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  Advancing Google Metaverse Rumors

GigaOM has a post on the rumored Google Metaverse, adding some interesting info about a China development team:

For instance, our sources in China say that Google has teamed up with a Chinese company to develop the “virtual people” or avatars, while an internal team develops the virtual world internally.

I've been big on the idea that Google will build or buy a Second-Life type virtual world, making that one of my predictions for 2007.

This China connection is interesting - because one of Google's more famous developers / bloggers happens to go to China regularly, and it's publicly known (though she's cleaned it out of her resume) that her current project is something in the social application space.


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  Prediction: Google Avatar World
Here's a prediction for 2007: Google will release something like Second Life (if they don't buy Second Life first).

Google will build a avatar enhanced social / virtual world with 3-D Graphics.

Why do I think they would they do this? If you watch certain Google Tech talks, it makes sense that they'd have some Second Life envy. Google also would like to build services that are popular with the kids, i.e. the 15-22 year old demographic, which is one of their weaker areas.

When this service comes out, it will probably be panned, and disliked by the cognosceti who think Google should stick to its knitting. But I think advertising in virtual worlds is something they will want to figure out.

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  Behavioral Targeting: Huge in '07
What's the most important ad technology for 2007? I think it's Behavioral Targeting.

Behavioural Targeting (or BT) is simply the ability to show you ads based on what you do (your behaviour) on the web.

The Wall St. Journal has an article discussing Microsofts attempt to use behavioral targeting in combination with search ads:

If someone types in "compare car prices" on Live Search, Microsoft's computers note that the person is probably considering buying a vehicle. The computers then check with the list of Hotmail accounts to see if they have any information on the person. ... Microsoft says that in testing in the U.S., behavioral targeting increased clicks on ads by as much as 76%.

Microsoft doesn't really matter much, especially in search. The biggest player in BT is Yahoo!, since they have the most email users and a broad network of content sites. Google could start to do it more as well, mostly based off of your search history, though they've mentioned they won't use it with AdSense. Tacoda is the best known, and probably biggest 3rd party ad network which touts BT more than anyone else.

Behavioural targeting is important because it works and when you have a huge database of peoples interests from their click stream and email, you can really improve ad response rate. In 2007, you should see a lot more offerings, a lot more proof that it works, and the price should go up a lot too!

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  The Single Most Important Mobile Trend for 2007

2007 will see mass consumer adoption of smart phones (i.e. More than 5M units sold). These are cheap blackberry clones - phones with mini keyboards.

In the US, this trend will be the thing that puts mobile apps on the map.

Why has it taken so long? The main barriers have been cost, screen resolutions and 3G networks. All those are now solved.

These trend-creating devices cost about $200, and will enable mass adoption of texting, mobile email and creative mobile applications. Examples of these phones include:

Paul Kedrosky recently posted some stats that 2M BlackBerrys out of 7M total sold are in the hands of consumers, rather than business people.

This is my most obvious and sure-fire prediction for 2007, and it will have a huge impact on the way the whole internet is used over the next 3 years.

You are hereby behooved to get one of these phones or risk missing out on the next big phase of consumer web, social networking and search development.

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  Predictions Recap
Here's one of those canonical end-of-year posts: How'd I do at my predictions for 2006.

Here's what I said last year in a post where I was trying to predict the major event for each of the upcoming 6 months:

January: Google Calendar releases. Integrates with Gmail by sucking dates out of your mail and into your calendar.

Good. 1 for 1.

February: Google Wallet or "Cash by Google" gets pushed out. Designed mainly to let you buy stuff from Froogle vendors.

OK. 2 for 2 - Google Checkout.

March: Google buys a music startup like Pandora.

Totally Wrong. They bought You Tube instead. 2 for 3.

April: Yahoo releases revamped Y! SMS (aka Overture) so the auction model works like Google, based on relevance. MSN takes away a bunch of inventory from Yahoo (i.e. MSN itself).

Totally wrong on Yahoo's time frame. MSN of course did take the inventory, and managed to decrease it as well. 2 for 4.

May: Ask Jeeves is re-branded / renamed. Still remains irrelevant, however.

I think this is right. I really haven't looked at Ask all year. 3 for 5.

June: MSN and Yahoo fight for more inventory, buying up properties, but they struggle and Google is more dominant in PPC than ever.

Good. MSN and Yahoo did do some deals for inventory (i.e. Facebook and Ebay). 4 for 6.

Overall, the best prediction I made last year was that Google would be MORE DOMINANT than ever. That's been true in spades.

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  Google Checkout: What the New York Times missed
There's an NYT article on Google Checkout, covering the success of their massive loss-leading promotion to drive Google Checkout usage this shopping season.

Google is giving away $10 on $30 purchases for customers who use Google Checkout, and this is causing big uptake from merchants. Ebay expert Scot Wingo agrees with the effectiveness of this promotion (Google Checkout's transactions are up over %1200 in Q4 from Q3) - it's definitely attracting eBay sellers to use Google Checkout and eventually AdWords. It's also attracting major sites like Toys R Us, which is promoting Google Checkout as it's top payment method.

I feel a bit vindicated by the positive reception to Google's strategy, because I thought Google Checkout was going to be a big deal from the beginning, especially relating to EBay's community.

Here's what the NYT article misses, and I still think most people don't see: Google will build a distributed "trust" system, much like eBays. The trust system will work across any website, and allow consumers to review which sites are worth buying from. Combined with the knowledge Google will have of people's purchase history, it will make Google Checkout a very strategic long term initiative, and a big problem for eBay and potentially Amazon.

Checkout is really a brilliantly simple move by Google:

  1. Change the credit card processing game by making it free.
  2. Reap the benefits of getting more merchants into AdWords.
  3. Be the source / arbiter of trust in internet commerce.
  4. Own the purchase data for huge numbers of internet buyers.

I think Google Checkout is a key initiative which opens up growth on the needed scale to make an impact on Google's future value.

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Recent Posts

Advancing Google Metaverse Rumors
Prediction: Google Avatar World
Behavioral Targeting: Huge in '07
The Single Most Important Mobile Trend for 2007
Predictions Recap
Google Checkout: What the New York Times missed


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