Archive: July, 2008

Microsoft is holding its annual financial analyst meeting today. Imagine being Steve Ballmer and walking into such a meeting without an ace hidden up your sleeve. It would a be nerve wracking experience to say the least.

It’s been a difficult six months for Microsoft during which the attempted acquisition of Yahoo! and lingering perceptions about a problem plagued Vista OS have damaged the company’s reputation and sucked vital energy and will. They needed to make a big announcement today, something so totally cool and off the wall, the world would forget about the last six months.

So they did just that…

Satya Nadella, Sr. VP of Microsoft’s Search, Portal & Advertising Platform Group announced that Microsoft Live web search and paid search advertising are coming to Facebook.

Facebook, which has until now not featured a web search option gets another way to monetize its operations. Microsoft gets the convented prize of ever-expanding contextual real estate to plunk its billboards (text ads) on. With over 100 million users around the world, Facebook provides an enormous land-grab for Microsoft’s adCenter program.

Google is rumoured to be interested in acquiring the social news website Digg. While this rumour has been circulating for a while both CNET and TechCrunch are reporting on the possible purchase this week with Techcrunch going as far as a headline reading, “Google In Final Negotiations to Aquire Digg…”. The rumoured purchase price is around $200million.

A number of people might wonder why Google would want to buy Digg. I think there are a number of reasons ranging from technical patents and processes to the number of eyeballs Digg could bring to Google’s ad inventory.

Google makes the vast share of its revenues from paid search advertising. Approximately 95% of Google’s quarterly revenues come from AdWords advertising. Every website displaying AdWords constitutes virtual real estate for Google to plunk billboards on. If someone else owns the property, Google does a revenue share with them when visitors click on AdWords ads. If Google owns the property however, it has to share with nobody. Digg draws a lot of traffic.

Digg also has patents and processes Google might wish to incorporate into future sets of search engine results. As noted in a post here last Friday, Google has been seen experimenting with search results that use a Digg-like voting and comments system.

An anticipated August 1 bloodbath might be averted. In an unexpected and highly controversial settlement, the board of directors at Yahoo! and agitator investor Carl Icahn have reached an agreement which makes Icahn a board member. In return, Icahn has agreed to call off his hostile proxy fight for control of the Yahoo! board.

Icahn owns or controls approximately 5% of Yahoo! common stock, with 68,789,320 shares. He has agreed to pull a slate of alternative board members he assembled earlier this year in his bid to take over the troubled corporation. Icahn has further agreed to use his block of votes to support the nominees put forward by the current board of directors.

After the August 1 election, the Yahoo! board will expand from its current nine members to eleven with Icahn guaranteed a seat via appointment. Two other appointments from the list of eight alternative nominees Icahn had earlier compiled will be added after the new board is elected. A ninth name, Johathan Miller (the former chair and CEO of AOL), will be added to that list.

Michael Arrington at TechCrunch notes Google is testing a search results page format that encourages users to vote for the validity or value of each listing. A plus or minus symbol beside a listing pushes that listing up or down in overall results. Beneath listings, a comments section allows users to post reviews or personal comments about each reference.

Apparently the system, which is not visible in Canada, finds inspiration from the Digg social network which allows its users to vote for articles and other media posted by its enormous user-base.

It is unknown if individual user votes can or will affect Google’s overall sites rankings or if Google will ever roll such a system in to any of the search results it provides. Chances are, the number of votes necessary to have an impact will only be seen by the largest and most popular websites.

It is also worth noting that Google already has a user-vote system that has a direct effect on search engine rankings. Google tracks every click-through from its search engine results pages. By comparing the number of clicks a specific listing gets to the time each user spends at that URL, Google can determine if users really think a site is valuable or not.