Bambi Francisco

Powerset search

Powerset, a stealth search engine in Silicon Valley, announced Monday that it's secured $12.5 million in funding for a pre-money valuation north of $30 million. That means, Powerset co-founders Barney Pell, Lorenzo Thione, and Steve Newcomb gave away about 25% of their company, and not a third, like some writers have suggested. (Powerset closed the $10.5 million in the past month and raised a $2 mln bridge round in the spring.)

Powerset is a fantastic search engine that is sure to raise eyebrows at the old guard search engines, such as Google (goog), InterActiveCorp's (IACI) Ask.com, Microsoft's (msft) Live and Yahoo (yhoo). After having an in-depth demonstration of the search engine last week, I’m convinced that Powerset has a great shot at improving the overall search experience. By doing the Pepsi challenge between Powerset and other search engines, I have to say, searching was a far richer and liberating experience on Powerset. Essentially, Powerset provides semantic search. Current search engines find results based on occurrence and proximity of words in a document. Powerset is building an index that takes into account the meaning and relationship of words. Be sure to read my Net Sense commentary on MarketWatch that goes out Tuesday for my review.

Also visit my MarketWatch blogs.

Powerset, a stealth search engine in Silicon Valley, announced Monday that it's secured $12.5 million in funding for a pre-money valuation north of $30 million. That means, Powerset co-founders Barney Pell, Lorenzo Thione, and Steve Newcomb gave away about 25% of their company, and not a third, like some writers have suggested. (Powerset closed the $10.5 million in the past month and raised a $2 mln bridge round in the spring.)

Powerset is a fantastic search engine that is sure to raise eyebrows at the old guard search engines, such as Google (goog), InterActiveCorp's (IACI) Ask.com, Microsoft's (msft) Live and Yahoo (yhoo). After having an in-depth demonstration of the search engine last week, I’m convinced that Powerset has a great shot at improving the overall search experience. By doing the Pepsi challenge between Powerset and other search engines, I have to say, searching was a far richer and liberating experience on Powerset. Essentially, Powerset provides semantic search. Current search engines find results based on occurrence and proximity of words in a document. Powerset is building an index that takes into account the meaning and relationship of words. Be sure to read my Net Sense commentary on MarketWatch that goes out Tuesday for my review.

Also visit my MarketWatch blogs.

Zotspot shares the search dollars

Zotspot - the search engine that shares the wealth - officially launched this week. The value proposition to users is that they get paid for their search activity. They can either keep their earnings or give them to one or more of their favorite charities or universities. The idea is very altruistic, and the search works reasonably well. But admittedly, I've come to expect my experience to be far more robust. When I search, I like to search the Web, news, images, blogs, etc. It seems that it may be difficult to attract users to a search engine just focused on text. That said, I was drawn to my credit card provider so I could share some transaction rewards with a University. If you want to learn more about Zotspot, watch the video.

Is it privacy or economics?

One of the most intriguing stories about the Internet isn't how much wealth it's created, but rather its impact on society. 

Each day, it seems, we spend more time on the Internet. We search more, share more, participate more and voice our opinions more. We've probably all become aware of how self-absorbed we are and/or how different we are from others, and we're proud of it.

But is there more about ourselves that we don't know? More that the data we leave behind may reveal?

"The Internet has changed everything," said Schmidt, who held a small session Wednesday with a couple dozen journalists after he was interviewed on stage by search guru Danny Sullivan at the Search Engine Strategies conference in San Jose, Calif.  Schmidt went on to describe how the Internet has obviously improved access to information and the empowerment it's given many, including the press, to gather that knowledge. But the "development to me that's most interesting is the social networks as online lifestyles. That's a really new phenomenon," he said. It's a phenomenon on scale with the rapid-fire adoption of instant messaging, he added. "It's [social networks] a big deal."  Indeed, his words are backed by his actions. On Monday, Google announced that it is paying $900 million to be the exclusive search engine of MySpace along with News Corp's other Net properties. What fascinates me about this deal is the potential to take search history data and marry it with personal data, such as what we like and dislike, who we like and dislike, and basically what makes us tick.  "We do not link," said Schmidt, adamantly. "We try to do things with user permission," he added.

Sure, there may be some privacy issues. But is that all? After all, we've become such a transparent society with high expectations about service (and that means better targeted ads).

Maybe I should have asked him, could Google make more money by using search history to serve up display ads on its partner sites?  Based on a simple analysis and example, it appears that perhaps the incremental benefit of using search history for targeted ads may not be worth it. For that analysis, you'll have to read my column. 

Read Net Sense on MarketWatch

Google pays up for next generation

Google's $900 million deal with Fox shows that the search giant is willing to pay a hefty amount for the next generation of Internet addicts who tend to socialize as much as they search.

It's been no secret that News Corp been seeking a search partner for the inquisitive MySpace members, who'd been wont to search on Google after socializing on the virtual site. But as the popular social networking sites' traffic surged, so did its ability to leverage its audience. MySpace generated 23 billion pageviews from 45.7 million unique visitors in June, according to Nielsen//NetRatings. sk.com to see who'd offer up, among other things, the highest guaranteed upfront revenue for the MySpace and Fox digital properties' traffic. News Corp set last Friday as the deadline for bids. No one matched Google's offer, though MSN's was competitive.

Obviously, it turns out Google was the most aggressive and willing to capture this exploding network on the Web.

Here are the takeaways. It's great news for News Corp because it's leveraging its online traffic and, if it meets certain thresholds, will definitely beat advertising forecasts set for its digital properties in '07 and the following years. Also, MySpace gets to keep its members on its site searching, because apparently a good portion of them left to search elsewhere.

It's probably good news for Google, since it won't have to pay that revenue unless certain search and traffic. ich had been providing search queries for MySpace, which recently topped the search engine as the most visited site on the Web, based on pageviews. Obviously, MySpace users like to search. According to HitWise, about 10% of MySpace users left the social network and went to Google to search. That's search traffic that Yahoo, MSN or Ask could have had.

It's terrible news for MSN, which is trying to bolster its ad-search business with AdCenter. What was it thinking? To me, the fact that MySpace chose Google isn't that surprising, since I've been writing about this possibility for some time. Whatwill be pretty intriguing to watch from now until the deal is over, is the extent to which Google personalizes the searches on MySpace personal pages and group pages. Now, personal information and search information may actually merge.

Read the rest of my column on MarketWatch.

Paying up for MySpace

You have to wonder what Microsoft's (msn), Yahoo (yhoo) and InterActiveCorp's (iaci) Ask.com were thinking by letting MySpace go to Google. MSN has enough money and it's trying to validate its own search advertising platform. Yet it wouldn't pay up for MySpace traffic, which tend to go to Google to search.

MySpace had 45 million unique visitors in June, according to Nielsen//NetRatings.  And, about 10% of MySpace traffic leaves MySpace to go to Google, according to HitWise. Clearly, there was an opportunity for the other search engines to capture that search traffic. They let it slip away. Too bad for MSN, Yahoo and Ask.com. Also, Bill Tancer noted a while back that when MySpace had an outage, a lot of its users went to Google. Read Tancer's take.

Btw, if you were reading my MarketWatch blog today, you would have known the MySpace/Google deal was coming. It was posted before the close of the trading day.

Blogs.MarketWatch.com/bambi

Also, watch for my Net Sense column, in which I'll comment about the Google/MySpace and Google/MTV deal. Also, go to MarketWatch Tuesday for my video interview with FIM's Ross Levinsohn.
Watch out for my commentary tomorrow.
   

Video enablers

Only 2% of the total online advertising pie was tied to video ads last year, according to eMarketer, an online marketing research company. That's only expected to rise this year to 2.3%, as online video ads are expected to rise 71% to $385 million while total advertising is expected to rise 34% to $16.7 billion in 2006.  So how will online media and video enablers funnel more dollars into video? For that answer, the best resources are the startups in my opinion. They are definitely redefining the world of video and commercials. I've noted several in my Net Sense column: Vidavee, a Manhattan-based company that's helping marketers place ads - banners, video, etc. -  at points within a video that attract the largest crowds. Gotuit, a startup that lets the audience fine-tune their searches inside a video; Vmix gives users copyrighted material to mash up with their own homegrown movies; One True Media takes makes video editing with its Web-browsing tool and Dave.tv is putting "buy now" buttons on its video-playing technology. Revver is helping amateur producers become stars, such as Fritz and Stephen (check out Eepybird.com).   The makers of the Mentos video made $30,000 so far at a $7.50 cpm.  Other companies mentioned in my Net Sense column are Jumpcut.com, Brightcove, Booyah Networks, and VideoEgg.

To read the whole story, go to my Net Sense column on MarketWatch. Or visit my official blog at blogs.MarketWatch.com/bambi
 

Riya visual search

In September, Riya will launch a service that will let you upload an image and search for similar images. It's a radically new approach to image searching. In many ways, it's far more efficient. For instance, you wouldn't get a page with photos of the feline mammal alongside the car if you search for "jaguar," like this page from Google images. There is a slght downside to this service, however. But it's probably something that can be easily tweaked. Nonetheless, it's a great new way to search! Read my thoughts on my MarketWatch blog for more.

Also, here's a video of Riya's CEO Munjal Shah speaking very personally about how Riya got its name. He also shares other interesting background information about the company.

Search: "The Brain"

Baynote is an 18-month-old enterprise search engine trying to improve upon the work of first-generation enterprise search companies. It just officially launched this week. Unlike some other social search companies that pride themselves on letting people manually rank or cast votes about particular results, Baynote relies on its Affinity server. Founder Jack Jia affectionately refers to this server as the "brain." This brain is no more than a "memory-prediction machine," Jia said to me, adding that he and his team tried to mimic the brain structure. Hence, the name. The brain segments searchers into peer groups, based on what they had searched for in the past and which pages they browsed, and the route which they took to find certain pages. The brain then looks at how long users stay on certain pages. The pages on which a user spends the most time is deemed the most relevant and then shown to others in that users' peer group. In theory, it sounds like a good methodology. In the commercial world, it seems to be working itself. If you don't believe Jia, just go to Interwoven and LSI Logic. Search for stuff and you'll see that Baynote will rank results based on what a certain group of users deemed relevant (based on that particular peer group and their activity). You can also compare Baynote's results with the results of the other enterprise search engines. Based on some of the searches I conducted with Jia on the phone guiding me, Baynote's results actually did seem more relevant.

Now, would I recommend using Baynote's technology? I guess it depends on the site. I'd imagine a person on a retail site has a different pattern of navigating than a person on a financial services site.  To that end, I'm sure lopping people into peer groups would take some tweaking depending on the site. For corporations, the service costs $950 per month. For small businesses, the service costs $95 per month.

Newspapers vs. News search engines

In 1846, as the new technology of the telegraph system was catching on, newspapers pooled their resources to create a more efficient news distribution system. Jim Kennedy, vice president of strategic planning at the Associated Press, which was born out of those efforts, says newspapers are facing a similar challenge today. "Fast forward 168 years later," Kennedy told attendees at a recent Las Vegas gathering, "that's the situation we face today." Translation: It's time for newspapermen to stop fighting among themselves and cooperate if they want to survive in the era of splintering audiences, and search-engine news gateways, such a P's Kennedy was spoke Friday alongside Tom Mohr, President of Knight Ridder Digital and Colby Atwood, vice president at Borrell Associates, a consulting firm specializing in local media. The panel was part of the Interactive Media Conference, hosted by Editor & Publisher and Mediaweek. 

The panel was titled "5-year forecast: See the Future Today," but from the comments made on stage, it might as well have been "The final days of newspapers." For offline newspapers, the writing is on the Web. Email delivery of national and niche news on our computers or on our BlackBerry devices has made it less of a priority to pick up a printed newspaper, especially when traveling. Why bother with the added weight? In 1949, newspapers accounted for 37% of the advertising market in the U.S., according to Atwood. Today, they account for 17% to 18%.

Given the choices people make on the Web, newspapers -- try as they might -- likely never will come close to having the same market share online that they once had in the offline world.

Atwood said that, surprisingly, newspapers still account for 35.8% of the online local ad marketplace, which he estimates to have been $2.4 billion in 2005. About 90% of advertisements in newspapers are local. Increasingly, those offline dollars are seriously at risk.

"There's a big race to go after local ad dollars," said Atwood. "I'd say newspapers will likely lose their share," he said. "They're not as well organized as the large dot-coms." Read rest of column on MarketWatch

Google machines vs. humans

As Google's algorithms do what humans can't -- scale -- community-based searches seemed like something Google would not be interested in.

After all, communities are made of people who tend to be fickle, slow and inherently lazy. They can't handle or process what Google's machines can do. Yet, Google is harnessing communities with Google Co-op, a concept that lets users contribute their knowledge and expertise to improve search results for everyone. Google also announced, on Wednesday, Google Desktop 4 and Google Notebook, which allows people to share their notes about their searches.

When I asked Google CEO Eric Schmidt what was the most exciting product launch in the last year, he said "Google Co-op." In his words: "It's a powerful idea" because it gets people to help Google structure the data. Through a co-op, "user-generated data becomes part of the answer," Schmidt said. think this is a brilliant idea for Google to tap into the more arcane searches. Among the digerati, these searches are called the "long tail." Getting to the long tail of searches, the results of the most convoluted or obscure search queries, is something that humans can help with.

"Machine algorithms aren't good at it," Alan Eustace, senior vice president of engineering at Google, said to me.  Great," I said. "Humans 1, machines 0."

Eustace gave me a little smile, with a look that said, but it won't be for long.

"For the time being, the human judgment is still much better," he said.

For more on Google Co-op, read Net Sense. 

Read Net Sense on MarketWatch

Google's community search

Google's analyst day thoughts. 1) Google is testing out community-based searches along the lines of the companies I've been writing about, such as PreFound (Tuesday's Net Sense), Plum, Jeteye and Kaboodle. Google's Co-op product (in beta of course) is a way for thought-leaders, guides, experts to share their searches. Essentially, anyone can sign up by going to Google.com/coop and create a page of things they've searched for and assign or label it with a topic that can be searched by someone else. Similar to the other aforementioned services I had written about, I can create a topic, say "Hawaii" and put all the information I searched about into that page. Others can collaborate on that topic as well. That page is public for others to search on. As an expert on that topic Hawaii, I become a guide of sorts. It's the About model reborn. The difference is that these guides are found in a search paradigm. With Google's co-op program, the search giant can create verticals rich with information created by people. I think it's a great idea because communities do add a layer of relevance above and beyond what machines can do.
2) Google's Schmidt said that social networks are great, but they don't make any money. He was elaborating on a question I asked about whether MySpace having its own search engine would be a concern to Google. He said that he'd like to get involved with social networks by helping them make money. I asked if he had to partner with these communities, like MySpace. He just smiled, suggesting that I could probably figure out whether Google would want to or not.  3) I asked if Google is building AdWords for video, and whether he thought AdWords for video would work. He said that if someone invents AdWords for Google, he'd check it out. 4) I was testing out my Logitech Webcam to do video interviews. It worked fine when I interviewed Esther Dyson, but unfortunately, by the time I tried to interview Google executives, it didn't work. Oh well. Technology isn't perfect. For instance, all day Google's WiFi network failed to work.

Myspace-engine

If MySpace had a search engine, wouldn't that ruffle the feathers at Google, MSN and Yahoo? It's a question worth contemplating at a time when the online search industry's Big Three are spending billions to supply better search results, and in the process get marketers to spend more ad bucks on those search pages. Additionally, paid search -- estimated to be a $7 billion market this year -- could be the No. 1 revenue source for MySpace. You can bet that MySpace, the leading social networking site on the Web, will be making inroads into search soon. Rupert Murdoch is no dummy. Why else would his News pend nearly $600 million on MySpace and not go after the most lucrative and biggest part of the online ad pie?

As I pointed out in a recent column, MySpace is a whole new distribution platform that is changing the face of the Net. In March, MySpace recorded 19.4 billion page views vs. 13.7 billion at Google, according to Nielsen/NetRatings.   With MySpace's traffic so significant, I had a hunch that major sites like Google and Yahoo might also receive a lot of benefit from that traffic. That hunch was right. Google received 8.2% of its traffic partly from its search tools that appear on pages within MySpace, making the social network the No. 1 source of traffic to Google, according to Bill Tancer of online research firm Hitwise, who retrieved the data for me.

Read Net Sense column on MarketWatch

McClatchy's Triangle

Take a look at some of the local sites that McClatchy is starting to roll out and essentially you'll see that they're a Craigslist meets CitySearch-like service, behind a Google-like façade. To illustrate Christian Hendricks' localized Internet strategy, have a look at the first search site McClatchy launched last quarter. It's called Triangle.com and it focuses on communities served by McClatchy papers in North Carolina. As Greg Sterling, an expert on local advertising, said to me in an email: "McClatchy seems to 'get it' more than others."

Read Net Sense on MarketWatch