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  Teaching Kids to Program

If your kid wants to write their own side-scrolling shooter game, they probably need to learn to program.

My 9-yr old is learning to code using Phrogram (a revision of KPL - Kid's Programming Language), which is based on the Microsoft Visual Basic IDE model, and uses a simple BASIC-like procedural language that has sprites and intersection detection - so it's easy to do games.

Phrogram runs on top of .Net, so it's Windows-only, but it has a nice tutorial, and a ton of example programs. It's also free. Phrogram runs pretty slow, so you need a fast machine.

So far, we spend about 15 minutes a night going over loops, conditionals, and methods. Here's some sample code:

 For J = 1 To NumberOfSticks
   If I <> J Then
     If Sticks[I].Intersects(Sticks[J]) Then
       HasIntersections = True
     End If
   End If

You could be radical, and try and teach your son (or daughter) Ruby, Python, or JavaScript or ActionScript. Peter Norvig recommends "Alice" or "Squeak" for Kids. But I'm finding Phrogram / KPL to be just the right level for a nine year old.

BTW, Let me know if I'm missing something great out there - the modern day equivalent of "Bill Budge's Pinball Construction Kit" game...

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  Microsoft Live Search DeathWatch™

You how Calacanis singlehandedly created the FatBloggin' meme? Well, he did.

My meme is the Live Search DeathWatch™ That's shorthand for when Microsoft kills it's search engine branding, and replaces it with something else (like, Yahoo, for example).

The patron saint of all Microsoft watches is Mary Jo Foley, and she reports on yet another executive departure: Dane Glasgow, general manager for Live Search, is leaving Microsoft. Ho hum.

I'll just use this opportunity to re-iterate my take on Live's recent re-org:

Summary: a red-shirted* VP named Satya Nadella is now in charge of Live search engineering. Good luck buddy.

My initial cynical reaction: "GREAT - let's give the guy who produced that incredible Microsoft CRM product that everyone uses the SEARCH AND AD PLATFORM"

*Red-shirted in the Star Trek sense

Glasgow was to report to Nadella, but apparently he didn't care much for his new red-shirted boss.

Crazy idea to get a ton of digg links: Come up with a "Deck of Cards" for Microsoft execs, like they had for Iraq back in 2003. Ballmer would be Saddam (Ace of Spades). Berkowitz would probably be the Jack of Spades... hmmm...

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  The Attitude that Built Google

Jeremy Chatfield has not one, but two brilliant posts up about search engine spam and the incipient collapse of the page-rank system.

However, Jeremy should just be hired by Google, because he really "gets" the old-school Google mentality. Here's what he says after explaining how the page-rank citation model is doomed in his second article:

I’ll avoid further describing more problems. If you’ve got this far, you can probably infer what else I’d say. If not, think about it for a while.

That little koan is soo hard-core Googly. Basically that's exactly how the early employees think.

Maybe Google should just hire Chatfield? Put him in charge of the AdWords API. They could get some mojo back if they did.

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  Stop Credit Card Junk Mail Offers

I get about 2 pre-approved credit card offers per day. My wife gets 1/day. If I had an incinerator, I'd try to get more junk mail, so I could use it to heat my house...

Anyways, here are details on several ways to opt-out of credit card offers. Easy answer: you can opt-out at:

I might actually miss the fridge magnets that look like Amex cards that they send me...

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  Why Can't Yahoo Compete?

Yahoo reported yet another depressingly weak quarter. The Q1 2007 earnings conference call is a litany of lame excuses as to why Yahoo can't perform.

One thing Yahoo is good at is plying an excuse. This time it's "Wall St. got ahead of itself on Panama." Of course, no mention of their trick last quarter, bogusly hyping Panama by saying they were launching it "earlier than expected".

The story with Google is getting simpler - each quarter they mint $1B in profits by sticking to traffic and search growth, while having a global, diversified ad system that prints the money.

Meanwhile Yahoo's market share has not grown in the past 3 years.

Yahoo!’s market share has been flat and steadily eroding over the past 4 years, while Google’s has dramatically accelerated. Yahoo! had a 28.9% share in February 2003 (according to Neilsen NetRatings ), compared to 29.5% for Google. However, Yahoo!’s share had dropped to 19.5% as of December 2006, and Google’s had increased to 65.4% (according to Bank of America Equity Research).

In a blisteringly accurate critique, seeking alpha columnist Eric Jackson lays out the reasons for Yahoo's failures, with the money quote being:

Google has grown its shareholder value 21 times more efficiently than Yahoo! over this time period, when the Internet ad market has been booming.

It's a theme repeated over and over. While Yahoo claims to be "leveraging it's audience insight" in order to "be in position" to capture "the growth of the internet", Google has ACTUALLY done it. Yahoo has dithered.

EVERY earnings call for the past 3 years has included Terry mumbling something similar to:

“We are on the cusp of witnessing a significant increase in engagement of consumers on the Internet and believe we are best positioned to capitalize on the many opportunities to which we are exposed.”
from the Q1 2005 call

Unfortunately, the fact is that Yahoo has performed worse and worse since then. Google has eaten their lunch. Even Ebay is coming back stronger than Yahoo.

Part 1: They Were Asleep at the Search Wheel

It's bad enough that Yahoo blew the chance to buy Google, but far worse is the fact that Yahoo wasn't even AWAKE on search strategy until it was too late. There were 3 key failures:

What has Yahoo done well? For a while, their display ad business was covering for the lagging search ads. No more. In Q3 2006, Semel warned of weakness in Finance and Auto sector display ads. Unfortunately, no matter how good display ads do, they are sensitive to seasonal and cyclic economic factors - more than search is. They can't make up for the loss of share and revenue on the search side. That's partly why the last few quarters haven't looked very good for Yahoo.

Yahoo's Problem is Leadership. Semel.

Yahoo's strategy has changed basically every 6 months under Terry Semel, as his initiatives have failed and Google has forced him to go someplace he doesn't want to be: Technology and Search.

Note the difference a year makes in Terry's opening earnings call summary:

Q1 2007:
"We have been executing aggressively against our plans to improve our search monetization, strengthen our display advertising business, and seize the opportunities we see in emerging areas like social media, mobile and video."

Q1 2006:
"The strategy that we have talked about for the last couple of years, to lead the shift from mass media to my media is starting to coalesce and the next phase of Yahoo! is becoming much more visible. You can see it through the continued development of communities on our network, the expanded programming of head and tail content and the evolution beyond web search to social search. All while providing personalized services for our users whenever and wherever they are."

In 2007 it's all about search. Only one year ago, search is barely mentioned. Media, Community & Personalization was far more important to Yahoo at the time. Terry talked about moving "beyond web search". HA! Somehow I hope he didn't mean that Yahoo would be losing market share in web search... but that's what happened.

As I've written before, Semel doesn't have the technical chops to lead Yahoo, he was brought into to make Yahoo into a media company. (BTW, did you notice that the Dreamworks studio - the much ballyhoo'd Spielberg, Geffen & Katzenberg collaboration was recently sold for a mere $1.6B? - that should indicate why Yahoo CAN'T be a media company.)

Basically, Yahoo has been pulled into a war they didn't want, with a much more focused and powerful enemy. Semel doesn't have the ability to fight that war.

Why Panama isn't the Answer

Panama is not enough. It is worse than Google's current system in EVERY WAY. It's harder to use, it has worse ROI, the inventory isn't there, and it isn't a global diversified ad system - one that has search, content, and many other forms of advertising built-in. Google has all of that. Yahoo could have that in maybe 5 years...

From a channeladvisor post on initial Panama results:

For example, we have a number of clients with strong national brands. Actual CPCs on Google for these brand terms are $0.01 to $0.06. On Yahoo, the CPCs on the same terms are at least $0.10. So, even though Yahoo sometimes has a higher conversion percentage on those terms, ROI on Google can be two to three times or more what it is on Yahoo (using return on ad spend—ROAS—as the measure of ROI). And, because retailers with strong national brands drive a large percentage of their paid search sales through brand terms, brand term ROAS is a significant contributor to overall ROAS. As a result, overall ROAS on Yahoo is lower.

Beyond ROI, Panama has 3 key problems:

  1. Yahoo's inventory is weak - due to declining search share - 30% to Google's 60%.
  2. Panama's not rolled out anywhere but the US and Canada
  3. It's technically 3 years behind AdWords in functionality.

So Panama, for the rest of the year can be expected to be blamed for disappointing results like it was this quarter. It's not the answer.

Moreover, Yahoo announced a re-org late last year. They still haven't been able to hire an executive in charge of "audience", and this quarter's results pretty much bear out what the consensus was on the re-org: "Deck chair shuffling".

What about Microsoft?

The only internet related company performing worse than Yahoo at this time is Microsoft. If Panama hasn't lived up to hype, Microsoft's search and AdCenter products have been total, complete miserable failures. Full of spam, and losing traffic daily, despite huge platform advantages (IE7) that should have propelled them higher.

So it's now possible that these two failing companies will get together, with Microsoft wanting to buy Yahoo to compete with the new boss: Google.

That would be a complete disaster. The only good thing would be getting rid of Terry Semel. However, Microsoft is more lost than Yahoo, and folding Yahoo's 12,000 strong workforce into MSFT's 73,000 people would pretty much kill any chance Yahoo has of growing into competing with Google.

Is There Any Hope for Yahoo?

If Yahoo had a technical leadership injection, it could get back into the game. Things are broken, and Semel clearly can't fix them, but Yahoo does have some strength.

Certainly Jackson's recommendations - designed to get Yahoo's stock back up, mostly should be considered:

However, I think the key to Yahoo's recovery is to figure out how to get advertisers to split their budgets closely between Google and Yahoo.

Yahoo mainly needs more inventory. They need to copy Google's strategy of being the ad system for ALL media by 2010. They need to be able to say to big advertisers: "We can give you better deals, better service, better reach than Google."

It's possible to say that because Google is on it's way to becoming incredibly dominant, and it has no shortage of arrogance in dealing with customers. Eventually it will screw up, and piss off big advertisers. Yahoo already has relationships and it could prosper as a strong #2.

However, the likely scenario is probably Microsoft buying Yahoo.

In that case, you should load up on YHOO stock now, in hopes that you get 30%+ premium over the next year on the buyout. And you should buy GOOG like crazy too. Because if Microsoft does win Yahoo, the combined incompetence will ensure that Google ends the biggest winner of all.

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  Google's Q1 2007 Earnings
Well, Google is so dominant that it's kind of boring. They had a basic blow-out quarter, while Yahoo is the sick man of the internet...

In fact, the earnings call WAS pretty boring, with the Google team practicing serious message discipline, everyone emphasizing that they really DO CARE about search and especially advertisers.

Gross revenue increased 63% over Q1 of last year to $3.7 billion. Revenue from Google properties was $2.3 billion, representing strong year-over-year growth of 76%. We experienced healthy traffic growth in our business both domestically and internationally.

Now turning to cash flow, operating cash flow was strong at just over $1.2 billion. Free cash flow, a non-GAAP measure which we define as cash flow from operations less CapEx, increased to $623 million.

In the tradition of Arsenio Hall, here are some thoughts - things that make you go "Hmmmm".

Overall, three things really strike me: 1) Google is making a lot of these gains with big advertisers. 2) Unlike Terry Semel, who says that Yahoo is "well-positioned to take advantage of future internet growth", Google is actually taking advantage of current internet growth in a massive way. 3) Google looks insanely strong internationally. By comparison, Yahoo's over-hyped Panama ad system is NOT live in any countries besides the US and Canada.

Even though every analyst currently has "buy" ratings on Google, which doesn't leave a lot of room for upside surprises, Google's financial performance and increasing dominance should be able to power the stock through the $500 - $600 level.

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  Do Women Work More Than Men?

No. According to a global survey / study of total work done in home and on the job which shows that, contrary to convential wisdom, women and men work the same amount per day. At least in "rich" countries - but not in Italy(!?)

Anyways, this summary in the Slate article made me laugh:

Although men in many rich countries do not work less than women, they do enjoy about 20 to 30 minutes more leisure per day (over an hour more in Italy) because they spend less time on sleep and other biological necessities. Men spend almost all of this additional leisure time watching television.

So true on all fronts...

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  Google's DoubleClick Purchase - How Yahoo Wins
Here are a few odd notions I have about Google's purchase of DoubleClick:

Obviously Microsoft must be crying in their soup over this. Angry incompetent people crying in their soup. Paul Kedrosky is right when he says this will probably push Microsoft to try and buy Yahoo. That's their brand of flailing.

Yahoo, on the other hand, could be a more solid #2 option if they had more inventory. They already lead in brand ads, display ads and behavioural targeting. I hope Yahoo rebuffs Microsoft somehow, yet manages to convince Gates that Yahoo should run Microsoft's online business.

If Yahoo had Microsoft search inventory back, and they got some good chunk of MSN properties, they'd be a place to spend a good chunk of money no matter what Google did.

The advertising world craves an alternative to Google. Microsoft cannot fulfill an anti-monopolistic craving. Yahoo could be it, but Yahoo and Microsoft alone are not going to beat Google standing separately, and as I said years ago, the only winner when their inventory is split up is Google.

Since Microsoft is incompetent at all things internet and ad related, it would be a DISASTER if they bought Yahoo. However, there's no reason for them not to let Yahoo run their online ad world. (Save for the ego aspect - which hopefully goes away when Ballmer is fired.)

Therefore, the ONLY HOPE for Microsoft is:

  1. Steve Ballmer is fired
  2. Microsoft fails to buy Yahoo
  3. Yahoo runs and rep almost all MSFT inventory online.

Sounds crazy, and it will never happen, right? But it makes a lot of sense. Microsoft is a miserable failure at all things internet. It's losing share and relevance minute-by-minute. It's desperate.

That's my optimistic hope - somehow Yahoo emerges with Microsoft's inventory. And NOT as a subsidiary of Microsoft.

More about DoubleClick

The blogs and internet journalists haven't really broken down DoubleClick and detailed exactly what Google is getting here. The most important thing that people aren't talking about is the DoubleClick Advertising Exchange (adx).

  • DoubleClick is launching an ad exchange (now in beta) - something that competes with RightMedia

    • Unlike RightMedia, the exchange has payment included.

      Buyers / sellers don't have to worry about payment from the other side of the transaction (DoubleClick guarantees payments for inventory sold through the system.) This is a huge advantage, and fits great with Google's ability to get AdWords users to participate by offering free imperial credits (a la Google Checkout) to AdWords customers.

  • Oddly, DoubleClick also has Performics, which is a affiliate network like Commission Junction, focused on lead generation.

    Along with the overall display advertising market share, it's the exchange which dovetails so nicely with Google. It's something they need, and Google's eco-system and technology will enhance it. (BTW, someone's now got to buy RightMedia - though Yahoo owns a chunk (~10%) already...)

    PS. Another point that few people seem to have remarked on:

    Google and DoubleClick are in essentially the same building in NYC. Good for integration until the closing in December (!), n'est ce pas?

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  • 4/10/2007
      Stuffing the Channel with Xbox 360
    Maybe I'm too jaded to blog these days. The only thing that gets me writing is more bad news from Microsoft. Paul Graham jumps in with a proclamation of the obvious: "Microsoft is Dead."

    Much more delicious is the long, angry analysis from Roger on how MSFT was stuffing the channel with Xbox 360s in order to make their numbers look better. Here's the bitter summation that makes me smile:

    There is something seriously, institutionally wrong with Microsoft. This is not the company I knew in the late 1990s. Get back to basics, boys. Because accounting tricks neither fool Mr. Market nor your customers forever.

    Yes, I know it. Microsoft Schadenfreude is the Advil of my blogging...


      Stross Eviscerates MSFT in NYT

    Randall Stross, who knows a bit about Microsoft and also done some skillful hatchet Jobs takes to the New York Times and rips Microsoft Live search a new one for their announcement that they will pay big IT departments to install Microsoft Live toolbars on all their PCs. The payments will be based on search volume.

    IF Microsoft has determined that it is futile to compete with Google head-to-head, and if, as seems to be the case, it is willing to cast dignity aside and adopt marketing gimmicks in an attempt to gain market share, why stop at half measures?

    Microsoft is so desperate and incompetent here, that one could almost start to feel sorry for them.

    Not really.

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      The Story of Adult Friend Finder

    Everything that you need to know about web marketing nicely wrapped up in one HUGE success story. The normally reticent Andrew Conru talks about Adult Friend Finder.

    via Kedrosky


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    Recent Posts

    Teaching Kids to Program
    Microsoft Live Search DeathWatch™
    The Attitude that Built Google
    Stop Credit Card Junk Mail Offers
    Why Can't Yahoo Compete?
    Google's Q1 2007 Earnings
    Do Women Work More Than Men?
    Google's DoubleClick Purchase - How Yahoo Wins
    Stuffing the Channel with Xbox 360
    Stross Eviscerates MSFT in NYT
    The Story of Adult Friend Finder


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    Teaching Kids to Program
    Microsoft Live Search DeathWatch™
    The Attitude that Built Google
    Stop Credit Card Junk Mail Offers
    Why Can't Yahoo Compete?
    Google's Q1 2007 Earnings
    Do Women Work More Than Men?
    Google's DoubleClick Purchase - How Yahoo Wins
    Stuffing the Channel with Xbox 360
    Stross Eviscerates MSFT in NYT
    The Story of Adult Friend Finder