EightBlack.

I’m about 20 minutes into the keynote address of the Google I/O Developers Conference, held last week in San Francisco (where else?).

The 2 smart bastards who created Google Maps are presenting to an audience of 3500+ devout Google followers, their latest party trick - Google Wave.

I couldn’t help notice the obvious. Last week, amidst much fanfare and oh, about $100 million dollars, Microsoft started telling the world about Bing, their new and improved search engine. Ok, because they’re Microsoft and because they’ve never excelled at search, the press listened (as did the web) and they got some traction.

I still reckon MS have a very long, slow road ahead of them. Google is a part of our DNA, and certainly our kids DNA. Its a verb, for chrissake. Microsoft on the hand is blasphemy in many circles.

But Google, who I reckon will completely change the game with Wave (and I’m saying that from a position of ignorance, as I still don’t fully get it), launched their platform as only they know how. For starters, they charged the attendees to their conference around $300 bucks a piece to sit down and listen to them for 2 days.

That means, they raked in just on a million dollars (which probably would have covered the cost of Moscone Center, the broadband bill and the catering). But the important thing is that they got away with it. The attendees were salivating like Pavlovs dog.

Maybe I’m wrong on this, but lets just say Google pulls it off with Wave, and it starts to fly. Guess what search engine is powering it. Theirs. Guess what they just did to MS? They just put another huge hurdle in front of them.

Expect a lot more chair throwing by Ballmer if this happens.

Seth Godin points out why he thinks Bing is more likely to go Bang. I couldn’t agree more.

And here’s the opening address. Most definitely worth watching.

Microsoft announces this week it is going to change the landscape yet again with the way we mere mortals search. And to help convince us to all switch over to their new search platform (called Bing), it’s throwing US$100M plus at a global advertising and marketing campaign. Originally codename Kumo, Bing is the replacement because, well, because it just is.

To be fair to Microsoft, I haven’t yet used the new search interface, but I simply don’t see how they are going to displace Google in any meaningful time frame.

Lets take Australia for example. We have one of the highest Google penetration rates in the world, with just on 92% of the population using Google as their preferred search engine. That means that about 4 people in Adelaide use Yahoo! and 2 drunk fisherman somewhere off Rottnest Island use Microsoft Live Search, and the only reason that is, is because they don’t know what a browser is and wouldn’t know how to change it even if they did.

In the US, recent stats show Googles market share continuing to advance with its share now at 64%, Yahoo’s at 20% and Microsofts at a lowly 8%.

A couple of post’s ago, I wrote about Wolfram Alpha, a supposed game changing search platform. I actually dont see Wolfram Alpha as a competitor to Google (but I do see it as something clever which Google could integrate into its wider offering).

We all know that search has been the thorn in Steve Ballmers side and that everytime someone mentions the word Google to him, he starts to convulse violently and his left eye twitches uncontrollably. Or something like that.

But a large room of brainwashed Microsoft software engineers who have the mantra to go after Google, aint, in my humble opinion, going to cut it.

I’ve always said that the only way for Microsoft to take on Google is to spin off search completely. Buy them a separate building. Hire the best talent globally. Give them a shitload of money and tell them to come back in 2 years with something that changes the game. And most importantly, get the hell out of their way.

But Microsoft being Microsoft just doesnt have this in their DNA. And Ballmer, from all accounts, is a control freak.

From a personal experience, I know that 2-3 committed software developers can out-run an army of 200-300. Anytime.

Google changed the face of the planet 10 years ago when it created its search engine, just as I will relucantly agree that so did Microsoft when it created Windows. We all know that Windows is about as reliable as a Citroen in winter. However, Microsoft didnt win by building and creating a world class software platform. They won by figuring out and then winning the distribution space. And that’s exactly what Google have done.

Traditional search is finished. The collective user base is like an aircraft carrier. It’s got huge momentum. Getting it to change direction overnight is virtually impossible. Google have had 10+ years to get its ship going, it’s been more successful than any other company in history, has a war chest of money to defend its position and for the most part, still has the world’s best talent working there (or wanting to work there).

Microsoft should stop farting about and pony up to Yahoo! and do a deal. That gives them a collective 28% market share in the US.

They should then spend all their time, effort and determination trying to win the distribution wars. Nothing else matters.

John Battelle has more here. And CNet coverage here (obviously CNet dont want to miss out on this years Microsoft Xmas Party, hence its glowing report on Bing).

The disruptive influence to this entire argument above though is Twitter. That’s an entirely separate ball game that Google desperately want in on, and Microsoft are even more desperate to understand. According to some, “live” search is the future.

There’s a lot of money being wagered on this space though. Twitter’s already knocked back an offer of US$500M from Facebook and the 2 guys who created Twitter have already sold a company to Google before, so aren’t in a rush to do it again.

When I first saw Twitter being demonstrated at Web 2.0 Expo in San Francisco 2 years ago. I didn’t get it. Maybe I still don’t. But one thing is for sure, the recurring theme of 2 guys in a garage keeps popping up.

I still haven’t got my head fully around Twitter. I know I should have. But I was looking at my main Twitter page today and noticed something strange.

Only one “tweet” came directly from the web. And that was mine. Virtually every other message came via a 3rd party application, like TweetDeck, Endless Tweets, Twhirl, Tweetie and Twitterfox plus many more.

This means people are interracting with Twitter in a custom environment. From their mobiles, their smartphone web interfaces, from their PC’s and wi-fi devices.

90 per cent of the noise on Twitter is simply just that. Noise. I don’t get most of the conversations. And plainly, there are people who seriously need to get a life. They tweet like cocaine addicts. Erratic. In a hurry. And full of shit.

But the appeal to Twitter, I think, to many smarter people than me, is its collective intelligence as a platform. No wonder Google wants it. And you can bet, the Borg (aka Microsoft), isn’t far away.

I’m travelling all week this week, so it will be a good test to see if I have the patience to get back on the Twitter train. Stay tuned.

There’s a lot of buzz in the industry about a new kind of search engine called Wolfram Alpha. Except for one thing. It’s not a search engine. The site refers to itself as a “computational knowledge engine”.

Let me see if I can explain it, and given that I’m technically challenged, you may want to have something which contains alcohol close by in case you start to lose the will to live.

Often, I use Google to tell me basic things such as “how many kilos there are in 224lbs?”, except you have to write the query in such a way that Google understands. You have to write “224lbs in kilos”. Or something similar. As you would expect, Google handles basic unit measure conversions like this with ease.

If I was however, wanting to know something far more important, like “how many calories in 330ml of beer”, this is when Google starts acting like an Russian built Lada Niva and essentially vomits on you with crap.

Enter Wolfram Alpha.

Type this exact question into its search box and you get this (plus a whole lot more):

Because we’ve all been indoctrinated with how to perform basic searches, it takes a little while before your brain gets around the fact that you can really ask Wolfram Alpha a real question (and an important one I might add) in plain english.

I don’t think Wolfram Alpha has any intention to compete with Google. To me, it’s a valuable tool, in much the same way that Wikipedia is. In fact, if Wolfram Alpha can’t seem to come up with an intelligent answer, it will refer you to Google.

Clearly, Stephen Wolfram (the founder of Wolfram Alpha) is a super geek of the highest magnititude. If he wasn’t already on Google’s radar, he definitely is now. It’s also abundantly obvious that an enormous amount of work has gone into building this enterprise - just how much he has invested is anyones guess.

At the end of the day though, Wolfram Alpha will need to monetize itself. And as Eric Schmidt emphatically said to a Web 2.0 audience a few years ago “in order to win on the internet, you need to be able to scale…”

I think this will be Wolfram Alpha’s biggest challenge. How it makes money and how it scales. Even for a technical desert like me, the computational horsepower required once a decent enquiry volume is there would be, I assume, simply staggering.

If Stephen Wolfram is easily influenced by scantily clad women, Ferrari’s, boats, houses in Monaco and obscenly large amounts of cash, then it would make sense for Google’s competitors to start “wooing” him. Sadly though, most super geeks want nothing of the above.

Google saw the value in hiring Vint Cerf. It may well pay to do the same with Mr. Wolfram Esq.

It probably all started with that infamous Sequoia presentation. The one that was circulated to all their investments and portfolio companies. It conveniently found it’s way onto the web. Obviously.

It’s here if you need a refresher.
Ceo All Hands 10-7-08 Final

Then, no one could have predicted what happened next. The global economy caught the equivalent of the ebola virus. The US banks cratered. The US auto industry imploded and their CEO’s promptly jumped in their learjets and went cap in hand to Washington and the global stockmarket experienced an epic case of bulimia. Venture capital all but dried up. Then a guy called Bernie Madoff, god bless him, drove the knife in deeper to Wall Street by coming clean with a slight accounting infraction to the tune of US$50 billion.

That’s billion.

It’s like that famous saying from the US Senator when he refers to the amount of money his government is spending on the war(s) they are fighting. He says something along the lines of “a billion here, a billion there. Pretty soon, you’re talking real money…” Or something like that.

Then the domino effect began. Europe starting gasping. And Australia had its share of problems - although I think our media is to blame for a generating a lot of hysteria in the marketplace.

So it brings me to the question. With all this economic uncertainty and tales of credit being harder to come by than Jessica Alba actually returning any of my calls, whats to become of the humble start-up? How many people are actually still going to go ahead and launch their venture in 2009?

I’ve had 2 business ideas pitched to me in the last 6-months which I think were fantastic. Actually 3. But one of them was led by a group of people who thought it was a good idea to launch an airline for the backpacker market and it was going to be bigger than Ben Hur and have a huge online play yada yada…

The guys were delirious with excitement. They thought that VC’s would be all over them. They brought model aeroplanes to the meeting and they argued over the logo that was going to be emblazoned on the side.

That’s when I thought the thing was a trainwreck and that perhaps, some of the guys (who were intelligent when you viewed them from a distance) may have been smoking far too much of the stuff backpackers smoke in Byron Bay. Or something like this.

Anyway.

In this country at least, there’s little “public” VC money. The funds that do exist, and good luck getting a meeting with them, are locked down so tight that it would take an act of god to dislodge any of it.

Private equity is probably the hardest to come by than it has ever been. And banks will treat you like a leper (unless you own everything outright).

But you can’t tell me that people’s creativity still isnt ticking over. Still keeping people awake at night. Still frustrated with the status quo of the web. The opportunity on the web to innovate is probably the best it’s ever been.

Our start-up, TaguchiMail is nearly a year old. We commercialised it last February. And we’re still alive. The trip mid last year to meet 4 of the top VC firms in the US (including Sequoia) was enlightening. And in a perverse sort of way, I’m personally glad we’re still bootstrapping the thing and we didn’t take on VC money. We’re not growing our headcount. Our expenses are minimal. And we’re focussed solely on sales and business development.

Have we made mistakes? Plenty. But we do think now that the light at the end of the tunnel is actually really a light and not an oncoming freight train. Enough people have validated our technology and our offering to convince us to keep going.

But what about all the new ideas. All the unfinished business plans. All the ideas waiting to be germinated with a touch of angel or VC money.

Maybe the good that will come from all these economic woes (both real and imagined) is that now, more than ever, only the strongest will survive. Entrepreneurs who can last through this cycle, who can still maintain their excitement and passion for their business, will no doubt prosper.

I fear a lot of great start-ups are going to wash up on shore in the next 6-months. I don’t reckon the US is yet finished with all its bad news (Barack Obama is going to inherit the mother of all messes when he steps foot inside the White House), and now the new regime in the US is talking about the economy requiring “trillions” to keep it afloat.

Being a prominant banker in the US doesn’t have the cache it once had. Nor would you be too eager to tell people you worked for GM or Chrysler at a dinner party.

But being an entreprenuer has its advantages - in the good times and bad. Running a start-up has always had these unique characteristics.  It’s called “Fail. Forward. Fast”. When you run a start-up and you run out of money, that’s normally it. It’s over. Until you find more. You are used to taking drastic action. You cull. You fold the thing. You start again. But you keep moving.

Big business (both here and in the US) seem to think differently.

Now, the thing that’s keeping me awake is how I can jump on the Larry Flint bandwagon (he’s decided the porn industry needs a bail out) and is asking for a paltry $5 billion. What he actually wants to do with the money is anyones guess, but I reckon a bunch of hookers and Vegas strippers would do a damn sight better than Wall Street, managing that sort of money.

My humble advice to any one contemplating a start-up is to keep going. Validate the business plan. Test the waters. See if you can run the thing without capital. I know this sounds dumb but hear me out. It’s a bit like playing the stockmarket using “fake” money - although some would argue the big banks have been performing of late with nothing but fake money.

If you can afford to let people use your technology for free, let them. Barter for office space. Barter for development time. Push every single limit you can and continue to bootstrap the thing. The main thing is to keep your own passion and interest alive in the project. And if you want to win on the internet, you have to be able to scale.

I’m hoping that the 2 guys or girls in the garage who are sitting on the next big thing are naive enough and arrogant enough to ignore the general business environment.

The web, now more than ever, needs a lot more innovation.

I was at a marketing conference late last year and I met a couple of folks from Fairfax, worried publishers of The Age, The Sydney Morning Herald, The Fin Review and BRW among other things.

Anyway, one of the challenges the Fairfax guys were expaining is that they have all this traffic that returns to their site on a daily basis (the average is approx 10 visits a day per person) but no real way of monetising it (apart from the obvious banner ad and sponsorship).

Their analytics vendors can tell them what articles are popular, but what about “who” is reading. What about segmentation?

The hardcore journo’s would be defiant in their quest for “true journalism”, the marketing dudes all preaching the rise and rise of the electronic age and the newspaper owners in an absolute state of conflux about what the hell were they going to do in order to stay in business.

Apparently, some so called experts in the US are talking about the pending death of The New York Times, the last bastion of real journalism on the east coast.

It made me think about my own reading habits in general of news content.

I may be early forties now, but the only paper I physically pick up is the Fin Review (and only on Tuesdays and Thursdays) because there’s a guy called Peter Reuhl (see left) who writes an article on the back page on those days. He’s a American, but a likeable one. And a cracker of a satirist. He’s the sort of guy you’d want to sit next to at a dinner party. Hugely flawed like the rest of us, has teenage kids he has no control over, and makes a mockery of politics and anything else that he thinks of during the times he’s not drunk or talking to his friend Otis in the states.

Anyway.

Everything else I get online. I’m one of those Fairfax stats that visits The Age online at least 10 times a day. I sometimes flick across to the WSJ (Wall Street Journal) when I need to look intelligent and someone has sprung me either watching a bit torrent download of the UK version of Top Gear or something mildly pornographic featuring Jessica Alba and a large jar of honey.

But I digress.

I scan the news sites, just picking up the stuff that interests me. It’s much faster than turning pages, and the best thing about it is, unlike the physical paper, the online sites are real time with their content.

I will though, gravitate to certain journalists. Like Peter Reuhl. And a cranky cow call Catherine Deveny from The Age who I think is just a hoot.

She’s also a person I’d like to sit next to at a dinner party. Not because she interests me the way Jessica does, but because I’d like to make sure I got as drunk as possible and then I’d get stuck right into her. She’d be great to have an argument with. She’s one of those highly opinionated, “I dont send my kids to private school because I have a bigger chip on my shoulder than all of Tasmania put together”, and “I’m not sure if I was a left wing lezzo mussolini bitch” in another life. Or something like that.

She’s an aetheist. She hates people who drive 4WD’s. She gives the Catholic Church a bootful. She thinks football is for mindless morons.

But most of all, she’s engaging. She’s opinionated. And she’s up for the debate. I look for her articles all the time. I reckon I agree with about 1 in 10 articles she writes. But that’s ok. That’s the fun of it.

I still think one of the answers for the papers is to let people customise the news the way they want to. If you were to login to the Age website once (cookies and smart browsers will take care of the following visits) and you tell the site what news interests you, then why cant you have a customised home page?

For example.

I don’t ever want to read about anything remotely to do with that bum sniffing nonsense called Rugby. I don’t think any self respecting Victorian does. During the footy season, pump as much AFL down the pipe as you want. I won’t mind. I’m into cars. So give me that. Food and wine. May as well. Breaking news - that’s important, I’ll have that too thanks.

Let me decide if I want email alerts on things. And give me an RSS option.

Then, lo and behold, if someone decided to anaylse my online behaviour (remember, I’ve opted in to subscribe and customise my news content), so I won’t (or don’t) have an issue with my data being analysed - then ads that are more targeted could be served. Hell, I might even pay a small fee for content I might regard as “premium”.

Anyway, I’ve gassed on long enough. I don’t think the physical papers have much of a future left. But the online versions - well, this is just the tip of the iceberg.

Now, to Peter and Catherine. Hurry up and return from holidays. I miss your columns!

There is an article in todays Fin Review (page 40) and it talks about the legendary Vint Cerf. I was lucky enough to work with Vint when I was at BT (on secondment to MCI in the US). Vint is now the Chief Internet Evangelist for Google. I for one couldn’t work out why it took them so long to hire him. Anyway.

At the time I saw Vint talk, the web was but a baby. It was probably 1998. And Vint was a visionary back then. I remember him addressing a huge contingent of sales and marketing staff from all over the world at a joint MCI/BT sales extravanganza. It was during the time when both telcos thought that they owned federal reserve printing presses and could hardly wait to spend money.

In the article, Vint talks about the need for the US government to appoint a Chief Technology Officer and it is a position that Obama is taking very seriously. The story also refers to how much of the web Obama’s campaign reached (and how much his campaign managers leveraged social media). Even Kevin247365DaysAYear used the web heavily with his election campaign (and continues to do so today).

Cerf states:

“It’s actually a remarkable opportunity for an individual, but also the US Government , to do something in 21st-century style, which I think Franklin Roosevelt did during the Great Depression.

You know, they say opportunity lies on the edge of chaos. Maybe that’s going to be true here too”.

Chaos is an understatement.

I for one reckon Vint would be the perfect CTO for the poor old, beleagured US government. Google should let him go with their blessing.

There are a ton of videos on Vint on YouTube etc. Here’s just a sample.

Internet for Everyone: Vint Cerf

Did you sit through one of those meetings Monday morning - everyone all raring to go and determined that 2009 will be different from 2008? Or maybe that was your boss doing all the “rah rah rah”. Same shit. Different day.

Or something like that.

Is this the year that the web will make a difference to your business?

Is this the year that you will set as an absolute priority the collecting of customer data from your website?

Is this the year you will finally stop ignoring blogging as a serious medium, Twitter, YouTube and LinkedIn? Well, is it?

Will you communicate frequently with your customer base? Will you let them decide how much is too much?

Last year, I’m betting, was probably the most extraordinary year witnessed by all of us. Certainly from a macro-economic perspective.

As Seth Godin quite rightly puts it - New Year’s resolutions are a crock. A bit like all those fools who decide that magically, this is the year they are going to lose weight or quit smoking. It lasts for about 3 days. I reckon my mother could fill a warehouse with all the exercise equipment she has bought over the years.

If you use a digital agency, or a smart web person, use the rest of January to talk to someone else. Just for a change. See what you learn. Have no agenda. You’re not being unfaithful - you’re just talking remember.

Question your entire online strategy. In fact, question your entire marketing strategy.

I haven’t made a new years resolution to start blogging again. Just found the motivation. And the 2 are completely different. I know I said I was going to hang up my “blogging boots” a little while ago.

But you know what, I changed my mind.

Happy New Year!

I’ve been missing blogging and it was always my intent when I finished up with Eight Black, that I would get the energy up to launch a TaguchiMail blog.

I may end up doing so. Apparently, some one smarter than me actually set up the new WordPress template. If only I could end up working out how to drive it.

But a lot of water has gone under the bridge these past 3-months and in this fragile commercial environment, there’s too much to share.

So, bear with me while we clean up the look and feel, fix the formatting and gather our thoughts. The focus will change a little bit - with more focus on email marketing, running a start-up, our thoughts around world domination and perhaps an attempt at looking at the lighter side of business.

I’m keen to share our pitch to the famous VC house - Sequoia, as well as 3 other Silicon Valley money houses. 3 months is a long time in “the Valley” and the landscape, since we went in July, has been changed forever.

Standby. More to come.

And here’s the link to the famous Sequoia presentation that’s been circulating the web. A good read no matter whether you work for someone or are self-employed. Or worse still, in a start-up!

This week is actually an important one. For me at least.

When I finally convince the mere mortals who work with me to fire up the other blog I intend to ruin with my drivel, I will outline what the hooh hah is all about.

This week is the week we get the opportunity to present to VC firms such as Sequoia Capital, Evercore, Globespan and Sutton Hill Ventures. Right in the heart of where the tech money lives - Sand Hill Road.

Win Lose or Draw, it will have been worth the experience. I doubt that these well heeled Silicon Valley money guys will let me take video footage of our chat, but you never know.

I’ll let you know what happens. Now, back to drinking heavily.