Friday, June 27, 2008

Andy Beal's Marketing Pilgrim

Andy Beal's Marketing Pilgrim

Rumor Mill: Microsoft Expecting $100M Powerset Acquisition to Save the Day?

Posted: 27 Jun 2008 06:03 AM CDT

Just six weeks after its coming out parade, natural language search engine Powerset is the subject of two rumors about its acquisition by Microsoft.

VentureBeat kicks things off, by telling us the deal has been done, and the purchase price $100 million.

Microsoft, the software giant flush with billions of dollars in its warchest, has agreed to buy Silicon Valley semantic search engine Powerset, we've learned.

The purchase price is rumored to be slightly more than $100 million. An announcement is expected next month.

As if annoyed that VentureBeat might have gotten the scoop, TechCrunch reports the deal is not actually final.

Our sources have been saying this deal is highly likely since May, but hasn't actually been signed yet and could still be disrupted by the ongoing Microsoft-Yahoo negotiations.

Keep in mind that neither VB or TC have any official confirmation or announcement.

But, let’s assume for a moment that Microsoft has indeed bought Powerset for $100M. That means that despite all of the huffing and puffing by Powerset execs, $100M is all it takes to sell out? Didn’t they just predict “2008 is the year that semantic and linguistic technologies cross over into widespread consumer use”?

$100M is probably the amount of interest Microsoft’s warchest earns in a day, so it’s not a big acquisition for the company. What the price tag does tell us is that perhaps my previous concerns are valid:

  1. Didn't Ask.com try natural language search? Didn't it fail?
  2. Didn't Google spend the last 10 years conditioning search engine users to use a handful of keywords–not natural language?
  3. Isn't Wikipedia made up of just 2.3 million pages, while Google's index is likely 40+ billion? Even I could build a search engine that scales to 2.5 million edited and organized web pages.
  4. If Powerset is licensing its natural language technology from Xerox PARC and its index from Wikipedia, where's the value? What's to stop Google or Microsoft from licensing the same technology?

Of course, we’ve not event looked at whether or not Microsoft would even know what to do with Powerset. From my experience, Microsoft doesn’t lack in the technology department, it lacks in the branding and execution department. Powerset doesn’t change that.

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Vivisimo Helps Citizens Search

Posted: 26 Jun 2008 10:46 PM CDT

Vivisimo, an enterprise search company based in Pennsylvania, announced Thursday that it has expanded its search affiliate program, which offers a free search engine for all government Web sites.

This search platform indexes more than 50 million government documents.

The platform covers news, images, frequently asked questions, maps, and weather forecasts. Searchers can also find government contact information, applications, and notices regarding jobs and benefits. Managers of web sites related to the government can add new features to their sites and even ambiguous search terms will extract useful information, Vivisimo said.

“Using Vivisimo’s superior search technology, and the expanded search affiliate program, anybody can easily access the vast amounts of information collected and generated by the U.S. government,” Raul Valdes-Perez, CEO and co-founder of Vivisimo, said in an announcement. “Vivisimo’s intuitive user-interface turns complexity into simplicity — and will help millions of people to get quick, authoritative answers to their questions.”

The latest version of Velocity’s platform includes Web 2.0 functionalities, like social tagging and social bookmarking.

Early users of the platform include USASearch.gov, the National Library of Medicine, Womenshealth.gov, the governments of New Zealand, and Israel.

This platform, which began with USASearch.gov, will offer citizens searching for information on government sites, at all levels, a faster, more efficient, and usable search experience.

It is interesting to note that government webmasters are seeking high quality vertical search solutions. Companies such as Vivisimo will likely begin to offer similar vertical search technology to industries. It remains to be seen how such offerings will fair against Google’s customizable search product and it’s low price point.

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Case Closed: Facebook Wins

Posted: 26 Jun 2008 04:50 PM CDT

Social networking site ConnectU sued Facebook founder Mark Zuckerberg for stealing their idea. They allege he used the source code they hired him to create for their site.

Now four years later Facebook is celebrating their four year anniversary, and that the lawsuit against them is finally settled - in Facebook’s favor. Facebook asked that the case be dismissed, for lack of evidence, and that happened. ConnectU then filed another lawsuit against Facebook in March, which is now closed.

Yesterday Judge James Ware of Federal District Court in San Jose, Calif., stood behind a February settlement between the companies. Also named were Zuckerberg’s Harvard classmates, twins Cameron and Tyler Winklevoss and Divya Narendra.

Facebook now has upwards of 39 million members and expanded to go beyond college students. ConnectU is said to have 15,000 members at 200 schools.

There is plenty of drama behind the suit and the story of Facebook’s beginnings. Zuckerberg’s writings say that he was drowning his sorrows in his dorm room after he got dumped. He may have lost in love, but he came up with a plan. He’d hack into Harvard’s student directory, download photographs of students, and post them online. He said the pictures were awful and compared them to farm animals. He decided to let people rate which was better - the people or the animals. That alone is funny.

As part of the suit, ConnectU questioned Facebook’s valuation of $15 billion and if the original settlement was valid. They noted that the valuation in the press release about Microsoft’s investment in Facebook, and the valuation given by Facebook's board of directors didn’t match.

Then they said the father of the twins (and ConnectU shareholder) named in the suit, Howard Winklevoss, didn’t sign the original settlement, making it invalid. That didn’t work.

Facebook countered saying ConnectU signed the settlement and knew exactly what they were doing, saying: “ConnectU's founders were represented by six lawyers and a professor at Wharton Business School when they signed the settlement agreement. The ConnectU founders understood the deal they made, and we are gratified that the court rejected their false allegations of fraud.”

Rolling Stone wrote a 5-page article on the battle over Facebook. From that article, one of my favorite lines from Zuckerberg, (remember this is coming from the mind of a teenage coder who decided to study psychology) is this insight:

“People are more voyeuristic than what I would have thought.”

His angst, programming skills, and that insight have turned a very quick success. And it appears that Zuckerberg is vindicated.

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Yahoo Announces Reorganization

Posted: 26 Jun 2008 04:35 PM CDT

We were pretty sure about this last week, but today Yahoo has formally announced their reorganization. Excuse me, their “Realignment to Support Core Strategies.” Of course. (via)

According to Kara Swisher, SVP Brad Garlinghouse will be replaced by Scott Dietzen, former CTO of Zimbra, which was acquired by Yahoo in September.

Just a year ago, Yahoo had a major management shakeup as Terry Semel stepped down and Jerry Yang and Susan Decker stepped in. Now, June rolls round again and it’s time for more changes. Among the changes announced:

Three new “teams” reporting to Sue Decker (President of Yahoo):

  • Audience Products Division, led by Ash Patel of Platforms & Infrastructure—companywide product strategy and product management.
  • A U.S. region, led by Hilary Schneider, former head of the Global Partner Solutions group—accountability for all go-to-market activity in the U.S.
  • Insights Strategy team, leader TBA—centralizing and executing a common strategy for the use of data and analysis across Yahoo!.

Further changes come under the Yahoo technology organization, still led by Chief Technology Officer Ari Balogh:

  • Developing a world-class cloud computing and storage infrastructure, to be handled by the new Cloud Computing & Data Infrastructure Group.
  • Rewiring Yahoo! onto common platforms, with all consumer-facing platform teams under the Audience Technology Group, led by Venkat Panchapakesan.
  • Creating a stronger partnership between product and engineering teams

New leadership in the tech organization includes:

  • Search group: Prabhakar Raghavan, head of Research, to direct search strategy
  • Search group: Tuoc Luong, leader of Search Engineering, as the interim leader of the search product team.
  • Advertising Technology Group: David Ku (under Search)

Yahoo says that Prabhakar and Tuoc will also continue to be the leaders of their former devisions.

In other news, Carl Icahn is probably still not impressed. He filed another proxy board with the SEC, but according to paidContent, the new filing basically rehashes the arguments of the previous filings and fights.

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