This piece appeared on Friday in Search Insider. It’s gotten some interesting comments, so feel free to respond either here or there.

On Tuesday, the BBC reported that Yahoo and Microsoft are adding new features as part of their ongoing attempts to convince the world that they are serious contenders to the Google throne. Yahoo will provide on-the-fly query suggestions, while Microsoft is quadrupling the size of its index. Both companies are touting the fact that they will soon include links to photos and video on the results pages.

Hmmm… where have I heard this before? In addition to Google’s own Universal Search, I mean. Oh, yeah! Ask.com did this back in June! And, despite rave reviews of Ask3D, comScore shows them slipping ever since, from a 5.0% market share in June to 4.7% in July to 4.5% in August.

Yet Yahoo and Microsoft insist on trying to woo searchers away from Google by launching new features. Unfortunately, they’re in a bit of a lose-lose situation right now. If they upgrade, they’re only playing catch-up. If they don’t upgrade, they fall even further behind.

They should have called me first. Me or Jeremy Kaplan, the editor of PC Magazine. Kaplan was interviewed on MarketWatch for his thoughts on the matter, and he had this to say:

It seems like it’s really a mindshare thing more than anything. I think most of the search engines seem to be able to cull the same information. It’s just a question of getting the brand out and transforming the way people search, and that’s definitely an uphill battle.

It’s likely that Jeremy Kaplan has access to a broader dataset than I do; even so, I surveyed myself and found his observation to be true.

For example, I have absolutely no inclination or disinclination towards Microsoft search. In fact, I’m quite confident that it delivers similarly useful results to Google. In addition, I am somewhat ashamed to admit that I have MSN as my home page because it came with the browser, and I’m doubly ashamed to admit that I’m too lazy to spend the three seconds it would take to make Google my home page. Nonetheless, every time I have to run a search, I launch Explorer and type Google into the address bar.

Thank you in advance for your many words of advice on how to change my inefficient habits. I realize I need help. My point here, however, is not about my own loss of street cred; it is that Google’s hold on the market, or at least on that share of the market sitting at my desk, is so strong that I invest effort to bypass the Microsoft search bar on my home page.

I invite you to think about your own habits when you search, and whether the promise of a couple of new features would be sufficient to entice you to change your behavior. What would it take?

Whatever the answer to that question may be, I don’t think it’s accessible to Microsoft and Yahoo. They’ve never achieved escape velocity, the minimum speed necessary to bust out of the Earth’s atmosphere, and now it’s too late: they’ve begun to decelerate.

No, there are only two possibilities for another search engine to unseat Google, and they would pretty much have to happen simultaneously:

1. A new search engine, or coalition of search engines, will have to offer both the novelty to capture the imagination of early adopters and the substance to cross the chasm, and
2. Google will have to make a major misstep.

Charles Knight at AltSearchEngines understands this, which is why he’s fighting for alternative search engines to collaborate. He realizes that, combined, they have a lot more momentum than they do individually, and a much greater chance of reaching escape velocity.

Within a few years, the Universal Interface that he champions could be in outer space—while Microsoft and Yahoo watch from the ground and fiddle with features.

Maile Ohye from Google is back, with a discussion on web history and personalization:

It’s the second in their video-series-of-indeterminate-length. You can see the first one here.

In this video, Maile shows you how you can see the history that’s associated with your Google account, pause recording of your Google activity, and delete specific records. This last is a useful trick if you’re shopping for a surprise birthday gift on a shared computer, although I would raise an eyebrow if my partner were suspiciously trolling through my search history.

Towards the end of this video, Maile points out that if you clear your history, the only data Google will be left with is what she described in the first video: your search query, IP address, and cookie.

From the first video: the info that gets retained in the Google logs

I may be really dense here, but isn’t the only difference between a cleared history and an uncleared one is that the uncleared one has your Google account, while the cleared one has your cookie? Here’s what Maile says about search history:

Your email and password don’t tell us personal stuff about you, like your name, age and occupation, so why do we need them? Well, in addition to helping us verify that you’re really you and not someone else who’s using your computer, your email and password allow us to maintain a record of your web history: the things you search for and the sites you visit.

Aha! Perhaps when you’re signed in they also track which sites you click through to! Maile doesn’t say whether they do, but she does say that you can check your history anytime. Just sign into Google and click ‘History’. I tried. Can’t do it. Maybe it doesn’t work in New Zealand. Here’s the full list of options available to me:

Did I miss it? Or is it not there? Have you been able to log into your history on Google? If so, what do you see? Also, what do you think of this new video?

The New York Times yesterday published a piece by Brad Stone entitled, MySpace to Discuss Effort to Customize Ads. In it, Brad unpicks the vast potential of using profile information to personalize ad service.

…MySpace, the Web’s largest social network and one of the most trafficked sites on the Internet, says that after experimenting with technology over the last six months it can tailor ads to the personal information that its 110 million active users leave on their profile pages.

Executives at Fox Interactive Media, the News Corporation unit that owns MySpace, will begin speaking about the results of that program this week. They say the tailoring technology has improved the likelihood that members will click on an ad by 80 percent on average.

“We are blessed with a phenomenal amount of information about the likes, dislikes and life’s passions of our users,” said Peter Levinsohn, president of Fox Interactive Media, who will talk about the program at an address to investors and analysts at a Merrill Lynch conference in Los Angeles on Tuesday. “We have an opportunity to provide advertisers with a completely new paradigm.”

That’s rather a long quote, so I’m going to repeat the bit that jumped out at me:

…the tailoring technology has improved the likelihood that members will click on an ad by 80 percent on average.

80 percent!

Remember how much everybody freaked out when Panama was shown to improve click-throughs on Yahoo! ads by 10%?

Back then, Jonathan Thaw was saying a 10% increase in click rate could translate into a 5% increase in revenue growth. So, ummm, if 10% equals 5%, then (let me just check my math with Miss Teen South Carolina here), such as, 80% could equal 40%? Which, such as, works out to more than $2 billion at Yahoo! and nearly $5 billion at Google.

I don’t need Don Dodge to tell me that a) this is an overly simplistic translation, b) Google and Yahoo would have to have access to the same extensive bank of personal information that MySpace does for each searcher in order to make it work, and c) I should call him for my math questions and just appreciate Miss Teen South Carolina for her beautiful heart and shiny white smile. No matter which way you look at it, these are big numbers we’re dealing with here.

Brad gets into the privacy issues on page 2:

MySpace also plans to give its advertisers information about what kind of people its ads have attracted. “We want them to leave knowing more about their audience then when they came into the door,” Arnie Gullov-Singh, vice president in the advertising technology group at Fox Interactive.

That is precisely the goal that worries some privacy advocates. They argue that users of social networks like MySpace and Facebook are not aware they are being monitored and that current ad-targeting is only the first step in what has become a huge arms race to collect revealing data on Internet users.

“People should be able to congregate online with their friends without thinking that big brother, whether it is Rupert Murdoch or Mark Zuckerberg, are stealthily peering in,” said Jeff Chester, executive director at the Center for Digital Democracy in Washington.

His organization will ask the Federal Trade Commission, during a planned hearing on Internet privacy in November, to investigate social networks for unfair and deceptive practices, he said.

This is definitely sensitive territory that MySpace is playing in, and they need to be careful. As I wrote yesterday, trust is worth more than gold on the Internet, and an 80% increase in clickthrough will mean nothing if there’s nobody there to see the personalized ads.

The reason this is so tricky is that MySpace members gave up the information in a context that had nothing to do with advertising.

In the NYT article, MySpace representatives were dismissive of the issue:

MySpace and Facebook executives argue that they are harming no one. They say that they are using information their members make publicly available, and contrast their ad targeting with efforts by Yahoo, America Online and Microsoft, whose advertising technologies follow people around the Web and try to deduce what they are interested in based on what sites they are looking at.

I think that’s a dangerous attitude to take, though. Given the potential reward, MySpace would be foolish to back off of a personalization program, but they need to get clear that retaining their audience trumps an increase in clickthroughs. A later comment indicates that perhaps they realize this:

Fox executives also say they are planning on letting users opt-out of the ad-targeting program on MySpace, though it means those members will see fewer relevant ads.

Smart move, but I think they’re doing themselves an injustice if they limit it to a simple ‘On-Off’ equation. We love to buy, but we don’t like to be sold to, and the primary difference is in how much control we have over the process. The more control MySpace gives its users over their ad targeting, the happier the users will be. Imagine a dashboard that offers me the ability to allow ads served based on the groups I belong to but not based on my individual conversations. Or that lets me indicate if I’m in ’shopping mode’. (My boyfriend will tell you that I am permanently in shopping mode, but that’s just not true.)

VortexDNA’s aim is to facilitate highly relevant personalization with complete control and total privacy. That is the triad—those three things are all equally important. It’s clear from the above article that MySpace understands the importance of personalization. I hope they manage to balance the triangle as well.

What do you think about their personalization efforts? Are you a MySpace user? Would you like to see targeted ads or would you feel they were intrusive? I’m eager to get your thoughts.

Spotted on the Google blog…

Repeated on the Google.org blog…

Sustainably-minded entrepreneurs, here’s your chance! Google.org has issued a $10 million Request for Proposals to advance sustainable transportation solutions. You can see the complete RFP here.

Google.org is seeking companies with technologies, products and services that will accelerate widespread commercialization in the following fields:

• Plug-in hybrid electric vehicles (PHEVs)
• Electric vehicles (EVs)
• Vehicle-to-grid solutions (V2G)

Some examples of companies or individuals that might want to apply:

• An early stage technology venture coming out of a university or lab looking to develop and commercialize a product (a new type of battery, for example)
• An innovative services business that can play a key role in the widespread adoption of PHEVs, EVs and/or V2G solutions
• A company focused on one of these markets which can use additional investment capital to scale up adoption of its products
• A company active in the automotive or power space that could modify an existing product that addresses a key need in one of these markets

Good luck, those of you who are in that space! I recently watched ‘Who Killed the Electric Car‘—what an eye-opener. There’s a market for green transportation, fo sho.

Should Yahoo outsource search to Google? That was the title of a speculative piece Larry Dignan posted today over on ZDNet. In it, he outlines ideas from Bear Stearns analyst Robert Peck, who puts forward as possibilities a range of dramatic chess moves and his take on the benefits and problems associated with each:

1. Yahoo outsources search entirely.
   This possibility doesn’t seem likely, according to Dignan and Peck.

   For starters, Yahoo needs to give Panama some time to work. Going with Yahoo would toss years of developing Panama down the drain. More importantly, however, is the fact that advertisers want to bundle search and display ads in campaigns. If Yahoo went with Google for search it’s unclear how these bundles would work. Yahoo has a hard enough time coordinating its own businesses. Imagine bringing Google into that loop somehow. In addition, Yahoo has combined its search and display sales teams to sell bundles.

2. Yahoo gets bought by Microsoft.
   This possibility is presented as one of the reasons for Yahoo not to outsource to Google.

   There’s another cynical reason for Yahoo to refrain from partnering with Google: A partnership would diminish Yahoo’s takeover price. Think about it. If Microsoft buys Yahoo today (something Peck floated) it would grab more search market share and make catching Google more of a reality. Right now, Microsoft catching Google in search is a pipe dream. If Yahoo sells out to Google one excuse to buy Yahoo disappears.

3. Yahoo outsources to Google in Europe only.
   The argument for this scenario is that Yahoo gets the benefit of Google’s fairy dust in a market where Yahoo isn’t looking too good to begin with, without burning too many bridges in its primary market.

   Peck estimates that if Yahoo outsourced search to Google in Europe it could double down on its U.S. efforts and rid itself of a situation that looks hopeless. In Asia, Yahoo would stay in the search market since it is in a much better position competitively.

   Outsourcing Europe search to Google would leave a lot of avenues open to Yahoo. If Yahoo were to close the monetization gap with Google it could always take back its Europe search.

I know you’ve all been saying to yourselves, ‘Bear Stearns is okay, but we really want to know Kaila’s take on it,’ and I am not one to disappoint people, so I’ll give it to you.

Gut reaction: NOOOooooooooooo!!!

Analytical reaction: First principles, people! This is a big question, one that presumably is requiring Yahoo flavor-of-the-month chief executive Jerry Yang to step back and ask himself a bigger question:

Why is Yahoo in business?

What is the purpose of the company? It may sound overly simplistic, but essentially if search is an integral part of the company mission, they should keep it; if not, they can at least explore the possibility of outsourcing.

Here’s Yahoo’s mission statement:

Yahoo!’s mission is to connect people to their passions, their communities and the world’s knowledge.

Google’s:

Google’s mission is to organize the world’s information and make it universally accessible and useful.

So if Yahoo is outsourcing search, what does that mean in terms of why the company exists? In what other ways are they connecting people to their passions, their communities and the world’s knowledge? In what ways are they adding value to the information that Google has organized and made accessible? If Google’s running the show, Yahoo isn’t connecting people; it’s acting as a landlord to an 800-lb tenant.

Evidently Peck feels that way too:

“We believe that the strategic impact of becoming a Google partner, rather than the financial, is weighing more heavily on the minds of management. We think it is strategically important for Yahoo to continue to be a principal in search, particularly in the domestic market,” says Peck.

People who read this blog regularly know that helping people and companies act in alignment with purpose is one of the primary drivers for VortexDNA, and there’s a simple reason for that: it works. If I want to become an Olympic gold medalist, I’m not going to hire someone to do my workouts for me. But if I were only looking at the emotional and physical cost of spending all that time in the pool, I might consider it. See what I mean? The core purpose has to be the yardstick against which big decisions such as these are measured.

The Europe question:
When I read Richard Branson’s Losing My Virginity, I was amazed at that part. You know, the one where he’s got the music biz and the airline biz, and the music biz is going really well and the airline biz is in the crapper, and he behaves exactly contrary to conventional wisdom and sells the great business to funnel money into the lousy business.

Should Yahoo outsource search to Google in Europe? I don’t really know. But Sir Richard’s parable taught me this:

Knowing what you really want to accomplish can help you remove obstacles in your thinking.

If Virgin had been stuck on, ‘Oh, we don’t have any money,’ or ‘Oh, the music business is going really well so we can’t sell it,’ then the Virgin empire would look very different than it does. But Branson was clear that he wanted to be in the airline business, which meant he could easily see that selling the music company would both free up his attention to focus on the airline and give him a comfortable cash injection to really make it work.

Until Yahoo is really clear about what they’re trying to do, they aren’t going to be able to resolve these questions to anyone’s satisfaction.

Would Microsoft even be allowed to buy Yahoo? That’s a question for another day. Right now, I’d really rather hear from you: what do you think about Yahoogle?

The Economist should think about changing its name to The Googlist after running two feature pieces on the company last Thursday.

The first, Inside the Googleplex, aims to paint a reality-checking picture of life inside Google that’s a bit different from the publicly promoted paradise.

Google tends to win talent wars because its brand is sexier and its perks are fantastically lavish. Googlers commute on discreet shuttle buses (equipped with wireless broadband and running on biodiesel, naturally) to and from the head office, or “Googleplex”, which is a photogenic playground of lava lamps, volleyball courts, swimming pools, free and good restaurants, massage rooms and so forth.

Yet for some on the inside, it can look different. One former executive, now suing Google over her treatment, says that the firm’s personnel department is “collapsing” and that “absolute chaos” reigns. When she was hired, nobody knew when or where she was supposed to work, and the balloons that all Nooglers get delivered to their desks ended up God knows where. She started receiving detailed e-mails “enforcing” Google’s outward informality by reminding her that high heels and jewellery were inappropriate. Before the corporate ski trip, it was explained that “if you wear fur, they will kill you.”

It may well be that absolute chaos reigns, but I think that last statement, the ‘if you wear fur’ one, is prejudicial. It’s appropriateness or lack thereof could vary wildly depending on the context. Perhaps she had just said, laughingly, “If I wear Spandex, my husband will kill me,” with a Googler responding in a similar vein. Or maybe she was dragged into a dark corner of the Googleplex by a mysterious character sporting a low-slung, face-obscuring fedora, who slammed his or her hand up against the former executive’s throat and muttered through a voice-distorting device, “Lady, stay away from fur if you know what’s good for you.”

You see what I’m saying. The situation surrounding the comment could reveal a lot.

The second article, Who’s afraid of Google, is a laundry list of potential problem areas for the search giant:

The list of constituencies that hate or fear Google grows by the week. Television networks, book publishers and newspaper owners feel that Google has grown by using their content without paying for it. Telecoms firms such as America’s AT&T and Verizon are miffed that Google prospers, in their eyes, by free-riding on the bandwidth that they provide; and it is about to bid against them in a forthcoming auction for radio spectrum. Many small firms hate Google because they relied on exploiting its search formulas to win prime positions in its rankings, but dropped to the internet’s equivalent of Hades after Google tweaked these algorithms.

And now come the politicians.

As any fair and balanced journalist should do, the author (not identified) makes some valid points in Google’s defense:

Given this, the onus of proof is with Google’s would-be prosecutors to prove it is doing something wrong. On antitrust, the price that Google charges its advertisers is set by auction, so its monopolistic clout is limited; and it has yet to use its dominance in one market to muscle into others in the way Microsoft did. The same presumption of innocence goes for copyright and privacy. Google’s book-search product, for instance, arguably helps rather than hurts publishers and authors by rescuing books from obscurity and encouraging readers to buy copyrighted works. And, despite Big Brotherish talk about knowing what choices people will be making tomorrow, Google has not betrayed the trust of its users over their privacy. If anything, it has been better than its rivals in standing up to prying governments in both America and China.

Google was born with a clever technology, an effective business model, and a cute motto: ‘Don’t be evil.’ They’ve scaled wonderfully. Their biggest challenge right now is understanding the psychological impact of their sheer size on public perception. Some of you have participated in a discussion on this blog about people wanting to cut down a company that’s successful, but if Google adopts the simplistic attitude that all of those people should just get over it, they will be ignoring a very real aspect of human nature—at their peril. After all, Google, like all of us, lives and dies by the people.

The shift in perception can be seen in that their philosophy, once seen as endearing and charming, is now being turned against them:

It does not help that Google is often seen as arrogant. Granted, this complaint often comes from sour-grapes rivals. But many others are put off by Google’s cocksure assertion of its own holiness, as if it merited unquestioning trust. This after all is the firm that chose “Don’t be evil” as its corporate motto and that explicitly intones that its goal is “not to make money”, as its boss, Eric Schmidt, puts it, but “to change the world”. Its ownership structure is set up to protect that vision.

Who’s afraid of Google summed it up far better than I can:

One obvious strategy is to allay concerns over Google’s trustworthiness by becoming more transparent and opening up more of its processes and plans to scrutiny. But it also needs a deeper change of heart. Pretending that, just because your founders are nice young men and you give away lots of services, society has no right to question your motives no longer seems sensible. Google is a capitalist tool—and a useful one. Better, surely, to face the coming storm on that foundation, than on a trite slogan that could be your undoing.