Please see this disclosure related to me and Google.

There certainly is a lot of noisy swirl of late around the escalating fight between Google and some traditional media companies over content online.

The loudest voice in this fight has clearly been News Corp. (NWS) kingpin Rupert Murdoch, who seemingly has not met a television interviewer of late he did not regale with tales of Google’s nefariousness.

Part of what he is saying is surely justified–it’s definitely a crisis for the news business.

And, in Murdoch’s mind, the blame should largely fall on Google, which he believes is profiting from the expensively-created content of others that it is not paying for to such a warped and massive degree that it makes a mockery of fair use.

In Silicon Valley style, Google defends itself by saying it sends valuable Web traffic to News Corp. and other sites, so a thank-you note is really the proper response.

That is definitely not in the mail from Murdoch, who has threatened to “de-index” at least some of his content assets–which are not insubstantial–from the now inevitable crawlers sent out by the search giant.

These are, of course, vintage tactics from the Global Media Mogul Playbook: Causing a public hubbub and spooking perceived enemies by threatening drastic action and implying dire consequences, while simultaneously dealmaking behind the scenes.

Trying mightily to make the stakes more dramatic, News Corp. has pulled Microsoft (MSFT) into the fray as a possible white knight–if you live long enough, you do see it all–for publishers.

Under that scenario, the software giant would fork over some sum of money to get News Corp. and perhaps from other key content companies, such as Associated Press, exclusively and prominently featured on its Bing search site.

The reward, presumably, would be increased searching on Bing for the stuff consumers could now not find on Google (GOOG).

BoomTown reported earlier this week that, in fact, Microsoft was unlikely to hand over any kind of king’s ransom to publishers.

As I wrote:

While a spate of reports has Microsoft execs girding the globe offering gobs of cash to content companies to block Google and favor its Bing search service, sources close to the situation caution that it is extremely unlikely that the software giant would pay giant sums for that pricey privilege, which many inside the company think will not help it gain much search share.

“While there is a lot of mutual interest, it’s doubtful Microsoft is going to pay to ‘rent’ a corpus of content that it does not own,” said one source close to the situation. “The economics are not there for anyone.”

In other words, this wrestling match is not about whether Google or Microsoft will serve up links to content online, but about how much–or not at all–they are willing to pay for doing so.

So, what’s really happening here? Here are five possibilities to consider, each of which is true in part:

1.) Murdoch really means it

In this scenario, Murdoch, as well as others like AP’s Tom Curley, truly believe that Google–like that creepy salt-seeking alien from “Star Trek”–is sucking the life out of the media industry by making bank off their news content, but not giving back nearly enough in return.

Of course, a lot of these companies have willingly done distribution deals with Google over the years.

But now, they don’t like it, since the increasing money being made by Google, even as their own revenues have suffered, has developed into a growing problem.

Which is simply this: There is a lot more money to be made in searching for content than in making it.

This realization has to shake content czars like Murdoch to the core, but it is indeed the situation they find themselves in.

Murdoch makes a fair point in that journalism costs money to make and it used to have a solid economic system under it, until Google and others on the Web disaggregated it wholly.

Thus, online aggregators become “tapeworms,” as The Wall Street Journal’s Managing Editor Robert Thomson quipped.

He also, on a recent panel at the Web 2.0 conference, said to Google’s front page head–Marissa Mayer–that she “unintentionally encourages promiscuity.”

Ouch. That remark, which was was quite striking if you were there to see Thomson say it, said volumes more.

(Full disclosure: News Corp. owns Dow Jones, which owns this site.)

2.) Murdoch really means to create a lot of confusion, in order to shake down Google

Well, it would not be the first time he and many others of his ilk have used public sharp elbows and saber rattling to get what they want.

Except, in this case, the algorithm experts over at Google know precisely–down to the tenth decimal–how much linking to News Corp. makes for them.

And, it is not much, especially when looking at the vast sea of data Google serves up.

Its money-making is widely dissipated, from searches for vacation information to mapping to car-buying to health. While news-finding definitely is part of the mix, it is not at the center of the Borg.

Ironically–and oddly left out of this debate–it is Yahoo (YHOO) that has a lot of power in this arena, with massive content sites that shoot traffic all over the Web (including to this site).

But, what Google cannot and never can quantify–although I have seen Co-Founder Larry Page try once or twice–is the impact of public perception on the company, which has slowly morphed from being a benign, brightly-colored digital, librarian-like helper to a scary, answer-to-no-one, evil-doing monster.

Their growing influence over what people see and do not see on the Web is palpably frightening to publishers, advertisers and anyone who wants to be digitally discovered.

Bad luck for Google: Creating and then attacking boogeymen is a Murdoch talent bar none.

3.) Murdoch really means to create a lot of confusion, in order to shake down Microsoft

Also obvious is the full-scale obsession Microsoft has with Google. While its execs try to hide it, the panic over the success of Google has been tough on the once dominant tech company, which has struggled in the Internet arena.

Worse still, Google rakes in the dough, while Microsoft, um, does not.

Finally, this year, Microsoft has created–with no small amount of much-needed innovation–Bing, a laudable effort that is starting to show some traction.

While it still has a very small market share in comparison to Google–by a factor of seven to one–it’s definitely got some momentum going.

And, after much turmoil, Microsoft finally did a deft and relatively inexpensive deal to join with Yahoo in a search and advertising partnership to give them both more heft, which will surely help matters.

More importantly, one of the ways Bing has differentiated itself is via product innovations and intense focus on search niches, such as health.

In this topic area, for example, Bing has struck a not-expensive content licensing arrangement with the Mayo Clinic, in order to better feature content.

This is smart business and offers consumers something better and different.

But, overpaying big media publishers for the same thing, even if they de-indexed Google at the same time, is not, unless it is for really niche things like special financial information.

And, even then, there are so many other sources of information out there, it would not take Google long to mount a similar offering, even in the face of some kind of OPEC of News consortium.

Even more–how much do consumers love OPECs of any kind? Not much!

Sources at Microsoft agree:

“If it was everyone, that might become interesting. But even that has issues, since Microsoft is not interested in having exclusive news for a temporary period of time by overpaying for it. It’s essentially a marketing expense, and there are a lot better ways to spend that money to win market share than giving it to publishers.”

Lastly, Microsoft has been to the Murdoch party before too, having been part of talks to fold News Corp.-owned social networking site MySpace into Yahoo, had Microsoft prevailed in its attempt to acquire it.

Microsoft missed that pricey bullet and might be more inclined to grow Bing the old-fashioned way–via innovation, marketing and product improvements, rather than just using up too much of its energy trying to mess with Google.

4.) A deal will be made

My not-too-surprising prediction is that, in the end, News Corp. and others will probably strike some kind of lesser deal with Microsoft–although it will tout the heck out of it–while taking some of its content behind a pay wall and, thereby, de-indexing it from Google.

More damaging would be if AP, which actually provides the most used news content online, removes its links completely from Google, because–unlike the premium content from other publishers–this is the bread and butter of consumer usage of content.

As to promotional material or links to its television shows and movies from publishers like News Corp.? Well, it would seem the most self-destructive form of pique to remove those links from any of the top search engines.

That said, even if it really pissed me off for publishers to do so, I would probably switch to another search engine to find information on “Glee” forced to. That’s how much I love those singing kids and Jane Lynch!

Finally, Murdoch has threatened also to challenge the fair use doctrine–which allows others to use copyrighted content within limits, as Google and many others do (such as this site too).

While some think that is a bridge too far, that might be his best argument of all. Why should Google make a fortune on the content of others, even if only listing it? Doesn’t the sheer volume of what the search giant vacuums up make its use of fair use as a defense pretty ridiculous?

You can be sure Murdoch has his many lawyers and lobbyists all over this one, as does Google.

5.) The truth is out there

In perhaps his most strident television interview with his Sky News Australia service (which you can see below on–oh, the irony–on Google’s YouTube), Murdoch said about those who used Google to find News Corp. content:

“They don’t suddenly become loyal readers of our content. We’d rather have fewer people coming to our Web site but paying.”

That really is the honest truth in all this hubbub: Murdoch and other publishers have to find a way to get a some pool of dedicated online readers to pay enough to be able to then provide them with content that will keep them coming back for more.

That’s a business that Google truly cannot help or hinder, really.

And, more to the point, it is also a business that Rupert Murdoch does seem to know a thing or two about.

Yet another goofy Silicon Valley name did not prevent Asana–the workplace productivity software start-up founded by former Facebookers Dustin Moskovitz and Justin Rosenstein–from nabbing $9 million in funding from Benchmark Capital and Andreessen Horowitz.

The round, which was announced today, will be used to turbocharge Asana and its small team, who are aiming at the very dull and unexciting but very large and problematic workplace collaboration and communications software market.

In Sanskrit, “asana” means “sitting down” and refers to strong but relaxed postures in yoga–so presumably, Moskovitz and Rosenstein are trying to help frustrated workers achieve a digital form of nirvana.

Former Facebooker Matt Cohler, now at Benchmark, will have a seat on the Asana board. Asana had previously raised just over $1 million in an angel round, which included a spate of Silicon Valley bigwigs.

In an interview today, Rosenstein said that solving the “friction of communications” in the workplace by innovating via “information transparency” was Asana’s goal.

But, said Rosenstein, “We are not taking existing tools and porting it over the to Web…but rethinking how people can productively work together.”

He added: “We want to change the way you manage information and how you keep everyone on the same page…there are tons of misses here everyday in the workplace and it is death by 1,000 cuts.”

Moskovitz said he was always trying to solve such issues at Facebook, the social networking site he co-founded and where he once was CTO.

Ticking off a variety of workplace collaboration tools he employed, including some newer Web-based ones such as Yammer, Moskovitz said, “We could not find any easy solution, because there is not any one that answers all your issues.”

The pair said they had working product that was being used internally at the company, but would not say when one would be released publicly.

Finding one would obviously be a magic bullet, said Benchmark’s Cohler.

“This is a really big existing problem that no one has solved,” he said.

Here’s the press release:

Asana Announces $9 Million in Funding from Benchmark Capital and Andreessen-Horowitz

11/24/2009

The challenge of groups of people working together effectively is fundamental to human endeavor, but the state of the art falls far short of real efficiency. Despite advances like email and wikis, the friction and overhead of communication remain acutely painful to organizations large and small. Group leaders spend an enormous portion of their time trying to keep everyone on the same page, and knowledge workers struggle daily with inadequate, disparate tools to wrangle the information they need to do their jobs.

The technical hurdles to building the right system to address these problems are immense, and the design challenges subtle and complex. The Asana team has thought deeply about these problems for many years, in leadership roles at some of the world’s best software companies. We are undertaking an ambitious project to tackle them with a vision that reimagines the way people manage information, to speed up knowledge work and communication by an order of magnitude. This is not another enterprise application suite, nor is it an ajaxification of existing desktop software concepts; it is a new kind of software product, built for the Web from the ground up, with a focus on speed, collaboration, and ease of use.

To help us build the company, we’re bringing in Benchmark Capital and Andreessen-Horowitz. The partners at these firms bring a tremendous amount of experience building companies and helping entrepreneurs reach their goals. Benchmark is leading the $9 million round of funding, and Matt Cohler, with whom we already have a close, trusting relationship, will have a seat on the board. Andreessen-Horowitz is the only other VC firm participating, and we’ve already started enjoying the benefits of Marc’s and Ben’s great wisdom.

We plan to use the funding most immediately for growing our team. We’re currently mobilizing a group of world-class peers, and looking for passionate engineers and UI designers to join us. We need people to help us tackle some of the hardest software engineering and computer science problems, including developing a ground-breaking programming system that decimates the time required to build a web application end-to-end.

“When you look at the sheer talent, vision and ability to execute that Dustin and Justin demonstrated at Facebook and Google, you know something big can happen here. In addition to being two of the world’s best engineers in their own right, they have an extraordinary ability to rally teams around a vision like very few people can, and they are putting together a world-class team of people at Asana. This is a company with limitless potential.” –Matt Cohler, general partner, Benchmark Capital

It’s well known that Google doesn’t do much in the way of marketing around its search service.

While you will catch advertising for the Chrome browser or for Android smartphones on the Web, given Google’s huge 70 percent market share in search, it hardly needs to attract users.

So, then, what is one to make of a series of new videos, which look suspiciously like commercials, that Google (GOOG) launched late last week on its blog and posted on a new channel on YouTube?

Called “Search Stories,” there are a half-dozen of the short videos, some more adorkable than others, which star the main search box.

One thing they have in common is that they have the look and feel of a marketing campaign, with the tag line “Search on.”

They also stress a variety of Google products, such as mapping, video, price comparisons, email and more.

One imagines what pre-Batman Bruce Wayne would look for, complete with ominous music, including search terms such as “coping with loss,” “flexible kevlar” and “gotham city crime statistics.”

Another video, called “Newbie,” has a grandmother searching on “keeping in touch with grandkids” and–in a clever dig at the MySpace and Facebook social networking services–“what is myfacebook,” which gets corrected by Google to “what is facebook.”

Could it be that the $100 million marketing push Microsoft (MSFT) launched for its Bing search service, which seems to be slowly gaining share, is starting to get on the nerves of those Spocks in Silicon Valley?

Not that Google would admit this, instead simply saying it was feeling all warm and fuzzy and so decided to make some kids-let’s-put-on-a-show videos.

Wrote Robert Wong of Google Creative Lab in a blog post, in part:

Because while we’re proud of the innovations we’re making in search, we’re proudest of the things people use search to accomplish. In other words, the best search results don’t show up on a webpage–they show up in somebody’s life.

So in that spirit, we made a bunch of videos. There’s one about grandma dipping her toe into technology. One about friends taking a Kerouac inspired road trip. And yes, there’s even one about Bruce Wayne.

Judge for yourself–here they all are:

Parisian Love

Mad to Live

Batman

Newbie

Potholes

High School

Please see this disclosure related to me and Google.

BoomTown was intrigued when Mind-Your-Own Biz Stone, one of the co-founders of Twitter, penned a blog post yesterday about the microblogging service changing its prompting question.

Now, above the little Twitter box, it reads, “What’s Happening?” and not the original tweet query, “What are you doing?”

“The fundamentally open model of Twitter created a new kind of information network and it has long outgrown the concept of personal status updates,” wrote Stone. “Twitter helps you share and discover what’s happening now among all the things, people, and events you care about. ‘What are you doing?’ isn’t the right question anymore…”

While the blogosphere covered this development as if it were a moment of monumental meaning, most were ignorant that the true beacon of innovative What’s-Happeningness does not reside in Silicon Valley.

Instead, it would be embodied completely by the 1970s television show, “What’s Happening!”

The sitcom was about three African-American teens living in the Watts section of Los Angeles–Raj, Rerun and Dwayne.

Here’s a video of the opening of the show, episodes of which can be found in their entirety all over the Web, and from which much Hey-Hey-Hey wisdom can be gleaned:

Greg Nelson (pictured here), who has had the thankless job of running MSN for Microsoft, has left that position and been given the even more thankless task of running the integration of the complex search and online advertising partnership struck by the software giant and Yahoo.

Microsoft (MSFT) sent out an internal email to staff about the move for the GM of MSN’s Global Media Group, which has already taken place.

MSN U.S. head Scott Moore is now reporting directly to MSN Corporate VP Erik Jorgensen. So will Brett Wayn, who has been working under Nelson on international coordination and who has taken over MSN’s international business on an interim basis.

Nelson’s counterpart at Yahoo (YHOO), according to sources, will be Mark Morrissey (pictured here), who is currently SVP of Products at the Internet giant.

The pair will have their hands full in what will ultimately be a two-year effort, sources estimate, to try to improve their competitive edge against Google (GOOG) in the search arena.

BoomTown’s title for the relationship: A Couple of White Geek Guys Sitting Around Arguing!

The role includes coordinating a massive shift of engineering talent from Yahoo to Microsoft, making sure ad systems are copacetic and most of all, smoothing over what is likely to be a number of bumps in the partnership.

To help make the frustrations less frustrating, there is a $50 million annual payment to Yahoo by Microsoft for three years, for unspecified “transition and implementation costs.”

At least 400 Yahoo employees will be hired by Microsoft, which will also provide funds for retention packages to keep 150 more Yahoos motivated during the transition.

The “Definitive Agreement” between the Silicon Valley company and the Redmond, Wash.-based Microsoft, which had been slated to be signed by Oct. 27, 2009, is about to be completed.

Then, as soon as regulatory approvals are in place, it will be showtime for Nelson and Morrissey.

Earlier today, BoomTown reported that Yahoo was poised to name a few new top execs at its Silicon Valley HQ.

But the company has also hired a new director of public affairs in the nation’s capital.

After I queried the company, Yahoo (YHOO) confirmed that it has tapped Amber Allman, a vice president at 463 Communications, for the job. She has extensive tech experience.

“We are very pleased that she is coming on board,” said Nina Blackwell, senior director of global public affairs, who will be Allman’s boss. “She will be a very valuable member of the team.

Yahoo’s last public affairs rep in D.C. was the most excellent Tracy Schmaler, who left Yahoo earlier this year.

At Yahoo, she worked on everything from human rights issues in China to the failed takeover attempt by Microsoft (MSFT) to Yahoo’s also-botched effort to do a search and advertising deal with search giant Google (GOOG).

Ironically, Schmaler is now deputy director, Office of Public Affairs, at the Justice Department, which is currently scrutinizing Yahoo’s search and ad partnership with Microsoft.

Ah, the revolving doors of Washington, D.C.!

Yahoo CEO Carol Bartz is making the most substantive changes in her exec ranks since she did a massive restructuring of its staff in late February, according to sources close to the situation.

“She is continuing to clean the place up,” said one top exec about the moves, which are likely to be announced internally tomorrow.

Among the shifts in management will be filling the slot left by the departure of North American Audience head Jeff Dossett in May.

UPDATE: Sources say Yahoo’s head of mobile, David Ko, will get the job of top Audience exec, although it is not clear if he will have the same portfolio has former media heads at Yahoo.

Since Dossett left, his job has been split between Jimmy Pitaro, who runs Vertical Audience Experiences, and Tim Mayer, who is in charge of Search & Social Applications. They both currently report to U.S. EVP Hilary Schneider.

The job of Audience head is a key role, given that Yahoo’s powerful media properties are among its most valuable assets. In recent months, Yahoo has made some major changes in the way it creates its juggernaut News property.

Also to be filled is the job being done by Corporate Partnership SVP Jim Schinella, who, as BoomTown previously reported, is set to leave at the end of the year.

I could not determine who will take Schinella’s job, inside or out.

Interestingly, Yahoo has yet to name an international head.

Sources said the company had filled the position, using a headhunter, but the London-based media exec candidate backed out at the last minute. That meant Yahoo had to restart its search.

There might also be other top exec changes, all part of Bartz’s consolidation of power at Yahoo. She has named a spate of new top execs from outside, but has also kept some from the regime of former CEO and co-founder Jerry Yang.

These staffing moves have come even as a stream of execs continued to depart the Silicon Valley Internet giant, including, most recently, Mike Walrath, who was SVP of advertising strategy. Walrath had led Right Media, the online ad exchange Yahoo bought for $680 million in 2007.

Walrath was widely expected to leave Yahoo in July, at the completion of his earnout from the acquisition, sources said, so the move was more sudden than expected internally.

Sources noted that Bartz moved Walrath’s departure forward in order to announce a new strategy for Right Media focused on premium publishers and to dump those ad networks and publishers of lesser ilk.

Whether this will stop the competitive onslaught in the ad exchange space is an open question given that Google has entered the fray significantly and that Facebook is widely expected to bolster its efforts.

Lastly, several sources said that there are also likely to be more changes on Yahoo’s board, which has seen the departure of two members recently.

In September, Maggie Wilderotter said she would leave the board by year’s end. And former Yahoo nemesis and investor Carl Icahn left the board in late October.

Whether Yahoo will replace them or keep its current size of 10 directors is not clear.

Also possible, several sources said, would be Bartz taking the chairman title, which is currently held by Roy Bostock. Bostock, along with Yang, played a key role in its botched takeover battle with Microsoft (MSFT).

Bartz finally successfully struck a sweeping search and advertising partnership with the software giant this summer, which is moving closer to being launched.

Yahoo and Microsoft are poised to finally sign the definitive agreement that will govern the complex and far-reaching search and online advertising partnership they struck in late July, said sources close to the situation.

If all goes well, the various Microsoft and Yahoo execs–who have been ferreted away over the last weeks, busy dotting all the i’s and crossing all the t’s in the massive document–could even turn in their deal homework to their bosses for signature by the end of the week.

Yahoo (YHOO) officials declined to comment, while Microsoft (MSFT) has not gotten back to BoomTown as yet.

In any case, getting the definitive agreement in place is critical to making the high-profile MicroHoo deal a reality and, of course, getting the anti-Google (GOOG) party started.

So when the pair blew through a deadline to complete it in late October, there were eyebrows raised all over Wall Street and Silicon Valley.

When Yahoo filed an 8-K with the Securities and Exchange Commission in August, it noted that the “Definitive Agreement” between the Silicon Valley Internet company and the Redmond, Wash., software giant needs to be sketched out by Oct. 27, 2009.

But it is a monster document, which is why MicroHoo did not complete it in time. After that whiff, Yahoo said as much in another filing with the SEC:

“The Letter Agreement specified that the parties would execute definitive agreements by October 27, 2009, but given the complex nature of the transaction, there remain some details to be finalized.”

Added Microsoft similarly:

“We have made good progress in finalizing the definitive agreements. Given the complex nature of this transaction there remain some issues that need some additional clarity and definitive details.”

Nonetheless, both companies have consistently said that they would be able to close this deal by early 2010.

Yahoo and Microsoft had already done a pretty hefty binding-agreement letter (here is a picture of Yahoo’s CEO Carol Bartz and Microsoft CEO Steve Ballmer holding it, in fact).

Also key: Getting approval for the deal from regulators in Washington, D.C., which, sources said, also seems to be on track.

With little opposition, Yahoo and Microsoft policy types have been chipping away on regulatory issues with federal regulators in Washington.

And, several sources said, those government approvals are now nearing completion at the Justice Department, even though the Federal Trade Commission might still ask for more assurances on privacy issues related to online advertising and consumer data.

International regulatory approval is another story, especially in Europe, which could further delay the implementation of the partnership, since it is unlikely the pair would move forward without clearance globally.

When that is done, the real game begins, as MicroHoo faces its the much more critical Tim Gunn acid test for the deal:

Making it work.

While at a book party for author Ken Auletta in San Francisco last night, BoomTown took the opportunity to ask those gathered whether they were scared or not of Google and its growing power.

The Auletta book covers a lot about the search giant, but also drills in on how traditional media and advertising, as well as the government, have all become increasingly wary of Google’s hegemony over key businesses on the Web.

But as it turned out, the Silicon Valley types I queried had nothing but attaboys for Google (GOOG). Oddly enough, many mentioned how they love the food served up at the Googleplex.

Here’s the video of the interviews, with scary up-close shots, with investor–including in Google–Ron Conway, almost-not CBS (CBS) Web dude/almost investment dude Quincy Smith, online classified czar Craig Newmark, Slide CEO Max Levchin and Google PR honcho David “I love my Soylent Green” Krane (see pertinent movie video clip below):

Please see this disclosure related to me and Google.

]]> http://kara.allthingsd.com/20091112/is-google-scary-not-to-silicon-valley-even-at-a-party-for-a-book-about-how-scary-it-could-be/feed/ 2 http://kara.allthingsd.com/20091112/author-ken-auletta-talks-about-google-and-its-lack-of-emotional-intelligence/ http://kara.allthingsd.com/20091112/author-ken-auletta-talks-about-google-and-its-lack-of-emotional-intelligence/#comments Thu, 12 Nov 2009 08:50:35 +0000 Kara Swisher http://kara.allthingsd.com/?p=20548

Guess what? Google has too many Spocks and not enough Captain Kirks.

This is one of the many interesting insights BoomTown gleaned from a video interview last night–which you can see below–with well-known New Yorker scribe Ken Auletta, who has just written a new book, “Googled: The End of the World as We Know It.”

This “lack of emotional intelligence” at the search giant, said Auletta, reminded him a lot of the subject of one of his previous books: Microsoft (MSFT).

Oh, the delicious irony!

Auletta was feted at a lovely party last night at the San Francisco house of Common Sense Media’s Jim Steyer, where a range of Google (GOOG) execs, Internet folks and fans gathered to talk about the book.

It’s all about Google, its history and, most important, its impact on the world. And how you look at the powerful search giant depends entirely on whether you are the changer or the changed, as Auletta stresses in multiple anecdotes in the book.

Traditional media, for example, have certainly been mucho irked of late about the impact of digital technologies on their businesses and have not been shy about casting blame most heapingly on Google’s Silicon Valley plate.

And government regulators are also giving the company the hairy eyeball, much as they had previously done to Microsoft.

Auletta and I talked about all of this and more in the video interview below, in which he notes that he told Googlers at a talk at their adorkable Googleplex HQ in Mountain View, Calif., yesterday that they need to focus less on being engineering brainiacs and more on trying to understand how to deal with fears of their growing power.

Here’s my interview with Auletta about this, as well as what old media needs to do to deal with all the change Google has wrought. (And you can see interviews I did with guests at the party, too).

And below that is one of the disturbing number of mash-up music videos about “Star Trek” buddies, the highly illogical Kirk and the Vulcanish Spock, the geek bromance of all time.

Please see this disclosure related to me and Google.

]]> http://kara.allthingsd.com/20091112/author-ken-auletta-talks-about-google-and-its-lack-of-emotional-intelligence/feed/ 3 http://kara.allthingsd.com/20091111/from-the-department-of-oh-no-she-didnt-whitman-defends-ebays-skype-debacle/ http://kara.allthingsd.com/20091111/from-the-department-of-oh-no-she-didnt-whitman-defends-ebays-skype-debacle/#comments Wed, 11 Nov 2009 19:30:19 +0000 Kara Swisher http://kara.allthingsd.com/?p=20516

If spinning is an intense political skill, former eBay CEO Meg Whitman is doing her very best at trying to create a silk purse out of a sow’s ear.

As Om Malik reports on GigaOm, Whitman–who is trying to nab the Republican gubernatorial nomination in California–told a radio interviewer recently that “actually I think Skype will prove to be a good acquisition for eBay.”

Well, good if you mean the $2.6 billion purchase of the Internet telephony company that never worked as Whitman had effusively promised in 2005.

She noted then: “By combining the two leading e-commerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net.”

That fabulous-sounding synergy did not happen, of course, eventually causing new eBay (EBAY) management to sell a huge chunk of Skype to an investor group.

Best of all, that sale included an ugly and expensive legal fight over software technology licensing issues with its co-founders, Niklas Zennström and Janus Friis, given that Whitman neglected in the competitive bidding to secure them properly.

That resulted in Zennström and Friis forcing eBay to include them just last week in the deal for a big chunk of Skype in exchange for those rights.

As the sick political joke goes: Other than that, Mrs. Lincoln, how was the play?

Nonetheless, Whitman has not let the facts get in the way of a good story!

She kind of had to, I guess, responding to an allegation by one of her rivals in the race, tech entrepreneur Steve Poizner, who has tried to chip away at her blue-chip business reputation by attacking the Skype deal.

Whitman was right to defend a lot of other great acquisitions she made as leader at eBay, such as PayPal; and she can be, as she said in the interview, “proud of my tenure at eBay.”

She should be, given that she was key to building a huge and profitable company that is a clear Silicon Valley Internet icon. While eBay did start to creak near the end of her decade-long stint there, many of Whitman’s accomplishments are nonetheless impressive.

But not all of them and definitely not the Skype buy, so she might want to stop making laughable declarations like this one in the interview:

“You probably read that the company just sold about two-thirds of the interest in Skype to an investor group, kept a portion, and got almost all the money back, and I think Skype will be very effective.”

Well, maybe so, but only because new management had to do clean-up and pay-up for her error, and new owners in charge of Skype could possibly better take advantage of what most consider a terrific property.

So, in the end, Whitman might be right.

And it might not even matter. In a recent poll, Whitman has pulled far ahead of ex-Congressman Tom Campbell, with 34 percent support from Republican primary voters compared to 13 percent for Campbell. Poizner clocks in third at six percent.

]]> http://kara.allthingsd.com/20091111/from-the-department-of-oh-no-she-didnt-whitman-defends-ebays-skype-debacle/feed/ 1 http://kara.allthingsd.com/20091109/accel-partners-feels-like-a-billion-dollars-today-no-really/ http://kara.allthingsd.com/20091109/accel-partners-feels-like-a-billion-dollars-today-no-really/#comments Mon, 09 Nov 2009 20:24:08 +0000 Kara Swisher http://kara.allthingsd.com/?p=20399

Who said the venture capital industry is sucking wind lately?

Well, it is–but not today, and especially, not Accel Partners, which sold two of its portfolio start-ups to large public companies for a total of $1.5 billion.

That would be the sale of AdMob to search behemoth Google (GOOG) for $750 million in stock and the acquisition of Playfish by gaming giant Electronic Arts (ERTS) for about $300 million (plus an earn-out of up to $100 million for Playfish staff).

While Accel shared the AdMob largess with Sequoia Capital and others with a stake in AdMob, which focuses on mobile advertising, and shared its social-gaming winnings from Playfish with Index Ventures, the Palo Alto, Calif.-based VC firm can surely afford to choose the pricier bottle of wine this week.

(Also, apropos of nothing, Accel Partner and Facebook board member Jim Breyer is now officially paying for the lunch he still owes me!)

Playfish had raised a total of $21 million in funding, while AdMob had pulled in about $47 million.

“I think you can imagine we are very pleased,” said Rich Wong, the Accel partner involved with AdMob, in an interview this morning. But he would not give any specifics about what Accel hauled in for its portion of the two companies.

Still, Wong said the venture market in Silicon Valley and elsewhere was definitely “stabilizing,” noting that there has been an increasing number of exits for investors via big companies scooping up strong start-ups.

“AdMob and Playfish are strong players in their respective spaces and in leading categories,” said Wong. “Their sale is a sign that this kind of innovation is important to major companies.”

And, apparently, to Accel.

]]> http://kara.allthingsd.com/20091109/accel-partners-feels-like-a-billion-dollars-today-no-really/feed/ 0 http://kara.allthingsd.com/20091109/google-primer-on-admob-acquisition-we-cant-believe-we-ate-the-whole-thing/ http://kara.allthingsd.com/20091109/google-primer-on-admob-acquisition-we-cant-believe-we-ate-the-whole-thing/#comments Mon, 09 Nov 2009 18:47:18 +0000 Kara Swisher http://kara.allthingsd.com/?p=20406 Google has a Web page up about today’s acquisition of AdMob for $750 million in stock, which includes the lovely image below of the differences between what the Silicon Valley companies do in the mobile advertising space.

Said Google (GOOG) on its site about the purchase:

“Mobile advertising is a rapidly growing and competitive space, and Google and AdMob are currently specializing in different areas. Though Google offers many forms of mobile advertising, its focus to date has been on mobile search ads, while AdMob’s focus has been mobile display ads and in-application ads.”

Translation: The Web search behemoth has been slower than molasses in the mobile and smart-phone ad space, sticking with boring blue text links of death, especially compared to the innovative and nimbler start-up, which is rocking the pretty ads.

So, we ate it.

Here’s the differences (click on the image to make it larger), according to Google:

Please see this disclosure related to me and Google.

]]> http://kara.allthingsd.com/20091109/google-primer-on-admob-acquisition-we-cant-believe-we-ate-the-whole-thing/feed/ 0 http://kara.allthingsd.com/20091109/google-acquires-admob-for-750-million-in-stock-the-press-release/ http://kara.allthingsd.com/20091109/google-acquires-admob-for-750-million-in-stock-the-press-release/#comments Mon, 09 Nov 2009 17:33:49 +0000 Kara Swisher http://kara.allthingsd.com/?p=20388

Google has acquired AdMob for $750 million, a huge price for an innovative start-up that has pioneered online ads on mobile and now smart phones.

BoomTown visited AdMob last fall and posted about how it was likely to eventually be acquired by…Google (GOOG)!

(Google has provided a primer on the sale, which you can read about here.)

The move is a major one for Google, which has been pushing hard into the mobile advertising space as it seeks to grow its already considerable Web search business. AdMob is arguably the most innovative and fastest out of the gate in the nascent arena.

As I wrote previously about the company’s prospects:

While there are very few bright spots to look at in the start-up space in Silicon Valley these days, especially those relying on online advertising, the San Mateo, Calif.-based AdMob is at least slightly shiny.

The mobile advertising marketplace, backed by Sequoia Capital and Accel Partners, just got a big slug of funding–almost $16 million–to keep pushing to get ads on mobile phones, which has gotten a huge boost from the popularity of the iPhone.

The massive data usage by users of the popular mobile device by Apple (AAPL) has clearly turbocharged AdMob’s prospects, which were already on the rise. Compared to a year ago, the company said, the number of ads it served more than tripled the number of ads served on a monthly basis to 4.5 billion.

Obviously, the better quality and more actionable nature of ads on improved screens is the reason for the shift, which should accelerate as more smartphones like Google’s G1 and the newest Blackberry Storm from RIM (RIMM) become more popular too.

Most importantly, even now, AdMob is cash flow-positive, which is not a bad thing to be in the current econalypse. It also has a cushion of cash–AdMob had previously garnered $15 million in funding from Sequoia and Accel.

It’s not all sunshine and daisies, of course, since the ad market in general is headed for a deep slump, and new markets are not going to grow as quickly, as marketers pull back from spending.

But, when the economy turns, the mobile advertising market is clearly going to be a fast-growing arena, with big players like Google, Yahoo (YHOO), Nokia (NOK) and Microsoft (MSFT) as AdMob competitors (or potential acquirers, especially Google).

With the money it just raised, AdMob said it would be getting ready for that race, and also use it to expand internationally.

Here’s a video interview with Omar Hamoui, founder and CEO of AdMob, on all this and more, as well as a tour of company’s offices:

And, here’s the press release:

Google to Acquire AdMob

MOUNTAIN VIEW, Calif.–(BUSINESS WIRE)–Google Inc. (NASDAQ:GOOG) today announced that it has signed a definitive agreement to acquire AdMob, a mobile display ad technology provider, for $750 million in stock. This acquisition will enhance Google’s existing expertise and technology in mobile advertising, while also giving advertisers and publishers more choice in this growing new area.

“Mobile advertising has enormous potential as a marketing medium and while this industry is still in the early stages of development, AdMob has already made exceptional progress in a very short time,” said Susan Wojcicki, Vice President of Product Management at Google. “AdMob is the quintessential Silicon Valley startup–generating impressive year on year revenue growth–and we’re excited to welcome this talented team to Google.”

“I think people underestimate how important ads have been to funding the development of innovative content on the Internet. Our goal all along at AdMob has been to make it possible for developers and publishers to bring their products and ideas to mobile with the same business model,” said Omar Hamoui, Founder and CEO of AdMob. “We’re proud of the progress we’ve made towards accomplishing this goal, and joining Google will only accelerate this process, ultimately leading to very real benefits for end users around the world. As publishers and developers generate more revenue from their mobile products, they will invest more, and their mobile offerings will become richer, more creative and more robust.”

The deal will help Google in its efforts to develop more effective tools for creating, serving and analyzing emerging mobile ads formats. As this ecosystem continues to grow, the company expects these new marketing media to offer significant benefits:

Advertisers will be better able to engage mobile users with AdMob’s ad formats

Publishers and developers will be able to monetize their content more effectively, which has benefits for the wider mobile ecosystem

Users will see more relevant ads and ultimately get access to more ad-supported content and applications – improving their mobile experience

“Attracting the world’s top engineering talent and people with entrepreneurial vision to Google has always been crucial to our success. AdMob’s proven track record in innovating at speed will help maintain that culture–which is why we are so excited to be working with them,” added Vic Gundotra, Vice President of Engineering at Google.

Both companies have approved the transaction, which is subject to customary closing conditions.

Please see this disclosure related to me and Google.

]]> http://kara.allthingsd.com/20091109/google-acquires-admob-for-750-million-in-stock-the-press-release/feed/ 2 http://kara.allthingsd.com/20091106/all-is-forgiven-its-a-clean-slate-says-andreessen-about-lawsuit-mad-skype-co-founders/ http://kara.allthingsd.com/20091106/all-is-forgiven-its-a-clean-slate-says-andreessen-about-lawsuit-mad-skype-co-founders/#comments Fri, 06 Nov 2009 19:28:48 +0000 Kara Swisher http://kara.allthingsd.com/?p=20364

Silicon Valley legend and now VC Marc Andreessen was making the interview rounds after the settlement between the litigation-addled co-founders of Skype and all the various people they were suing was announced this morning.

He has been tight-lipped until now, due to the morass of lawsuits.

But, as Andreessen told BoomTown in a phone interview about the aggressive legal tactics of Niklas Zennström and Janus Friis that resulted in them finally seizing a stake in the Internet telephony giant by suing him and many other Silicon Valley players:

“We did not take it personally. It’s a clean sheet of paper.”

Well, it is actually a torn, stained and very worn out piece of paper, due to all the various machinations, but bygones!

Andreessen–who knows a thing or two about legal tussles, if you recall Netscape-Microsoft (MSFT)–said the real point is that it is time to focus on the business of Skype rather than fighting over who controls Skype.

“It’s really good to have everyone lined up and rowing in the same direction. We have to capitalize on the opportunity, because Skype is poised for a new wave of growth,” said Andreessen. “They have an amazing head of steam, because the logical way for voice and video communications to be conducted will be over the Web.”

Thus, Zennström and Friis now join the winning buyout group, Silver Lake Partners, Andreessen Horowitz and the Canada Pension Plan Investment Board, along with eBay, in owning Skype.

But Index Ventures, which was in, is–as Heidi Klum might say–out!

Under the terms of the agreement, Niklas Zennström and Janus Friis will take a 14 percent stake in the company they founded and then sold to eBay (EBAY), which will include an undisclosed investment by them.

I reported yesterday that the total was 13 percent–10 percent for the rights to key Skype technology held by the co-founders and the option to invest $83 million for three percent more.

In exchange, the pair will give Skype software essential to its operation and drop their various lawsuits against eBay and Skype’s buyers.

As for Zennström and Friis’s egregious use of the courts to grab their 14 percent stake in Skype, litigation they waged after losing their bid to buy Skype back from eBay, Andreessen was being very politic.

“We love working with aggressive founders and are in favor of founders being involved in their companies,” he said. “Great founders are not known for being shy and reserved. Look at Bill Gates. It’s not a question of personality, but of accomplishment.”

Noting that he had not worked with the pair before, Andreessen (pictured here) said, “We have a lot of respect for them. We think they’re geniuses.”

But, I queried, would he have used such tactics?

“It’s not a book club, it’s a super-serious, high-stakes game,” said Andreessen. “I don’t know; I’ve not been in the situation they’re in. If your goal in life is to avoid drama, this is probably the wrong industry for you.”

Perhaps, but I told him that I doubted even a battle-hardened entrepreneur like Andreessen would use the courts in such a manner to achieve business goals.

To each his own, said Andreessen!

“One of our investing mottos is that we invest in strength, not lack of weakness,” he said. “The question is how big is the opportunity.”

And, apparently, it is big enough to overlook all the drama that has gone on.

Andreessen said he expects to be more involved at Skype–which, with his $50 million investment, is the biggest deal in his $300 million fund–than other board members, noting different directors have different roles.

It’s a big board of 23, as I had previously reported. Zennström and Friis are each getting a seat.

“We are going to be helpful,” Andreessen said about his fund’s role at Skype. “We’re a company picker, looking for those that have the greatest potential.”

Andreessen, ever the diplomat, made sure to add that that also means doing business with Index, the member of his Skype consortium that departed as Friis and Zennström (pictured here) entered, due to stark tensions between the two sides.

“I have a lot of respect for [Index partners Danny Rimer and Mike Volpi] and expect to work with them a lot in the future,” said Andreessen. “In fact, I am talking to them today about two other deals.”

In other words, in Silicon Valley, the big wheel just keeps on turning.

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