After months of trying, BoomTown was finally granted an audience with the two key execs who are now responsible for one of the diciest digital jobs going right now: Microsoft’s Greg Nelson and Yahoo’s Mark Morrissey.

The pair’s two-year task is to coordinate the massive search and online advertising partnership the companies struck last year, a job that is perhaps one of the more complex and critical to their businesses going forward.

The deal was finally approved by government regulators in February, and that started the clock for Nelson and Morrissey to get it cooking with gas.

Although it is not as if either Microsoft (MSFT) or Yahoo (YHOO) had a choice but to join together in order to make a dent in the dominant market position of Google (GOOG) in search, the companies are hoping their combined share of close to 30 percent will make a difference to both advertisers and consumers.

The integration will be ongoing, with hopes that the U.S. market will see a unified backend for search technology by the end of the year. Paid search will follow, as will the rest of the global markets.

As part of the shift, some staff from the Yahoo search technology group have either left, been laid off or have been moving over to Microsoft in the transition.

That has meant a Silicon Valley-to-Seattle area back and forth commute for Nelson and Morrissey, both longtime employees who have worked on a variety of other jobs at both companies, including heading MSN and major advertising platform initiatives, respectively.

But this effort is bigger than any of that, since it essentially is the search equivalent of herding cats–by creating a seamless search and online advertising product that works quickly and well across two major Web properties.

Thus, here is the first of two parts of an edited transcript of much of my hour-long interview with both, in which we talked about a range of issues from operations to culture to codependency.

Part Two of of the interview is posted here.

GREG NELSON: So, you want to hear how I got into this thing?

BOOMTOWN: Yeah…explain it to me.

GREG NELSON: So, you know me from the MSN days. And [Microsoft search head Qi Lu] said, “I like what you’re doing with your team, but I have this assignment. And I said, “Qi, I really respect what you’re trying to do. I don’t know if I’m the right guy for you, but go ahead and talk to everybody you want to talk to. And if you come back and ask me to do it, I’ll say yes.”

So, he went out and interviewed a bunch of people and then came back and said, I want you to do it. That was hard, because I loved my MSN team, and I loved what I was doing. But, you know, when Qi asks, you say yes.

BOOMTOWN: Had you been doing any search business?

GREG NELSON: Well, only through the MSN lens. I was a publisher in a way, because I had the responsibility to drive search volume through MSN as a publisher. So, I would work with our editorial staff in all these different markets to think about search experiences in the context of a portal or a media property, and how you turn search into content or how you drive premium content experiences that add value to search, whatever it might be.

So, I thought about it only from that point of view. The algorithmic part of search, like the way that you generate relevance in search, the way that you attach it to advertising in search, that’s sort of my…that’s what I get to learn out of this job, which is great.

MARK MORRISSEY: When he started, both of our executives got our top level teams together. We wanted to be really on the ground running by the time they got regulatory approval.

GREG NELSON: Just to give you a sense of what I walked into, there were hundreds…I don’t remember exactly how many, probably 200 people that had expressed interest in working on that Yahoo partnership by the time that I was asked to take it on. And they were people from all different parts of the company and division; not necessarily all at senior levels, but people that had said, “Wow, I think that’s really interesting, I’d like to come work on it.”

So, I went through a review of all those resumes and all that talent, and then also did additional sort of looking around and picking people one at a time to build what we thought we would be a great team.

BOOMTOWN: And how many people are working on it from Microsoft?

GREG NELSON: All up?

BOOMTOWN: Yes.

GREG NELSON: Thousands.

BOOMTOWN: No, of course, but…

GREG NELSON: Yeah, I mean, there’s about 25 on my team, 25, 30, something like that.

MARK MORRISSEY: But even after you got your team together, one of the things that we’ve continued to do is find some key talent at Yahoo that has moved over to also be part of the Microsoft team.

GREG NELSON: That’s been really key.

MARK MORRISSEY: Yeah. So, we want people that really understand the search business and have extensive experience at Yahoo and can really help bridge not only the cultural differences, but the technical differences and the way we’ve approached the market.

BOOMTOWN: You’ve done a lot of these.

MARK MORRISSEY: So, yeah, about five years ago, they brought me into the product portion of Panama….And then that’s probably the closest comparable effort in the industry, because we did have to move our 400,000, plus or minus, global advertisers over from the platform over to Panama.

When [Yahoo CEO Carol Bartz] came on board, she asked me to be part of a small team that worked directly with Microsoft from the very beginning to figure out what the right thing was for us to do at the company, and obviously then to do…figure out what the right aligned incentives and the right structure would be for a long term, 10-year, global agreement between the two companies.

So, I did that, and that was a big portion of my responsibility last year. And then similar to Greg, as soon as it became clear that we were going to get an agreement signed sort of in the October timeframe, maybe a little bit sooner than that, Carol sat me down. I had another position in the company, and she said, it’s the right thing for you to do, and she asked me to do it.

So, she asked me to take on this role, and I just have had a long term affinity for search and search advertising. I wanted to make sure with all the work that we did on Panama and all the investments we made in search that we really ended up with the right future. Search is critical to Yahoo’s future, and yet we’ve got to make sure that we do this transition in a way that really puts us forward of all of our different customers.

BOOMTOWN: When you say Yahoo’s future, how do you look at it in search?

MARK MORRISSEY: It’s a critical part of our business today, and a critical part of our consumer experience, and it always will be. What the market deserves is it really needs a true alternative to Google. And the best way for us to achieve that is to acknowledge things that we do well, and the things that Microsoft does well, and to leverage those things together, as opposed to us trying to do everything ourselves, particularly in the areas that we’re maybe not so good at.

So, between Microsoft’s experience and focus on delivering great global platforms with true scale, Yahoo’s strength in terms of working with advertisers and understanding of the market, I really believe that in the mechanics we set up from the very beginning of this that by leveraging both of our strengths, that we can really deliver a true competitor to Google.

Not only does our scale combine to really give them much better liquidity that is huge, right, getting up close to 30 percent in the U.S., big, but then the focus that we have really helps out.

[We're not going to be in] the search platform business, the crawling, the ranking and the indexing of the Web. There is a lot of search-related technology that we’re still going to do, because we believe that the search experience…where the market needs to go for search, it’s still a relatively young market, at least from my perspective. But the search experience really needs to evolve significantly.

So, rather than us with less resources than what Google or Microsoft have had in the past trying to do all the back-end platforms and do search experience, now we’re going to take our best talent and focus on search experience and the overall consumer experience.

And then some of our talent is moving over to Microsoft. There’s about 400 people in the products organization between the search technology and paid search that are moving between Yahoo and Microsoft.

BOOMTOWN: And how successful have you been recruiting those [to Microsoft]?

GREG NELSON: Oh, really. Yeah, very successful.

BOOMTOWN: And they’re staying down there [in Silicon Valley]?

GREG NELSON: Yeah, most of them are in India. Some of them are in Silicon Valley, and other places. We’ve had a super-high acceptance rate.

So, we’ve made that quite a big priority, including a lot of executive visits, and a lot of kind of, “Hey, welcome to Microsoft, we’re excited to have you.”

BOOMTOWN: So, then you brought up over about 400, is that right?

GREG NELSON: They come in waves actually, because Mark had talked about Panama, if you want, but they still have to continue to run Panama over a period of time, across all these different markets.

So, as they are closing down Panama in various places, then we’re bringing waves of employees over and training them on adCenter.

MARK MORRISSEY: And that was one of the things that really started to demonstrate and build a lot of confidence in the execution portion of the partnership. There’s two very competing objectives: Get the employees over as fast as you possibly can, because getting that talent into Microsoft not only puts more key talent on developing the things that we need to have done for the future of the platform, but also helps in just the transition itself.

And yet we don’t want to move the talent so quickly that we’re not able to continue to the platform all the way through.

So, we went through a very rigorous…I think it took about five or six weeks with the senior leadership at Microsoft on what employees can go in what locations with what skill sets to allow us to balance between the two, and I thought it went fantastic.

Employees are engaged; the Microsoft team did an excellent job of helping to explain their level of investment and give those employees…because employees, they want to beat Google, and knowing that they have a future at a company that is going to invest significantly to make that happen was a big deal.

BOOMTOWN: And, Greg, when you’re saying, when they move over, there’s not a flipped switch, I understand that, but what’s the time line at this point?

GREG NELSON: I think we’ve brought over 100 or so.

MARK MORRISSEY: A big chunk went last week.

BOOMTOWN: When does it switch over?

MARK MORRISSEY: Beginning of next year.

BOOMTOWN: The U.S. moves first and then…

GREG NELSON: Yeah. Well, U.S. and Canada, North America.

BOOMTOWN: Right, and then? Then the rest of the world?

GREG NELSON: You can kind of do it by size of market. So, Europe next.

MARK MORRISSEY: Basically, there’s 59 total countries and the objective is to get all countries done by Q2 of 2012, the first few markets being U.S. and Canada.

GREG NELSON: It’s 24 months after commencement, which is February 18th.

BOOMTOWN: Right, but it begins next January, correct?

MARK MORRISSEY: The principle is to transition with quality. That’s the overriding factor. And that’s based on the consumer experience and the yield and performance of advertisers and publishers in our owned-and-operated properties, right, because the intent here is make sure that, as we make the transition to going forward, we want the business results to get nothing but better and better.

We set a goal for both of our teams, if we can possibly move U.S. and Canada over before the holiday season, with quality, this year–this year, we want to do so.

BOOMTOWN: Quality, what does that mean?

MARK MORRISSEY: The first one is the experience. For consumers we want to deliver the same quality experience–basically the look and feel before and after the transition.

And the results will get nothing but more and more relevant over time. But the overall experience, the speed, the performance need to be as good or better going forward. For advertisers, there are capabilities that they’ve really enjoyed in Panama that are not in adCenter today. We’re not promising them one-for-one capabilities, but there are investments that we’re making together with Microsoft to bring adCenter up for advertisers and publishers.

In terms of the first one is experience–experience for consumers, advertisers, publishers, and we want the capabilities to be what they expect or better.

Then secondly, it’s around the business metrics….We want to make sure that again for not every single advertiser, not every single publisher, but if you look at in aggregate the groups of major marketplaces, we want the overall performance and business metrics, particularly going into the holiday season, it needs to be as good or better going forward.

So, quality is about the experience itself, measured probably in terms of capabilities, and then there’s the business metrics, and we need to make sure that their yield is as good.

GREG NELSON: And there’s great alignment on that. It’s a 10-year partnership at minimum, hopefully longer, and you want to get off on the right foot with everybody: Consumers, advertisers, publishers. You want them to feel like this is a strong launch, it’s a credible alternative, and we’re in.

So, we’re not going to rush it. If the companies don’t feel ready, like we can really achieve that, then, of course, we’re better to wait.

BOOMTOWN: Well, there is some pressure.

GREG NELSON: The time line that we started to communicate to–publicly, specifically–our advertisers and publishers, is our goal is to have, you know, as pretty confident, algo transition, U.S. and Canada, will happen this year.

We want the paid transition to happen this year, if we can do so with quality, before the holiday season. We’ve got to protect the holiday season at all costs here. And then the next big part of the goal is we have to have it all done by Q2 of 2012.

So, right now we’re finalizing with each of our markets what that sequence will be in terms of the countries, starting in the first quarter of next year, and then we just roll all the way through to that last year.

BOOMTOWN: And how have the cultural changes [been managed]?

GREG NELSON: It’s interesting, because, of course, walking into this I had sort of a point of view and some apprehension, like “Wow, is this going to be really hard.”

It’s been far easier than I had expected, and I think part of that is just that Mark and I get along very well. We’re both kind of pragmatic and it takes a lot to kind of get us ruffled. So, I think we have similar styles. And the people that we’ve hired, we’ve really focused on finding people that are resilient and emotionally mature, and it will sort of steer something of this complexity over a long period of time.

So, I think you often read about, oh, Microsoft has this one culture, Yahoo has another. In practice, at least between these teams, I haven’t found that to be true.

MARK MORRISSEY: Well, right, and the interests here and the incentives that sort of reinforce those interests are very aligned. The way that the partnership was put together, we all have this one big goal, and we’ve hired people that are just really strongly committed to getting that done, and you have support from both companies at the CEO level down. It’s the top priority for both companies. It’s been far easier than I thought.

BOOMTOWN: But in terms of disgruntlement at Yahoo over not being in search technology anymore, how did you cope with that?

MARK MORRISSEY: So, first, we are in search, we’re always going to be in search. There’s an element of that particular part of the search technology that we’re not going to be in. Yeah, there were some disgruntled employees, there always will be when you make a hard decision.

But, in general, employees have responded very well, and the level of commitment that we’ve seen from the Yahoo end, work that we have to do, because this is an extraordinarily complex transition process where we have to connect our front-end to Microsoft’s back-end, and it’s got to work at tremendous scale.

I don’t know if you had a chance to see my presentation from investor day, but one of the things that I showed was some of the screenshots of what we already have in test. February wasn’t that long ago. To have gotten regulatory approval for us, to get through the mountain of requirements and use cases that we had to figure out, to have gotten the API, agreement on the APIs, and to get the coding behind those APIs and get into test by June is phenomenal.

It’s really just a long way of saying that doesn’t happen unless the Yahoos that are working on this are incredibly committed to the future of where Yahoo is going, and the future of working together with Microsoft to achieve this objective.

So, while there will always be disgruntled employees, if you look at the larger population, I mean, we have people that are not just working, they’re working unbelievably hard to make this happen.

BOOMTOWN: Now, the search experience teams are competitive teams.

MARK MORRISSEY: Some are competitive and there are some places that we’re working together. It’s a mix of both.

BOOMTOWN: Such as? Bing has been very impressive in terms of their innovation.

MARK MORRISSEY: Absolutely.

GREG NELSON: Right, and then there’s a separate conversation which is longer term, and, you know, it’s the sort of thing that would feel great to work on if we could do it right now, but right now we’re sort of just trying to ship.

But, both companies have unique assets that we’d love to put into the search alliance, and we want to drive that conversation. And right now we just want to make sure that we get Yahoo to parity of their existing experience, and then we also want to have that conversation about how do we build strength.

MARK MORRISSEY: Another way of looking at it is this is the first agreement in the industry where we have full parity in the platform.

So, as Microsoft invests in innovation around the experience, that’s going to require changes in the platform. As Yahoo invests in things that we want to do in the search experience, that will require changes in the platform. So, we’re always going to meet in the middle at the platform anyway.

Now, that’s not to say that every single thing that we decide to do around entertainment will be the same things that Microsoft decides to do. Some of the things we want to innovate independently, because we’ll discover more things and really move the ball forward. But we already have established a very strong working relationship around how we make those platform decisions, because there are things that Yahoo does today that are quite different than the way Microsoft does them today.

In order for us to get to that comparable experience, this could have been a fight to the death, right? Why would we want to do that in the Microsoft platform? And they’d say, well, “No, we don’t want to do it.”

What we did–and again I think it speaks to the maturity of both of our teams–is we just worked through use cases. Well, what are consumers really trying to do here, how has Microsoft been approaching solving that problem, how is Yahoo doing that. I thought we worked not just agreeable solutions, but ones that moved the ball forward for both of us.

But I’m anxious to get into those future conversations much more. But right now we’ve got to ship.

GREG NELSON: That’s the next chapter. The chapter right now is everybody’s head is down trying to just land Yahoo properly on the platform, and with the great equivalent searching experience.

BOOMTOWN: And when you have complaints? [Microsoft is the] vendor essentially and [Yahoo] the customer.

MARK MORRISSEY: The structure of the agreement, we really worked hard. This goes way back to the very first discussions that we had. We wanted to have aligned incentives where we set up this codependence that kept us really working well together through each of our respective roles. So, by and large, the issues or concerns, why isn’t this working, why don’t I have this capability, you know, it’s Google does it this way…we are going to be a major voice of the customer to the Microsoft teams.

In the structure of the agreement we have both this operational rigor of how do we bring those things in, how do we make marketplace decisions, which are really important. They have the technology, we have the customer-facing piece–and then how do we make road map decisions.

So, throughout transition I have approval authority in Microsoft’s platform road maps, and then going forward then we have a way of we keep providing that type of input.

It’s not a typical vendor-customer complaint process, it’s much more of a partnership, but we each have respective roles where one of us is more the vendor and one of us is more the customer.

So, for the platform they’re more the vendor, we’re more the customer. For sales we’re the vendor, they’re the customer.

And that keeps us again this kind of healthy codependence. And again to leverage–that aligns with each of our strengths.

BOOMTOWN: Is there such a thing as a healthy codependence?

GREG NELSON: Just watch.

Good news for AOL CEO Tim Armstrong: His predecessor, AOL founder Steve Case, thinks the Google veteran has a chance to turn around the company. The bad news: He has a very long way to go.

Liveblog

11:14 am: Apologies, technical difficulties–joining late.

11:15 am: Armstrong is traveling back in time, discussing AOL (AOL) prior to his arrival. The company was managed based on gross revenue and page views, and that may work for some, but those metrics didn’t make sense to me.

Kara: Such as?

Armstrong: The Bebo acquisition looked successful, because page views were shooting up, but unique visitors were dropping down. Photo galleries with 80 photos into it. That sort of stuff. We’re pulling back on that stuff.

Kara: You’ve been pulling back on a lot of stuff. Revenue is down, too. Not a bad idea to go to zero so you can build back up.

Armstrong: Hopefully we don’t go to zero. But (former Gap CEO) Mickey Drexler gave me good advice. He told me I’d be under a lot of pressure to move the numbers up and that I should resist it.

11:17 am: Kara–anyone from Google (GOOG) you didn’t hire?

Armstrong: We need people who are passionate, but also willing to play on a team. The analogy I use is “when I got to AOL, there were a lot of people playing golf.” We need people on an orchestra or a football team.

11:18 am: Kara–I’ve called this the best management team to run a digital lemonade stand. You have a big team and a small business.

Armstrong: Compared to Time Warner (TWX), it’s a small business. But it’s still a large business: 100 million unique users in the U.S., etc. Bigger point: We have the largest opportunity on the Internet. But I tell investors that they shouldn’t be expecting quarter-after-quarter results. That’s not what we’re doing.

11:19 am: Kara–Okay, so what’s the opportunity?

Armstrong: It’s melding technology and journalism. Local efforts via patch. “We believe the local marketplace for journalism is important, and the local marketplace for services online is important.”

11:22 am: Armstrong–Beyond local, there are other areas that we can move into to fill unmet needs. Like religion–big opportunity there.

Kara: So how are matching tech with journalism?

Armstrong: We’re marrying demand algorithms with…

Kara: Like Demand Media?

Armstrong: They’re more search-based. We’re trying something else. But also giving editorial people better data. When I was at Google, I used to go to meetings at publishers where sales people had reams of data, and the journalists had none. There’s a lot of fear that some journalists have about technology and data, but they can use them as tools. But “the fear is where the opportunity is….There’s no reason why technology can’t fuel opportunity.”

11:26 am: Kara–So how do you sell all this stuff?

Armstrong: We service a lot of large audiences, but have technology that lets you delineate that audience and just serve who you want. And we also have models that let brands get next to the appropriate content.

Kara: You mean putting brands in the story?

Armstrong: No. Church and state is important. Brands next to stories, getting brands in front of the appropriate audiences.

11:28 am: Kara–You’re selling off Bebo. Will anyone buy it?

Armstrong: We’ve said we will sell it or shut it down. We’ve had interest from people who are interested in buying it. We’ll see how that turns out.

Kara: What about other stuff you might sell?

Armstrong: We’re keeping stuff that’s valuable. Mail and communications are important to us.

Kara: Social networking, given that you’re selling Bebo?

Armstrong: Very valuable. But it will be a joint strategy. Being a principal in a social network is something that we’re clearly not focused on.

11:29 am: Kara–What about search? You helped sign that big Google deal.

Armstrong: Last week, we kicked off the process of the search deal. We are meeting with multiple partners.

Kara: So you’re not re-upping with Google?

Armstrong: Google has been a great partner for 10 years. There’s a disadvantage in that we know what works and doesn’t work, and so do they. So now we need to compare both our needs, with Google and others.

Kara: There are only two partners, right?

Armstrong: There are probably more than two that we’ll talk to [like who?]. We’re valuable to search partners because the AOL audience performs very well for search. We perform more strongly than our market share implies.

Kara: Will you want a guarantee like the original deal?

Armstrong: We have a rev-share deal. There may be upfront payments, there may not be. But either way, those upfront payments are usually about market. They’re not core to the arrangement.

11:33 am::Kara–How do you look at Google and what they’re doing?

Armstrong: One of the things that Google has done a really good job with is taking risks, and you know, push, push, push. Like a lot of successful companies.

On the outside, as a partner, you appreciate that innovation. On the partnership side, you have to realize that you’re one partner out of a lot of partners that they have. And that’s the piece of it where personal relationships really matter. With them or other partners.

11:34 am: Kara–What about risks they face?

Armstrong: Risk for any company that size is how do you keep innovating? When Mark Zuckerberg was up here and you guys were hammering him, that can make you want to retreat. And you have to keep innovating.

11:35 am: Kara–AOL used to be innovative and important. The brand is tarnished now. Can you revive it?

Armstrong: Two different brands. By the way, before I officially left Google, I had a lot of people telling me to kill off the brand. But then I traveled around. And I found that there’s the brand that media people know about, and the merger, etc. And then there’s the brand that everyone else knows, and they have warm fuzzy feelings about it.

11:37 am::Who are your competitors? What do you think of Yahoo (YHOO), etc.

Armstrong: We have partnerships with Yahoo; we compete with them for users and advertisers. But AOL is not in a situation where we need to give advice or comment to people about what they ought to be doing. Yahoo is a big, strong company, though their strategy is much more focused on what we’re doing now, which is great.

Q&A

Q: Are you doing anything about the Gulf oil spill? Are you doing anything with your local journalism to help people with that? (seriously).

A: We’re covering it nationally. But we actually are working with someone locally, where there’s a girl in a town, where she’s raising money for the Gulf, and it’s not a town on the Gulf, but we’re trying to help her.

Q: Can you talk about AOL culture and how it’s changed since you got there?

A: At Google, I was managing 2,500 people. Now I’m managing 4,700. So I’ve learned that cultures are okay when they’re moving–up or down–and everyone knows what the plan is. They don’t work when there’s no plan. So people who don’t want to stay and don’t like the plan need an opportunity to leave. This is “Full Metal Jacket.” Turning this company around is not going to be easy. It’s not going to be eight-hour days.

Q from Kara: Management style?

A: I’m collegial. But at the end of the day, sometimes I need to execute and get it done. Like when I came aboard, there was a $400 million check I had to sign for a distribution deal. And then I asked people at a meeting to speak up about it and tell me what they said. There have been many cases where I’ve had to make decisions without a collegial environment. But the culture is getting better and collegial.

Q&A over.

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one.

While in Las Vegas recently, BoomTown dropped in at the HQ of Zappos, the online retailer Amazon (AMZN) bought last summer in a deal valued at about $850 million.

The company is well known for its culture of intense happiness, both in its high level of customer service and the enthusiasm of employees of the company, which started as a Web shoe retailer but has been expanding its offerings.

I can tell you first hand that I nearly went into a diabetic coma on my recent tour of the e-commerce company, led by Zappos “Mayor” Jerry Tidmore. That included a lot of sweetness from the staff, as well as way too many baked goods strewn about.

Here’s the video, in which Tidmore related to me at the end of our time together the innovative secret ingredient of Zappos’s success:

(I also did a video interview here with Zappos CEO Tony Hsieh about his new book, “Delivering Happiness: A Path to Profits, Passion, and Purpose,” which comes out in June.)

]]> http://allthingsd.com/20100419/terminally-happy-mayor-of-zappos-meets-born-grumpy-dictator-of-boomtown-hijinks-ensue/feed/ 0 http://allthingsd.com/20100322/china-to-google-go-ahead-and-leave-ya-big-loser/ http://allthingsd.com/20100322/china-to-google-go-ahead-and-leave-ya-big-loser/#comments Mon, 22 Mar 2010 11:45:01 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=36957 China’s state-run news media are ramping up their anti-Google rhetoric amid reports that Google will soon announce the closure of its Chinese-language search engine. This morning, China Daily accused Google of political chicanery and warned the company that it will be “the biggest loser” if it pulls out of the Chinese market.

“Business is business,” the publication wrote. “But when it involves political tricks, business will come to an end soon. The more Google politicizes the issue, the less room it leaves for itself for further negotiations. And netizens here, who are known for their inclination for novelties, will simply move on to other search engines if Google pulls out of a large and growing market. The US company will be the biggest loser in all of this.”

China Daily’s editorial echoed a similar piece published a day earlier by China’s official Xinhua News Agency. It, too, accused Google (GOOG) of acting as a foreign-policy arm of the U.S. government.
The company is “politicizing” its threatened withdrawal from the country, Xinhua said, adding that accusations that Beijing had supported a hacker attack against the company are “groundless.”

“It is a great pity that the Google case told us the company’s aim of entering the Chinese market seems not for commercial reasons but to act as a tool to penetrate into the Chinese culture as well as into Chinese people’s values,” Xinhua wrote. “It is ridiculous and arrogant for an American company to attempt to change China’s laws. The country doesn’t need a politicized Google or Google’s politics.”

And then there was this from Sing Tao Daily: “I’m not sure if Google knows that its arrogance can easily remind the Chinese people of the ‘big powers’ that cracked open China’s door by warships and cannons in the 19th century….The only difference was military weapons in the past and Internet service today.”

Clearly, tensions between Google and China are escalating, and quickly. At this point, Google’s closure of its Chinese search engine seems more an inevitability than anything else.

]]> http://allthingsd.com/20100322/china-to-google-go-ahead-and-leave-ya-big-loser/feed/ 0 http://allthingsd.com/20100204/pbs-frontline-considers-the-digital-nation-a-lot-of-handwringing-over-the-inevitable-but-watch-it-anyway/ http://allthingsd.com/20100204/pbs-frontline-considers-the-digital-nation-a-lot-of-handwringing-over-the-inevitable-but-watch-it-anyway/#comments Thu, 04 Feb 2010 13:26:36 +0000 Kara Swisher http://kara.allthingsd.com/?p=24055

Earlier this week, the reliably erudite PBS public affairs program, “Frontline,” aired a documentary called “Digital Nation,” which I caught on television in one of the rare moments I find myself actually in front of one.

Produced by Rachel Dretzin, in collaboration with tech author and pundit Douglas Rushkoff, it’s the second in a series–the first, which aired in 2008, was titled “Growing Up Online”–about how the inevitable digital onslaught is affecting everyone.

As the site for the show describes itself, in part:

Over a single generation, the Web and digital media have remade nearly every aspect of modern culture, transforming the way we work, learn and connect in ways that we’re only beginning to understand…Dretzin and her team report from the front lines of digital culture–from love affairs blossoming in virtual worlds, to the thoroughly wired classrooms of the future, to military bases where the Air Force is fighting a new form of digital warfare. Along the way, they begin to map the critical ways that technology is transforming us–and what we may be learning about ourselves in the process.

And, indeed, Dretzin and her team race hither and yon interviewing a pile of smart folks–most of whom, thankfully, are not from Silicon Valley–to uncover what’s up with this Internet thing, which the kids seem to love.

There are ruminations on the out-of-focus students at the Massachusetts Institute of Technology and the evils of multitasking, fretting over how this digital submersion is affecting the brains of schoolchildren and more jaw-dropping over the creepily compelling oddness of virtual worlds and online relationships.

Dretzin even features and–natch!–clucks over her own computer-savvy children and what it all means to them. She plays the role of the less-plugged-in mother, complete with a furrowed brow about it all, although the kids are obviously sharp as tacks, digital French flashcards or not.

This egads-no-one-know-where-this-geekery-is-taking-us worrywartness is probably appropriate, and though nothing new, is well told.

Perhaps the best part is a visit to the spanking new gaming-heavy center the Army has built that sucks in teen boys like nobody’s business.

While the piece has aired, you still can watch the whole thing on the well done Digital Nation Web site, the best part of which is the contributions of regular people who added their own voices to the digital conversation.

Which is remarkably robust, as far as I can tell, so perhaps we have not gone to hell in a cloud-computing handbasket quite yet.

Here are two of the more adorkable of those videos:

Here is the whole “Digital Nation” doc, in nine chapters:

Distracted by Everything

What’s It Doing to Their Brains

South Korea’s Gaming Craze

Teaching With Technology

The Dumbest Generation?

Relationships

Virtual Worlds

Can Virtual Experiences Change Us?

Where Are We Headed?

]]> http://allthingsd.com/20100204/pbs-frontline-considers-the-digital-nation-a-lot-of-handwringing-over-the-inevitable-but-watch-it-anyway/feed/ 2 http://allthingsd.com/20091007/google-says-googles-perks-are-overrated-and-belt-tightening-is-underrated/ http://allthingsd.com/20091007/google-says-googles-perks-are-overrated-and-belt-tightening-is-underrated/#comments Wed, 07 Oct 2009 19:41:56 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=11856 Hey Googlers! All those perks the company is famous for: The great food, the high-end daycare, the fancy bathrooms? Overrated, your bosses say. So is the dream of getting insanely wealthy at your job.

Instead, Google CEO Eric Schmidt said today, you ought to be happy to work at Google…because it’s Google. In that sense, Schmidt said, the recession of the past year has been good for the company since it has highlighted the difference between working at his company and other options–including not working at all.

Schmidt’s comments came during a press conference he and Sergey Brin held today, which was wide-ranging and went down several interesting avenues. I’m reproducing a long chunk of it here from my recording of the chat, because I think it addresses one of the core challenges Google (GOOG) has: How to keep the innovative energy and intelligence the company had from its garage start-up days now that it’s a 20,000-person monster.

Google has been grappling with this for quite some time, but the challenge became more evident in the last year or so as the company began cutting back on perks like free food and low-cost child care, and even made its first-ever layoffs. (The photo at the top of this post is from the 2008 version of the company’s annual “Google Dance,” which was canceled this year).

Those moves were made in response to the economy, but they also did double duty by helping the company “reset the culture,” Brin said.

The exchange kicked off when a reporter asked the duo about a sense of entitlement among Google staff, in reference to a passage in Ken Auletta’s new book about the company.

Brin: I do think there was a period of time where the culture, as it were, was misinterpreted. I certainly remember when we would start, when there were a  few of us working in the garage, and occasionally [co-founder] Larry [Page] would rollerblade in with a few sandwiches for food. And that grew up into everybody’s expectation: “Oh, they should have all the gourmet food they want, at any time.”

I think it’s important to reset the culture from time to time. And I think several years ago we did that. Clearly, people had extrapolated from our past practices what the vision might be. And having actually been there, and knowing the rationale…we decided to, for example, we significantly cut down all the snacks that had been available. [laughter]

[The question is reframed: Isn't the real perk at Google supposed to be stock options, and aren't those much less valuable, now that the company's go-go growth days are over?]

Brin: Well, I don’t know. it depends on where in the graph you look. Certainly it has fluctuated ever since we’ve gone public. Up and down, so…

Schmidt: Let’s say this: It is axiomatic that the best thing to do is to found a multibillion-dollar corporation with free stock, take it public and have the difference between zero and the stock price….That would be the maximum gain possible. For most people, they don’t have the wherewithal and the skills to do that.

Brin: Or the luck.

Schmidt: And luck. Yes, I suppose. In your case, I think, skill and brilliance. People make decisions….The way to state this is that Google pays very well. Google is clearly a growth company, by any metric. And people at Google don’t work for those reasons at Google. We don’t want them to come to Google for those reasons. We want them to come to Google to change the world.

Life is short. And everybody here understands that. Life is short; you should work on the things that are most important. If you want to work on what Google is working on–cloud computing, search, all the things that we talk about all the time–then come to Google and we will pay you well.

That works. We don’t want a different workforce than the one that I just described.

And I would also answer the entitlement question, as I understood your question, as to say that the last year has been very good at solving that problem.

The tightening that [CFO] Patrick [Pichette] in particular did, who I think is the current Google hero, really did change the culture in a much more pragmatic way: “We’re happy to work here. We’re happy to be employed. We love what we’re doing. Our friends, you know, have been laid off.” It’s been a maturing process. And I think a generally good one.

[Image credit: permanently scatterbrained]

]]> http://allthingsd.com/20091007/google-says-googles-perks-are-overrated-and-belt-tightening-is-underrated/feed/ 0 http://allthingsd.com/20090722/earths-biggest-shoe-store/ http://allthingsd.com/20090722/earths-biggest-shoe-store/#comments Wed, 22 Jul 2009 20:40:47 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=21918 Well, this is unexpected. Amazon has agreed to purchase online shoe retailer Zappos.com in a deal valued at about $850 million.

Under the terms of the deal, the retailer will acquire all outstanding Zappos shares in exchange for roughly 10 million shares of Amazon common stock, valued at about $807 million, and some $40 million in cash and restricted stock. Amazon (AMZN) says the deal should be completed by fall.

“This morning, our board approved and we signed what’s known as a ‘definitive agreement,’ in which all of the existing shareholders and investors of Zappos (there are over 100) will be exchanging their Zappos stock for Amazon stock,” Zappos CEO Tony Hsieh said in a post to the company blog. “Once the exchange is done, Amazon will become the only shareholder of Zappos stock….

“We think that there is a huge opportunity for us to really accelerate the growth of the Zappos brand and culture,” Hsieh continued, “and we believe that Amazon is the best partner to help us get there faster. Amazon supports us in continuing to grow our vision as an independent entity, under the Zappos brand and with our unique culture.”

“Zappos is a customer focused company,” said Amazon CEO Jeff Bezos in a statement. “We see great opportunities for both companies to learn from each other and create even better experiences for our customers.”

If the shoe fits, right?

Below, Bezos announces the acquisition in person.

]]> http://allthingsd.com/20090722/earths-biggest-shoe-store/feed/ 2 http://allthingsd.com/20090722/earths-biggest-shoe-store-2/ http://allthingsd.com/20090722/earths-biggest-shoe-store-2/#comments Wed, 22 Jul 2009 20:40:47 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=21918 Well, this is unexpected. Amazon has agreed to purchase online shoe retailer Zappos.com in a deal valued at about $850 million.

Under the terms of the deal, the retailer will acquire all outstanding Zappos shares in exchange for roughly 10 million shares of Amazon common stock, valued at about $807 million, and some $40 million in cash and restricted stock. Amazon (AMZN) says the deal should be completed by fall.

“This morning, our board approved and we signed what’s known as a ‘definitive agreement,’ in which all of the existing shareholders and investors of Zappos (there are over 100) will be exchanging their Zappos stock for Amazon stock,” Zappos CEO Tony Hsieh said in a post to the company blog. “Once the exchange is done, Amazon will become the only shareholder of Zappos stock….

“We think that there is a huge opportunity for us to really accelerate the growth of the Zappos brand and culture,” Hsieh continued, “and we believe that Amazon is the best partner to help us get there faster. Amazon supports us in continuing to grow our vision as an independent entity, under the Zappos brand and with our unique culture.”

“Zappos is a customer focused company,” said Amazon CEO Jeff Bezos in a statement. “We see great opportunities for both companies to learn from each other and create even better experiences for our customers.”

If the shoe fits, right?

Below, Bezos announces the acquisition in person.

]]> http://allthingsd.com/20090722/earths-biggest-shoe-store-2/feed/ 0 http://allthingsd.com/20090617/myspace-after-the-layoffs-heres-whats-what-and-whats-next/ http://allthingsd.com/20090617/myspace-after-the-layoffs-heres-whats-what-and-whats-next/#comments Wed, 17 Jun 2009 12:30:13 +0000 Kara Swisher http://kara.allthingsd.com/?p=14631

Now what?

The party-all-night social-networking site that has been MySpace so far got a massive morning-after shock yesterday when 30 percent of its workforce–or 420 employees–was laid off.

And today, MySpace, which is still 1,000-strong, and its leaders have to face the cold, harsh light of day in the aftermath of the restructuring and get busy quickly figuring out a way to reinvigorate a brand that has suffered after a stunning rocket of a start many years ago.

That’s especially true since a report also just came out by market research outfit comScore (SCOR) showing that Facebook has surpassed MySpace in the key U.S. market as the top social-networking site.

So, based on many sources I have spoken to over the last week, here’s a rundown of the next steps MySpace will likely be taking and who’ll be making them.

MORE LAYOFFS?

“Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company,” said new CEO Owen Van Natta in a statement about the layoffs.

What he did not say was that cost-cutting via layoffs is almost always the first move in a turnaround.

These cuts have actually been long in coming, but it’s promising that they finally happened so quickly after Van Natta–along with COO Michael Jones and Chief Product Officer Jason Hirschhorn–were brought in by News Corp. (NWS) digital head Jon Miller to replace co-founder and CEO Chris DeWolfe.

(News Corp. owns MySpace, as well as Dow Jones, which owns this site.)

“The layoffs were a total reset,” said one source, who noted that unless MySpace’s advertising business falls off a cliff, which it is unlikely to do in the short term, more cuts in the U.S. will not be needed for now. That might not be true internationally, where MySpace has not performed as strongly.

At this point, MySpace is now about the same size as chief rival Facebook’s staff, which has been growing much more quickly (you can see my video tour of its new Silicon Valley HQ here).

Except for not making the move to new offices in Los Angeles, the Beverly Hills, Calif.-based MySpace is also not going to be closing offices elsewhere, as has been reported, most especially its San Francisco one.

In fact, Van Natta is traveling to visit all of them, his memo said, over the next several days.

LEADERSHIP

Despite the large number of layoffs and the departure of DeWolfe, most expect there to be very little change in the top ranks of MySpace leadership for the time being.

While Jeff Berman, MySpace’s president of sales and marketing, has been rumored to be on the bubble, multiple sources said he would be staying in his job.

He’ll continue to be aided by Angela Courtin, SVP of marketing, who is well-regarded.

The same is true of the other major question mark, co-founder Tom Anderson (pictured here), who has held the president title at the company and was in charge of its products.

Anderson does not have a new title yet and will no longer be in a key operational role, but many sources said his historical knowledge and his tight relationship with the MySpace community make it important that he remain at the company.

“Tom is clearly in touch with what has made MySpace special,” said one source. “And it is important that he remain to keep the culture alive.”

Also staying for now is Tom Andrus, who has been SVP of product management under Anderson and is now reporting to Hirschhorn. While initially upset by being supplanted so quickly by new execs, most sources told me that he is a solid and well-liked exec.

The same is said of Jason Oberfest, SVP of business development, who is also staying. So too, CTO Aber Whitcomb, whom many thought would be leaving.

The only major exec departure I could confirm was Fox Interactive Media CFO Ed McKenna, who was in charge of MySpace too. Sources said will be leaving the company as his function gets consolidated into higher corporate units at News Corp.

PRODUCT REHAUL

Lastly, most noted that MySpace cannot cut its way back to health, which is why sources said its execs are now beginning to engage in a major overhaul of the product itself.

While leadership had considered bringing in a separate new skunkworks-type team to do that, it has been decided that the current staff–helped by some outside consultants–will be doing a top-to-bottom redo of MySpace.

MySpace could use it. As you can see from the charts below from a poll that we did for the seventh D: All Things Digital conference recently–and where Walt Mossberg and I interviewed Van Natta and Miller onstage (see the highlights video below)–it has a lot to fix, including reengaging users, improving technology and differentiating itself from Facebook.

And, in fact, carving itself out as a different product than Facebook is one major aim because the offerings–while both are social networks–are quite different in approach. Facebook has evolved into more of a utility, while MySpace has made better inroads as an entertainment hub.

Whatever changes are made, most sources note that MySpace needs to try to remain true to its original frisky and fun start-up core, while innovating a next-generation product and continuing to goose its advertising business.

That also includes starting up renegotiations with Google (GOOG) about its search-advertising partnership, talks that are just getting started now (more on that soon).

Most of all, said one person, pointing to the long and painfully public struggle at Yahoo (YHOO), leadership has to stop the focus on MySpace being broken as soon as possible.

“MySpace needed to be shaken up, but it is still a very powerful brand and has huge traffic,” said the source. “Its management has to project a sense inside and outside that it is not only fixable, but also can lead again.”

As with Yahoo, Time Warner (TWX) online unit AOL and many others before it, that’s no easy task for MySpace, starting today.

In any case, here’s the highlights video of the Miller/Van Natta interview at D7:

And here are three not-so-upbeat poll charts about MySpace and how users think about it (click on them to make them larger):

]]> http://allthingsd.com/20090617/myspace-after-the-layoffs-heres-whats-what-and-whats-next/feed/ 4 http://allthingsd.com/20090408/trueslant-tests-another-model-of-web-journalism/ http://allthingsd.com/20090408/trueslant-tests-another-model-of-web-journalism/#comments Thu, 09 Apr 2009 01:08:03 +0000 Walter S. Mossberg http://ptech.allthingsd.com/20090408/trueslant-tests-another-model-of-web-journalism/ As newspapers, magazines and TV stations face dire economic challenges, and journalism moves increasingly online, debates are raging about how best to preserve quality news and commentary while still making money.

There’s lots of experimentation with different approaches. Many journalists, old and new, are operating as stand-alone bloggers, but finding it hard to make a living. Web advertising has weakened with the economy, and often can’t cover the costs of expensive reporting. A couple of respected traditional publications have successfully attracted large numbers of paid subscribers online, but many others who have tried have failed.

Meanwhile, advertisers also are scrambling to figure out the best way to sell their products online, in a manner that both attracts potential customers and blends in well with the content and style of news sites. And publishers are trying to capture the conversation and sense of community that permeate services like Facebook and Twitter.

This week, a new Web news site is entering the fray, with a novel approach to journalistic entrepreneurship, new forms of advertising, and an effort to blend journalism and social networking.

The site, called True/Slant, at trueslant.com, is opening its doors via an odd preliminary status it calls an “open alpha.” This means it’s rough around the edges, and not yet taking in revenue, but hopes to attract enough participation to hone its design and operation.

True/Slant is run by a former news executive at America Online who worked at a variety of publications, including The Wall Street Journal. It covers a wide range of topics, such as politics, culture, sports, business, health, science and food.

It is launching with 65 journalists, or “knowledge experts,” assigned to specific topics. Each of these contributors gets a page to house their journalism and, it is hoped, an active social network of followers who will regularly discuss the articles they read there. Each page also will feature headlines of stories elsewhere on the Web selected by the contributors. These “headline grabs” link back to the originating outside site.

The initial group of contributors includes current or former writers for publications such as the Financial Times, Rolling Stone, the New York Times, Time magazine and the Boston Globe.

Readers can go directly to the page of their favorite contributor, but the site’s home page will knit together popular content and contributors, and each reader will be able to track multiple topics and contributors through a streaming feed called “I’m following.”

True/Slant will run regular Web ads throughout. But, in a highly unusual move, the site plans to offer advertisers their own entire pages where they can run blogs and try to attract a network of followers. These will have the same design and features of the journalists’ pages, but will be labeled as ad content.

The journalists are paid a small amount, but the plan is to turn them into minipublishers under the True/Slant umbrella. They will be offered a share of the advertising and sponsorship revenues their individual pages generate and, in some cases, equity in True/Slant, which is backed by venture capital.

These contributors are allowed to keep writing elsewhere, either online or in traditional media, and even to promote these outside efforts on True/Slant. But they are expected to post original commentary and analysis to True/Slant. They also are allowed to arrange for their own advertising or sponsorships, in addition to what True/Slant can sell, and even, in some cases, to add other authors to their pages.

In another unusual move, the contributors also are required to actively engage with readers on the site. They must post a minimum number of comments in reader discussions about their articles and curate the comments, giving prominence to the most interesting. They are even expected to comment on each other’s posts.

This required engagement is an attempt to capture some of the excitement of a social network, and it ties in directly with a contributor’s success. On the home page, and elsewhere throughout the site, True/Slant promotes not only the most popular contributors, but also the most active ones. High rankings in these categories can lead to higher traffic on each contributor’s page, and, indirectly, to higher income.

Readers who are active commenters can also gain prominence on the site, especially if those comments are popular or called out for special attention. A front-page panel will highlight the most active commenters, and the most called-out comments.

The layout of the site is clean and handsome, a decent effort to meld a news site and a social network. One layout flaw the company hopes to fix: There’s no easy way to find a list of all topics, only those it considers hot at any moment.

It’s way too early to know if True/Slant will succeed. For one thing, it is still dependent on advertising, not subscriptions. And ethical questions could arise, because the site’s operators don’t edit or preapprove the content, and the model of blended journalism and advertising could prove problematic.

But it’s another example of how the Web is changing traditional media, and might be worth a look.

Find all of Walt Mossberg’s columns and videos online, free, at the All Things Digital Web site, walt.allthingsd.com. Email him at mossberg@wsj.com.

]]> http://allthingsd.com/20090408/trueslant-tests-another-model-of-web-journalism/feed/ 0 http://allthingsd.com/20090313/diplomacy-20-with-cellphone-games/ http://allthingsd.com/20090313/diplomacy-20-with-cellphone-games/#comments Fri, 13 Mar 2009 15:56:19 +0000 Marisa Taylor http://voices.allthingsd.com/?p=9441 For diplomacy’s sake, the State Department is banking on the fact that it’s not just Americans who are obsessed with gaming and cellphones.

The Bureau of International Information Programs at the DOS teamed up with MetroStar Systems, a Reston, Va.-based software developer, to create X-Life, a mobile game for Middle Easterners aimed at teaching them about English language and American history and culture.

The State Department invested $415,000 in X-Life as a pilot project to see whether the concept of “e-diplomacy” might spread cross-cultural understanding between the U.S. and countries in the Middle East and Persian Gulf. The game has two different role-playing modules, one in which a user’s avatar is a student studying abroad in the United States, and the other is a musician in a Guitar Hero-like scenario (Grammy-winning band Ozomatli contributed a song for the game).

Read the rest of this post

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