The Reasoning

A 2006 and a 2007 deal and their public relations which are pretty smart so far will overreach rational goals so much it will break Google's ascendency quite a lost faster than anyone thinks now and also faster than the respective paths of former contenders International Business Machines Corporation (1955 - 1985), Apple Inc. (1977 - 1987, 1997 - 2007), Microsoft Corporation (1987 - 2007) suggest. Compare this to what Mr. Tolkien wrote about Saruman the White, chief wizard of Middle Earth and head of the White council: "But his cunning overreached his aim;"*

Schmidt will have his role in this. The guy is just simply too smart. The American obsession with feasability always turns against you when dribbling in the penalty area. And in the penalty area Google and their balls have been for at least 2 and a half years now. Well, they might get rid of him and recover still.

How to Overcome the "Inno" - Dilemma

The digital world has brought about lots and lots of hollow discussions on disruptive technology, creative destruction, management strategy, markets as conversations, losers, winners and finally good and bad.

These discussions have misled many a would be inventor, business student, investor or desperate management person inside an incumbent. It is important to not just know a bit of 3 to 4 concepts each, but to understand some fundamentals.

To understand for example, that good management and listening to customers is important but not a help in any case.

It is also important to understand the difference between disruptive and radical innovation.

V. Rao took the opportunity of the tenth anniversary of the publication of Mr. Clayton Christensen's influential book The Innovator’s Dilemma to give a good hint at how incumbent organizations, if they still have a nerve, can do anything at all.

How the dilemma comes together

Customers and investors are able to punish/reward companies to stay away from disruptive innovation because mature companies are structurally set up to feel the pain. (our bold)

That is what has massively been happening to the media industry in more than 1 way. With public TV it is the growing masses of seniors and their taste that bind the companies and discourage too much innovation.

With everybody it is the ad and promotion industry who still live in the 90ies and have near completely lost their feeling for today's style, patterns and methods. What they demand is nearly killing. And the media have not found a recipe to counter-act on this. They just feel the pains.

The European political elite who mostly still are in the 70ies and 80ies with their minds are a further weight. And all of these are serviced by the defensive managers this situation attracts.

How to Overcome the Dilemma

Christenson concludes that the only way for an incumbent to pursue a disruptive idea is to separate the new business completely from the culture, processes and market pressures of its old one. This was what worked for the IBM PC. I haven’t yet seen a counter-example to this principle yet.(our bold)

And indeed the creation of the original IBM PC is the foremost example for a successful innovation by an incumbent.

How Norwegian publishing house Shibsted Forlag (founded 1839) has handled the disruptive set of technologies commonly called the web so far seems to be another one.

There are also rules what you should and what you should not do:

• Separate the new business completely from the culture, processes and market pressures of the old one
• Do not, do not reintegrate too fast and too early
• After 1st success do not drive your innovators too hard
• Do not over- or underprivilege your innovators too much

Post Scriptum: As we have repeated so often before and at the risk of being crude we like to remind the p.t. audience one more time how important the creation of the IBM PC was to save the concept of personal affordable real computer, as invented and put into the world by Chuck Peddle, Bill Mensch, Frederico Faggin, Masatoshi Shima, Ed Roberts, Jack Tramiel, Steve Wozniak and others from the future grips of management and marketing. The credits for this have to go to Don Estridge and John Opel.

Wise Guys, Not So Wise Guys

They who know not and know not that they know not are fools; try to avoid them. They who know not and know that they know not are a learners; learn with them. They who know and know not that they know are half asleep; try to wake up with them. They who know and know that they know are wise guys; go with them.

The previous lines are an updated version of a little verse, that according to Venkatesh Rao's The Tragicomic Exasperations of Expertise has been variously attributed to Confucian, Arabic, Persian or Sanskrit sources, in short to someone in the middle to far east.

He who knows not and knows not that he knows not is a fool; avoid him. He who knows not and knows that he knows not is a student; teach him. He who knows and knows not that he knows is asleep; wake him. He who knows and knows that he knows is a wise man; follow him.

That quote of course has got a content as it would have been invariably formulated in a written book in a world that has become known under the term of literate patriarchy in the 2nd half of the 20th century. It assumes leaders and idiots. Not little of that style is still in place and probably has to be.

It is also a 2by2 quadruple figure which is a strong and vigorous figure. Because the homosexual ancient greeks prefered singles, duals, and triples it somehow remained obscure for a while.

Quadruple figures might be hard, because as opposed to 1 nose, 1 mouth, 1 primary sexual organ and 1 rectum we have many things in pairs. Also most people know love in pairs and practically all in triples, love in quadruples seems to touch only those people who are early graced with a partner with whom to counter their parents.

Marshal McLuhan, Marion Zimmer Bradley and others started to use that figure since 1960. Go figure.

Addendum: According to Webster's a wise guy is an upstart who makes conceited, sardonic, insolent comments. For a time it has also been used for members of predominantly Italian inspired crime organizations in the southern states of the Union.

Algorithm, please predict my past behavior!

If it’s such a great idea, why not really brag about it?

Laut Standard/Etat haben Mag. (FH) Kathrin Oberreither und und andere (laut Pressemeldung der FH Mag. Helmut Kammerzelt) von der Fachhochschule St. Pölten in Zusammenarbeit mit der Online Unit Fastbridge Austria untersucht, ob die Realität dem Anspruch, "Streuverluste bei der Verbreitung von Werbebotschaften" durch Behavioral Targeting zu vermeiden, standhält. Und das - nach eigenen Aussagen der FH - mit modernsten Methoden.

Die Studie kommt zu keinen signifikanten Unterschieden zur sogenannten altmodischen Umfeldplatzierung.

Aus der Pressemitteilung der FH: Die Studie der FH St. Pölten zeigt, dass das bisher wenig erforschte Behavioral Targeting in Sachen Werbeeffizienz mit der bewährten Umfeldplatzierung nahezu gleichauf liegt.

PTE-Text im Standard/Etat: "Die Klickanalyse konnte das Ergebnis der beiden vorangegangenen Forschungsmethoden weiter stützen. Die Klickrate des Behavioural Targeting lag im untersuchten Fall mit 0,18 Prozent nahezu auf demselben Wert der Umfeldplatzierung, die 0,19 Prozent erreichen konnte", so Oberreither.

Die Marktetablierung des Behavioural Targeting wird auch noch nicht überschäumend gesehen.

"Obwohl die Targeting-Methode mittlerweile bereits seit einiger Zeit existiert, hat sie sich am Markt noch nicht wirklich etabliert. Die Hauptgründe hierfür sind vor allem der verhältnismäßig hohe technische und finanzielle Aufwand", schildert Oberreither.

Neben der hochmodernen Click-Through-Berechnung kam auch ein hochmodernes Eye-Tracking zum Einsatz:

"Mit Hilfe der Blickverlaufsmessung haben wir gezeigt, welche Bereiche der untersuchten Webseite besonders viel bzw. besonders wenig Aufmerksamkeit erregten und konnten diese dann auch miteinander vergleichen. Des Weiteren haben wir den Blickverlauf, also die Reihenfolge der betrachteten Bereiche einer Webseite, berechnet. Wie bereits die Untersuchung im Rahmen der Kampagne (die mit der Clickberechnung) zeigte sich auch hier, dass Umfeldplatzierung und Behavioral Targeting in Bezug auf die Werbeeffizienz gleichwertig sind."

Pressetext zum Download. Auf der Fastbridge Seite findet sich leider nix mehr. Ob die Studie irgendwie erhältlich ist, können wir nicht ermitteln.

Was an beiden Stellen nicht vorkommt, ist, wo die über Behavioral Targeting gesteuerte Kampagne gelaufen ist. Das wäre interessant gewesen. Wie die Berechnung des Blickverlaufs geht, interessiert uns auch. Leider sieht es nicht so aus, als ob wir das in Erfahrung bringen könnten.

Was auch nicht vorkommt, ist, dass Medien wegen ihrer Umfelder das BT gar nicht benötigen. Google Search benötigt es wegen des an die Suchbegriffe gebundenen Umfelds auch nicht.

Communities wie Youtube und Facebook, und Dienste wie Yahoo-, Hot- und G- und GMX-Mail, wollen sie irgendeine akzeptable Performance haben, brauchen es aber sehr dringend. Die haben einfach gar keinen Kontext, wenn sie das Verhalten und die Äußerungen der User nicht tracken und nutzen.

Es gibt anscheinend auch Leute, die Verdacht gegen Tracken und Targeten hegen:

Industry needs to do a better job of meaningful, rigorous self-regulation, or it will certainly invite legislation by Congress and a more regulatory approach by our Commission,” Leibowitz said. “Put simply, this could be the last clear chance to show that self-regulation can – and will – effectively protect consumers’ privacy in a dynamic online marketplace."

Commissioner Jon Leibovitz in einer Pressemitteilung der FTC: FTC Staff Revises Online Behavioral Advertising Principles. Dort gibt es den Report und Statements beider Commissioners.

BT war auch ein Thema auf dem Konsumentengipfel der Union: Behavioural targeting at the European Consumer Summit.

In her key note speech Commissioner Meglena Kuvena observed that "personal data is the new oil of the Internet and the currency of the digital world" - a reality to be accepted in exchange for free content online. However, well established consumer protection principles, including the applicable data protection regulations, are not fully complied with in the "World Wide Web (...) turning out to be the world 'wild west'."

Vielleicht macht es auch Sinn, sich "In re Doubleclick Inc. Privacy Litigation, 154 F. Supp. 2d 497" aus dem Jahr 2001 noch mal anzusehen. Von wegen "bisher noch wenig untersucht".

TechRepublic says, that "the search giant quietly started behavioral targeting" on March 11 of this year. Read it and Behavioral targeting: What you need to know. You will be pretty well informed about different BT and PBT techniques.

Google sagt unter Werbung und Datenschutz Bei unserem AdSense-Programm basiert die Anzeigenschaltung auf den Inhalten der aktuellen Website. Falls Sie beispielsweise eine Garten-Website besuchen, können die Anzeigen auf dieser Website einen Bezug zu Gartenthemen haben. Außerdem kann die Anzeigenschaltung auf Ihren Interessen basieren. Wenn Sie Websites besuchen, die mit uns zusammenarbeiten, oder Google-Websites, die das DoubleClick-Cookie verwenden (z. B. YouTube), kann Google das DoubleClick-Cookie in Ihrem Browser setzen, um Informationen zu der Art der besuchten Seiten oder zu den angezeigten Inhalten zu sammeln. Auf Basis dieser Informationen weist Google Ihrem Browser relevante Interessenkategorien zu und verwendet diese Kategorien zur Schaltung interessenbezogener Anzeigen. Natürlich kann man rausopten.

Google verwendet das Zeug auch für Werbung in GMail: Like most email services, Gmail uses software to scan emails for viruses and to filter out spam. Google uses this same kind of software to scan for keywords in users’ emails which we can then use to match ads. When a user opens an email message, computers scan the text and then instantaneously display relevant information that is matched to the text of the message. Once the message is closed, ads are no longer displayed. The whole process is automated and involves no humans. No humans, that is OK!

Anscheinend hat Susan Wojcicki, VP of Product Management (die Schwägerin von Sergey Brin) im Google Blog gesagt: "At Google, we believe that ads are a valuable source of information, one that can connect people to the advertisers offering products, services and ideas that interest them. By making ads more relevant, and improving the connection between advertisers and our users, we can create more value for everyone. Users get more useful ads, and these more relevant ads generate higher returns for advertisers and publishers."

Die interessante Frage von Michael Kassner ist:

Wenn es so eine tolle Sache ist, warum gibt dann niemand damit an?

For all you video buffs, here is an interview with Eric Schmidt, in which, TechRepublic say, he alluded to a new revenue stream that would be a win-win situation for Google and those who use Google’s services.

Beware, this thing is 54 minutes long and very ideological. At minute 48 you will find a pretty self-consious statement about why America will stay in front.

Komm egal, ist eh nur das Internet. Es wird wieder eine alternative Technologie auftauchen, für das nächste Eitelkeitsspiel. Behavior Blocker, Target Blocker, Prediction Blocker und vieles anderes mehr. Sehr schön.

Irgendwann wird dann der letzte Olm im Internet die letze Werbung empfangen haben. Dann kosten die Services halt alle wieder was. Wir finden das gut. We're pay, anyway, aren't we.

Only in Boston and the Valley: About Venture Capital

From oral history with Don Valentine, VC supreme:

RW: Well, do you - do you think that that as one of the successes of Silicon Valley, the availability of venture funds?

DV: There is no question. It's very difficult. And over the years we've been visited by hundreds of people from every country in the world, almost all of the states in the country. They all want to figure out and clone what causes Silicon Valley to exist and thrive. Many or most of the visitors are interested in the underlying employment creation.

But if you look at venture capital, it only works two places in the world. It doesn't work outside the U.S., and it only works in Boston, or the greater Boston area, and in Silicon Valley. Basically, almost no other major financial center in the world has ever generated companies of consequence and providence that is so large and visibly successful. And you can blame it on the weather. You can give credit to the great universities. You can explain that the venture community here is stronger and more experienced than other parts of the world.

I once tried to explain to the Deputy Prime Minister of Singapore who was here trying to take back the magic, and I said it's a state of mind. You can't take it back. Somehow or other you'd have to move your people here and they would have to have their DNA changed so that when they went back to Singapore, there was a DNA adjustment in the way they thought, the way they were willing to take risks. I mean in a place like Japan, if you start a company and it fails you're disgraced. Some people would commit suicide - if that happened.

So weit wir es beurteilen können, sagt Herr Valentine die Wahrheit. Es ist ein Kreuz aber es ist so. Und das ist noch nicht einmal alles. Und jetzt ist California doch pleite, irgendwie.

Wie sagt General Stillwell in Steven Spielbergs Film "1941"? This is not the state of California, this is the state of insanity.