Is Google Losing Its Magic For Employees?

As Google Inc. exploded into a company of more than 12,000 employees, attracting a million resumes a year, the Internet giant rarely lost staff to start-ups or had prospective workers turn down job offers. Now, though, Google's magnetic pull on top Silicon Valley talent is showing signs of weakening.

Take Justin Rosenstein, 24 years old, a Google employee since March 2004 who invented its Web-site-building service, Page Creator. He joined social-networking start-up Facebook Inc. last month as a senior software engineer, and says Google's past success in hiring entrepreneurial people helps explain why it's seeing some of those people leave as it becomes larger: "That same caliber of people is naturally going to consider carefully whether it's at Google or somewhere else that they have the most potential to do big things and do them quickly."

Google had more than six times the number of workers at the end of the first quarter than it had at the same point in 2004, which some former employees say tends to slow decision-making and make it harder for individuals to feel like they're having an impact.

Another big consideration: Some highly lucrative stock options are beginning to finish vesting for thousands of employees brought on during a big Google hiring spree in 2003 and 2004, lessening the financial incentives to stay. Options granted during 2003 have average exercise prices as low as 49 cents, compared with the $526.29 price in trading at 4 p.m. on the Nasdaq market yesterday.

On top of all this, a new generation of Internet start-ups has matured enough to attract top technical talent and offer a real possibility of riches from a stock offering or sale to a bigger company. In contrast, Google's shares hit a record level this week, suggesting the stock simply doesn't offer the same potential gains it once did. The concentration of many of the start-ups within a few miles of Google's headquarters, which Google itself has exploited in the past, can make poaching staff a faster and easier pursuit.

But Google People Operations Vice President Laszlo Bock says the company's staff attrition rate has remained "pretty steady" in recent years at under 5% and the rate at which Google job offers are accepted is similarly stable, approaching 90% or higher depending on the position being filled. He chalks any perception that start-ups are gaining on Google in recruiting to the fact that the Internet giant is hiring many more people than in the past. With more staff and more hiring -- and steady attrition and acceptance rates -- in absolute terms there are more people snubbing Google for start-ups, he says. "So the start-ups experience it as a change, while from our perspective there hasn't been much of a change," adds Mr. Bock.

Still, Mr. Bock says Google executives spend a lot of time thinking about how to attract and retain top talent as the company grows in size. "We don't want to become a victim of our own success; we're aware of that risk," he says. Cautionary tales abound, as a string of other technology companies -- from Microsoft Corp. during the dot-com boom to more-recently Yahoo Inc. and eBay Inc. -- has seen hiring and retention challenges accompany massive growth.

It's unclear whether the latest departures will have any impact on Google's performance down the line. But the company acknowledges that creative and entrepreneurial people are the core of its success -- that's one reason Google lavishes them with extravagant free food and other perks. "If we do not succeed in attracting excellent personnel or retaining or motivating existing personnel, we may be unable to grow effectively," Google has acknowledged in regulatory filings.

Facebook, Mr. Rosenstein's new employer, is one company that professes having an easier time competing with Google for staff. Co-founder and engineering vice president Dustin Moskovitz says the 250-person start-up has managed to hire 10 out of the roughly 11 engineers who had rival job offers from Google since the beginning of the year, an improvement on the past. "There are lot of people [at Google] who are talking about leaving now and what they want to do next," says Mr. Moskovitz.

Mr. Rosenstein says he still loves Google, but was attracted enough by the "huge potential upside" at Facebook and other factors to leave "a lot of value on the table" in stock options that had yet to vest when he jumped. After leaving, he posted a note online for friends describing Facebook as "the Google of yesterday, the Microsoft of long ago." Similar factors are at play in other Google departures. Suranga Chandratillake, chief executive of video-search startup Blinkx, just hired a young engineer from Google. "Google was a big draw for exactly the sort of people we looked for a year ago, and that seems less the case now," he says.

Vanessa Fox, 34, a two-year Google veteran who created a service called Webmaster Central to help sites better manage their inclusion in search results, recently left the company and will begin working at online real estate start-up Zillow.com next month.

Two other Google defectors, Bret Taylor, 26, and Jim Norris, 26, started yesterday at venture-capital firm Benchmark Capital as entrepreneurs-in-residence and are working on their own Internet start-up idea. Two of the engineers who created the Google Maps service, they last year received the prestigious Google Founders' Award for their work. "Google has grown to be a larger company now, so I wanted to find our own destiny," says Mr. Taylor, who joined Google in March 2003 and estimates his net worth at under $10 million.

Bismarck Lepe, 27, is starting an interactive-video company called Ooyala Inc. with two other former Google employees. "We decided even Google, such an innovative company, wasn't taking an innovative approach at solving" a video-related problem they were working on, says Mr. Lepe, a four-year Google veteran. He began thinking about leaving when his initial options grant was about to vest completely in March, after four years.

"Google is losing a number of its very talented individuals -- some because they're frustrated and some because they're burned out," Mr. Lepe adds. He predicts any flow of staff out of Google will eventually slow, as the company finds ways to stem it and the wave of cheap options vesting passes next year.

Google's Mr. Bock, though, says vesting stock options have "not been in our experience a huge driver of people leaving." In addition, he says that the company is taking measures to try to keep employees satisfied. Google has begun experimenting with the creation of offsite "skunkworks" operations to develop cutting-edge products and separating out parts of the business to be run as more autonomous units within the company. It's trying to distribute authority for activities such as hiring and deal making farther down in the organization. Like other big companies, Google has also established a training program for employees it identifies as having leadership potential.

But Mr. Lepe says Google in the meantime has lost currency with young engineering recruits. "They just assume Google is now 'the Borg,' now 'the Man,'" says Mr. Lepe, conjuring groupthink bogeymen from 1960s radicalism to "Star Trek: The Next Generation."

Mr. Bock points out that the company is on track to receive more than two million resumes in 2007.

Google Acquires GrandCentral, Telephone Management Company

Techcrunch reported that Google has acquired GrandCentral, a company that let's you keep one telephone number as you move from home to home or job to job. Arrington said, "We have a high degree of confidence that the deal has actually been closed."

Neither Google nor GrandCentral confirmed this report as of yet. However, Techcrunch tends to be spot on with these reports. More coverage over at Techmeme.

Google loses Gmail trademark case in Germany

Looks like Google will finally have to stop using the Gmail trademark in Germany. A German appellate court ruled against the company, says German venture capitalist Daniel Giersch, who brought the case against Google. The court is expected to provide a written ruling on July 4, according to Google and Giersch.

Giersch runs an electronic postal delivery business that goes by the name G-mail, which is short for "Giersch mail." Giersch says he only wants to use the trademark in Germany, Switzerland, Norway and Monaco.

A Swiss court also has ruled against Google.

Separately, Google had to rename its e-mail service Google Mail in the United Kingdom in 2005 after losing a trademark case there. Google's use of the trademark also is being challenged in Poland.

Google wants U.S. help fighting censorship

WASHINGTON (AP) -- Once relatively indifferent to government affairs, Google Inc. is seeking help inside the Beltway to fight the rise of Web censorship worldwide.

Google says censorship of the Internet poses trade barriers that should be fought with trade agreements.

The online search giant is taking a novel approach to the problem by asking U.S. trade officials to treat Internet restrictions as international trade barriers, similar to other hurdles to global commerce, such as tariffs.

Google sees the dramatic increase in government Net censorship, particularly in Asia and the Middle East, as a potential threat to its advertising-driven business model, and wants government officials to consider the issue in economic, rather than just political, terms."It's fair to say that censorship is the No. 1 barrier to trade that we face," said Andrew McLaughlin, Google's director of public policy and government affairs. A Google spokesman said Monday that McLaughlin has met with officials from the U.S. Trade Representative's office several times this year to discuss the issue. "If censorship regimes create barriers to trade in violation of international trade rules, the USTR would get involved," USTR spokeswoman Gretchen Hamel said. She added though that human rights issues, such as censorship, typically falls under the purview of the State Department.

While human rights activists are pleased with Google's efforts to fight censorship, they harshly criticized the company early last year for agreeing to censor its Web site in China, which has the second-largest number of Internet users in the world. The company defends its actions, saying the Chinese government made it a condition of allowing Chinese users access to Google Web pages. China has an Internet firewall that slows or disrupts Chinese users from accessing foreign uncensored Web sites.

Censorship on the rise

Censorship online has risen dramatically the past five years, belying the hype of the late 1990s, which portrayed the Internet as largely impervious to government interference. A study released last month by the OpenNet Initiative found that 25 of 41 countries surveyed engage in Internet censorship. That's a dramatic increase from the two or three countries guilty of the practice in 2002, says John Palfrey, executive director of the Berkman Center for Internet & Society at Harvard Law School, who helped prepare the report.

China, Vietnam, Saudi Arabia, India, Singapore and Thailand, among others, are increasingly blocking or filtering Web pages, Palfrey says. Governments "are having more success than the more idealistic of us thought," acknowledges Danny O'Brien, international outreach coordinator at the Electronic Frontier Foundation. Still, even government filtering isn't always successful. In a brutal regime like Iran, which filters Web content, there are nearly 100,000 bloggers, making Farsi "one of the most blogged languages in the world," says Palfrey.

Google's YouTube has become a common target for thin-skinned rulers. Turkey in March blocked the video-sharing site for two days after a complaint that some clips insulted Turkey's founding father, Mustafa Kemal Ataturk. Thailand continues to block YouTube after several videos appeared in April, criticizing the country's monarch.

Bloggers in Morocco said in late May that they could not access YouTube shortly after videos were posted critical of that nation's treatment of the people of Western Sahara, a territory that Morocco took control of in 1975. A government spokesman blamed a technical glitch.

Law school paper may have sparked idea

One likely source for Google's censorship idea is a paper written two years ago by Timothy Wu, a professor at Columbia Law School, who argues that downloading a Web page hosted in another country effectively imports a service.

Drawing on that concept, Google envisions using trade agreements to fight back. The negotiated pacts would include provisions guaranteeing free trade in "information services." As is true of most trade pacts, the provisions would call for arbitration if there are violations.

The U.S. has a trade agreement with Morocco and began negotiating one with Thailand in 2004, although those talks were suspended early last year after a military coup. Columbia's Wu said the trade pact approach is likely to be more effective when governments are guilty of blocking entire Web sites or applications, such as Internet phone-calling, than when they filter specific content. Under World Trade Organization rules, countries can limit trade for national security or public moral reasons, Wu said, exceptions that authoritarian governments would likely cite when filtering politically sensitive material.

The company's trade initiative reflects Google's increasing acceptance of the value of federal lobbying. The company didn't hire a lobbyist until 2003, according to public filings, but paid the high-powered Washington-based Podesta Group $160,000 last year to work on Internet free-speech, tax and other issues.

Effort seems sincere

Human rights groups say Google's censorship efforts seem sincere, albeit motivated by bottom-line incentives. "Free expression is a unique selling point" for a company like Google, O'Brien said. Filtering and censorship "diminishes the value of their product." Yet last month at the company's annual meeting, Google's board recommended investors vote against a shareholder resolution urging Google to renounce censorship.

The resolution was defeated, although Google is already acting on some of the proposal's ideas, including working with other technology leaders, such as Microsoft Corp. and Yahoo Inc., to develop a set of principles on how companies should respond to censorship and other human rights violations when doing business abroad.

Human rights advocates, academics and corporate social responsibility groups are involved in the project, announced earlier this year. Meanwhile, Google's global growth efforts continue. YouTube said Tuesday that it plans to expand into nine other countries, including Brazil, France, Spain and Poland, offering local-language Web sites and highlighting videos of domestic interest.

In China, where Google is the No. 2 search engine behind the domestically based Baidu.com, the company said in April it will increase its investment as it works to create more content of interest to Chinese users.

Yahoo boss steps down from post

Mr Semel admitted all was not well with Yahoo's financial performance

The chief executive of internet search firm Yahoo, Terry Semel, has quit his position and has been replaced by co-founder Jerry Yang.

In the post since 2001, Mr Semel has been under pressure for some time amid disappointing trading results and the growing dominance of rival Google.

The firm suffered a 16% fall in profits in the first three months of 2007.

Mr Yang helped launch the business, which now has more than 500 million users worldwide, in 1995.

Recent struggles

Mr Semel will take on the role of non-executive chairman but will no longer be involved in the day-to-day running of the business.

Yahoo has struggled in recent years, losing market share to rivals such as Google and being criticised for poor technology and a lack of innovation.

This is a time for new executive leadership Terry Semel, former Yahoo chief executive See Yahoo shares

It currently accounts for about 26% of all online searches in the US, well behind Google which has a market share above 49%.

Announcing his departure, Mr Semel said no-one at the firm was "satisfied" with the company's recent financial performance.

"This is a time for new executive leadership, with different skills and strengths, to step in and drive the company to realise its potential," he said. "It is the right thing to do and the right time is now." In a statement, Yahoo acknowledged that the past year had been a "difficult one" for the business.

JERRY YANG FACTFILE Born in Taiwan, moved to US aged 10 Developed website concepts while studying at Stanford University Co-founded Yahoo in 1995 Estimated to have a personal fortune of $2.2bn

But it stressed that it had made progress in key areas such as developing advertising search functions and building its presence in video and on mobile platforms.

Mr Yang, 38, created the original Yahoo search engine in 1995 alongside partner David Filo before helping to launch the business on the stock market a year later. Since then, he has held a number of important roles overseeing corporate strategy, technological development and international expansion.

Microsoft link

Yahoo has repeatedly been linked with a deal with Microsoft to try and counter Google's increasing supremacy in the online search market. The two were reported to have held informal merger talks last year and to have revived discussions over possible co-operation earlier this year.

The two firms have dismissed the reports as speculation but, on both occasions, such talk led to a sharp increase in Yahoo's share price. Mr Semel joined Yahoo at a time when its fortunes were at a low ebb following the collapse of the dotcom boom and helped to lead a revival in its business. But Google's formidable growth and concerns about Yahoo's ability to respond has led to growing doubts about the firm's direction.

Yahoo's shares rose nearly 3% after news of Mr Semel's departure was revealed.

Google cuts data retention times

Google is to cut the length of time it holds users' personal search data.

The move comes in response to a data protection group that wrote to the firm questioning its privacy policies.

The European advisory body, called Article 29, said Google's current data retention practices could be breaking European privacy laws. The search giant has said it will now keep personally identifiable search data for 18 months rather than the previous period of 18 to 24 months.

We are committed to data protection principles that meet the expectations of our users in Europe and across the globe Peter Fleischer, Google

Google currently collects and stores information from each search query, holding information about the search query itself, the unique PC address (known as an IP number), and details about how a user makes their searches, such as the web browser that is being used.

The company says it needs this information to improve its different services and to help fight threats such as fraud, spam and malicious attacks, and to aid "valid legal orders" from law enforcement agencies.

It keeps this information for a set period before "anonymising" it - disconnecting the data from an individual.

New policy

However, some are worried that this collected data from Google and other search engines may be infringing on civil liberties. In May, working group Article 29, made up from data protection commissioners from around the EU, wrote to Google expressing particular concern over the length of time personally identifiable data was being retained on the company's servers. It said the search engine's policy did not appear "to meet the requirements of the European legal data protection framework".

In a response to Article 29's letter, Google's global privacy counsel Peter Fleischer responded: "We are committed to data protection principles that meet the expectations of our users in Europe and across the globe." He said that Google believed their current policy complied with data protection law, but admitted a shorter period of data retention than existed at present was possible.

Mr Fleischer wrote: "After considering the working party's concerns, we are announcing a new policy: to anonymise our search server logs after 18 months, rather than the previously-established period of 18 to 24 months."

He said that the company could still "address our legitimate interests in security, innovation and anti-fraud efforts" within the shorter period. However, he added that "we also firmly reject any suggestions that we could meet our legitimate interests... with any retention period shorter than 18 months". Article 29 has said it will "carefully study" Google's letter, and will discuss it at its next session taking place on 20 and 21 June.

China's Sina, Google team up on China services

BEIJING (Reuters) - Sina Corp., one of China's top Internet portals, and Google Inc. said on Monday they would cooperate on news, advertising and search services in China, the world's second-largest online community.

The partnership would initially allow Google users easier access to Sina's news content, the two companies said. They did not reveal any financial details of the agreement. "In the future, we can explore cooperation in advertising and search, and other areas," Lee Kai-Fu, the president of Google in Greater China, told reporters.

The two said details about how the cooperation would proceed were still being worked out. Although Google and Yahoo have been making inroads into China, analysts have said that domestic operators such as Sohu.com, Baidu and Alibaba held an obvious cultural and first-mover edge.

LookSmart’s CFO Resigns, But Revenue Increasing

Mixed signals from LookSmart today as their Chief Financial Officer John Simonelli has announced his resignation as CFO and Chief Operating Officer after a replacement is found and his responsibilities have been transitioned.

Dave Hills, President and Chief Executive Officer of LookSmart, said,

“John has been an effective partner during this phase of the Company’s development and we will certainly miss him. At the same time, all of us support his decision to spend more time with his family. We are confident in our operational and financial controls and processes which John played a key role in developing, and his willingness to remain on board while we find and integrate a replacement speaks to his dedication and enthusiasm for the Company. On behalf of myself, the Board and the entire LookSmart team, we thank John for his service.”

LookSmart also announced that given added visibility into the second quarter which ends June 30, 2007, it preliminarily expects that its financial results will meet or exceed prior guidance provided to the market.

In the second quarter, LookSmart now expects to report a total revenue increase of 25%-27% year-over-year.

Additionally, in the second quarter LookSmart continues to expect gross margins of 42%-43% and operating expenses to increase approximately 5% year-over-year.

Baidu Calls European Expansion Rumors "Groundless"

Baidu denies plans for European expansion from InfoWorld reports that rumors of Baidu expanding to Europe are false.

Baidu, the Chinese search engine, released a statement saying, "Recent rumors alleging that Baidu.com is expanding into Europe are groundless." A UK Telegraph article recently sparked such rumors.

iProspect Releases Search Marketer Measurement & Performance Study

Search Marketer Measurement & Performance Study from iProspect and JupiterResearch was released, providing an update to the search marketing landscape. Here are some key points learned from the study.

* 43% of SEMs cannot measure the ROI from SEO campaign
* SEO nets a higher ROI than paid search
* Traffic is the most common job performance indicator for search marketers
* However, 14% of SEMs are not evaluated based on SEM metrics for their jobs

Google Universal Search - Video and Maps Benefit

Ccolumn in TIME this week is about Google's dominance of the search market which, as of this week, measures at 64.8% of all U.S. Internet searches, more than double the nearest competitor Yahoo! Search. They've had many requests for an updated Google Properties chart posted here, but decided to do a pre/post analysis of the recent Google Universal Search initiative announced May 16, 2007.

Percentage U.S. Visits to Custom Category of Top Google Properties

It appears from this early analysis that the big winners for this new format are YouTube and Maps, while Image Search and News (which under the older format were occasionally featured top of page) are on the losing end.

Sproose Updated

Sproose, a social search engine that allows users to rank results which I wrote about back in February - Sproose, a social search engine has updated, making it easier for users to rank the index of results. Simply run a search, find a site that you like and click on 'I like it' to move it up the rankings. And move it up the rankings you can. I took a site that was listed in the 100th position and turned it into one ranked on the first page. While it's a nice idea, I think for one person to be able to manipulate results to that extent is slightly extreme. Yes, I know that it's only because there were a few votes and it won't happen in a subject area with lots of results, but until Sproose gets to the point I think it's a valid criticism.

I also found that I couldn't 'unvote' the page either; there wasn't an 'oops' button, and while I could remove a page, it was only removed from my version of the index, so I couldn't backtrack that way. I still think that there's some way to go before this concept starts to work properly, and it's a system that looks like it's open to abuse.

Google Announces Salesforce.com AdWords Alliance

The rumors have been confirmed. Google announced a strategic alliance with Salesforce.com today.

The alliance will mean that Salesforce.com will build Google AdWords advertising tools directly into the Salesforce.com portal. Salesforce.com will resell AdWords services as a distribution channel for Google.

"The Web has quickly become the most powerful tool small and medium sized businesses can use to compete and win in today’s economy," said Eric Schmidt, chief executive officer at Google. "Combining the power and simplicity of Salesforce with Google AdWords helps businesses find and keep customers to ultimately drive their continued success."

"The alliance of Google and salesforce.com brings together the world’s leading platforms to empower small and medium size businesses to accelerate and thrive," said Marc Benioff, chairman and CEO of salesforce.com. "The Internet has completely changed the landscape for small and medium businesses and the alliance between Google and salesforce.com enables companies of all sizes to acquire new customers and streamline their business to experience unfettered success."

The full release can be found at: http://www.google.com/intl/en/press/pressrel/salesforce_alliance.html.

Blinkx, Video Search Engine, To Power Ask.com Video Search

Blinkx Strikes Ask.com Video Search-Engine Deal from CNNMoney.com reports that video search engine, Blinkx will power Ask.com's video search.

This deal will give Ask.com access to Blinkx's 12 million hours of audio and video content. Each time a user searches for Blinkx's content, Ask.com has agreed to pay a fee, according to the release. Reportedly, a Blinkx area on the Ask.com site will be how users access the audio and video content.

"Ask.com's momentum is impressive and we're very proud to be powering their new video search offering," said Suranga Chandratillake, founder and CEO, blinkx. "This relationship further demonstrates our technology leadership in the video search space and is an exciting development for our 130 or so media partners whose content can now be accessed through Ask.com."

The full release is available over here.

Google Updates & Details Webmaster Guidelines

Google has just updated their Google Webmaster guidelines page with clearer and more detailed guidelines.

If you scroll down to the quality guidelines portion and the "Quality guidelines - specific guidelines" section, you will notice that those specifics are now hyperlinked to more details.

• Avoid hidden text or hidden links.
• Don't use cloaking or sneaky redirects.
• Don't send automated queries to Google.
• Don't load pages with irrelevant keywords.
• Don't create multiple pages, subdomains, or domains with substantially duplicate content.
• Don't create pages that install viruses, trojans, or other badware.
• Avoid "doorway" pages created just for search engines, or other "cookie cutter" approaches such as affiliate programs with little or no original content.
• If your site participates in an affiliate program, make sure that your site adds value. Provide unique and relevant content that gives users a reason to visit your site first.

I may update this post with more information, after I dig deeper into the pages and listen to Matt Cutts at Google talk about it on the Penalty Box Summit session at SMX.

Google Updates AdSense Program Policies

The Inside AdSense blog informed us that they have recently updated their AdSense program policies.

The two major changes according to AdSense include:

(1) Google now requires AdSense publishers to comply with "the spirit" of the AdWords Page Quality Guidelines.
(2) You can place up to three link units on a page.

I took a deeper look and compared the old version with the new version.

The new version added this line:

Publishers using online advertising to drive traffic to pages showing Google ads must comply with the spirit of Google's Landing Page Quality Guidelines. For instance, if you advertise for sites participating in the AdSense program, the advertising should not be deceptive to users.

And in regards to the link units, the old copy was:

A single link unit may also be placed on each page.

And it now reads:

Up to three link units may also be placed on each page.

Internet Retailer 2007 Thoughts From First Day

Jim McCann, founder and CEO of 1-800-Flowers, gave the keynote address. Closing in on $1 billion in annual sales, 1-800-Flowers has aggressively acquired other companies in past years and expanded far outside flowers into other gift products such as candy and wine. According to Internet Retailer, that growth has been expensive, and all is not good within the company. I find that easy to believe. McCann filled his 30 minutes with bad jokes and very little substance. He was either trying very hard to keep the company strategy under wraps or he does not have a company strategy. I suspect the latter. He ended his talk with a rather bizarre plea for help from the audience. No thank you–if I figure out a better way to sell flowers online, I do not feel like sharing it with Jim McCann. I would rather start a flower company.

The Chief Marketing Officer of Ebay, Gary Briggs, was the next speaker, and I was very impressed. Gary challenged internet retailers to step up their game and truly innovate rather than just copying each other. He specifically made a little fun of e-tailers whose complete marketing strategy seems to consist of offering free shipping. He shared much of the Ebay strategy for the future, and it is definitely innovative. They want to take advantage of the increased bandwidth in homes and push typical Ebay functionality from the browser to the consumer desktops. They are also introducting distributed shopping to partner sites. I found myself contrasting the tough, smart approach of Ebay to the apparent lack strategy of 1-800-Flowers and decided to buy Ebay stock.

The next speaker was a professor of marketing at Texas A&M University named Venky Shankar. He demonstrated perfectly why I do not like to see professor types at these kinds of conventions. The Internet is simply moving too fast for the universities to keep up with, and his presentation was a bit naive and was not current.

Ken Burke, CEO of MarketLive, then presented a new white paper about improving site conversion. He was very informative, and I plan to discuss this white paper in a future post. Along with MarketingExperiments, MarketLive performs a service desperately needed by e-tailers. There are very simple changes that can be made to about any ecommerce website that will probably generate incremental improvements to the site’s conversion rate, and the MarketLive white paper is full of recommendations for those kinds of changes.

After two forgettable presentations from Callaway Golf and Wal-Mart, we listened to a short debate about internet regluation between David MCClure of the US Internet Industry Association and Tod Cohen, an Ebay VP. Ebay is taking a lead in proposing legislation to outlaw 2-tier networks that will keep companies such as AOL from controlling what sites are displayed to their users. McClure believes that legislation is unnecessary because market forces will make such a scenario impossible. However, both McClure and Cohen agreed that the most dangerous problem facing Internet Retailers is the possibility of an Internet sales tax.

All in all, I have learned a lot today. Fortunately, I have my laptop with me, so can get some work done during some of the less interesting speakers. More tomorrow…

U.S. online ad revenue up 26 pct in first quarter

NEW YORK (Reuters) - U.S. online advertising revenue grew 26 percent year on year to a record $4.9 billion in the first quarter of 2007, according to the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC).

The online advertising sector has seen strong growth in recent years as marketers put more money into online, and away from traditional areas such as newspapers and television. "The continued growth of online ad revenues clearly illustrates marketers' increased comfort with the extraordinary vitality and accountability of this medium," IAB President and CEO Randall Rothenberg said in a statement. The sector has been bolstered in recent months by merger and acquisition activity involving some of online advertising's biggest names. Last month Microsoft Corp. agreed to buy aQuantive Inc., an online advertising business for $6 billion, while advertising group WPP Group Plc. said it would pay $649 million for 24/7 Real Media Inc..

In April, Google Inc., said it would pay $3.1 billion for Doubleclick Inc., which offers a digital marketplace that connects ad agencies, marketers and Web site publishers. Investors are betting on increased growth in the online ad sector as broadband penetration grows and more services move to the Web. "We may expect continued strong revenue growth buoyed by an expanding broadband subscriber base," said Peter Petrusky, director at PwC. "(This) could translate into more users spending more time online and offers a platform for rich media and video ads that dial-up connections can't render."

Google Releases Audio Ads To Public While eBay Begins Radio Ad Auction Push

Google announced they have completed their audio ad test and is now in the process of rolling out audio ads to all US advertisers. In fact, I reported on May 15th, that many advertisers began seeing the audio ads option within their AdWords console.

Today, EBay to Broker Radio Ad Time from the Wall Street Journal reports that eBay is getting into the audio ad (radio ad) auctioning business as well. eBay with Bid4Spots Inc. of Encino, California will begin allowing radio stations to auction off air time within the eBay media marketplace. More than 2,300 radio stations are expected to participate.

Google Acquires Multicore Programming Company, PeakStream

Google shivs server crowd with PeakStream buy from The Register reports Google has purchased PeakStream, a start-up that sells tools for programming chips with multiple processing units.

The financial terms of the buyout were not disclosed, but rumors are that Google bought them on the cheap. Reportedly, PeakStream was not doing well financially and Google wanted to ensure the company's stability - so they bought them. PeakStream develops tools that help improve the performance of single-threaded applications on multi-core chips. Google has an interest in improving such tools, to help with their own servers.

"We believe the PeakStream team's broad technical expertise can help build products and features that will benefit our users," Google said in a statement. "We look forward to providing them with additional resources as they continue developing high performance applications for modern multi-core systems."

Yahoo Search June 2007 Update

The Yahoo Search Blog announced that they are doing an index and ranking algorithm update. The update started last night and should be "complete very soon," said Priyank Garg of Yahoo Search.

Yahoo's last update was just a few weeks ago on May 22nd. That update was a minor update.

Ask re-writes web search rules

Ask has revamped its search engine to help distinguish itself from rivals such as Google and Microsoft.

In the revamp it has added to the traditional list of links results from a wide range of sources including videos and blogs.The new page also lets users fine tune search terms to help them home in on the results they really want. The revamp follows a similar move by Google in late May in which it combined different search results.

Lost list

Ask's revamp involves both its main page and the layout of the results that any search produces. The Ask homepage has been cleaned up and the long list of different search categories has disappeared.

Now any search takes people to a page divided into three columns. The left-hand column lets searchers refine what they are looking for to make their terms either more or less specific.

With this feature Ask hopes to reduce the number of times users have to "hunt and peck" so they get the results they wanted. The search firm said research reveals that users typically have to try four times before they find what they set out to look for. The central column contains a familiar list of results plus adverts and the tools that let people save pages or get a sneak preview of websites. The right-hand column gives instant access to results from other categories such as images, blogs and video.

Search analyst John Battelle looking over the revamp said on his blog that it was "about time" that the list of "ten blue links" was abandoned. He added: " This is Ask, a perennial 4th place player in an increasingly one player market, doing what only a 4th place player can do: Throwing caution to the wind."

Google snaps up media distributor Feedburner

Terms of deal for RSS technology pioneer undisclosed; estimates range at about $100 million.

Google Inc. said Friday it is acquiring Feedburner Inc., bolstering the Internet advertising leader's capacity to distribute both media and advertising to blogs and social network site users.

Terms of the deal were not disclosed, a Google spokesman said, although various blog reports in recent weeks had put the price of a potential deal at about $100 million.

Video More video Google's 'street level' mapping tool offers up-close views of homes, cars and even faces. But how close is too close? Play video

On Thursday, Panoramio, a site founded by two Spaniards that allows digital photographers to plot the geographic location of their pictures on Google Maps or Google Earth, was acquired by Google (Charts, Fortune 500), also for undisclosed terms. In March, the site said it had mapped more than a million user photos.

Feedburner is a pioneer in the market for delivering the latest updated information to other Web sites using technology known as Really Simple Syndication (RSS). Customers include the Wall Street Journal, BBC and Amazon.com Inc (Charts, Fortune 500). More recently, retailers and travel agents have begun sending promotional offers to online customers via Feedburner.

Google also sees the technology as a way for its base of hundreds of thousands of advertisers to reach some of the most active groups of Web users - social network members who use mini-applications called widgets or the growing audience surfing the Internet over mobile phones, executives said.

"We're constantly looking for ways to identify and offer new tools for content creators and Web site publishers," Susan Wojcicki, Google's vice president of product management, said in a blog post, adding that the purchase helps it provide new tools for its hundreds of thousands of advertising customers.

Feedburner also offers analytics to help Web publishers understand who reads their sites, as well as embedded advertising allowing Web site publishers to get paid by advertisers based on the audiences they attract via RSS feeds.

"It is going to get more and more important for publishers to have this round-trip view of their audience," Feedburner Co-founder and Chief Executive Dick Costolo told reporters on a conference call. Costolo is joining Google as an executive.

The deal, while small in financial terms, is the latest in a series of rapid moves to consolidate the fast-growing online advertising market. The deal would expand Google's existing blog advertising service, known as AdSense for feeds, which delivers targeted advertising tied to Web page content.

Two weeks ago, rival Microsoft Corp. (Charts, Fortune 500) announced its largest-ever acquisition, a $6 billion deal to buy aQuantive Inc., the largest independent online ad company. In April, Google agreed to acquire an aQuantive competitor, DoubleClick, for $3.1 billion.

Feedburner counts more than 430,000 Web site publishers as users of RSS. A total of 736,000 RSS feeds, including roughly 110,000 audio or video feeds, are delivered to readers as publishers update their Web sites, the company said. The 30-employee company will remain based in Chicago.

Feedburner has raised $10 million from Mobius Venture Capital, Portage Venture Partners, Sutter Hill Ventures, Draper Fisher Jurvetson and Union Square Ventures.

The Google 'ick' factor

Google Inc. bills the latest twist on its online maps as "Street View," but it looks a bit like "Candid Camera" as you cruise through the panorama of pictures that captured fleeting moments in neighborhoods scattered across the country.

In San Francisco, there's a man picking his nose on a street corner, another fellow taking out the trash and another guy scaling the outside of an apartment building, perhaps just for fun or maybe for some more sinister purpose.

Further down the highway at Stanford University, there's the titillation of a couple coeds sunbathing in their bikinis. In San Jose, there's the rather sad sight of a bearded man apparently sleeping -- or did he just pass out? -- in the shadow of a garbage can, with what appears to be an empty cup perched in front of him.

In Miami, there's a group of protesters carrying signs outside an abortion clinic. In other cities, you can see men entering adult book stores or leaving strip joints. (Watch candid moments on Google's mapping tool )

Potentially embarrassing or compromising scenes like these are raising questions about whether the Internet's leading search engine has gone too far in its latest attempt to make the world a more accessible -- and transparent -- place.

"Everyone expects a certain level of anonymity as they move about their daily lives," said Kevin Bankston, a staff attorney for the Electronic Frontier Foundation, a group devoted to protecting people's rights on the Internet. "There is a certain 'ick' factor here."

Google is hoping to elicit "oohs and ahhs" with Street View, which was introduced on its maps for the San Francisco Bay area, New York, Las Vegas, Denver and Miami earlier this week. The Mountain View-based company already is planning to expand the service to other U.S. cities and other countries.

The feature provides high-resolution photos to enable street-level tours so users can get a more realistic, 360-degree look at places they might go or spots where they already have been. To guard against privacy intrusions, Google said all the photos were taken from vehicles driving along public streets during the past year. The photos will be periodically updated, but the company hasn't specified a timetable for doing so.

"This imagery is no different from what any person can readily capture or see walking down the street," Google spokeswoman Megan Quinn said in a statement. "Imagery of this kind is available in a wide variety of formats for cities all around the world."

Google certainly isn't the first company to venture down this photographic avenue. Amazon.com Inc. launched a similar mapping feature in January 2005 on a search engine called A9.com. That search engine's former chief executive, Udi Manber, now works for Google. And Microsoft Corp. began displaying street-level pictures on its online maps for San Francisco and Seattle late last year.

A9's photographic maps, which were abandoned late last year, raised privacy concerns about women being seen entering domestic violence shelters.

Hoping to avoid similar complaints, Google tried to identify potentially sensitive locations by contacting the Safety Net Project at the National Network to End Domestic Violence, much to the delight of Cindy Southworth, the group's director.

"We were thrilled that a major technology company like this reached out in this way to help protect these victims," she said.

Google also is offering a "help" button on all the street-level photos to provide a link for users to request the removal of an image that is objectionable or clearly identifies a person who doesn't want to be included in the visual tapestry. Company spokeswoman Victoria Grand said Google has fielded "very few" removal requests so far.

Eileen Diamond is hoping she can persuade Google to replace its current picture of a Miami street corner where protesters gather once a week to protest the abortions performed at A Choice For Women. The picture, still available on Google's maps Friday afternoon, includes a cluster of protesters standing outside the clinic, an image that clinic administrator Diamond worries will scare away potential patients or perhaps attract trouble makers to the facility.

"It's sort of disturbing because it's certainly not the kind of message we want to be sending out," said Diamond. "It's already very painful for our patients to come in. We want them to feel safe and protected."

As of Friday, Diamond said she was still having trouble finding the right way through Google's Web site to notify the company she would like the picture removed.

Privacy experts believe these kinds of ticklish situations are bound to arise as technology makes it increasingly easy to share pictures and video on the Internet, pitting the rights of free expression against the rights to personal privacy.

"What you have to do is balance out the perception against the reality and I think in this case, the perception is much scarier than the reality," said Lauren Weinstein, co-founder of People For Internet Responsibility, a policy group.

Because Google's street-level pictures were taken in public places, the company appears to be on solid legal ground, according to both Bankston and Weinstein.

But Bankston doesn't think the law necessarily absolves Google, particularly since the company has embraced "Don't Be Evil" as its creed. He worries that some people in need of psychological or medical help won't seek treatment for fear of being caught in the cross-hairs of Google's cameras.

"There's a distinction between what Google has a legal right to do and what is the responsible thing to do," said Bankston, who believes the company should have blurred the images of unwitting pedestrians before it posted the street-level pictures. "It's a problem we as a society have to grapple with, and I think we are just now seeing the fault lines emerge."

While he thinks some of the issues raised by Google's new service are prime fodder for a healthy debate, Weinstein worries that it might inspire overly repressive laws.

"It's a tough area, but it just seems there is no way around the fact that public spaces are public spaces," Weinstein said. "You don't want to create an environment where it becomes illegal to take photos in public. It can be riskier not to be able to see something than it is to be able to see something."