Bronte Media

They say the most important person in a hotel to know and get to love is the conceirge. They see everything. Perhaps the same is true for hearing and taxi drivers.

Om Malik points to one rumor about how the rumor spread that eBay would buy Skype: a New York taxi driver overheard two eBay execs hammering out the deal while driving them. He even reported it back to Skype’s Customer Support, who didn’t believe him. Many other Wall Street traders did and lopped a chunk off the company’s stock (the size of which is usually only reserved for more-than-rumors).

Classified Intelligence broke the news that Google was working with classifieds sites to get a direct feed rather than fumbling around their sites and crawling them every minute.

But then Editorial Director Jim Townsend said one of the most bizarre things I have heard, especially given his role:

“On other side of that coin, Townsend said, ads that are freely available through search could destroy the pricing model used by print and online classifieds publishers.

“Just as Craigslist had a lot to do with killing the paid real estate listings,” Townsend said, “the more you give away for free, the harder it is to place a high value on it.”

Huh? Destroy the pricing model?!?! The ads are getting greater distribution! The advertiser still pays Careerbuilder, Autotrader or whomever! In fact greater distribution should lead to *higher* rates and higher pricing because more people are seeing them. Wake up and smell the coffee Mrs Bueller.

Online classifieds sites should do everything in their power to create this feed for Google. They already spend millions of dollars optimizing their web site to be crawled by the vanilla spider and placing text ads with the search engines.

A year or so ago there was a film that explored the thesis of the modern day corporation as a personality. If you summed their actions what sort of person would they be? Their conclusion was that most exhibit psychotic behavior.

Can you imagine what Google might be? An incredibly smart person no doubt. But also a rather shy, stubborn and insecure one:

- They wouldn’t talk to CNET, a trade publication, after an article appeared about CEO Eric Schmidt and some person details that were gleaned through searches on Google. Now, after months of not talking to CNET, they finally are again.

- Yahoo came out and said its index was bigger than Google and Google was not happy. They said that index size doesn’t matter and just in case it did its index is now three times bigger than Yahoo’s. But you can’t track or measure that claim, they say. And they are taking the number off their frontpage because the size of the index doesn’t matter people! But theirs is three times bigger!

When you add thousands of employee per year from a very small base I think these sort of growing pains are inevitable. You can dampen the effect by striving to be a different sort of company but in the end you can’t change human behavior.

Jakob Neilsen has a very good AlertBox article (subscribe to the newsletter right away if you don’t already) describing a user’s propensity to click on the first listing on a search engine result page compared to the second.

The article is based on a Cornell University study [PDF] that found that users clicked on the first result most of the time. When they served the search engine results unchanged they found that 42% of users clicked on the first result, 8% clicked on the second and the other half clicked somewhere else.

They then flipped the results and showed the second result first, and the first result second. Surprisingly (or not so) 34% clicked on the first result (which was really the second one), 12% on the second result and 54% elsewhere. Confused?

Basically it finds that people are lazy. Or trusting. Or that the top two search engine results are really not that much more relevant than each other. Or all of the above.

While it is inevitably a combination of all three, I think it has more to do with the last factor: that there is not that much marginal difference in the relevancy of the results. That is the reason why search engine marketing works. The paid results are, on average, not that much less relevant than the top organic results. Sometimes they are more so. Put them high enough and users will click on them.

Kevin Delaney and Robert Guth have written a fantastic article on MSN search over at the WSJ. The article charts the decline of MSN search share after introducing its own algorithm.

To be fair its search share has been on a steady decline for five years. And Yahoo, which replaced Google’s with its own, has seen a similar trend, although has held the line in recent times.

Yusef Mehdi tried to put on a brave face: “It couldn’t be further from the truth than to say that we haven’t made fast progress,” says Yusuf Mehdi, a Microsoft senior vice president who is heading the search effort. “We are very close to closing the gap” in the relevance of MSN’s results versus those of Google, he adds.”

Note the first sentence does not directly reference search share. And the second says that they are close to closing the gap, not actually closing the gap! You have to love it!

The article then documents a gossipy tidbit about Microsoft getting Keynote Systems to mute the findings of its search study.

Building a better mouse trap in search is very tough. It is not good enough to be better, you have to be noticably better to the consumer. Only a leap forward, such as looking at links as votes the first time Google did, is noticable. MSN or anyone else has not come up with such an improvement. The chances are they wont, Google or Yahoo have an equal or better chance of doing so, and throwing billions of dollars at the problem wont work.

Either way, I hope The Economist had a chance to read the article. It might have helped them before writing the utter crap they did about Yahoo.

People often begin sentences denying their real intent or belief. “I don’t mean to be rude but…”, “It’s not that I don’t like it but..”, “You are an exceptional person but…”.

Then there are CEOs who rule from the top down. Like Bernie Ebbers of Worldcom who secretly replaced the water coolers with non-filtered water to save costs.

And so it is that Jeeves the butler is now six feet under. The WSJ reports that Barry Diller officially announced the change at a Goldman Sachs investor conference yesterday. He had unofficially announced the change as soon as he bought the company.

But you have to keep up the charade. According to a spokeswoman: “A recent round of consumer research concluded that the Jeeves butler, a character originally created by English comic writer P.G. Wodehouse, “inhibits how people view our brand,” said an Ask Jeeves spokeswoman.”

Diller, a very witty individual, was unable to have one last parting shot: “Mr. Diller had hinted in previous public comments that he was inclined to ditch Jeeves, though he suggested on Wednesday that the ousting wasn’t personal. “Not that I don’t like that fat butler,” Mr. Diller said at the conference”

Poor Jeeves! Even after he went on an Atkins-diet-like shedding of pounds last September so that Interactive Corp would even buy him in the first place!

The WSJ has the first news out of a Goldman Sachs investor conference that featured the first time Time Warner CEO Richard Parsons had spoken post AOL rumors.

To sum it up for those non-WSJ subscribers: “no we are not selling”. AOL is simply too strategically important to all its other media assets (the merger, after all, did make sense, it just was horrendously mis-priced).

Does anyone really believe that Google would buy AOL? Lauren Rich Fine of Merrill Lynch seems to think so.

Rather worringly she seems to have some rather bad mathematics. Google, they estimate, receives around 12% of their revenue from AOL. If they switch to MSN Google could lose between 5 and 10 percent of their earnings, she says. But agreements like that of Google’s with AOL are very low margin (the average traffic acquisition cost is 80% and larger deals even higher). So the effect would be next to nothing (well <2% of EPS).

The one thing everyone seems to be missing is that why would Time Warner sell AOL? Unless they got $25bn+ I can’t see them doing it. They are on the cusp of rolling the dice and the exciting times are just beginning. As for the tie up with MSN, there is no way in hell Bill Gates is going to form a JV on one of the most important strategic fronts Microsoft is fighting. That makes a deal between MSN and AOL a very long shot, unless Microsoft buys it outright.

The two ships are not sinking but they are on their last legs in the search world. One plus one would certainly *not* equal two or anything greater. With two of the largest corporate parents both will want to control their destiny in this very important juncture of the industry. I just can’t see a deal happening.

Paper prices continue to be the primary driver of newspaper change. Knight Ridder’s latest comments tells a sorry story.

Ad revenue up 1.2%, paper prices up 9.1%.

The price of paper is the primary cost of a newspaper. In a very simple sense, unless advertising revenue grows in step the business goes backwards. They need to cut costs elsewhere. But in the end there is only so much to cut.

This sadly is the true motivating force for newspapers to embrace the Internet. Fear not greed. But at least there is something motivating them.

Scott Heiferman, of Meetup, is undergoing a membership drive for the New York tech meetup group. I was due to go to the last meeting but hadn’t realized my Coldplay ticket was for the same night. I have met a few regulars and can’t wait until I get to attend the next one. Each meeting is a mini DEMO of cool technologies people are working on.

The group is a good mix. At the moment there are more technologists and creators than lawyers and PR people.

Here is Scott’s aim for the group:

New York needs a united tech community. If we grow, we’ll all have an incredible resource for everyone involved. People have found jobs & financing & friends & ideas at the NY Tech Meetups, and it’ll get much better if we’re much bigger.

Here is how you (or I) could win a new iPod Nano:

** So, let’s do a 3-Day Member Drive. Between now and Fri 9/16
Noon. To spark it, a little contest: For everyone that you refer, you and their names will go into a drawing for 2 new 2gb iPod Nanos… one for you, and one for the person you refer.
(When they sign up, the site asks who sent them.) **

http://newtech.meetup.com/1/about/

Go on. Join up.