Analyst Impressions, Web 2.0


I had run into American Technology Research analyst Mark Mahaney at Web 2.0. One of the more sober Internet analysts, I have enjoyed his work in the past. He later sent me his research report, which outlines his impressions of the Web 2.0 conference. I have highlighted notable bits.

  • The overall tone was highly positive. This will sound odd, but we detected a swagger to the event that reminded us of 1999 and early 2000. And yet, we also detected a more level-headed, battle-scarred, and determined attitude. “Hard work ahead, but rewards if we do this right” was our way of capturing the tone versus the “low-hanging fruit, sky’s the limit” attitude that we remember from 1999 and 2000. (Also recommended, my cover piece, The New Road to Riches)
  • Peter Norvig, the director of search quality at Google Labs, unveiled three initiatives that Google is currently working on — statistical machine translation, named entities, and word clusters. The goal of these is to improve the understanding of meaning in written words. To the uninitiated — including us — statistical machine translation means language translation (as far we can tell). Peter demo’ed Arabic to English and Chinese to English language translations that appeared fairly accurate….well, at least, the English phrasing appeared generally correct. (I sat with Peter at a panel at WTN and he made the same presentiation)
  • Representatives from Yahoo!, MSN, Ask Jeeves, and’s A9 search unit appeared to agree during a panel that two of the most important innovation focus areas for search now are integrated desktop search and personalization. In general, the representatives from these companies expressed a high level of confidence in the future growth drivers for search advertising – term coverage, pricing, search traffic, etc…No shit dudes. I recommend Blinkx over this anyday.
  • Idealab CEO Bill Gross launched a new search engine at , which contains some significant new features, such as refined subset search functionality, the ability to sort search results by click-thru rates, flexible payment structures for advertisers (pay per click, pay per transaction, pay per action, etc…), and substantial metrics transparency. While we wouldn’t view as a likely major new competitor to the leading search engines, the simple take-away for us is that no one company has a monopoly on search innovation.
  • My personal highlights: meeting Marc Canter and checking out Laszlo Systems and Rojo. Love both the products, and I think these two companies have a bright future. Also read David’s comments about RSS Space :-)



The other point I forgot to make is that these companies are all pursuing this goal of personalized search and local search – neither of which has a business model nearly as compelling as general search. Personalized search – I get, but local search? Like I want ads coming up when I search my hard drive for a document? Gimme a break (becoming my sad catch phrase).

I completely agree with you – the innovation on Google wasn’t the search results (which are good) – it was the user interface and the amazing speed. All these products are trying to add features that, in my opinion, most people probably don’t want. They want that speed and simplicty, and they want more accurate results. But unless the results are 4x better, I’m not convinced that anyone is going to switch.

As for why I haven’t been updating my blog – well, I’ve been a bit busy and lazy at the same time, but I’m also not sure it’s unique enough and I want to have a subject area – similar to you and VOIP – that can draw an audience. So I’m still trying to figure that out a bit – but Rafat at paidcontent just does too good a job at the media stuff, so I’m not sure what to write about – I’d welcome any input. I’m considering changing the subject to focus on hedge funds….


I agree with you wholeheartedly. i cannot figure out how many desktop search engines are going to be there. i think with the exception of the three biggies, i see room for one indy which eventually will be acquired. the ad-based models make sense only on large scale of google or yahoo. so that’s my worry.

i saw the amazon search engine, and could not figure out why i would use it. most people overlook the fact, that the reason most all use google is because it is a relatively simple user interface, and others are well complicated and will die because of that.

By the way, why aren’t you updating your blog these days?


The focus on search is the current fad in Silicon Valley, and, like all fads, it will pass from being the hottest thing once people realize that we don’t need 800 search engines. All of these search engines are incremental (at best) improvements. What made Google so good was that it was about 4x better than the nearest competitor – and that’s pretty much what it takes to move consumers to your product these days. Bill Gross’ latest product is an example of this: it’s not a big improvement and is more of a business model experiment than a good product. But what Google got right was the product – then they figured out how to make a bunch of money from it (by copying Overture). What all these other guys are doing is simply coming up with a me-too product that no one cares about. And the only reason they’re doing that is because “search is hot”. Gimme a break.

Here’s some questions for you Om: why does anyone care about Amazon’s search product, and why isn’t anyone concerned that Google has essentially come up with a bunch of revenue-less products over the past few months? Where is Google classifieds? Google auctions? Google jobs? Where are the products that leverage the platform and incredibly passionate user base? Instead we have Google SMS, GMail (very good product but not yet rolled out), Google News (another interesting product never to leave beta without a clear revenue model), Foogle and now Google book search (yawn). Why are they not addressing areas that are clearly $1b opportunities?

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