Google Checkout and PayPal Battle to Lure Buyers

By Saul Hansell

Behind the pitched Cyber Monday battle of online retailers is the battle of the payment systems. Both Google Checkout and eBay’s PayPal unveiled generous promotions today to increase their share of holiday spending.

Last year, Google spent heavily on a promotion that offered users as much as $20 off every $50 they spent. Industry executives say Google’s system quickly accounted for more than 10 percent of transactions at sites that offered the deals, but its share fell sharply as soon as the discounts were withdrawn.

This year, Google is offering two frequent-flier miles on any of seven airlines (all the majors except American) for every $1 spent. It also offers $5 to $50 discounts, with minimum purchase, at several dozen merchants. It has deals with CompUSA and Drugstore.com, but not a lot of other major retail brands.

PayPal has fewer merchants but its offer is more lucrative for shoppers in some ways, with 20 percent of purchases credited to the buyer’s PayPal account. And it has more top names including Barnes & Noble, Toys ‘R’ Us, Hewlett Packard and eBags. To prevent people from grabbing too many of these incentives, eBay is capping the rebate at $50 per PayPal account.

It’s not clear that any of these promotions will get more than a handful of people to use either system at sites that take credit cards directly.

“If they can save a few bucks using Google Checkout they’ll use it, but they will revert back to tried and true methods,” said Peter Cobb, the senior vice president at eBags. “PayPal has deeper roots, with the eBay connection, and people are a little more comfortable with it.”

Without promotions, only 2 percent to 5 percent of eBags buyers use Google Checkout, and between 5 percent and 10 percent use PayPal, Mr. Cobb said.

Major sites like eBags have their own systems to store credit card numbers and shipping addresses, so PayPal and Google Checkout do not add that much value for consumers. Things are different for very small sites that use one or the other as their only payment processing method.

These systems do appeal to people who are shy about spreading their credit card numbers around, Mr. Cobb said.

“Retail is about overcoming objections,” he said. “If people want to use a payment method, we will take it.”

But at the end of the day, how much business is either system going to have if they don’t pay people to be their customers?

Source: NY Times

What is Web 2.0?

Author: John Kline
SearchBliss

So what exactly is Web 2.0 anyway? It sounds like a software upgrade...which doesn't exist in the "real" world...or does it.

Here's what I found to TRY to clarify it.

According to Wikipedia,

Web 2.0 is an idea in people's heads rather than a reality. It’s actually an idea that the reciprocity between the user and the provider is what's emphasized. In other words, genuine interactivity if you like, simply because people can upload as well as download.

They often use the referance word "idea".

The term Web 2.0 was actually coined at a conference by Tim O'Reilly. It began with a brainstorming session between O'Reilly and MediaLive International. Dale Dougherty, web pioneer and O'Reilly VP, noted that far from having "crashed", the web was more important than ever, with exciting new applications and sites popping up with surprising regularity. What's more, the companies that had survived the collapse seemed to have some things in common. Could it be that the dot-com collapse marked some kind of turning point for the web, such that a call to action such as "Web 2.0" might make sense? We agreed that it did, and so the Web 2.0 Conference was born.

Maybe this will put Web 2.0 into perspective...

Web 1.0 ------------ Web 2.0
DoubleClick --> Google AdSense
Ofoto --> Flickr
Akamai --> BitTorrent
mp3.com --> Napster
Britannica Online --> Wikipedia
personal websites --> blogging
evite --> upcoming.org and EVDB
domain name speculation --> search engine optimization
page views --> cost per click
screen scraping --> web services
publishing --> participation
content management systems --> wikis
directories (taxonomy) --> tagging ("folksonomy")
stickiness --> syndication

Or maybe not. Either way, I think that Web 2.0 is simply a concept as a result of changing trends on the internet? Or maybe you can clarify it for me.

Adsense Video Units Spreading to UK, Ireland, and Canada

Following their success in the U.S., we're rolling out video units over the next several days to English-language publishers in the UK, Ireland, and Canada. If you're not already familiar with video units, they're embedded, customizable video players that can enrich your site with relevant video content while enabling you to earn extra revenue from the relevant, non-intrusive ads that accompany the videos.

With this new launch, publishers in the UK, Ireland and Canada will be able to show videos from our YouTube content partners and choose those videos by category, individual YouTube partner, or have video automatically targeted to their site. Based on publisher feedback, we've also just added a feature which lets you choose individual videos to be displayed in your video units.

To set up video units on your site, log in to your AdSense account and visit the AdSense Setup page. For more information about video units, please feel free to revisit our original post about the launch and our recent follow-up answering some of your most common questions. In addition, you might find the information in our Help Center useful.

If you don't yet see video units in your account, please check back over the next few days. We're staggering the roll-out to ensure a smooth launch in the new countries where video units are available.

Source: Adsense

Lawmakers Urge Google/DoubleClick Deal Scrutiny

WASHINGTON (Reuters) - Two U.S. senators on the antitrust subcommittee urged the Federal Trade Commission's chairman to submit Google Inc's purchase of advertising company DoubleClick to "serious scrutiny."

Sen. Herb Kohl, a Wisconsin Democrat, and Sen. Orrin Hatch, a Utah Republican, argued that Google had a dominant position in a form of Internet advertising called contextual ads while DoubleClick was a market leader in display advertising.

They said industry experts believed the deal could harm competition on the Web.

"While we have not reached any definitive conclusion regarding this issue, we urge that you only approve the merger if you determine that it will not cause any substantial lessening of competition with respect to Internet advertising," they wrote.

Kohl and Hatch also raised questions about privacy implications since both Google and DoubleClick collect information about Web usage.

"We believe that this deal raises fundamental consumer privacy concerns worthy of serious scrutiny," the letter said.

FTC spokeswoman Nancy Judy said Chairman Deborah Majoras had received the letter but that it would inappropriate for her to comment on it.

Google said in a statement it had already discussed the privacy and market share questions with the FTC.

"We remain confident that the FTC will conclude that this deal is good for consumers, advertisers and Web site publishers," Google said.

(Reporting by Diane Bartz; Editing by Braden Reddall)

Source: Reuters

Adsense Creator Leaves Google to Start Own Company

By Yi-Wyn Yen

Gokul Rajaram, a high-ranking Google product manager who helped launch one of the search giant’s most profitable ventures has left to start his own company.

“I’ve been having the itch to do something entrepreneurial for awhile now,” says Rajaram, 33, known by Googlers as one of the “godfathers of AdSense.” “I’m in my early 30s and I have some experience and financial security, so the time felt right.”

“I have some ideas on the consumer Internet side,” he adds. “I’m still trying to flesh that out in the next few weeks. Right now, I’m just trying to get used to not going to work.”

Rajaram, who left Google on Nov. 2., says he’s also interested in pursuing journalism or writing.

Whatever venture he pursues, he has the blessings of top Google (GOOG) brass Eric Schmidt and Sergey Brin. Product management vice president Susan Wojcicki honored him with a large plaque signed by a few hundred Googlers at his farewell party at the Googleplex in Mountain View, Calif., two weeks ago.

When Rajaram joined the company in January 2003, Brin and Wojcicki were cooking up an idea to sell advertising space to run relevant ads on publishers’ websites. They saw huge growth potential for AdSense based on the early success the year before of AdWords, which allows advertisers to bid for prime real estate on Google’s site whenever a person performs keyword searches.

AdSense has revolutionized web publishing by turning blogs and content sites into profitable businesses. In the third quarter, Google generated $1.45 billion from AdSense, a third of its revenue.

“It was a high level concept back then,” Rajaram says. “Google had already understood how to match keywords with URLs, so the next step was building a matching algorithm and create an advertising system around it. Sergey had a mandate to launch it in June 2003. So we had less than six months.”

Rajaram considered staying on to handle the integration of DoubleClick, the display-advertising network that Google announced in April it was acquiring for $3.1 billion. But he says he misses working on a small team and he hopes to recreate the startup environment when he launches his own company. “When we started AdSense, it was just me and four engineers,” Rajaram says. “The night before we launched, Sergey spent five hours with me testing the system and pointing out bugs.”

Rajaram joins a number of top Googlers who have departed recently, including former e-commerce director Benjamin Ling and ex-YouTube CFO Gideon Yu who both joined Facebook.

Source: CNN

Content is Dead

Community is King Now
By Stoney DeGeyter (c) 2007

I can hardly bring myself to say the old cliche about content being... well, you know. I think it's one of the original cliche's in the SEO industry. And as redundant as it has become, for whatever reason we keep hearing it over and over again. And every now and then a new study pops up seemingly proving, once again, that content is... uh, good.

But much like a TV producer suggesting "video is king" or a radio advertiser demanding that "audio is king", so goes the SEO demanding the same about content. Content has its role--and an important one at that, but it's not the be-all, end-all of online marketing. Not even close.

But the roots of the "content is" movement are important for our industry. The mantra was first heard in the early days of the search engine optimization industry when SEOs were doing nothing more than throwing a bunch of keywords on a page and hoping they ranked well. Little or no thought or consideration was given to the readability of the web page. After all, it's only rankings that matter, right? But those of us who learned to game search engines slowly began to learn something that those in the marketing industry have known for years. Words sell. Or turn people off, depending on what's written and how it's written.

So the movement to developing good content--real content--was an important one for our industry. But to get there we had to have the content mantra beat into our head over and over (and over). We got it. We know.

The King is Losing His Grip on the Kingdom

But like any worthy cause, we've reached a point where the mantra has been used and abused to the point where we use whatever we can find to prove once again that content is... y'know, that. Take a recent study by OPA and Nielsen/ NetRatings that shows that Internet users are spending more time than ever on content based websites.

Share of Time Spent Online

Commerce: 13.8%
Communications: 32.0%
Content: 49.6%
Search: 4.5%

That seems to confirm what many have been saying for years. Content is... uh, great for web marketing. And I've seen a few posts around the blogosphere and forums using this data to make that connection. The problem is, it's not really there.

With the rise in popularity of blogs and social media sites it's no wonder that more people spend their time reading online than anything else. While time reading and gathering information online has increased, time spent shopping has actually decreased, down over 2% from a year before. But does that tell us anything about marketing online? No, not really.

We know people like information and we know they like to communicate. We also know people like to shop and online shopping has continued to increase year over year. All this study suggests is what we spend most of our time doing on the web. Well, true enough, I don't spend most of my time shopping.

Since when is it the goal of ecommerce sites to get people to spend a long time on their site? Isn't it more important to drive shoppers to the sale and get the conversion? Step 1: Get traffic. Step 2: Keep visitors engaged. Step 3: Close the sale. That's not necessarily a process that necessitates long periods of time spent on a site.

In no way do I want to diminish the importance of content on ecommerce websites. Having a database of information that helps visitors make their decision, helpful tutorials, etc. can improve your visitor's overall experience and keep them coming back to your site. But the goal of all of that is to lead people to the sale.

Community Killed Content and Stole the Throne

If I were to interpret this data I wouldn't necessarily come away thinking content is... so very important. What I would conclude, however is that we need to build websites that meet a number of users needs. Adding more content to your ecommerce site is not the magic bullet. What is, however, is creating a great user experience and providing just the right amount of information and customer engagement that shoppers need to get to the conversion goal. That can be done through a number of means.

Many online stores are already paving the way by opening the door to ratings and reviews. Others are doing that by creating blogs to disseminate important and relevant industry information along with tips and tutorials. Still others do that by creating an information database that can visitors frequent to gain additional insights.

I might suggest that the best ecommerce websites are not those that build content around their products but build a community around the product interest. By creating a place where shoppers can come and gain information, learn more about the products and discuss or share information with others and then make purchases as well, will do more for sales than simply creating a shopping website.

By building a community you not only sell more products but you build brand recognition and customer loyalty. And both of those are worth far more than a single one-off sell. So while content may not be dead (not by a long shot, really), there is a new king in the online marketing industry. Long live community. Long live the (new) king.

Source: SiteProNews

University Sues Google Over Search Patent

Google faces a US federal patent infringement lawsuit by Northeastern University over technology used in its core web-search system, according to legal papers filed last week.

The complaint was filed on 6 November in Marshall, in the Eastern District of Texas — the US court with a history of decisions that are highly favourable to plaintiffs in patent cases — but the case only came to light over the weekend.

The plaintiffs are Boston-based Northeastern University and Jarg, a start-up founded by a Northeastern University professor that is the exclusive licensee of search technology patented in 1997, a year before Google was incorporated.

A spokesman for Google said the company believed the suit was without merit.

"While we have not been served, we are aware of the complaint and believe it to be without merit based upon our initial investigation," Google spokesman Jon Murchison said.

The leading internet company derives 99 percent of its revenue from online advertising, which is delivered in response to keyword searches Google users perform to find web links.

Michael Belanger, president and co-founder of Jarg, said in a phone interview that his company had become aware of the infringement several years ago, but lacked the resources to press its case until it found a law firm willing to fund the case on a contingency-fee basis. Northeastern then signed on.

The plaintiffs' attorneys are from the Texas-based global law firm of Vinson & Elkins, which is paying the costs of the case, assisted by local counsel in Marshall and nearby Tyler.

The suit alleges that Google has never obtained a legal opinion on whether the company infringes on the patent. It seeks a jury trial and an injunction against further infringement of the search patent, as well as damages and royalty payments.

The case centres on US patent number 5,694,593, entitled "Distributed Computer Database System and Method", which was invented by Kenneth Baclawski, an associate professor in Northeastern's computer science department.

Baclawski is co-founder of Massachusetts-based Jarg, which was incorporated in 1998. He first published his method of searching and retrieving information from large, distributed databases in 1994, according to court documents.

Jarg remains a small company focused on developing a new generation of semantic tools for web search, Belanger said.

It is testing its software with a handful of unidentified customers in the life sciences and biomedical fields thorough its subsidiary, Semantics Life Sciences.

The plaintiffs are looking to be paid for their intellectual property, not to put Google out of business.

"We are just interested in a normal royalty if the case determines that... Google is using the technology we developed," Belanger said.

Source: ZDnet

Online Advertising Could be Doomed

By Scott Nelson

The report back from last week's FTC discussion about tracking and targeting should have all online advertisers worried, and scrambling to get involved.

If you thought the rumblings coming out of the Federal Trade Commission Town Hall titled "Ehavioral Advertising: Tracking, Targeting, and Technology" last week will only impact behavioral targeting, you had better look beneath the surface.

The purpose of the two-day event was to address consumer protection issues raised by the tracking of consumers' activities online for the purposes of targeting. The publishers were well represented with AOL, Yahoo!, Microsoft, Google and others as well as consumer advocates, technologists and industry representatives. Despite the efforts of the event organizers at the FTC, there was one constituency noticeably under represented: the companies that fund the entire industry of interactive advertising, the advertisers.

Several of you may recall a similar event the FTC held in 1999, which prompted the formation of the Network Advertising Initiative (NAI), a successful venture whose goal was to moderate the Federal Government's interest in legislating consumer privacy standards online, at least until now. Commissioner Jon Leibowitz stated in his presentation at this month's event that industry self-regulation has been inadequate and that the FTC may have to step in. However, as I pointed out during my presentation with Google and Microsoft, there are other options in the management, use and retention of data that should be considered before resorting to sanctions or legislation.

The quiet truth is that census-based performance reporting, not behavioral targeting, has been the driving force behind the success of interactive advertising. An advertiser can see in hours how an offer or a piece of media is performing and make immediate optimization decisions. This has only been possible because of cookies.

Make no mistake; the promise of behavioral targeting has been met in certain instances. But the effectiveness of anonymous cookie profiling databases for effective targeting has been over promised and under delivered. Virtually every impression and click, however, is measured, and that is why media dollars have continued to flow online year-over-year. The implications of a Do-Not-Track registry for interactive advertising would include the removal of these measurement capabilities, effectively throwing the measurement baby out with the behavioral targeting bath water.

We are currently engaged in one of the most significant discussions in eight years about interactive technology and the consumer. The single most influential (and influenced) group is obvious in their absence at the table. Of course Microsoft, eBay, AOL and the other major web companies are large advertisers. But the bulk of interactive media dollars are spent by retail, automotive, financial, travel and similar companies. I counted one panelist -- Verizon -- that I would classify as such a company.

To the thousands of chief marketing officers who spend money online, it is time to get engaged. And to the event organizers at the FTC, it is vital that you find a way to encourage their participation. Remove barriers to raise the interest and reduce the reticence of the advertiser community before finalizing your recommendations.

Behavioral targeting, post-click metrics, and every capability resulting from the cookie have been developed because of the requirement by advertisers to maximize the return from every media dollar. The focus of the FTC is the consumer. The focus of the advertiser is the consumer. You may have a lot more in common than has been advertised.

Source: iMedia

Latest Additive at Gas Pumps: Google

By MICHAEL LIEDTKE

SAN FRANCISCO (AP) — Lost drivers soon will be able to Google for help at the pump.

As part of a partnership to be announced Wednesday, the online search leader will dispense driving directions at thousands of gasoline pumps across the United States beginning early next month.

The pumps, made by Gilbarco Veeder-Root, include an Internet connection and will display Google's mapping service in color on a small screen. Motorists will be able to scroll through several categories to find local landmarks, hotels, restaurants and hospitals selected by the gas station's owner.

After the driver selects a destination, the pump will print out directions. Eventually, Gilbarco Veeder-Root hopes to enable motorists to type in a specific address and get directions.

"We think the service will create more customer loyalty for retailers," said Gilbarco Veeder-Root spokeswoman Lucy Sackett.

Greensboro, N.C.-based Gilbarco Veeder-Root will initially offer the service in about 3,500 gas pumps and expand based on retailer demand.

Unlike most of Google's services, this one won't include ads bringing the company income. But participating retailers will be able to make extra money from other merchants that offer coupons on the service.

Making maps available at gas pumps appealed to Google because the Mountain View-based company wants to make its services available whenever and wherever people need them, said Karen Roter Davis, a principal business development manager for Google.

Also this week, Google unveiled plans for free cell phone software designed to make it easier and more enticing to reach the Internet on mobile devices. The first so-called smart phones equipped with Google's software, called "Android," won't be available until the second half of next year.

Calling up a map at a gas pump should be particularly popular among motorists who are too stubborn or embarrassed to pull over and ask someone for help, Roter Davis said. "This will be sort of a Googley, more stealthy way of getting directions."

Source: Associated Press

FTC Vows Tighter Grip on Online Ads

By LOUISE STORY

A MEMBER of the Federal Trade Commission said yesterday that the agency would be exerting a tighter grip over online advertising, partly because of increased tracking by marketing companies of people’s activity on the Internet.

Jon Leibowitz, the commissioner, said he was concerned about ads being shown to children online and about the tactics advertisers are using to collect data about people.

“When you’re surfing the Internet, you never know who is peering over your shoulder or how many marketers are watching,” he said.

Mr. Leibowitz spoke in Washington at the opening of a two-day forum on behavioral targeting, the increasingly popular tactic of delivering ads to people based on what Web sites they have visited.

In practice, the targeting issue goes beyond just Web surfing: Google’s Gmail funnels ads to people based on key words in the e-mail messages they write, and MySpace helps marketers select ads for people based on the information about themselves they willingly post in online profiles.

To safeguard consumers, Mr. Leibowitz said that standard rules about the privacy policies of Web sites may need to be established. He pointed to a study that found that people with a high school education can easily understand only 1 percent of the privacy policies of large companies.

He also noted that none of the companies in the survey made targeting an opt-in decision. Most companies today make people take action in order to opt out of their tracking programs; Mr. Leibowitz suggested that more policies should be opt-in.

“People should have dominion over their computers,” he said. “The current ‘don’t ask, don’t tell’ in online tracking and profiling has to end.”

But some people from the online advertising industry said that the commission, which conducted the forum, should stay out.

Randall Rothenberg, president and chief executive of the Interactive Advertising Bureau, said the agency should not regulate online advertising because it could limit what he called a recent “extraordinary pattern of innovation.”

At the forum, privacy advocates and executives from companies like Google and Microsoft debated the trade-off between the personal information that marketers collect and the relevance of the ads that people are shown. While most consumers would prefer to see an ad for something they might possibly buy rather than something irrelevant to them, even within the advertising industry there are disagreements about the kind of data that is appropriate for marketers to use.

Executives from several Internet companies said they could easily improve the quality and accuracy of their online advertising campaigns without compromising basic privacy principles.

“Privacy and trust are probably the two words that are going to make the Internet the healthiest in the future,” said Tim Armstrong, president of advertising and commerce for North America at Google. “User trust and loyalty are probably the No. 1 thing we focus on at Google.”

Executives from Yahoo, Microsoft, Facebook and AOL expressed similar sentiments.

Privacy advocates echoed the concern of Mr. Leibowitz about ads being shown to children and teenagers on the Internet.

Teenagers “are on there living their social lives and personal lives,” said Kathryn Montgomery, a professor at the School of Communication at American University.

Because blogs and social network pages are for the most part available for anyone to see, the marketing industry treats their lives and personal details as “open books,” she said,

Another consumer advocate said that Web sites are asking visitors to provide excessive amounts of information, putting them in uncomfortable situations. Amina Fazlullah, a lawyer at the U. S. Public Interest Research Group, compared shopping online to visiting a used-car dealership. Online advertisers, she said, ask the kinds of questions about people’s buying power and interests that they would probably choose not to tell a used car dealer, for instance.

“In the brick and mortar world, if you’re asked for information, you can say ‘no,’” she said.

Mr. Leibowitz spoke briefly about the commission’s evaluation of Google’s pending deal to purchase DoubleClick, an Internet ad delivery company. The F.T.C. is determining whether the deal would have anticompetitive effects, not how it would affect privacy online. However, Mr. Leibowitz said, it was clear that the agency needed to increase its scrutiny of online targeting.

Google’s deal to purchase DoubleClick for $3.1 billion was just one of many Internet industry acquisitions over the last year. Microsoft bought aQuantive for $6 billion, the Publicis Groupe acquired Digitas for $1.3 billion, Yahoo paid more than $680 million for Right Media, an ad exchange, and AOL is believed to have spent $275 million for Tacoda, an ad network.

With all these deals comes more pressure to generate more money through online advertising, Mr. Leibowitz said.

Google Assigns Dollar Value to Search Results

Google's ads are paid for; its search results, supposedly, are untainted by commercial concerns. But French blog Zorgloob landed itself a screenshot that calls Google's purity into question. It shows what Google search results look like to a member of Google's AdWords sales team. The picture raises more questions than it answers. For example, why are there dollar signs among so-called "natural" search results? And why does Google note whether a website in its search results belongs to an advertiser? Here's the image.
The most charitable interpretation? Google's salespeople uses these results to identify potential customers. An AdWords sales rep probably looks up a product and these results indicate if each site turned up by Google's algorithmic search is also advertising with AdWords. If a site owner is not, the GG Score indicates how much that site owner would have to pay to get a sponsored link to appear near the top for that search term.

But there's a darker possibility -- that this data factors into Google's website-ranking algorithms. Small website owners have long groused that their Google rankings seem to change arbitrarily, and that buying AdWords seems to be the only way to get back in Google's good graces. Until now, it's been easy to dismiss their complaints as mere whining. But if Google is actively tracking the revenue potential of websites that appear in its search results, who's to say it can't quietly tweak those results to help its salespeople meet their quotas?

Source: ValleyWag