In another step in this direction, the recent discussions between Google and the major music labels seem to be headed in a similar direction. Google’s goal is to play catch-up to the trendy Spotify music solution, and their approach is interesting. Google hasn’t traditionally had a meaningful music offering, missing out to iTunes, Pandora, and others. But, they did buy YouTube and they see that as their grubstake. Google has been slathering YouTube with pre-run commercials for a while now, to the point where it’s almost unwatchable. In addition to pestering seekers after amusing kitten videos with ad after ad to the point where the Ad-allergic like myself find it unusable.

Now there is a solution. In a supposedly private negotiation, which is such a poorly kept secret that I just hear about it from my Bulldog (who isn’t that much of a news junkie), Google is cutting a deal with the major labels to offer their music content as part of a (presumably) Google Play branded initiative which will offer a Spotify like music service which also removes the ads from your YouTube viewing experience. It’s a cunning plan… let’s annoy the consumers to the point where they will pay a small amount to get rid of the commercials. Oh, and we will throw in all the music you can eat for good measure. The controversy comes over how the music guys get paid for their content. They would like a per-track feed, Google is offering a rev share on what they get. Either way it’s another short step to an ad free environment.

If you were Google, you might be forgiven for wondering what’s in the water that is prompting the world to hate you quite as much as they are this week. The answer is easy… a goal of owning and managing the worlds data to your own advantage is getting folks a little jumpy. In a crowded week for Google haters, the launch of the very cool Google Glass product is getting push back from state legislators who are already pushing to make them illegal for driving to casino operators who are already banning them from the gaming floor. Civil rights groups and privacy activists are forming strange bedfellows with bar operators and strip club proprietors against these devices. None of this stops me wanting to buy a pair (as long as they come in my prescription).

At the same time, a ground swell against Glass is getting underway. Monopoly regulators in Europe are calling foul on Google’s aggressive use of patents it purchases from Motorola against arch nemesis Apple in Germany. In a double EU whammy, the tax regulators are clearly coming after Google for their creative financial planning.  Just in case you thought Google was in fact a warm, fuzzy Silicone Valley Company it’s not… it’s really based in Bermuda. It’s EU operations are ostensibly transacted through Ireland with a pass through to Bermuda… minimizing EU tax exposure. Unfortunately recently they recruited a bunch of folk for “sales” roles in UK, France, and Germany… and by doing that, they inadvertently qualified themselves to be more aggressively taxed in those countries.  Clearly the EU has it in for big G, and is determined to get them any way they can.

The problem Google faces is that they make a great target for anyone with a beef against corporate America, technology in general, and information in particular. They are also incredibly secretive and harder to get a straightforward answer from than Ben Bernanke on Quaaludes. Apple gives us cool toys and Amazon let’s us buy pretty much anything we want to any time anywhere, Google seems to be infiltrating pretty much a very place where we touch information.  If they didn’t invent, it they “borrow it” (witness Android and AdWords both critical products they “borrowed” from Apple and Yahoo respectively).  Add to that their enthusiasm for minimizing their tax burden which enrages legislators, their willingness to use patents to hobble competitors, and their absolute power over how we navigate the Internet; and it’s not hard to see why they are getting increasingly rough treatment… and it doesn’t seem to bother them very much.

Google announced, at the TechCrunch conference yesterday, that it is integrating with an initial handful of large content sites so that when app users open the app, they are invited to log in with their Google+ account. That then allows Google to index data about the users behavior, which can then be exposed to searchers through regular Google search. In theory, searches for movies would get data on trending films from Fandango or music on SoundCloud. It’s an interesting idea; Google is essentially harvesting data and content from the walled gardens by collecting activity in those gardens from Google+ users. Google+ has been accused of being a social media platform without a reason to exist… and this, in part, at least contributes to it’s reason to exist. Logically this will become more compelling as it rolls out to a much larger fraction of the millions of Aps out there. If it’s easily available, app developers are likely to include it and we will all benefit… we will see.

The Tom Cruise movie Minority Report is often held up as an example of what the future may hold, a world where the digital world overlays the real one and retailers greet shoppers with digital assistants offering deals customized to your interests.  That’s still a ways off…well the time travel part is anyway, but Google is clearly leading the charge to get us there. I’m reading the new book from Eric Schmidt (Google’s Chairman) at the moment, and it’s clear that he sees the future in very Minority Report ways. He envisages a digital world where the rich countries live in an immersed digital culture and even Kalahari bushmen have cellphones to report in on herd movement.

This week has seen progress in multiple Minority Report ways. For example, the first reports are coming in from the lucky folk who were able to pay $1,500 to get hold of a pair of Google Glass glasses. The initial results are mixed but encouraging. It seems that if you actually read the instructions they apparently they work pretty well. They understandably garner lots of interest from passersby… much like early horseless carriages must have done. A widely reported side effect is the ‘creep’ factor that people assume they are being recorded by the wearers… and don’t appreciate it. The glasses communicate with your wireless phone to display search results, maps directions etc directly to the user. Another example of the importance of the mobile device in your pocket… in fact you could think of Glass as not much more than a wearable heads up display for your phone.

Another Google step towards Minority Report World comes in the release in the Apple App store of Google Now. The release is a few months behind the release on Android but now it’s made it into the store so even us poor iPhone users can play with this neat App.  The premise is that your phone takes notes on what you are interested in, where you go, and where you are. It also gives you heads up on your schedule, email, and other essential parts of your digital world. Combine Google Glass with Google Now, and the digital overlay tailored to your world gets a couple of steps closer.

The part which isn’t getting as much play as the Gee Wizardry of Glass is how all this monetizes. It’s fair to say that Google missed the boat with the tablet and is still playing catch-up with Android on the iPhone. If the future is at least in part a digital overlay, then Glass represents the first serious take at delivering it. The fact that Google has amassed the largest basket of advertisers who will already pay for clicks in search, plays directly into this opportunity. When I look at Google Now I’m presented with cards for various local restaurants, it’s only a short step from there for Google to present me with offers from local retailers since Google Now knows my location and has been collecting my interests. Now add Google Glass to the mix as a way to deliver information and commercial messages as I move around, and we really do have the potential for the Minority Report experience which customizes commercial messages to my interests and locations. It also makes sense for advertisers to bid more for an impression on Glass when the wearer is in proximity to the product or location. Being in proximity to an object or location is a different kind of search… and arguably a very powerful kind of search as it took effort and time to get there. It truly is a brave new world, very much in line with Schmidt’s vision… and (so far anyway), a world pretty much controlled by Google.

The tickets were free and I’m always looking for interesting and exciting new places to fight with my lovely wife at, so we grabbed a hotel and went on an AGT adventure. On a side note, I used a new app called “Hotel Tonight” to get a room. It only sells hotels for that day, and doesn’t start selling until 12 noon local. Unlike Hotwire, it let’s you see the hotel before you commit. It has some decent deals and the price actually dropped as I was booking.

We arrived at the theater to begin several hours of waiting in line in the sun and general hanging about before we were brutally strip searched by the camp guards, given a change of clothing, deloused, tattooed, and finally admitted to the theater to be further bossed around.  I was actually pleasantly surprised at how they managed the process of recording the acts, the delays between each contestant were manageable and the audience wrangler did a good job of keeping us reasonably entertained. At the beginning of the recording, they asked the entire audience to learn a simple mini dance routine to “living in America” for use in the opening credits (maybe). It was all fun and games for the first dozen or two runs but by the time we had passed 20 the natives were getting restless… we were about three more forced repetitions from an all out camp uprising.

So what about the old dog learning new tricks? Well, it wasn’t much of a trick…but it was interesting to watch. The audience is patrolled for the entire show by what can only be described as video bouncers. They watch avidly for anyone trying to sneak a pic or video of a dog dancer or belly dancer (yes we had one and yes she went through to the next round). Any attempt at video is leapt upon, water cannons are turned on the audience the offending person is dragged out, beaten senseless and in some cases water boarded on stage. However in a massive break with tradition, they did allow the audience to video the judges’ progress from the back of the theater to the stage. In fact, the audience is actively encouraged to do that… and post the pics or videos on their Facebook, Twitter, Vine or Instagram. In a further concession to the real world, all the busy and bossy crew wore t-shirts with #NBCAGT emblazoned across the back. They plugged the heck out of the Hashtag, and from the number of followers and tweets they are getting it seems to be working reasonably well. In my video (attached) of the King arriving, it’s interesting to note that you can hear cheers from the crowd but not much applause… for the simple fact that you can’t clap when you are recording… and fully 75% of the crowd was recording.

What would have been much more interesting would have been for them to let the crowd film anything they wanted, publish, and be damned. What I suspect would have happened is they would create tons of buzz on the show long before its real broadcast driving people who want to see the event in HD, as opposed to shaky phone cam – but baby steps still count as progress.

The PR Battle

Google used to be cute, now it’s a monster which eats it’s own and grinds the face of its critics into the dirt… a perfectly logical progression in business, but it’s clear Google themselves have a problem being seen as the ogre they are rather than the cool kids they think they should be. Putting aside the fact that the German authorities just hate Google and all things Google, the German regulators have just handed down the largest fine they were able to for the reckless collection of non-map data as they built the German street view component a few years back. Although Google claimed it was a problem caused by over enthusiastic geeks; the Germans weren’t having any of it. Indeed, they made it clear in their ruling that had they had a larger book to throw at them, they would have been happy to oblige. At almost the same time, Eric Schmidt continued to defend Google’s legal but creative way of reducing taxes as much as they can. The BBC chewed him up and spat him out, and other media rushed in to pile on. The Brits love paying taxes, so for them to see Google gleefully avoid paying taxes they can legally avoid, it makes them see red.

Focus, Focus and Focus

Google used to throw off pet and or goofy projects with gay abandon… now not so much. Indeed they are thinning the herd. They let their digital children persist of kill them off depending on revenue and potential, and or the phase of the moon. Recently they have been killing products at a faster clip than usual. They killed off their very popular RSS reader, and last week they axed the Google Affiliate Network… to the consternation of many who have scratched out a living in this industry. The affiliate network wasn’t a huge contribute, but it’s interesting that they axed the product which was (presumably) profitable. The logical successor to the late and not very lamented GAN, is the shopping search they introduced last year as a paying service. That’s an enormous opportunity which will likely eclipse the rather clunky GAN…indeed it’s probably already done that.

Colonizing the Future

Google won the search war by doing one thing supremely well, and “borrow” anything else they may need.  They pretty much invented the search category and have benefited enormously from that initial win. The classic example of this strategy is the ad product, which they built on their first empire. That platform is powered by an auction bid platform, which they simply stole from Overture (then Yahoo). They spent good parts of the next year or so in court settling with Yahoo. That legal process allowed them enough room to solidify their market share so that even though they were paid fortunes when they settled, Yahoo lost. The odd thing is that although they innovate like crazy, they rarely get it right in house and have to use their checkbook to play catch-up. They missed video (and bought YouTube), they missed social media with the awful Google Buzz and have foisted Google Plus on a reluctant world. Apple beat them to the punch on phones, and Android is a good copy – albeit under legal attack.  ITunes rules paid downloaded content; Google play is a distant second place.  They missed local reviews and couldn’t buy Yelp. They missed classified to Craigslist, and the quilter market to Pintrest. The list goes on. The list is complicated by the sea changes underway in both how we experience all things digital (mobile, iPads, etc), and the places we go to search (Amazon represents a huge threat to commercial search).

All this puts them under what I have to imagine is intense pressure to second-guess the future to consolidate their hegemony. Google Now is interesting as a potential digital assistant, which will follow you around and be your constant digital helper. Google Glass represents a new category… and maybe their first, truly new category, useful digital overlay. Some are skeptical but I’m already a believer (after a fashion). My new car has a rather cool Heads Up Display feature; where it projects basic travel data and directions in the screen so that you can gauge your speed etc. without ever taking your eyes off the road. After only a week or two of using it I’m hooked. As long as Google Glass comes in my prescription, I’m going to be an early adopter.

The download space has been a lucrative area for many years. Cain slew Able because Able had downloaded some stuff onto Cain’s PC and given him a Malware browser infection. Way back in the day, it was possible to covertly get a browser object onto a end users browser, then traffic ads against it from Google amongst other folks. In the mid 2000′s, Google started getting more and more stringent on what they would approve before they would power a downloaded app with their search results. Each change made it harder and harder to get a Google feed to monetize with.

In the new privacy rules announced by Google earlier this month, they have pretty much put a stake through the heart of anyone relying on Google to monetize their downloads. The changes are pretty sweeping; a download must:

• Be pre-approved by Google
• Offer one-click, complete uninstall
• Provide clear, full disclosure and transparency to people about what is being installed and what changes are being made to their devices
• Install itself on only one browser per download
• Be bundled with and distributed by only reputable parties who comply with our policies.

As barriers to entry go, these are so high as to be visible from outer space. The download guys have always been uneasy bedfellows for Google, and these most recent changes have essentially kicked them out of bed entirely. I’m sure it’s theoretically possible for a toolbar to get approved and maintain a user base under these conditions but it’s an uphill task.

On the grounds that even the blackest cloud has a silver lining this should be good news for Yahoo. The download guys will pretty much be forced to move their traffic to Yahoo who will be happy to monetize at a lower rate than Google, and at a worse revenue share. It won’t kill the space… it’s far too lucrative for that, but it will make it tougher to do any kind of business in volume. It makes me nostalgic for the good old days of 2003.

At the same time, Yahoo built a syndication network; where at one point, pretty much any site or tool with a pulse could offer Yahoo powered results to online searchers.  The results of the strategies speak for themselves… Google search giant… Yahoo not so much. Obviously that’s not the only thing that made the difference, but it was a factor. Yahoo, having taken the syndication route, did a pretty good job of doing that and in so doing spawned an entire industry of folk dedicated to offering Yahoo results to all comers getting chubby at the Yahoo buffet… then came regime change.

Marissa Mayer is a very smart cookie, and as an original Googler is no doubt used to the Google way. She shocked pundits early in her rein by down playing the importance of search in the future plans of Yahoo (search …smerch…who needs it!?), and supposedly spurred on by the denizens at Bing (who power Yahoo search), she has “set her cap” (I’m watching a lot of Game of Thrones right now so tend to lapse into old English on occasion) against syndication. High quality search traffic which used to score 8 all day long now scores 5 one day, then 7 the next, then 4.5, then nine. Clicks jump from 30 cents to 3, and back for no obvious reason. It’s not just us seeing this… all over AdTech sharp young men with shaved heads, and intense women with power purses were hurling themselves out of high windows or could be seen sobbing into their third Martini at lunch.

The net result of all this weirdness has to be that syndication revenues are cratering at Yahoo. That wouldn’t matter if they already had 68% of the market like Google has, but for a relatively distant third place which has relied on syndication for so many years, this change in strategy is a lot like the Republicans deciding that they don’t need the Old White Guy vote in favor of a rainbow TuTu… it’s cute… but the other guys already have that model and who is going to pay the bills? The hope in the conference was that someone would get bored or freaked out and things would return to normal… but if the new normal is this, the next AdTech San Fran may well be five guys outside the Starbucks at the Moscone center.

The Germans have a word for it… Schadenfreude.  It literally means something like shameful enjoyment… the pleasure one takes in seeing a good friend fall off a roof… it’s also a terrific song in the show Avenue Q.  In any event I was guilty of the “S” word yesterday watching Google fall off the mobile roof. The guilty banana peel is the new app from our good friends at Facebook called Facebook Home. As far as I can tell, it only works on Android but what it does is let loyal Facebook users turn their mobile device into essentially a Facebook Phone. The home screen of the phone, and all the other places and apps which a phone might reach out to, can be controlled through Facebook. The millions of Facebookers using Android devices can now lead a much more highly integrated Facebook world… mostly at the expense of Google… and there’s not a whole lot Google can do about it.

One of the great strengths of Android is that it does allows apps to talk to each other and do just these kind of things. It’s very open and Google, unlike Apple, doesn’t police who can offer what in their store… so they are vulnerable to those kinds of integrations. I imagine there will be an immediate rush to adopt the new tool… after all many Facebookers are just rabid in their devotion to their craft. Once Facebook has taken control, it can set the defaults for things like search to its preferences. It’s a brilliant move essentially allowing Facebook to gain a substantial foothold in mobile without having to come up with an operating system, a handset, or a deal with a carrier. Facebook can essentially hijack android devices.

The real pleasure comes from watching Google, who so studiously ripped off iOS by Apple, getting a piece of their own medicine.  Steve Jobs was just furious when Android came out… indeed he had the Google guys over to yell at them from his death bed.  So to see Google’s beloved Android having copied Apple then built a significant market share so comprehensively hijacked (just as mobile is exploding) by the only people who could pull that off in a large enough volume to hurt them, does warm my cold dead heart very slightly. Ironically, were Google to release a similar product featuring Google+ I’d be prepared to bet that they wouldn’t get anywhere near the same traction. Google+ is famously a bit of a ghost town with many profiles adopted but not much going on… where as Facebook is still the place where the cool kids hang out… actually Twitter is where the cool kids go but you see my point.

To reinforce that it really is all about news and celebrity, Twitter is being cited as an unindicted co conspirator to the recent re-death of Jay Leno as host of the Tonight Show. Leaving aside the inherent goofiness of the public execution (again) of the lantern-jawed late night hack, one of the key reasons for his demise is (supposedly) the modest Twitter following he has accumulated. Strictly speaking, Jay doesn’t have his own page but the Late show does and it garners a measly 500+ thousand followers. In contrast, his replacement Jimmy has over 8 million followers and is famous for viral videos. In terms of online engagement, he’s head and jaw ahead of Jay. The late night TV crowd typically skews old… or very old.  It’s unclear that Fallon will be able to bring with him any, or some, of his twitter flock… many of his crowd are no doubt out having fun when his show runs live.  In any event, the battle for the key 18-49 demographic has already been lost to the Daily Show and my personal favorite the Colbert Report. Had they broken ranks and made one of those guys the new king of late night, we would really have a battle on our hands… and remember, Twitter is not just for celebrity and news.