ReadWriteWeb

John: how you handling the success?

Sergey: attributes success to luck. followed our hearts in terms of research areas. found they had something useful and impactful. early on talked about open sourcing, but eventually started the company. exciting and wild ride. starting to get used to it.

John: brings up terry semel conversation, how he said judge google as a portal and being #4.

Sergey: makes google the underdog. humourous aside about how google cafe ranks against other silicon valley cafes. audience laughs.

John: Microsoft said "we're the underdog now".

Sergey: would be exited to be viewed as #1 in technology. in tech development, we are a leader. from technical pov, likes to think they're #1.

John: stock price and expectation of being a public company

Sergey: in terms of search market share, delighted. primarily come to google - and stay - due to search experience.

John: interface - clean blank page - will it continue as a portal

Sergey: hopes it continues to be clean. re gmail, great user experience has helped other email systems (others have increased storage etc). there are areas that have been overlooked in industry, much as search was overlooked in the 90's. thinks they have technology, distribution infrastructure to address those things.

John: competition with microsoft. now has feed reader, platform of innovation. how do you make decisions about what to do next and make decisions about what to add to the google suite.

Sergey: Historically people who have feed reader companies may expect a lot of M&A activities. they care about "enabling other businesses". re adsense: the idea that other companies need to make lots of money. extended technology to serve many web pages. They were worried about content being lost on the Web, one of the big motivations of adsense was to create and maintain online businesses.

John: semel, diller, miller all made user-generated and professional content as important part of what they will do on web. your view?

Sergey: we fundamentally believe in sending users to other sites (for content). so our philosphy is quite different. we want to send people to best sites (uses eg yahoo finance). we're not about creating all of our own content, we send them off to other sites.

Questions:

Q1: google office

Sergey: i don't really think that trying to take previous technologies in our generation and port them directly [...] always makes sense. the web and 2.0 technologies give opportunity to do new and better things - some of what is done in past [on pc] and more. if there's some combination of office type functionality, then would consider it. [nb: not verbatim - esp that last sentence]

Q2: click fraud

Sergey: something we have to work on, spend a lot of work on detecting etc. long list of protections for click fraud. a lot of our advertisers - in fact most - care about getting conversions and making sales. they know exact roi they're getting. also ad fraud is quite complex.

Q3: what areas are you focusing on? safe to invest in?

Sergey: in general, have several kinds of projects. ones that are core and be strategic about. surprises - most successes. from engineers. some of most successful products haven't been directed from top-level mgmt.

I feel like a lot of portals have just taken everything they see. so want to do different.

Q4: google's vision for communications and user-gen content

Sergey: we have focused where people spend a lot of time - eg email. google made it more efficient etc. put up lot of things on labs because it's really hard to predict. eg wikipedia many years ago - not many people would've believed it would work. need to experiment.

Q5: personal level, where will video search is going?

Sergey: people underestimate quality of info present in video. key not so much format, but so much effort went into preparation. some of best quality content we have is in video form - make it searchable.

Shows stats - 36k feeds that really matter; 14k "really really matter", 60 feeds that are Paris Hilton hot; 1 feed is da bomb - slashdot. [will update these stats later]

Long tail of searches - 95%. eg head queries: hurricane rita, maps, song lyrics.

Long tail of verticals (or categories). Also long tail of revenue - "most of revenue still made in the head". 30% of searches drive 70% of search revenue. "still very very early" in the marketplace.

Head query: 1.57 keywords, tail is 5.01 keywords. More compeition (obviously) for head keywords.

25% of clicks on Ask index went to only 330k URLs. 50% clicks went to very small head (search results).

Only 1% of users use advanced search. Instead users iterate.

UI. 2% use the tabs. header 15% CTR. 35% CTR for image bar. 45% CTR for main search area. 15% CTR on right-hand vertical bar (where Google puts their ads, but Ask puts content). Jim says it's a 1-2% CTR for Google ads on right, by comparison.

Jim will put all this data on their site later today.

Open source client platform for messaging, communications. Shows email interface with links embedded in each message - with web services calls to various apps/services. e.g. mouse over for Google map, appointment, events, fedex package updates. Lots of mash-ups. Impressive.

APIs are open, can write mash-ups. Has the ajax magic going on. Fully indexed backend and search, a la Gmail. Including filter by calendar, attachment type, etc.

Group scheduling, calendaring - drag and drop etc.

"web services enabled platform" - can write different clients. e.g. mobile client. open source project.

Sounds great, I've gotta check this out.

This is a Show Me of new technologies. Rolf Herken talking, founder of mental images. 3D visualization component software. mental ray photorealism - worked on The Matrix, Alexander, 2046. "Rendering the imagination visible".

Thinks there's need for 3D on the Web. e.g. 3D online entertainment, e-commerce, product stuff, mobile.

Very heavy data - gigabytes. Current approach to 3D client-based, requires plug-ins, lossy, etc.

Server-based 3D --> RealityServer is their product. Let all computation happen on the server --> broadband will allow this in HD (high def). Mobile devices big driver.

Only need html browser on client side, because everything happens on the server. Need a lot of bandwidth to send commands down to the browser. very light clients possible, multiple users can collaborate, open and scalable, secure, standards compatible. Data complexity is terabytes.

e.g. satellite images - working with data set; architectural simulations; consumer designing car.

This is all browser-based, only constraint is bandwidth.

Kim, CEO of SpikeSource: "the world has completely changed for building a software company."

Joe: talking about Jotspot, "DIY publishing" - wikis next step after blogs for web publishing. Jotspot heading towards "DIY apps".

Joe talking about Jotspot mistakes this year - not focusing on revenue. "Jotspot was in beta for way too long" --> not measuring the right things; refers to Google being in betas for so long --> people want feeling of reward which betas don't provide. Joe now wants to skip beta phase in his products.

John: both of you have grown quickly, have you gotten to point where you lose community etc of the culture?

Kim: not yet grown that big.

Joe: everyone can still see each other. want little bit of "standing room only" so has energy etc. Inspired by Google's hiring philosophy. Jotspot's hiring philosophy is "no false positives" --> everyone you get in the company will be "great".

John: what about contracters?

Kim: development team is distributed --> set up offshore operations in India.

John: venture capital. what's the profile re financing?

Joe: myth of entrepreneurship - some people need VC backing, some don't. clear matter of economics, supply and demand. lot of companies are "features wrapped up in company's clothing" - those ones shouldn't take VC capital. need to get to $30-40million to get a decent return, which is rare. The VC is not the prize, wrong thing to focus on.

John: arc of kleiner-backed start-up (potential for billion dollar company etc)

Kim: not trying to do that. "let's get this right", scaling correctly etc.

John: excite going public - did you enjoy that (as goal of company)?

Joe: "private piece of the market feels very frothy right now"... "bootstrap froth" - can be a good thing, but if inject lots of money and pump up the valuations, it can be a problem ("venture froth")

John: death by bootstrap "fratricide"

Joe: it's so cheap to start a company these days. jotspot took $100k to go to market, much cheaper than excite. cheap infrastructure, offshore development. Tons of angel or bootstrap companies - "you'll see a ton more entrepreneurship". Will cause its own set of problems, but it's fantastic.

John: is it different this time personally?

Kim: more calm experience, people have families so not burning midnight oil, don't have to kill yourself to build a company - still long hours, but exciting.

Joe: is equally "paranoid, neurotic"; the desire, drive, nervousness - he's "wired that way". Wants to make it successful. Joe thinks he's "no more calm than I was in Excite."

Google just announced their new RSS Reader, called Google Reader. It's browser-based (of course) and has similar look n' feel to Gmail. Very Ajaxy. I'll play with it some more and report back later. For now, here's more info from SEW:

"Google Reader is a browser-based application that works with virtually all popular browsers on Windows, Mac and Linux platforms.

More later...

John starts by grilling Jonathan: "are you talking to Microsoft?" [crowd roars]. Jonathan replies that AOL is in transition from proprietary mindset/business model to more open model - like Web 2.0. John tries again: AOL is an important player in platform market, Microsoft wants to create a partnership with AOL.

Jonathan: "we're the largest swing voter".

John: "exactly, you hold a lot of power."

But Jonathan doesn't say any more about this. So John turns to question of weblogsinc deal. He says weblogs are in the middle of user-generated and professional content. They have a whole spectrum of content and "we need to be a place where all of that coexists."

John asks what will we see from AOL in a year or two.

Jonathan: weblogs business "we will greatly expand." more content partnerships, hollywood plays, user-generated content, video content on the web.

John: AOL has a lot of video, tell me about AOL and video.

Jonathan: two main players: Yahoo and AOL. "we're sitting side by side" but AOL does more than anyone else - and will continue to.

John: how is "the open thing" going?

Jonathan: was one of the hardest parts of the job, to change that [old proprietary] mentality. Get in synch with the market - which propietary walled gardens are not. "We're past that point."

John: but you're not abandoning the isp business?

Jonathan: not at all, they're different. [...] talks about subscribers and the Web. Do you want to be limited by subscribers, or embrace the world wide web on worldwide basis.

Talks about really big brands on the Web - he would make the argument that only one has been made in last 10 years: Google. AOL is one too, but "the worst thing you can do is limit it to dial-up" etc. Most important thing to be is to be expansive as possible.

John: what about China? (America Online)

Jonathan: We're today officially changing the name of the company from America Online to AOL. We believe it's a brand that will go worldwide.

Think worldwide. Looking into China and a couple of other countries - "active exploration" - for Web business.

Word associations from Jonathan:

Google = money
Yahoo = smart
ebay = platform
barry diller = hardest to soundbite. "Barry pays attention."
newscorp = directed (when rupert decides to do something, he goes and does it)

[stuff about Time Warner and investment]

Questions:

On why they didn't buy Jeeves and let Diller get it: "I couldn't make the math work." And he doesn't want to fight a battle on search. However video and "certain verticals" they will.

Qst on weblogsinc: person thinks they bought it for content instead of conversations. what will happen when blogosphere doubles in size and weblogsinc doesn't look so valuable? Answer was they will figure it out (or something like that).

Summary: I thought Jonathan Miller came across as a very smart and on-the-ball CEO. Sounds like AOL is back in business in Web 2.0, although I'm skeptical of the weblogsinc value to AOL. Why? Because I had high hopes AOL would roll out a more 'loosely-formed' network, in which unique user brands could bloom. I think Yahoo will definitely do that, which is why I like Y! more when it comes to user-generated content.

Discussion: Open vs. Closed Models Danny Rimer , Jeff Barr, Toni Schneider

Tim: what do you actually own?

Jeff from Amazon: we own customer db and namespace of products (Tim's summary).

Toni from Yahoo!: different answer for each product; but Y! owns "user's trust".

Tim asks Toni whether Y! lets people export data?

Toni: community of people connected via the data, so value of the data is in that. [RM: as far as I know, a user still can't export their data from Yahoo My Web 2.0. With del.icio.us, users can export as XML - which is the more open thing to do]

Tim asks about metadata.

Toni: several ways Y! can add value to data - layer services on top, mix data, etc.

Amazon guy gives same answer as Y! - value of data is the community and so taking it away/exporting [from Amazon] will devalue it.

Danny (a VC on board of Skype): can easily interoperate with other services (no real details though)

video guy (sorry don't have his name currently): other services can innovate on top of them

Tim: intelligence of masses vs centralized control

Toni: believes in open model, but when you open things up "don't just throw it out there". Talk with developers, where does it make sense to open up, learn from them.

Tim: where to draw the line about where the services are located? eg putting data on Y!, or syndicating it out / inbound-outbound.

Toni: openness goes both ways. some developers don't want to host it, so Y! has to keep options open.

Danny: innovation not just happening in Silicon Valley. Don't need to be here to experience the "ecosystem effect". So their bet: not just focusing on this geography. Companies they're backing have services offered to free to users.

Tim: services with no idea about business model / exit is to be acquired. what's the rationale?

Toni: Big part of Y!'s strategy - easier to bring platforms in. Last year the ideas emerged, this year products are emerging, next year businesses will have to emerge [RM: great observation]. e.g. he thinks Amazon affiliate programs built on Amazon WS are "not that interesting".

Danny: a few blessed brands will try to scoop up as much talent as they can. Acquisitions are a cheap way to lock in some innovative developers, rather than face potential competitors down the road. [RM: good point, which I've heard from others too. I suppose the measure of this is how many of these acquisitions get developed and backed further once they're in the bigco]

Tim asks Danny: why eBay (as buyer of Skype)

Danny: Skype creators want to continue to be revolutionary; so ebay locking in that innovation.

Tim: do ebay want to be bigger platform player?

Danny: yes he thinks so.

qst: thinks there are a lot of opportunities in affiliate businesses - e.g. Amazon and eBay.

Toni: yes, but those programs primarily designed to support developer platform. For true innovation to happen, need to open things up and create new things on the platform.

And that's the end of the discussion.

Mary Meeker called where we're at now a "boom-let". We've gone from boom to bust to boom-let (presumably a precursor to the next boom). She thinks the first 10 years of Web were just the warm-up act for what will happen next. She's particularly bullish on mobile technologies, which definitely haven't matured yet. Mary mentioned in her speech here at the conference that 2009 would be the year of 3G.

Susan Mernit thinks the upcoming.org sale to Yahoo! marks the beginning of a boom. She sees the recent acquisitions of Google and Yahoo! as a sign they're building "the base tool set/platform for a consumer-driven Web 2.0." I agree with that and it shows the Web 2.0 'space' is heating up big time. But does that make it a bubble yet, or will it take more mature broadband and mobile technologies to push it into a market-driven frenzy?

I've kind of mashed up Mary's and Susan's termininology to re-name Mary's boom-let to bubble-let. At the Web 2.0 conference, I'm sensing the buzz of a bubble. But I'm new here (in the Valley). So I wonder what others think. Are we now in a Web 2.0 bubble? Or is it still a bubble-let - opportunities are bubbling up but not quite frothy yet? What do you think?

Lots of data points.

"Korea is goto place to figure out where the Internet is going"

Innovation coming out of China - 5,6,7 yrs time

we're at "boom-let" stage now (after boom and bust)

market valuations of top 5 companies huge (google, yahoo, ebay, yahoo japan, amazon), compared to 2000.

entering 2 most profound cycles ever: PC Internet (broadband) --> Mobile Internet

3G won't hit big until 2009

3.6-1 mobile phone to internet user ratio in Japan (0.8-1 in US). The point is "we're [US] not leading in this space"]

87% Skype usage is outside North America

70% revenue from mobile comes from sms and mms. Content will be revenue earner on bb Internet. So when mobile and bb collide, it will be interesting to see how it plays out.

LOTS of data in this talk!

"essence of this presentation is how important communications is" and convergence of bb and mobile etc.

Mobile-PC becoming new client-server model?

SFO (search / find / obtain) as future role of Google/Yahoo?

Power of Google/Yahoo ecosystems --> "importance of these two players in the marketplace" [advertising]

Internet ad spend will increase (currently last among other media) as internet usage increases

low-priced content, make it easy to SFO, can make it up on volume. "wish that more media companies with great content would figure that out - and make our Internet experience better."

first 10 years of Web (95-05) just the warm-up act for what will happen!

Update: here's Mary's presentation.