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My 2 featured articles for the week ending Mar. 9, 2007:

Archived blogs for the week of Mar. 5, 2007

1310 - Mar. 8, 2007 - 3.19 PM EST

Christopher Payne leaves MSN Search

Microsoft's corporate vice president for the MSN Live Search initiative, Christopher Payne, is leaving the company.

Payne said he wants to launch a Seattle-based technology firm unrelated to the search business.

Microsoft's Live Search has lost an important market share since it launched its own MSN site two years ago, in an attempt to challenge Google.

A Microsoft spokesperson declined to comment, and Payne wasn't available to take phone calls. A replacement hasn't been announced as of yet.

1309 - Mar. 6, 2007 - 5.42 PM EST

Targeted advertising market still young

"The market for targeted advertising is still very young, with lots of innovation and lots of improvement still to come," said Eric Schmidt, CEO of Google.

Schmidt was addressing an investors group yesterday when he said that statement. "Google and the rest of the search industry are just at the beginning of our ability to target specific ads.

Overall, there are many new technologies to come real soon," Schmidt said in a presentation and Q&A session at the Morgan Stanley Technology Conference in San Francisco. Despite a few large companies dominating the search and online ad space such as Yahoo, Google and MSN, Schmidt added it's way too early to talk about any consolidation.

He pointed to more mature industries, like enterprise software, as better candidates for consolidations. Schmidt also pointed to Oracle's many moves in consolidating by acquisitions, "and doing a fairly good job as far as I can tell." But Schmidt also predicted an explosion of innovation related to targeted advertising over the next several years.

"On average, there are so many new places for targeted advertising, it's not the time for consolidation," he said. One of those places is mobile phones and devices.

Schmidt spoke highly of the forthcoming iPhone and mobile phones in general as "the first highly targetable devices." "The iPhone is an incredible product. It's the first full-featured phone that's a music player, Internet browser and computer," said Schmidt. "I'm sure there will be many more of these kind of devices coming soon."

On the subject of a different platform, Schmidt said about 90 to 95 percent of TV viewers are already exposed to random ads. "It's a constant barrage of ads that aren't relevant.

Pet food for people without pets, baby products for families without kids, etc. Even a small improvement in relevancy would have a very large overall impact."

Schmidt said Google is exploring ways to better target TV advertising and leverage the fact that an increasing number of consumers have IP addressable set top boxes. As regards Apple, Schmidt noted he is on the board representing shareholders and isn't directing any product strategy. But he applauded Apple for what he called the success of its "clear strategy."

"Google and Apple are doing more and more things together," he said. "Apple remains one of the great innovators for now. We have similar goals, similar idealogies and similar competitors." Read more...

1308 - Mar. 5, 2007 - 4.23 PM EST

Google losing money with YouTube

Some acquisitions take time, usually years before they show their real value... As of today, Google is operating YouTube with a deficit. Last week, Bear Stearns issued an analyst report that suggests YouTube had revenue of $15 million last year, which means Google paid more than one-hundred times the video site's annual intake.

But don't panic, at least not just yet.

"Generally speaking, it's still way too early to guess if the acquisition has been successful or not," said UBS analyst Benjamin Schachter.

"Overall, Google is building itself for the long term and this is one piece in building that."

But it is clear that Google's backing has opened doors for YouTube and made it an even more formidable contender in the world of media content than it was before. To be sure, take last week's deal with the NBA, which created a channel of about 30 authorized clips on YouTube. Negotiations with YouTube stemmed from the basketball league's original partnership with Google.

"Obviously, we came to the deal through Google," said Steve Grimes, NBA's v.p. of interactive. "Would we have ended up here any other way? It's certainly possible. However, the Google connection is what made it happen in the time frame it did."

In 2006, Google and the NBA have paired up in a one-season deal, in which Google sold NBA games on video.google.com for $3.95 each. Though that service has ended, the NBA has since moved on to be part of a new advertising test with the search giant.

Google is taking videos made by the NBA, as well as Sony BMG Music Entertainment, Dow Jones, Conde Nast and others, complementing them with commercial advertising and distributing them to a network of Web sites.

In the three-tier deal which began in February, Google supplies a Google-branded video player that runs both the clips and the advertising itself. For example, viewers can watch NBA clips on the basketball site www.bball.com. Once the clip plays, a commercial airs. Each time it's watched, the advertiser pays Google, which then shares the revenues with the NBA and www.bball.com.

So far, no such deal exists with YouTube. However, it's not too much of a stretch to imagine that, if Google's experiment goes well, YouTube might adopt a similar model. For now, YouTube and the NBA have agreed to share advertising that runs alongside the NBA clips and videos of fans showing off their best basketball moves.

"We are very committed in supporting this medium with advertising," said Chris Maxcy, YouTube's head of business development.

In an emailed response to questions, David Eun, Google's v.p. of content partnerships said the merger has been going smoothly so far. Read more....

Posted on Businessblog™

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