of Yahoo that s going on. And a lot of the components that they have there are being built in this new foundation that they re creating to data more social and mash-up dimension to all the Yahoo services and just having one profile. And in addition, Scott Dietzen who was one of the top people at Zimbra is now running the mail group, replacing Brad Garlinghouse. So that may have some impact. Gillmor: It s interesting to me that Scott was adamant when Zimbra was started that they were not going to go after the consumer space. And now he s in a job, which is almost totally focused on the consumer space. I thought that was a mistake that Zimbra didn t go after what Google then emerged as doing, which was to provide inexpensive or free office functionality all over the network. Instead, what they did was to go after the corporate space and do a Salesforce play around Office Objects. Farber: Yeah, I m not quite sure I understand the strategy. Gillmor: OK. Well, so next week you re off and you re going to be away from this exciting, aggressive software space. Farber: I will be off. I will be away. But I have my trusty Sprint card. Gillmor: You do? So you will be logging onto Twitter and FriendFeed and Identica? Farber: I will limit myself to one hour per day. Gillmor: On which service? Farber: Well, all of them. Gillmor: Which is your favorite service right now? Farber: My favorite service right now? You mean of Twitter? I m still a Twitter fan, because it s just simple and efficient, when it works. Obviously, when it works. I like sidebars. Gillmor: You re not concerned about the firewall? You do like friend-alls. As we found out yesterday Summize has got a sweetheart deal with Twitter. And thank God for that, or else us Trac-addicts would be completely devastated. Farber: But FriendFeed is a nice service as well, and my Google Reader. Gillmor: Do you think that Facebook s attempt to sweeten the activity stream pot with comments is going to work? Farber: I think if you look at what Facebook is doing, they re gradually adding a number of features. They re very careful about how they add features, very sensitive to the user experience and privacy and all those things. And you can see that in the way they integrated chat. So I think there s a bunch of other things they re probably thinking about and working on, which would be Twitter functionality as well as doing a more serious job at email. Gillmor: Well, I have my doubts about anybody making significant inroads into Twitter s core backbone strategy. Although people Farber: What is Twitter s core backbone strategy? The thing is not up half the time. So how is that a core backbone strategy? And how is that anything unique that others could not duplicate? What Twitter has going for it is a brand and some momentum and some early adopters. But we ve seen other Gillmor: I love it when you get spunky on me. It s really exciting. It just takes the whole thing and just lifts it up. Farber: Well, I ll leave that. I know you baited me with that anyway. This is all part of the show, part of the drama, but don t let the audience know. Gillmor: Do you remember Windows 2.0? Farber: I think I do. Gillmor: Now there was a robust Farber: Was it before Windows 3.0? Gillmor: Yeah, it was. It was back when there were only wires that connected people to the wall, and you couldn t talk to anybody anywhere. Farber: You mean the local area network? Gillmor: Yeah, but it s a single-tasking environment where it went into a race condition if you tried to open a second window. Outlook still does that, doesn t it? Farber: Outlook is quite capable right now. Gillmor: OK. So do you understand what I m saying about the strategy of Twitter versus the ephemeral reality of its service at the moment? Farber: No. Gillmor: They ve got the largest grip of active, addicted users on the planet. Farber: Who does? Gillmor: Twitter. Farber: How many? Gillmor: They won t tell us, which is a good sign that it s more than anybody else. Farber: No, that s a good sign that they don t have a clue. Gillmor: OK. Farber: I mean I have the same issue with Kindle. I asked Jeff Bezos: How many Kindles have you sold? Well, he can t say. Well, what s the big deal? Why can t you say? Gillmor: Well, they ve only sold 10 of them. Farber: Because they don t like the number. And I think Twitter would be the same thing. They don t like the number. Gillmor: Well, I hear it s a couple of million. But it s a lot more than any of these other systems. Farber: All right. Well, so be it. I must carry on. Gillmor: All right. Well, thank you very much, Dan. This has been the Gillmor Gang. Farber: Have a good holiday. Gillmor: You, too. And thanks to everybody who showed up, Dan, and especially those who didn t, everybody else. And to the chat room and to Jerry and everybody out there in News Gang. There will be a News Gang later today, but we will not have a show tomorrow of the Gillmor Gang or News Gang. So we ll see you again on Monday. Bye-bye. [music]
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