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Archive for July, 2009

Yahoo! has finally lost the search battle. It gave up its own search and now a few months old Bing will power Yahoo!’s search. But before we write obituary of Yahoo! Search, there are a few immediate questions that come to my mind:

  • Flikr Integration: Yahoo! had a fantastic integration of Flickr in Image Search which made it comparable to Google in terms of relevancy. Will Yahoo! open Flickr to Bing as well? Image search on Bing sucks big time
  • Mobile Search – oneSearch: How about ‘oneSearch’? Yahoo! has a good mobile search product in oneSearch and its federated search result pages were a big hit, and had higher market share than Google in many local markets
  • Local Search: What happens to Yahoo! Local Search? Or for that matter other search verticals like Jobs, News, Maps? Of all these, Yahoo! had poured a lot of money in Local Search, and I guess Bing is nowhere close to Yahoo! in these verticals. The minority of loyal Yahoo! search users is only going to shrink further if Bing powers these search verticals. A huge opportunity to compete with Google in these verticals (where actually Yahoo! was not lagging way behind of Google and was doing comparably well) goes down the drain
  • Social Search: There was a lot of talk of integrating Del.icio.us with Yahoo! Search, which I thought had great promise. Search needs to be more social, and success of Twitter as search engine is for everyone to see. With a strong social bookmarking product like Del.icio.us with it, Yahoo! could have done a lot in search. Wonder what happens now with search technology getting outsourced to Bing?
  • Glue: What happens to Glue? Yahoo! launched it last year as a new search product and Yahoo! India Search have Glue pages for a large chunk of popular queries

These questions may be of no relevance once Yahoo! says that its technology is not the one which can provide the best search experience to its user. And as it says that, Yahoo! writes-off all the investment it had put over years in improving its search engine and adding those awesome search features like ‘Search Assist’ to the latest one of ‘Search Pad’. With this, it also writes-off all the effort engineers there had put in building the search and its various features. Carol Bartz announced that there will be lay-offs in search team, and am sure elsewhere also in Yahoo! there will be a huge attrition now.

May be Yahoo! should have just spun-off Yahoo! Search as separate company. That would have unlocked the real value of rest of Yahoo!’s businesses in which it is doing quite well (It is still the most trafficked portal in world. Display advertisement remains Yahoo!’s forte altogether). Market would have determined the right value for this separate search company, and am sure Yahoo! would have got a better price for it than what it has got in this deal.

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“Games Indians Play” attempts to answer the question “why we are the way we are”; and it does so using Game Theory. For the beginners, Game Theory is a branch of applied mathematics quite commonly used in economics and elsewhere to mathematically capture and predict human behavior in strategic situations, in which an individual’s success in making choices depends on the choices of others. It is an interesting tool for all strategic thinkers and often provides great insight into best choices we should be making rationally.

Author of this book – Dr. V. Raghunathan has been an academic at IIM Ahmedabad, and has made a good attempt at exploring why we Indians are “privately smart, but publicly dumb”. He uses game theory to explain why we Indians are so lousy, disorderly and always in a mess at simple things in daily life. He applies game theory to answer questions like why we have such bad civic sense, why do we throw garbage outside our houses in open, why do we almost never follow traffic rules, why are we so corrupt, why don’t our systems ever work, why are we always busy pulling others down, and so on. These are questions which come to mind of every Indian who has some common sense and can quickly see that with some patience and brains applied; most of our problems can be solved in a blink. Dr. Raghunathan does a good job at analyzing this behavior of us Indians scientifically, and explains the stuff in simple lucid manner which even a commoner can understand.

However at times the book stretches and drags on the reader. Once the author has explained the application of game theory principles to these problems and proposed a solution, more similar examples become a drag. At times one gets a feeling that publisher must have asked author to fill in a few pages in between, and talk more about the problems than the solution itself.

I give author this benefit of doubt, because he ends the book with an excellent chapter where he takes game theory principles to a new level and links them to teachings of Bhagwad Gita. Game theory tells what rational choices one should make which will have maximum benefit for everyone involved, and so does Gita. Simple message which forms the gist of Gita – “You have right only to your actions, and not to their results” becomes the key driving force for an individual to make those utility-maximizing rational choices as suggested by game theory. If one follows what Gita teaches as Dharma, s/he will actually be playing things as per game theory. This correlation was a fantastic read, and forms a superb bridge between something as bland and scientific like applied mathematics and something as supernatural and ancient as Gita.

Book is an easy read; one can in fact finish it end-to-end in 2-3 sittings. For someone who is an incessant cribber and goes mad to no limits seeing idiots running the show everywhere in the country, this is definitely a good read to bring some sense to the non-sense. For those who have developed enough patience and calm to witness this stupidity from a distance and actually enjoy it, can give it a miss – this book will only be a good reiteration of what they already have figured out and have settled with. And for those in between, this is surely a better choice than all the other self-help books. This is a much more scientific way to bring oneself to peace with the difficult rhetoric question of “how can this stupid not understand such a simple thing!” Take your pick!

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There is a thought among entrepreneurs from internet world that one needs to first focus on building a sizable user-base for their service/product; and think of its monetization later. Entrepreneur often end up making a very innovative service/product, but miss out on devising a sustainable revenue model. Later on as he tries to force-fit revenue model, he risks impacting the very core of the service/product, and might even prove fatal for the startup.

Selling the user-base to the marketers:

In today’s internet world, there is an increasing trend of letting the end-customer use the service/product free-of-cost; and instead charge institutions (read marketers) who are interested in reaching out to these end-customers through this medium. This activity of marketers advertising to end-customers need to be so well blended with the key proposition of the business, that the end-user does not mind it; else this can result into dilution of the very proposition on which the business has built the traffic and audience.

Let me explain this with an example. Twitter is today one of the hottest internet startups and has an exponentially growing user-base using the service for free. Also several social-media marketers have started using this channel to promote their stuff to this audience. Now tomorrow if Twitter starts charging these marketers hefty fees for using their channel, these marketers will also have to become aggressive in their promotions and advertisement in order to get a decent return for their investment. This might end up in making Twitter a commercial place with more spam content than actual micro-blogging generated content. Twitter will have to ensure a balance between this commercial content and the actual core offering of communicating “what are you doing”.

Of course this will be an extreme case, but the point is that if Twitter tries to generate revenue through this mechanism, it always risks spamming itself. Take example of Search business. We have one Google which owing to its almost monopolistic market share can afford to limit the number of ads to be shown on its search result page, allow only relevant ads and push up the price (revenue per search) through an auction-based model. The lesser successful search engines have to resort to showing as many as 4 or 5 ads above actual search results, and may also have to take all advertisements that they can get and compromise on relevancy of ads – resulitng in spamming their own service – to sustain their business. And still their price (revenue per search) lags Google. Startups should try to innovate around revenue model for search, instead of force-fitting one (by copying one which has been successful for Google and end up playing a catch-up game).

Making the service/product paid:

In a bid to force-fit a revenue model, one may stop offering the service/product for free, and ask the end-customer to pay a nominal fee to use it. The end-customer will pay the fee if the value he derives is more than the fees charged. However again, there is a chance that this may dilute the very proposition itself.

For example, say tomorrow Facebook becomes a paid service (at a very nominal cost like say Rs. 10/- per month), there would surely be a drop in the registered users. Even if I am ready to pay the fee, if my current network on Facebook shrinks, it reduces the benefit I am getting from the service. Then there are problems of collecting such nominal amounts through e-payment methods and so on. Something like LinkedIn – which offers basic service for free, and advanced features (which are an integral part of the core offering) for a charge – might work, but then this needs to be thought about at the beginning itself. What Facebook or Twitter service would you as a normal user would like to pay for?

Acquisition and Other Methods:

Entrepreneur by definition is an optimistic person, and acquisition will always remain a very attractive exit option. While every entrepreneur always starts with a confidence of building the Google-killer and hopes of getting acquired, having a sound revenue model is of utmost important to make that happen. An acquisition for the audience/traffic built will be possible only if the startup is among the top players in the segment. For others, having an operationally profitable revenue model becomes absolutely necessary.

There might be several other ways of monetizing the generated traffic and audience (like CPM based online advertising, database marketing, etc.) but one need to be ensure that the payoffs from these are enough to sustain the business on a daily basis.

Extending innovation to revenue model:

Entrepreneurship (even social entrepreneurship) is not philanthropy; instead it should be financially fulfilling for the entrepreneur, only then he will be able to continue. And for that to happen, devising a viable and sustainable (and also flexible) revenue model at the outset should be integral to the idea of entrepreneurship. This model might undergo changes as the business evolves, but it should always be of prime consideration for the entrepreneur. Postponing revenue-model for a later stage and then trying to force-fit one can be a very dangerous choice to make. Entrepreneur should not limit his innovation to the service/product alone, but should extend it to revenue model also, and have a rewarding entrepreneurial experience.

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I am at my hometown Nagpur and today morning when I picked up ‘Nagpur Times’ (city supplement of Nagpur edition of The Times of India), I saw a quarter-page advertisement from Google. It had a message “Take off to exciting destinations. Keep your airfare on ground.” and asked readers to search on internet to find cheap airfares and hotels. It has a screen shot of Google search box with query “Cheap tickets Goa”.

I was amazed on seeing direct print advertising from Google, and wanted to put it on Twitter, so I checked online edition of TOI, but sadly TOI does not have Nagpur edition online :(. I checked city supplements from other cities to see if this is a nationwide campaign from Google, but could find only this ad in Ahmedabad city supplement (of the cities whose editions are available online). However the tag line there was different. In Ahmedabad city edition, the ad carried message “How to remove the excess weight from your airfare”. And the search query in this ad was “Cheap tickets Kerala”.

My observations on these are:

  • Advertisement is about searching on internet, and not on Google. Looks like Google believes that if anyone from these tier II cities (in terms of internet penetration) search on internet, it will be on Google only
  • While the message in Nagpur is about cheaper airfares, that in Ahmedabad is about reducing the baggage weight. Also the destination in the search query change per city. Google has some smart brains designing these campaigns 🙂
  • What makes Google go into print advertisement in India, that too in such a targeted fashion that it has different communication message in different cities? Google has often said that for it to grow in emerging markets like India, it will have to grow the market; and may be it believes cities like Nagpur and Ahmedabad offer the right promise for them
  • And lastly, while Google believes that it makes sense to advertise about their services in a city like Nagpur, our own desi Time of India thinks otherwise, and does not care to have Nagpur edition online (wonder what extra cost they will incur to have all their editions online!)

Google has never advertised itself, especially on any of the mass media channels. The TVC for Chrome browser in Japan created quite a buzz about Google selling itself on mass medium. It would be interesting to see if this shift towards advertising on mass media is a temporary one or if Google has some totally different plans for Indian market.

Google Print Ad in Ahmedabad

Google Print Ad in Ahmedabad

Google Print Ad in Nagpur

Google Print Ad in Nagpur

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Empires of the Indus

“Empires of the Indus – The Story of a River” is a book about river Indus – the river which gave our country her name, her culture. Everybody in India must have read about the Indus valley civilization and would immediately recollect seeing in their history textbooks the pictures of broken statue of dancing lady and bullock cart from the ruins of Harappa and Mohenjo-Daro cities from this civilization. So when I read that this book was about the journey of author from the mouth of river Indus at Karachi, Pakistan to its source in Tibet, China, I knew I had to pick this up. This is a book which I picked up without any recommendation, and I am so pleased that I went by my intuition. This is surely one of the best books I have read off late.

Author Alice Albinia is a British historian and I must say has done a marvelous job of taking her readers through an amazing journey along the river Indus – of not only the approximately 3,200 KM that the river flows, but also of more than 4500 years back in history. Historical accounts, even when they are told more as stories, get boring at times, especially when they are meant to infer something, or worse to glorify or demean some character or ideology. Alice beautifully stays away from all this, and stimulates your imagination and creativity every time she recreates the historical moments which this river has witnessed over thousands of years.

These are the moments when the Aryans invaders crossed the river and drove away the original inhabitants and established what we call today the Vedic culture…

These are the moments when Buddha’s teachings were inscribed on stones along the river by the first emperor king of country The Ashoka and were spread by monks west across river to present day Afghanistan and north to Ladakh and Tibet…

These are the moments when Alexander the Great must have stood atop the hill at tiny village of Pirsar in present day north Pakistan and looked down and across the river with the thought of conquering what he thought was the last kingdom before the eastern edge of world…

These are the moments when traders carried silk and gold and other precious materials along “The Silk Route” crossing the treacherous terrain of mountains from Tibet to Central Asia…

These are the moments when Muslim Sultans from Muhammad Ghazni to Moghals looted and plundered country’s wealth and propagated their faith, more often than not forcefully…

These are the moments when the Great Gurus like Nanak and Gobind Singh laid the foundation of Sikhism and Emperor Ranjit Singh defended it fiercely from every attack…

In this story of the river, Alice tells us the sub-stories about the Karachi city which was transformed overnight by the Partition into a city of refugees (just like what happened to Delhi), about the Sufi sect and their magical ways, about the African slaves brought to sub-continent through slave trade, about the matriarchal culture practiced by pre-historic people of this land, about the mystical Kalash people who believe they are direct descendants of Aryans and many more such wonders.

It is such a shame that we know so little about history of Pakistan, which barring these last 60 years have been part of our country – making its history our own. It surprises me to no end when I am told that the hills we now call area of Taliban and violent Al-Qaeda hosted Taxilla which was once home of Buddhist teachings of peace and harmony; when I am told that what we call the Islamic Republic of Pakistan is the very place where the most ancient of all Vedas – The Rig Veda was written.

Alice effortlessly moves back and forth across thousands of years of history, her language is lucid and description crisp. She keeps linking the glorious rich past of the river to the present socio-economic penury of religious intolerance and of water shortage – which has brought the two countries at war so often. Through this book, Alice brings to us the forgotten river which gave our country her identity. For all those inclined towards history, and appreciate the fact that last 60 years of animosity with Pakistan is a blink when it comes to thousands of years of being one country, this is an amazing opportunity to know about ourselves and our history.

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