Microsoft Opens Up

Remember the early days of Microsoft?  at war with Apple in the marketplace and in the courts – each one racing to dominate the personal computer universe – allegations that this one stole that but from the other one and so on.  Seems Microsoft won that early round by focusing on its Operating System and making it available to PC manufacturers all over the world.  Apple kept its OS proprietary and bundled it with its own hardware, relegating itself to boutique status.

But that’s 30 year old news.  When Steve Jobs came back to Apple he took the company in a dozen new directions, and changed everything. Not just Apple, not just business in general:  he changed the world.  We consume music today completely differently than we did at the end of the last century thanks to his Ipod and ITunes store.  The IPhone has replaced the camera as the most widely used image capture device.  The success of the IPad at least contributed to Microsoft’s decision to make its current operating system – which, by the way, is a bit of a disaster – touch capable.

After years at the bottom of the barrel, Apple is more profitable than Microsoft.  The two companies were in a dead heat in 2010.  But look at what’s happened since:


(The steadily rising red bar is Google.  The lion’s share of its revenue comes from its websites, largely via advertising.)

Today, Apple’s core business is not the Mac.  That bit of bundled hardware/software is responsible for only 13% of its revenue.  The IPad is 18% and the IPhone is 55%.  Apple’s core business is now in your purse or pocket!

Now take a look at Microsoft and where its revenue comes from:

70% of what they bring in comes from licensing!  Licensing what?  Well, Windows of course, but there are other things as well, notably, Microsoft Office.   In fact, in the fiscal year ending June, 2013, $16 Billion of Microsoft’s nearly $27 Billion in Operating Profit were generated by the MS. Office dominated Business Division.

Microsoft has a new CEO.  Satya Nadella took over for Steve Ballmer a couple of months ago.  Ballmer was a wild man (the bald guy):

And, he was very protective of Office.  He led Microsoft through a time when it – like Apple – held tightly to its products and property.  It was this protectiveness that enabled Google to gain so much so quickly.  They popped on the scene making their products available for free and also available for anyone to use and develop!

All of which takes us to this week, when Satya Nadella holds his first press conference.  He is expected to announce that Office 365 will become available for use on the IPad.  According to Charles Cooper at CNet, “The decision to make Microsoft’s cash cow available on a product sold by one of its arch rivals not only breaks with a long Windows-centric history, it also sends a signal from the new boss that more big changes are in store.”

The lesson from these tech giants is that the game is always changing, the bullseye is always shifting, and the nature of the business evolves.  Extinction occurs when we stand still and cling to what once was.

Big Brother, Google and Print Media

Has it occurred to you yet that Google – at least the search engine part of Google – is, essentially, a monopoly?  They have achieved such penetration in the realm of Internet search that, what few competitors there are,  are insignificant.

I remember when I started surfing the net back in the 90’s.  None of us knew what we were doing and AOL gained a huge leg-up by organizing the Internet (today that seems so silly) and by giving us crude search capabilities.  I drifted from search engine to search engine and eventually settled into AltaVista.  In the mid-nineties AltaVista leaped ahead of its competitors by pioneering the use of web-crawlers that would go out, scan websites for information, and return data for indexing.  Today we call the crawlers ‘Spiders’ and they scamper a little faster.  AltaVista was eventually bought by Yahoo and, in May of last year, was shut down.  Now, when you try to search using AltaVista, you’re really searching using Yahoo.  As an interesting aside, it was AltaVista that brought us that wonderful translation tool, Babel-Fish.  Just as the search part of AV has been over taken by Google, so has Babel-Fish:  today we use Google Translate.

Which brings me back to the Google monopoly.  They didn’t gain that position by destroying or overtaking competitors; we gave it to them.  Google came out of the box so far ahead of their competitors that almost overnight other search engines were left in the dust.  Google made the Internet useful.  It brought order to chaos.  That’s the nice part.  But to monetize search, Google had to bring value to those of us with something to sell or something to say.  They realized (just as Don Taylor did in 1976) that the most effective marketing was highly targeted marketing.  The delivery of a highly targeted demographic to an advertiser proved to be very valuable and targeted pay-per-click ads became a dominant feature of the Internet.

So, how did Google get so good at segmenting and categorizing demographic groups to deliver to advertisers?  They kept track of us.  They recorded what we searched for and what we clicked on.  They watched how we behaved when we interacted with them and they stored that information, analyzed it, reduced it to numbers and predictive algorithms.  Today Google knows more about what interests me than just about anyone else!

We’d like to believe that Google is blind, like justice.  We’d like to believe that if I – a White male in his 60s living in Southern California – search for something, that you – a Hispanic female in your 30s living in the Northeast – also search for, we’d get the same results.  Not so. Google not only sells you as a potential target to advertisers, it also uses what it knows about your online behavior to filter search results so that your search outcome may be very different than mine.

I got a big reminder of this yesterday.  Ron McCoy, who lives 90 miles away in Riverside, just bough an IPad II.  The Apple version of PowerPoint on the IPad is something called Notebook.  Ron wanted to convert his PowerPoint Franchise Sales Presentation to Notebook and had no luck figuring it out.  While we were on the phone, I Googled it and quickly came up with a website devoted to Notebook with a long string of how-to’s about this very subject.  When Ron did the same search the website was buried. Google gave us different results because:  we live in different areas and we search for different stuff.  Google watches . . . Google knows.

Don’t get me wrong.  I love Google.  I’m more a Google person than a PC (Microsoft) person.  I have a Google T-Shirt.  I have an Android phone.  But sometimes all of this Google-looking-over-my-shoulder-while-I-browse creeps me out a bit.  Sure, their motives are purely Capitalistic:  they want great data on me to sell to advertisers.  But what if their information came under the control of an entity – a faction, a government, a policing unit – who maybe had other motives?  Makes me want to browse through an anonymizer!

I applaud Google for what its done to marketing.  That arena is fundamentally different and the difference is directly related to what Google did.  But it’s interesting:  after years of diss-ing print media as the nearly extinct dinosaur that it is, Google has taken to using traditional paper advertising to show its concern for our online safety.  They’ve earmarked tens of millions of dollars for a ‘Good to Know’ campaign running in newspapers and magazines.  The first ad ran in Britain recently and encouraged people to be a little more creative with their passwords.  It’s actually very good information, so good that I’ll reproduce the ad here and encourage you to do what Mother-Google is asking you to do!


Having gotten all of that rambling tangential junk out of the way, here’s my point for you today:  If Google – who owns the Internet – who invented online marketing – is getting into print advertising, isn’t’ it something you ought to consider for your business?   For five years we’ve preached that print is dead-dead-dead, and every time one of our brokers put a toe in the print-media waters he pulled it back in shock and horror.  But suddenly, Maurine Grisso takes a full page ad in her local paper for a song the week between Christmas and New Years and actually develops LEADS.  I know:  Maurine is a brash pioneer, sometimes so far on the cutting edge that she’s actually on the bleeding edge; but nobody can fault her for not taking risks and sometimes reaping big rewards.  And I’m not suggesting you sink thousands of dollars into print advertising this month or next.  What I am suggesting is that it might be time to put that toe back in the water.  Spend $50 or $100 and run a little ‘Sell Fast – Save Thousands’ ad or something similar.  Try putting a true ETM (with sold-and-saves, testimonials, and an Easy Way plus a few listings) on the back of a Homes magazine.  Pay very close attention to the results you get:  how many inquiries does this specific ad produce?  Then let me know if Google and Maurine are right or if it’s still too early.  Thanks!

Big Brother: 1984, 2011 Style

Does the idea of someone hiding secretly in your living room, peering out through a little hole in the curtains, watching your every move, taking notes, gathering information they may use against you in the future creep you out a little?  Are you starting to recognize a pattern in the results your Google searches retrieve?  Does there seem to be a theme to the ads on your Facebook page?  Cue the eerie music, and start looking over you shoulder because there is most definitely a Ghost in Your Machine.

Eli Pariser is out with a book today (The Filter Bubble: What the Internet is Hiding from You) describing the discomfort if not the danger of the new ‘highly-personalized’ Internet.  Since 2009, Google has gathered information about your online behavior and used it to tailor your search results.  Facebook has been doing the same and at this point most sites that serve up information to you are following suit.  The idea makes great sense from a marketing standpoint:  if they know what kinds of information you routinely seek, if they know what kind of advertisement makes you ‘Click’, they can serve up more of the same to you eliciting even more clicks.  It is the ultimate in targeting, something we Help-U-Sell folk know all about.

So, if you are a tea party Republican and visit sites espousing those views and your friend is an eco-friendly liberal and surfs accordingly, when you both Google ‘Obama’ at the same time, you’re going to get very different results.

And that’s the danger.  The Internet (read: Google) is serving us a diet made up not of truth, but of what we want to see.  And it is a very personalized offering.

I am particularly disturbed by this because if flies in the face of so much I’ve said about the glories of unlimited access to information.  Let me see if I can quote myself . . . ‘Instead of sending troops to Afghanistan, we should be flying over and dropping smartphones on the people.’  I guess if we did that and the people immediately started surfing to sites that espouse hatred for the West, Google would establish that pattern and serve up more of the same; hardly  the eye opening and broadening effect we might want.

We had so much press about polarizing rhetoric several months ago, particularly after Arizona Congresswoman Gabrielle Giffords was  shot.  There was a plea that we turn down the volume, crank it back a notch, become more civil to one another.  Now I understand how the language could have become so rigid, so harsh, polarizing.  Thanks to the personalized Internet, each side of the debate (any debate) was being buoyed by the constant reinforcement of their own point of view.  If all you see is what you want to see you can become pretty rigid in your thinking.

After all, tolerance is a virtue and it is born of empathy – the ability to walk in the other guy’s shoes, live in the other person’s skin for a moment.  If all you’re getting is a recycling of your own opinions, how can you ever know what the other guy thinks or feels? How can you ever empathize?  How can you become tolerant?

I guess the point is this:  you can’t rely on Google or Facebook or any clickable source to serve up truth.  If you want truth, you’re going to have to do it the old fashioned way:  you’re going to have to dig.  You’re going to have to go out of your way to understand the opposing point of view.  Bias is everywhere and on the Internet, the bias is YOURS.

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