Monday, July 25, 2011

Thomson Reuters Challenges: Turning a Ship of the Line into Superfrigates

WSJ.com and others are covering the recent management shifts at Thomson Reuters, which have claimed Markets Division COO Devin Wenig. Man, I don't envy CEO Tom Glocer's situation. Thomson Reuters is about the only media company with fundamentally profitable financials, but their board seems to be yearning for its long-lost growth company potential. Quite a challenge, especially when investment banks, hedge fund and portfolio managers and others aren't staffing up with the headcounts of young people to fit in with some of their core strategies in finance. It's auto-trading or quants - trading and sales is becoming a shadow of its former self. The solution is not easy, because it involves making long-term investing interesting again to both securities underwriters and average investors. TR can't wave a wand and make that happen.

In the meantime, Bloomberg, LP has accepted this reality to some greater degree and is investing in applying the lessons of real-time information management to covering Washington and other political centers, where much of the access to capital lies right now. A risky strategy in the short run, but probably sound for the long run. Factset continues to chip away that the everyday portfolio manager, giving them the tools to get their job done, not always in a flashy way but they help them to get the numbers crunched. Given these competitive challenges, it's a small miracle that TR has done as well as it has.

Where to go from here? Well, that's what consultants are supposed to get paid to help figure out, but a few quick thoughts. First, revisit pricing models. The street doesn't like transaction-priced information services from vendors, or even from clearinghouses or crossing networks, for that matter, but if information vendors are partners in giving them enormous market advantages in low-latency trading, perhaps the structure and level of the pricing needs to be reconsidered. Beyond a certain point, the houses can't afford to do it themselves with enough entrepreneurial oomph to keep up with the requirements, even with - or, perhaps, especially with - a consortium. They know it. Call their bluff.

Secondly, perhaps focus a bit less on gee-whiz services for sales and trading and a bit more on services that help them to have a better product to sell. It may sound a little nutty, but why not buy a major ratings house, gut it, and do ratings right? Worth its weight in gold, and a sure cash cow in and of itself - the indirect benefit being that people would have more confidence in investments. Nobody trusts analysts anymore. That needs to change, and perhaps TR could make that change to shake up the game and steal a march, to mix metaphors. Investor confidence in fundamental investments will put butts in sales and trading chairs - maybe not like the old days, but moreso.

Finally, think a bit more like Bloomberg and think about the big picture of what your fundamental strengths are. Real-time on a global basis like none other. Access to credible players via your news organisation. A deep understanding of how people really use computer interfaces professionally. These are assets that have been won through centuries of dedication to being a leading service provider. But they don't have to be applied to the same-old, same-old. Be like companies in applied sciences that are trying to find blue oceans and adjacent markets for their growth. The whole world is becoming a real-time, transaction-driven economy; how do you want to play in it?

My best regards to my former colleagues at Thomson Reuters, it's been a few years, but the quality of the work that they put out still impresses. Perhaps its time to turn the ship of the line into a squadron of superfrigates, those fast, strong  and ultimately successful fighting ships that challenged both larger and smaller ships in the early 19th century. You've got it in you. I just hope that your board is prepared to be ready to get what they ask for, because being a growth company isn't easy.

Tuesday, July 5, 2011

Plus It All: Google Bets Its Brand on Pervasive Social Media

With a flick of some early invites to a small group of everyday people, tech enthusiasts and social media mavens that has mushroomed into a remarkable overnight sensation, Google+ is live and growing rapidly, changing the entire social media landscape as the Mountain View crew changes how people look at it and how it looks at the world.

A little over a year ago, Google decided to face an uncomfortable fact: the Web had gone social, and Google wasn't in the center of it any more, in spite of it's search engine's dominance. With Facebook and Twitter at the center of the emerging "social graph", the rich lode of content and metadata that everyday people were generating on the Web, was becoming the main tool that helped people to discover content -  and where they spent their time on the Web. Google's dominant, ultra-fast search technology was in danger of being eclipsed by its lack of access to Facebook pages, which Microsoft was gaining access to through a partnership that brought their Bing search engine to the Facebook portal. The open Web that had fed Google's revenues and its vision was fast becoming a stopoff point on the path to increasingly closed worlds of content.

Faced with this reality, Google made some hard decisions. It had to do something with its mish-mosh of social media initiatives that had failed, floundered or been just plain ignored. Google Wave,a brilliantly conceived real-time collaborative communications platform and protocol, had been rushed to wide exposure with hardly a thought as to how billions of people around the world would figure out how to use its innovative capabilities. Google Buzz, launched early last year, was a more mainstream social media tool that had great promise but suffered from sloppy attention to how people would manage privacy for their contacts information imported into it from Gmail, as well as a tight integration into Gmail that dimmed its new-hotness for a generation that grew up texting more than emailing. Google Latitude, a locaton-based mobile messaging tool, was a nifty feature with Foursquare-like location checkin tools, but, like many other Google tools without a real product plan, it languished in obscurity. Orkut? A niche product with almost no integration. Google Friend Connect? Hardly used. Google Sidewiki? Oh, yeah, that.

Rather than committing its brand to social media full-force, Google had carved out little side-pockets of projects that had moderate commitment from its senior management at best, in spite of some prominent guest appearances at launches. The mojo-makers at Google were committing Google's brand to search, ads, mobile phones, video, books, music, tablets, photos and other initiatives that seemed to have grabbed the laurels while a few small teams of tech geniuses toiled away in relative obscurity on social media projects. But none of the Google suffixes growing out of these initiatives - AdWords, Android, Chrome, YouTube - would make much of a difference if the Web on which they relied for revenues was disappearing behind closed walls and becoming indecipherable to Google search technologies.

In other words, it wasn't just that Google was losing social. Google was at risk of losing its core brand value. With hundreds of millions of people saying "Facebook me" as instinctively as they used to say "Google me," there had to be a game-changing frame of mind at Google. If the Web had gone fundamentally social, every product at Google had to become fundamentally social.

Thus was born the 100-day Google project named Emerald Sea, which was characterized by Bradley Horowitz, one of the project's leaders, as being like a moon shot. The scale of Emerald Sea would span almost every Google platform, would become embedded in every key page of Google services, and would realign fundamentally the relationship that it had with its billions of users. Like the U.S race to the moon, though, tight deadlines would mean that this would have to be a project that built on the work of previous efforts, focusing existing work as much as inventing new work. The result: Google Buzz, the maligned social media platform that did many things right in the wrong context, and Google Profiles, which incorporated streams of posts from people's Buzz accounts, would become the core product elements for a new central platform for sharing messages, photos, videos, links, and locations.

But this new project, now called Google+,  would be more than putting Buzz-like infrastructure to broader use. For example, Buzz already had the ability for people to share content to limited groups of people, based on groups of contacts in Gmail. It was an awkward system to use, in part because it required wrestling with Gmail's features and in part because it wasn't very easy to filter people's sharing by groups. Enter Andy Hertzfeld, a software design maven who worked on the look and feel of Apple's breakthrough graphic interface design on its original Macintosh computers. Gone was any semblance of Gmail's old-school contacts interface, in its place a fun interface that enables people to drag and drop contacts into groupings called Circles.

The Google+ posting interface makes is very easy to choose a circle with which to choose some content and to find posts of messages, photos, videos and other content from just those people. These circles include both default groupings, such as family, friends and acquaintances, circles that you can define yourself, and a Public circle that allows content that you post to Google+ to be seen on your Google Profiles page by anyone and searched on the Web. There's also the ability to share content with "extended circles," people who are in the circles of people with whom you share a circle relationship. Content sent to people via extended circles and other unsolicited content goes to an "Incoming" filter on Google+, where you can sort through who's content might be worth following - a concept seen earlier in Google Wave. This concept of targeted messaging and filtering plus extended social networks comes from the social research of Paul Allen, who now works for Facebook.

The net result of this core functionality of Google+ is that it's still easy to follow lots of people to get an overall feel for what's happening in Google+ but also very easy to follow, share and re-share content with very specific and potentially overlapping groups of people. An easily tuned notifications window enables you to see when new posts, comments, reshares, photo face tags and circles are available. You can choose to edit your Profile page to display different types of information for people in specific circles. And each post, comment and other content element includes Google's new "+1" content voting feature. The core functionality certainly resembles Facebook at a first glance, but the design, ease of use and the ability to organize, edit and share information in ways that Facebook can't - or won't is immediately apparent.

If this redesign of core elements of Google Buzz stopped there, you could say that Google had done a pretty good job with trying to catch up with Facebook. But this is just where Google+ starts. Photo sharing comes into its own in Google+ via a redesign of its Picasaweb photo and video sharing service, which is well integrated into the Google+ experience. While it's still possible to share videos from YouTube, the concept seems to be to move more short, personal video content into Picasaweb, which is now labeled Photos on Google Profiles pages and navigation. The photo gallery viewing feature in Google+ is slick, and includes a comments feature that enables you to see comments while you're viewing a photo gallery or when you're viewing its posting.

Google has also sweetened the pot by offering unlimited storage on Picasaweb/Photos. Also on the Web version of Google + are Hangout, a videoconferencing feature that enables up to ten people to share a video "party line," and Sparks, a specially tuned version of Google news that selects filtered articles and blog posts from Google News to "spark" conversations in Google+. The main toolbar that appears at the top of all of Google's main pages such as Gmail and its Web search page, now includes status notifications for Google+ and a small, Twitter-like box for sharing messages on Google+.

The real kicker for Google+, though, is that in many ways it's designed first as a mobile app on Android devices. Status notifications, photos, circles and profiles are all accessed easily from its native app, and messages with links can shared with phones using SMS texting. You can check in to GPS-located places, share messages on a Google map, or use Huddle, a group messaging service similar to Beluga, to carry on text conversations with one or more circles on a topic. Photo, video and text sharing is very easy via its Buzz-like "widget" tool that provides quick access to these features. Notifications for mobile devices can be tuned quite precisely to ensure that you get whatever amount of update notifications makes sense for you on the go. And as usual there are APIs to facilitate developers offering browser and in-app extensions and other functionality.

Will this all fly? The initial impression I get is that Google+ has a strong chance of succeeding. The design is very slick, completely unlike the awkward, utilitarian designs of many of Google's core products. Google prides itself on efficient designs that enable it to serve up Web pages and services rapidly, but if the content that's served up isn't engaging and fun to use, then they won't stick around. Google+ couples a wide complement of social media features with a lean and fun design that's both efficient and elegant looking. A widely distributed image on Google+ compares Facebook as TV reality show star "Snookie" versus Google+ as Audrey Hepburn. That's probably an exaggeration, but given people's attraction to the retro elegance of TV's "Mad Men" series, perhaps it's a telling one.

Certainly Google+ has captured the attention of many notables. Tech media mavens such as Jeff Jarvis and Leo LaPorte, who had grown gun-shy at the thought of Google social media initiatives, appeared to be very impressed - and triggered a flood of interest from other tech notables using the service. Google's own senior management, including CEO Larry Page, have been contributing prominently on Google+'s public streams, posting not just dry little corporate speak items but also photo streams, comments, location checkins and even hosting a few Hangout video chats with whoever showed up. Google has bet it all on succeeding with Google+, and they are willing to show the world that they are able to use it convincingly and confidently. The initial invites for this "sneak preview" circulated rapidly and enabled people to invite any number of contacts. Within a matter of hours the initial membership grew so quickly that invites were turned off, now metered out more slowly behind the scenes. Helping along the rapid growth of Google+ has been the existing base of Google Buzz users, who constitute no more than about ten percent of Facebook's following, but are already familiar with most of Google+'s features in their earlier form and have been pumping out content and filling up their circles with contacts rapidly.

And this is just the beginning. Still to be added to Google+ are its search feature, profiles for businesses and Shared Circles, which will allow people to join common circles. Feedback is being incorporated rapidly into the product, which will remain in its "project" phase indefinitely, but it will probably be the worst kept secret on the Web. This is in part because while only a limited group of people are using Google+ so far, unlike Facebook much of their content is going into public channels. You can search and share public Google+ content, which means that statuses and links can appear easily in services like Twitter - much as I have been doing with my own headlines and commentary on Google Buzz for the past year and a half.

The Web as a whole and social media mavens in particular are still struggling to adjust to just what Google+ means for them. For those who have focused on making social media mass media, Google+ offers a new opportunity to continue that - but not just that. The Circles function of Google+ makes it far easier for people to work on many different levels of public and private interchange through text, photos, live video and mobile sharing, combining the intimacy of sharing and friends and family on Facebook in a more private environment with the ability to shout to the world on demand. In a sense, the legal backlash against Google's gaffes with privacy management have served them well, forcing them to come up with a way to balance public and private personas that puts the social back in social media.

Of course, Facebook and Twitter aren't going away any time soon. regardless of what Snookie vs. Hepburn comparisons might imply, no more than the Ford Motor Company disappeared once General Motors burst on the scene with a new way to market automobiles. Although Twitter results were turned off recently in Google search results due to the expiration of their contract agreement, it's likely that Google will continue to "play Switzerland" for promoting real-time content from Twitter as well as breaking content from Google+ and other providers. Google's primary aim is to decipher the social graph to the point where its search, ad and marketing tools can adapt more effectively to a much more contextual world of mobile and online content. In the meantime, Facebook is readying new features that will likely position its capabilities against Google+ more effectively.

As with most Google initiatives, if Google+ enables the Web to be more open and accessible to these services, then it will have served their purpose, regardless of whether Google+ dominates all other social media providers. This is one of the reasons why Google is now promoting its "Data Liberation Front," which enables anyone with content and data in a Google product to move it in and out of that product. This is a direct challenge to Twitter and Facebook, products which enable content to be generated by its users but which in essence own that content forever and make it difficult to take it with you when you leave their services. This is both good policy and clever marketing by Google, giving it "white hat" status on both privacy and ownership issues that many other social media players have been reluctant to embrace. Yet again, it's the Web that Google wants to win, and for the Web to win, Google's users have to be winners on it and feel safe on it. Wherever their data goes, chances are pretty good that Google's searches and ads will benefit from it..

So as much as Google+ is designed to address virtually every imaginable feature that a social media platform could offer and every issue that a person could have with using those features, it's really about the future of the Web itself. Without the open Web, the Google brand is nothing. And without Google succeeding on mobile platforms with social media, the center of the emerging world of Web-first mobile communications, the Google brand will miss out on its greatest opportunities for growth for years to come. Google+ has entered the scene at a time at which Google needed to address one of its key weaknesses if it wanted to keep from losing its foundations. To that end, Google+ will serve it well. Beyond that end, if it serves the Web well, then we all should breathe a sigh of relief.