Google’s challenge to China yesterday was big news here, barely a whisper in China. According to Andrew Jacobs in Google’s Threat Echoed Everywhere, Except China in today’s NYT, the Great Firewall hid almost every trace of the uproar from the Chinese public. Imagine that! They even censor news about their censorship, about which nobody is in the dark.
I’ve greatly admired Google since the day my Kiwi friend Bruce Hoult suggested trying it as a replacement for an aging Alta Vista. My search behavior comes close to monogamy, although I’ve occasionally dallied with others. I predominantly used the home-town favorite, WebCrawler, for ages, then was lured by better results at Alta Vista, and finally Google. Google’s product was good, but so was their soul as far as I could tell. They rose above the grasping machinations of Redmond’s empire (and their bloated MSN portal), they were never tacky like AOL or Yahoo!; they didn’t need to play any game but doing their job well every day, and it seemed like they didn’t particularly want to. “Don’t be Evil”, said the corporate mission statement, and it wasn’t hard to believe.
Every once in a while, however, word came out that they had caved in to some stupid request from the US government to hand over search data, just like the DoJ-frightened Microsoft and the ever-clueless AOL. Somehow they managed to redeem themselves, at least to a small degree, by being a bit less accommodating then the other search engines. But it really worried me whenever I heard of their Chinese operations. When they setup shop there four years ago, they did so under an agreement to censor certain subjects on google.cn. As Victoria used to say, “We are not amused” by such things. In fact, I was disgusted and disappointed.
It’s one thing to fall in with the US government, it has to work within certain limits. It is also recently run by those that aren’t exactly mental giants, recalling a president that obviously didn’t delight in reading and left the impression that he didn’t know how. The Chinese are not limited by any legal restraint, any historical sense of decency in power, and they’re not stupid. Neither China nor the rest of the world are well served by an amoral regime that is unchecked by anyone.
Yesterday, Google announced “A new approach to China” on their official blog. Finally motivated by a series of attacks against their systems last month, Google has “decided we are no longer willing to continue censoring our results on Google.cn”. It’s a tough call whether the people of China are better off with a censored Google or none at all, in the short term. In the long term, however, it’s definitely in the interest of the people of China that their government not be allowed to pretend that it is a legitimate and mature member of the community of modern nations.
It’s a risky bet. China has gotten their way until now, and the other companies that have gone along with the statist thugs in Beijing (Microsoft, Yahoo!, and Cisco spring to mind, but there are dozens of other co-conspirators to censorship in the world’s largest country) may all decide to take advantage of Google’s absence. It won’t even slightly surprise me if they do. On the other hand, I would be delighted to learn that Ballmer is abashed at the comparative venality of coöperating and steps up to join them. Google has more to lose here than anyone else, and they’re willing to make the bet.
They’re are worse things than censorship, slavery and murder for example. But those are illegal and we don’t need anybody to take a stand against them. Censorship is profoundly evil and damaging, and we need champions to continue to highlight it. Thank you Google!
The New York Times yesterday ran an item in their “Bits” blog titled “The Gap Between Google and Rivals May Be Smaller Than You Think“. The author, Miguel Helft, missed the boat by a mile. Twice.
First he asserted “With a combined 28 percent of the American search market, Yahoo and Microsoft could double their usage and still trail Google, which accounts for 65 percent of the market.”. Now, I’d like to find out what schools he attended and make sure they were stripped of their accreditation. I’m not talking about any college he went to, I’m talking about his grade school here. The market to which he refers is made up of a number of players, some big and some small, but the total market share of all the players will always be 100%. Period. Can’t be changed. Assuming that the market share of all the small players remains at 7%, which seems likely, if the Microsoft/Google alliance ran their share up to 56% they would be the dominant power because Google could only possibly have 37% share. Anyone who can’t add two-digit numbers up to 100, or doesn’t know that 100 is as far as percentages can go, should not be allowed out of grade school. And on the off chance that the Times still has editors, whoever passed this column for publication needs to head back to fifth grade as well, at least for arithmetic.
Helft then heads off into areas that are less-obviously absurd. He reports that Microsoft/Yahoo actually has pretty good market penetration, that 73% of all searchers use their service at least occasionally. (Google’s penetration is 84%.) But clearly what’s important is the number of searches, as every search presents the opportunity to display ads. Helft quotes Eli Goodman of comScore asserting “The challenge will be to create a search experience compelling enough to convert lighter searchers into regular searchers which is generally easier than converting new users,” which Helft obviously agrees with. That is patently absurd, although admittedly not arithmetically absurd. This is much like saying that all Miller needs to do to grow is turn the women who occasionally drink one of that company’s insipid products into heavy beer drinkers. The people who occasionally perform a search are the ones that aren’t particularly serious about their internet experience. They have one browser window open, and their home page is whatever somebody setup for them when they got their computer, and that’s where they run their occasional searches. (This was the crowd that made AOL huge.) Serious users have multiple tabs open in their browsers and probably rarely even see their home pages, or set them to Google so they wouldn’t have to wait for MSN to load. These are the users who flocked to WebCrawler in 1994, were using DEC’s AltaVista by the summer of ‘95, tried Dogpile in ‘96 (and weren’t impressed), and flocked to Google in ‘98.
Although occasional searchers can be expected to gradually get more comfortable with searching, and therefore do more of it, they aren’t likely to become serious searchers. It’s a different mindset. While I appreciate the 1700 hits to my Julia Child quotes page that Bing sent in a nine-hour period last week, I’m more impressed by Google’s steady traffic. But the only way for Bing, or any other search engine, to achieve large volumes of searches is for them to become a good tool for the serious searcher. It’s possible, Bing returns pretty good results. It’s far more likely than Miller ever coming up with products that would compete with Rogue or Bridgeport for my beer money!
I did some work at Yelm, Washington last year, and had the chance to catch a burger at the grill on the golf course. The “Blue Chip Burger” was definitely in the top half dozen burgers of my experience, with Maytag blue cheese, bacon, mushrooms, and sautéed onions. Definitely a three or four napkin burger.
Now I’m building them a website. It will be fairly basic, mostly because the folks at the restaurant don’t seem to have time for peripheral stuff like marketing. It took me a full month to get them to send me the PDF of the menu. They have some images to use for backgrounds on the website, I hope it won’t take another month to get the files because the menus are just floating on a white background now, which isn’t the look I’m going for to say the least. But the descriptions and prices should be correct.
I’m not normally much into sports bars, but Clark’s Bar and Grill is probably worth visiting if there isn’t a big game on! If I Were King I’d insist they open one here at Freeland.
I’m not sufficiently informed on Iranian politics to know if Mir Hussein Moussavi is really a huge step forward over the raving, intransigent incumbent, but the people of Iran certainly think so. I’m not certain that the US should take a strong position in support of Moussavi, the risks of appearing to meddle in local affairs are too great. But when the electorate knows the results are fraudulent, because they’re the ones that cast the ballots, the government that refuses to honor the actual ballots cast loses all legitimacy.
They are, in essence, no longer a government but a gang of thugs wearing uniforms. The police forces dispatched by such a government have no moral standing, and that includes the vicious Basij militia, only moreso.
The one thing I believe the US government should do, and I would welcome all other legitimate governments to do the same, is to identify every internet project that assists users in getting past government censorship online and providing cash, technical support, and backup equipment to make sure that there is enough bandwidth for all those that need to communicate when the authorities try to block it.
I also think the Iranians disappointed in the outcome of this election should simply arrest the police. There may be a lot of Basij terrorists (a more apt term than “militia”, I suggest), but their numbers have to be small in comparison to the population. No matter how well armed and macho any individual Basiji might be, with three or four Persian women clinging to his back he’s going to go down. Strip him of his weapons, tie his hands behind his back, and stash him in a warehouse somewhere.
With a quarter of the cops taken out of service, the rest will be cowering in the station houses or burning their uniforms and denying they’d ever heard of the units that issued them. The current government would be gone within days.
If I Were King it would be grossly offensive to me if my security forces were treated in such a way, but it would be my first obligation to rule in such a way that it would never be necessary.
Okay, there’s almost nothing there yet, but this morning the owner of A-OK Self Storage at Freeland (South Whidbey, Washington) called. I’d had a chat with the on-site manager on Monday when I was paying the bill for our 10×10-foot storage unit, and we talked just a bit about how a small website could augment their small yellow-pages presence. On Tuesday she called back and wanted me to send some links of sample sites to the owner. From the time we got off the phone to the time the site was visible, including domain registration, DNS setup, server creation, and uploading a simple tombstone, was just over an hour. By the time the search engines get it indexed, we’ll have a real site attached to it. The royal household is big on stuff, so we always have one or two storage units, and we’ve been happy with the service here. Doubly happy now that they’re a client as well as a supplier!
The car companies are up against the wall. They have to figure out how to make money in the third millennium, and at least a couple of them have to figure this out right smartly. On Thursday of this week UPS delivered notices to 789 Chrysler dealers letting them know they weren’t going to be part of the solution, the next day FedEx carried similar news to about 1100 GM dealers. Chrysler’s bankruptcy means they can make their terminations stick; GM will have a little more trouble if they stay out of bankruptcy, but that probably won’t change much. Even with strong state franchise laws, when the manufacturer wants to close a dealership they eventually will.
But why? I have my doubts about the economy of eliminating brands, but at least there was some cost saving when Chrysler no longer had to pay to produce ad campaigns for both Dodge and Plymouth, and they may have saved a couple of dozen salaries by eliminating the design effort to make a Plymouth look a little different than a Dodge. But how much can an auto manufacturer save by eliminating a dealer?
Every dealer has to have the special tools designed for specific repairs, but the dealers pay for those.
When I think of recent business successes, two names that come immediately to mind are Amazon and Netflix. Both are thriving from the “long tail” approach, a concept first identified by Wired’s Chris Anderson which means a strategy of focusing on a thousand products that sell a few units a month instead of a few products that sell a thousand each. The company that can provide you with any of ten thousand movies profitably will probably be your source for more common flicks, even if you have a Blockbuster ten minutes away.
Dell has built a huge business building one computer at a time. Yes, they’re under pressure during the current downturn, but Packard Bell doesn’t exist at all.
Yes, it’s possible that a large dealer will be more profitable than five smaller ones, but that’s the dealers’ problem, not the manufacturers. GM isn’t paying the rent on those four extra showrooms, although they probably had a lot of say in what they look like and pushed the dealers to build them. Chrysler does shell out for advertising for every dealer, but that’s all “co-op” in which the dealer pays for the ads and is reimbursed, based on their purchases, so other than processing the extra paperwork, there’s no difference.
And that, I suspect, is the crux of the matter. During a period when IT advances have made it vastly less expensive to sell small-volume products through small-volume dealers, Detroit was oblivious.
Murray Motors, the Chrysler and Dodge dealer in my home town got one of the notices on Thursday after 66 years. When the economy recovers, will long-time Dodge owners drive an hour and a half to look at new cars, and commit to that same drive for ongoing service, or will they take a look at what the Ford and Toyota dealers have on offer?
Fashioning a marketing organization that fits the current marketplace may be challenging, but it will work a lot better than just lopping off the less-profitable parts of their tail. Chrysler and GM are making a stupid mistake. If I Were King, or even if I weren’t, they need to remember that stupidity is a capital crime on this planet.
The Child Online Protection Act finally died yesterday. The bill, signed late in 1998 by Bill Clinton, made it illegal to put sexually explicit materials on a website seeking commercial gain, but never went into effect. The bill made it to the Supreme Court in 2004 but was remanded to the US appellate court at Philadelphia. As Mukasey vs ACLU it was dismissed Wednesday without comment.
Although we are certain that participating in creating pornography is likely to be damaging to children, we are skeptical that seeing it has any effect at all. Even if it did, any damage that could be done by exposure to pornography is insignificant compared to the damage of raising children in an environment where censorship is practiced.
If I Were King, the government would not have pressed this case.
Shortly after Wall Street hammered Apple’s stock over health concerns regarding Steve Jobs, the company announced outstanding results for the quarter just ended. Both revenue and net profits were up nicely, at a time when any company turning in improved results is a shock. As always, the stories are mentioning that Apple’s gross profit margin was 34.7 percent, the same as in the prior-year quarter.
This is curious. In fact, this is nonsense. The issue is that the press is constantly comparing Apple to Dell or HP in this regard, but the comparison is silly. What they are overlooking is that Apple’s margin includes both the margin on the hardware, which is probably better than Dell’s but probably not all that much better, and its margin on the operating system, which is probably not as high as Microsoft’s margin on Windows. When Microsoft reports their margin, it’s closer to 85% on Windows. I have no idea what Dell pays Microsoft for an OEM copy of Windows Vista, but though it isn’t anything like the retail price, it isn’t trivial.
On server products, the advantage probably goes to Dell/MS or HP/MS. When a Windows server is sold, the base operating system is in the total to the tune of $500 and up, for five users, on which MS earns their 85%. But there isn’t much reason to buy a real server for five users, so the client buys sets of CALs – Client Access Licenses. Five additional CALs cost about $150, on which the MS margin has to be on the order of 99%.
In other words, the constantly repeated theme that Apple is making dramatically higher margins than their competitors is the result of poor logic and arithmetic skills on the part of the media. As has been said before on these pages, If I Were King, education would be focused on addressing this, and nobody with a high school diploma would be likely to make such an error. We assume that the media would continue to hire only those who have at least that level of education.
For several years now, we’ve known that digital broadcast television was coming. In the US, the date decreed as the end of analog broadcast television was set as 17 February 2009. Yawn. This happened years after I had last actually tuned in to any broadcast television. It might have come up when I had cable, or maybe during one of the times I had satellite service. More likely, it happened when I didn’t have any access to any television at all. Yes, I do smugly feel superior by virtue of not watching television.
But my reaction to the end of broadcast TV wasn’t entirely selfish. I simply didn’t think anyone still received their signals this way. I flat out don’t know a single person who uses an antenna to pluck vidiocy from the ether. I know many who still watch, but they have long since gone beyond the limits of Channel 2 through 13, and won’t put up with the reception quality anyway.
As Her Majesty often says to me, “You don’t get out enough.” It seems that millions have signed up for coupons that pay the first $40 of the cost of a converter box. In fact, the US government ran through the entire allocation of $1.34 billion as of last Sunday. Ignoring any overhead charges and postage, that would be 33.5 million coupons. They’ve started a waiting list.
President-elect Obama’s transition team has asked Congress for an extension of analog broadcasts, and they will doubtless pony up enough funds for millions of additional coupons. Last month there were 7.2 million requests. If those signals are of value to that many people, then that should be done. But that’s not why I mentioned it.
The FCC has already sold much of this spectrum, the successful bidders are certain to demand some compensation for any delay. But I have to wonder, does it really make sense to sell spectrum? That is, is the best use of our spectrum resources necessarily those that are most profitable? And if this is a public resource, why does the government get the money? Why not simply return this spectrum to the public and see what clever uses it gets put to? It is not necessarily the case that all good ideas for communications come from companies with deep pockets to buy spectrum, our clever citizens should be given room to play around.
The 4 November 2008 FCC ruling to release channels 21 to 51 for network transmission in locations where there is no TV station broadcasting is a good start, but only certified devices will be permitted. That’s fine for players like Microsoft and Google, who pushed for the decision. If I Were King, I’d make the next big chunk of spectrum available to the public, with no licensing or certification required, with nothing more than a requirement that signals not interfere with uses outside the frequency range and that power be limited, possibly to 250 watts – enough to actually do something useful over meaningful distances. The creative potential of tinkerers and experimenters has been constrained by the heavy hand of government for far too long.