While he won’t officially take over as CEO of Google until April, the recent full-frontal slapfest on Microsoft’s Bing search engine for shoplifting results from the search giant was so Larry Page in tone and temperament that it brought back memories from many years ago when I covered Google more closely.

Like the time in 2004 when he railed on the investment banking system as Google considered its IPO. Or, a meeting in 2005 when Page aggressively argued minutiae about the size of Google’s index size after Yahoo claimed its data trove was bigger.

And my ears are still ringing from a Googleplex lunch we had in the midst of his ire over a 2005 story on CNET that chronicled a lot of personal information about CEO Eric Schmidt, trying to show how much data was easily available on Google.

Page thought it best to be on the offensive and attack the report as a privacy violation, while I took the position that it was accurate and fair game and you don’t argue with the press and win.

It’s unlikely Page remembers any of this, but I do because I kept notes as part of my ongoing assessment of his characteristics as an Internet leader.

In fact, after our first interview in 2001, my notes on the encounter had this one line underlined and in all caps:

LARRY PAGE=BILL GATES.

It was not meant as an insult, but I can tell you I never wrote such a note about Page’s co-founder, the jokey and affable Sergey Brin.

Even then, Gates had a fearsome reputation as a manically competitive exec, a cutting manner to those not as smart as he clearly is and a reputation as a very tough and often eviscerating boss. (And all that was also my experience whenever I was interviewing him.)

While much wonkier, friendlier and more of a sensitive new-aged male, Page, it seemed to me, had the exact same obvious drive and aggression as Gates.

I stopped covering Google as closely years later–for personal reasons (see disclosure above)–and, thus, largely fell out of regular touch with Page.

But in reading the tough quotes and later blog post by Amit Singhal–quite possibly the sweetest dude at Google–accusing Bing of cheating, it felt like he was channeling Page’s very clear and nerdily indignant voice again.

In a nutshell: We have data to prove Microsoft’s stealing. Look at our detailed proof from our complex sting. We are outraged by this violation of geek code. Don’t you lay people get it?!?

I would wager that we’re about to see a lot more of this pugnacious, in-your-face tone from Google under Page’s leadership, which could have far-reaching implications for the company.

While I have no idea if it was his decision to let loose the dogs of algo-war on Microsoft, many with knowledge of how Google manages its public persona observed to me this week that this was just the kind of popping off that the outgoing Schmidt often tried to mitigate and soften.

But such bravado will play well with Google’s elite and pampered engineering corps in Silicon Valley.

And, in any case, PR considerations have never really been the point for Page, who cares not for how it might come off in the media (which he largely disdains anyway).

Which is to say like a temper tantrum of a very smart and very gifted child, who is probably largely right, but should not be quite so exercised given the level of violation.

No matter, since Page likely still lives and breathes data and algorithms and the Spock-like application of information.

It’s the rest of us who are illogical.

Again, be wary of reading too much into any stock’s performance on any given day. But it seems safe to draw at least one conclusion: Investors aren’t freaked out about Demand’s symbiosis with/dependence on Google. Even after a puzzling blog post from the search giant last week.

The post, written by Google engineer Matt Cutts, defended the search engine’s performance against a chorus of criticism. But it acknowledged that Google was paying attention to complaints about “content farms and sites that consist primarily of spammy or low-quality content” clogging its search results.

Lots of people logically assumed that Google/Cutts was talking about Demand, although the post never mentioned the company by name. And if Google, which supplies 28 percent of Demand’s revenue and a big slug of its traffic, has a problem with Demand…

But Demand CEO Richard Rosenblatt insists that Cutts wasn’t talking about his company at all. In fact, he says, Demand and Google are getting along just great, in a relationship that pays out real dividends for both parties. It looks like investors believe him.

I chatted with Rosenblatt about the Google post, and the companies’ relationship, yesterday at Demand’s New York outpost. Here’s an excerpt from our conversation:

Peter Kafka: Do you think that Google post was directed at you in any way?

Richard Rosenblatt: It’s not directed at us in any way.

Did you talk to them about that?

I can’t comment on that.

Okay. But they wrote this post, which talks about content farms, and even though you say they weren’t talking about you, it left a lot of people scratching their heads.

Let’s just say that we know what they’re trying to do. Last year, they put out three major changes. They put out Mayday–that was going specifically after spammers and low-quality content. Our traffic increased when they did that. The reason why is our content is being scraped and stolen, [because we're] the largest content producer. So they’re looking for original, non-duplicated, human-made content. That’s all our content. So if they were targeting us, you’d also see Wikipedia, About.com, Wikihow, every person that makes more than a few dozen articles….Our traffic went up.

Second one: They did something called Caffeine, to increase the [search] index. Our traffic went up.

They then did Google Instant. Our traffic went up.

So the three things [Cutts] talks about in his blog post did not adversely affect us. You can draw your own conclusions.

The post talks about going after spammers and content farms. But when you guys think of content farms, you don’t think that means Demand, right? You’re thinking of people who take my copy or your copy, and cut and paste it, and tweak it enough to fool Google.

He’s talking about duplicate, non-original content. Every single piece of ours is original. Written by somebody. And I understand how that could confuse some people, because of that stupid “content farm” label, which we got tagged with. I don’t know who ever invented it, and who tagged us with it, but that’s not us…We keep getting tagged with “content farm”. [Ahem.] It’s just insulting to our writers. We don’t want our writers to feel like they’re part of a “content farm.”

So can you sum up your relationship with Google today?

This is why our partnership with Google makes sense. 1) We help them fill the gaps in their index, where they don’t have quality content. 2) We’re the largest supplier of all video to YouTube, over two billion views and 3) we’re a large AdSense partner. So our relationship is synergistic, and it’s a great partnership. And it’s a partnership that we’re excited to continue to expand.

Asked whether creating a real-time search engine is a viable start-up business, Campbell answered quickly: “No.” His company’s pivot is the latest of multiple efforts in the space; last year, OneRiot gave up its search business to pursue real-time advertising, and Ellerdale sold to Flipboard to help add relevance analysis to its social magazine app.

The exit of Collecta and its competitors from real-time search is remarkable given they had swarmed to the space only a couple of years ago.

In 2009, many entrepreneurs and their investors bet that real-time search was the next frontier, recognizing that search engines were having trouble handling the onslaught of status updates and fresh information streaming onto the Web from Twitter and elsewhere.

Given the companies’ emphasis on speed, perhaps it’s not surprising that they failed and moved on so quickly.

Campbell would not say how many employees Collecta had laid off as part of the change, but he maintained the company has plenty of money in the bank from the $4.7 million it raised last spring from Dace Ventures and True Ventures. Mashable reported earlier today in its story about the Collecta changes that co-founder Jack Moffitt is no longer with the company.

Campbell said Collecta will apply its “very serious technology” to other real-time projects, but it will not become a real-time ad engine like OneRiot.

Who’s left in real-time search? There are still a few, including Wowd and Topsy.

Topsy’s tweet search is much more comprehensive than Twitter’s own, and it serves half a billion queries per month, mostly through its API, Topsy co-founder Rishab Aiyer Ghosh told NetworkEffect via email today. And while Google and Bing also index tweets (and Bing has an extensive relationship with Facebook), they have not fully incorporated social updates into their core search engines.

“With TweetMeme, CrowdEye and Collecta all pivoting out of it, Topsy may be the only real-time/social search engine left,” Ghosh said. He maintained that there’s still an opportunity to build an independent real-time search engine “done right,” despite the competition dropping like flies. Topsy has raised $15 million in funding from investors including BlueRun Ventures, Ignition Partners and the Founders Fund.

While lots of music services are still trying to figure out how to make money by distributing copyrighted music you’ve heard of, SoundCloud is taking a different tack. As I wrote last fall:

It’s designed to let professional and amateur musicians share their own music with each other and the public, via cloud-based files that the company hosts.

Once the tunes are on SoundCloud’s servers, the service makes it easy to move the stuff around the Web, via its own widget and an API that’s showing up on lots of interesting sites, apps, services and devices, including Facebook and Apple’s iPad. You can load SoundCloud files into Spotify, the streaming music company that Index has also invested in.

The service uses the freemium model, offering most of its capabilities for free, and charging up to $700 a year for more storage and extra features.

You can also use SoundCloud for less enlightened purposes, like sharing music you don’t own. But the company has recently implemented an audible “fingerprinting” service, like the ones Google’s YouTube uses, which allows copyright owners to take down files they don’t want on the Web. And that should give the company legal cover, unless the YouTube/Viacom case takes a very different turn.

In a blog post announcing the funding, SoundCloud says it will use the money to scale faster and “be more present in the US.” It also posts short clips, using its service, from its new investors–Index’s Mike Volpi and Union Square’s Fred Wilson.

Here’s Wilson:
Thoughts on SoundCloud by fredwilson. Uploaded with SoundCloud Android

And Volpi:
Mike Volpi Audio Blog on Friday morning by mvolpi. Uploaded with SoundCloud iPhone

And if you’d like something more entertaining, here’s a very long mix of classic hip-hop, via Cut Chemist:

Cut Chemist – Hip Hop Lives (1985-1996) by Cut Chemist

With the launch of Clicker Predict, Clicker became the latest site to join Facebook’s Instant Personalization program, which customizes an outside site based on information a user and the users’ Facebook friends have submitted to Facebook or the site itself. This can happen the very first time a user visits a site–so if you’re new to Clicker, but are currently logged in through your browser to Facebook, Clicker can instantly make recommendations about what you should watch.

The experience of visiting a new site that already knows who you are can be a bit unnerving, which is why Facebook is rolling out Instant Personalization slowly and carefully. It’s one of the company’s more aggressive products on the privacy front. Other partners include Rotten Tomatoes, Yelp and Pandora.

San Francisco-based Clicker indexes more than one million shows and movies available on the Web.

Please see the disclosure about Facebook in my ethics statement.

Yesterday–presumably so as not to be left out of the dueling press gatherings that Apple (AAPL), Google (GOOG) and Facebook have all had in recent weeks to show off fancy new stuff–Twitter lobbed out an an invite for an event this afternoon:

We’d like to invite you to come to Twitter HQ for an event tomorrow afternoon (Sept 14)…Please be there by 3:45pm. RSVP below.

See you there.

So, what, oh, what are those little elves at the microblogging service going to show off?

It could be a lot of things, from a new advertising shiny object to the results of recent promoted tweet efforts to updated mobile products.

Or perhaps it is introducing some more video capability into its tweets.

And maybe Twitter bought some pretty little start-up or is annoying a whole new fascist country.

So, because BoomTown always reads to the last page of mysteries to get to the ending first, here is my best spoiler guess of what Twitter could announce: An updated search offering.

Well, at least, I hope the company will finally fill in what has become what I consider to be one of the very biggest holes in its service.

Right now, Twitter’s real-time search engine uses technology from Summize, which it bought in 2008.

And, simply put, it remains pretty lousy–with an index that only holds tweets from a few days and has no massive archive.

In fact, results have been better from others, such as Google and the Microsoft (MSFT) Bing search service, both of which did deals to license Twitter’s flood of tweets about a year ago.

And Google recently upped the ante with its dedicated real-time search offering, made up, in large part, of Twitter’s index archive and including a coolio timeline.

It is long past time for Twitter to keep up here, in terms of simple innovation, given these tweets are its own content.

What would be interesting to see is if Twitter needed the help of a search giant such as Google or Microsoft to help power such a service–sources said its execs had been putting feelers out many months ago on the subject of such aid.

Then again, it could all be home built, too.

In any case, let’s hope Twitter gives its tweets the respect they deserve.

Or else introduces its own mobile device called the Tweetphone that vibrates every time you are mentioned on Twitter.

Until then, here is the video of the very funny “Tweet Tweet” rap song from Jimmy Kimmel and Drake that debuted in late June:

The presentation catalyzed a movement. Start-ups everywhere adopted a lean, low-burn, low-investment model. To this day, companies seeking funding at our venture firm, Andreessen Horowitz, proudly proclaim in their pitch decks that they are raising tiny amounts of capital so they can run lean.

On the one hand, it is a fact that capital invested is negatively correlated with returns in the venture capital industry. Pumping too much money into a small start-up is unhealthy for both the company and the investor. On the other hand, Facebook has raised several hundred million dollars and is on track to produce fantastic returns for all of its investors.

So what’s a start-up to do? Much of what has been written and said about lean start-ups makes good sense. However, that advice is often incomplete, and some of the things left unsaid are the least intuitive. In this article, I will articulate some of those things left unsaid in arguing the case for the Fat Start-up.

Here is my central argument. There are only two priorities for a start-up:
Winning the market and not running out of cash. Running lean is not an end. For that matter, neither is running fat. Both are tactics that you use to win the market and not run out of cash before you do so. By making “running lean” an end, you may lose your opportunity to win the market, either because you fail to fund the R&D necessary to find product/market fit or you let a competitor out-execute you in taking the market. Sometimes running fat is the right thing to do.

What the hell do I know?

“Al Pacino couldn’t be no gangsta, DeNiro in ‘Casino’ he no gangsta
Wanna be, wanna see, wan’ get a shovel
dig Tookie up n*&%^!, cause he know gangstas”

–The Game

At this point, some of you are asking yourselves, “What the hell does Ben know? If he were really smart, then he’d know that thin is in.” It turns out that I have some experience in managing a fat start-up through the dot-com implosion of the early 2000s. This chart offers a brief summary of equity market history when I was CEO of Loudcloud and Opsware (click to enlarge):

Note that the Nasdaq index is very highly correlated to the start-up funding environment. During the two years I was CEO of Opsware, the Nasdaq fell 80 percent, far more than it has fallen during the current 2008-10 downturn. So the 2000-02 environment was at least as traumatic as this one for Silicon Valley companies–and arguably much worse.

Here is a brief summary of Loudcloud/Opsware’s fund-raising history during that time:

• September 1999: Loudcloud founded
• November 1999: Loudcloud raises $21 million at a $45 million pre-money valuation (Benchmark Capital is the lead investor)
• January 2000: Loudcloud borrows $45 million from Morgan Stanley (MS)
• June 2000: Loudcloud raises $120M at a $700M pre-money valuation
• March 2001: Loudcloud goes public on Nasdaq, raises $160 million and is valued in the public markets at approximately $480 million. Total funds raised to this point: $346 million.
• August 2002: Loudcloud sells the managed services business to EDS (this was the only actual business we had at the time) for $63.5 million and becomes a software company (and changes its name to Opsware).
• September 2002: Opsware trades for 35 cents per share or approximately a $28 million market cap.
• September 2007: Hewlett-Packard (HPQ) acquires Opsware for $1.6 billion

During this period, Loudcloud/Opsware had over 20 direct competitors. Almost all the competitors from the Loudcloud era went bankrupt, including MFN/SiteSmith, Exodus, LogicTier, Williams Communication, Global Crossing, WorldCom/Digex and Storage Networks. Those that survived got bought with valuations of less than $100 million (e.g., Totality) or still have very low valuations (e.g., Navisite).

How did we do it?

“I had a dream I could buy my way to heaven
When I awoke, I spent that on a necklace”

–Kanye West

So how did we navigate through the great dot-com crash, crush the competition, emerge as the No. 1 company in our space and sell the company to HP for $1.6 billion? Did we “cut spending, cut now, and preserve capital?” Did we make cash preservation our No. 1 priority?

No, we didn’t. To underscore the point, here are Loudcloud’s average monthly cash burn figures for the quarters ending in:

• Apr 2001:  $39 million
• Jul 2001:  $35 million
• Oct 2001:  $29 million
• Jan 2002:  $25 million
• Apr 2002:  $22 million
• Jul 2002:  $19.4 million

As you can see, we were aggressively investing in the business throughout 2001 and 2002. While we did reduce our cash burn, we did not make cash preservation our No. 1 priority. As it was, over the course of the transition from Loudcloud to EDS, we sadly laid off 400 employees and transferred another 150 to EDS. However, we didn’t scrimp and save our way to a $1.6 billion acquisition: Instead, it’s what we chose not to cut that ultimately got us there.

Loudcloud was a Web-hosting business. Today, we’d call it a “cloud services” business, but people weren’t quite ready for the “cloud” in 2001. We supercharged our hosting business with software (called Opsware) that automated our Web-hosting operations. The other cloud services businesses of our day also had software investments. However, as the macroeconomic climate changed, they all “cut deep and cut now.” In the end, they ended up putting their software in maintenance mode and stopped building new features.

As we weighed a decision to make the same deep cuts in our own software R&D efforts (a move advocated by the intelligentsia of the day, as well as nearly every MBA we had working in the company), I faced a hard decision: Cut deep and get to cash flow break-even quickly or continue to invest heavily in software?

In the end, I decided to run fat so that we could continue to invest in the Opsware software. At the end of the day, I realized that much larger companies like IBM (IBM) could hire smart people and train them. But without a lasting technology-based advantage, it would be increasingly hard for us to defeat them and build our customer base despite early wins with Ford (F), Fox Sports, and the U.K. government (to name just three of our early customers).

Running fat meant that I laid off zero software engineers so that we could keep on investing in our technology, find our product/market fit, and build a lasting technological advantage.

Still, we had to reduce costs or we would clearly go bankrupt. With this new view of the world, I decided that rather than divesting our intellectual property, I would divest our business. Now, that may sound logical the way I’ve described it, but consider these facts:

• We were generating $65 million/year from the Web-hosting business.
• We were a publicly traded company with a market capitalization of close to $200 million.
• All of our investors (pubic and private) believed in and invested in the Web-hosting business.
• We had close to 500 employees at the time. Nearly all of them were supporting the Web-hosting business.
• We had no other business. We had software, but we did not have a software product and certainly did not have a software business.

Despite all of this, we sold the Loudcloud hosting business to EDS and became Opsware the software company. It was not clear that this was a good idea at the time. In fact, the market thought it was a terrible idea: Our stock promptly lost 80 percent of its value, putting our market cap at about $28 million. It’s worth pointing out that this was about $40 million less than the cash that we had in the bank.

During the transition, we shrank our payroll from 450 employees to fewer than 100. Even with this massive reduction in expenses, it would take another three quarters to reach cash-flow break-even, a milestone we finally reached in Q2 of 2003.

One could argue–and many did–that we should have cut a lot deeper than we did given that we only had one customer. Although EDS was a very large customer (it generated $20 million/year in revenue), a brand new software company doesn’t need 100 people. We could have taken steps to reach cash-flow break-even immediately (clearly, that might have helped us get above 35 cents per share). In other words, we could have “gone lean” by cutting deep, cutting now, and preserving capital.

But rather than do what seemed obvious, I decided to keep on investing. Here’s why: In an economic boom, cash is great, but not necessarily a meaningful competitive advantage. If every company is well funded, being super-well funded doesn’t help you win. In fact, being super-well funded can actually screw you.

But in a bust (like the one we were in), having a lot of cash can be a huge competitive advantage because you can use that cash to put enormous pressure on your underfunded competitors. And that’s what we did.

We spent aggressively to match our best competitor’s product, feature for feature. And we used our public currency to acquire important adjacent functionality (network, process and storage management) that our competitors did not have and couldn’t acquire because they didn’t have the cash (or the equity).

In doing so, we were able to beat a really high-quality start-up (Bladelogic) that did not have the massive technical and cultural baggage that came from exiting the managed services business. Bladelogic was eventually sold to BMC (BMC) for $800 million. But I’m firmly convinced that had we not spent the money, Bladelogic would have emerged as the No. 1 company in the space and gotten the $1.6 billion exit instead of Opsware.

In the end, by continuing to invest aggressively in our technological advantage despite a hellacious funding environment, we were able to turn a doomed business into a winning one.

That is the very short version of how we won the market during the great tech recession of the early 2000s.

So did we learn?

“Hegel was right when he said that we learn from history that man can never learn anything from history.”

–George Bernard Shaw (1856-1950)

Every start-up is in a furious race against time. The start-up must find the product-market fit that leads to a great business and substantially take the market before running out of cash. As a result, the top two priorities are always to:

1. Find the product that 1,000 enterprise or 50 million consumers want to buy and grab those customers before your competitors do.
2. Raise enough cash and spend it intelligently so that you don’t go broke along the way.

Clearly, you can’t succeed if you don’t achieve both priority No. 1 and priority No. 2. So why is taking the market more important than not running out of cash? Because the only thing worse for an entrepreneur than start-up hell (bankruptcy) is start-up purgatory.

What is start-up purgatory, you ask? Start-up purgatory occurs when you don’t go bankrupt, but you fail to build the No. 1 product in the space. You have enough money with your conservative burn rate to last for many years. You may even be cash-flow positive. However, you have zero chance of becoming a high-growth company. You have zero chance of being anything but a very small technology business (see Navisite). From the entrepreneur’s point of view, this can be worse than start-up hell since you are stuck with the small company.

You recruited all the employees, you raised all the money and you made all the promises. You either see it through or leave–without your good reputation. No one wants to work for an entrepreneur who quits his or her own company. This is start-up purgatory, where you work just as hard, reap none of the rewards, and watch all your best people leave you. It sucks to be you.

The Bottom Line

Spending a little or spending a lot is a means, not an end. Choose the right strategy to win the market or you may end up going straight to purgatory.

As you listen to the virtues of the lean start-up–lightweight sales, light engineering, and so on–keep the following in mind:

• If you are a high-tech start-up, your value is in your intellectual property. Don’t stare at your spreadsheets so long that you get confused about that.
• You cannot save your way to winning the market.
• The best companies can raise money even in this market. If you are one of those, you should consider raising enough to wipe out your competition.

Thin is in, but sometimes you gotta eat.

Ben Horowitz is co-founder and general partner of Andreessen Horowitz. He co-founded Loudcloud, later renamed Opsware Inc., in 1999 and served as CEO of the company before it was acquired in 2007 by Hewlett-Packard. He was most recently vice president and general manager of Hewlett-Packard’s Business Technology Organization Unit.

Here are two quotes that got me thinking about what would happen if Facebook–whose user base is inexorably marching toward 400 million–ever got serious about the news aggregation business.

First, perpetual apple-cart-upsetter Mark Cuban raised everyone’s hackles this week by taking aim at online sites that aggregate news from other sources, especially Google (GOOG).

Among other colorful things Cuban said during a keynote speech:

“Google is a vampire, and you run scared. There is no reason to be indexed in Google….You haven’t gotten anything back except that you’ve turned into zombies….You’ve got to realize they’re vampires and you can’t be the dumb blonde showing your neck.”

Then, yesterday, in a fourth-quarter earnings call, AOL (AOL) CEO Tim Armstrong, answering a question about the renewal status of its search deal with Google, talked about how other outlets, especially Facebook, are now more important than ever to getting traffic for his company’s content.

“Our strategy on distribution is not relying on search,” said Armstrong. “Fragmentation is our friend.”

It was a curious way of putting it, but the message was clear and correct–it will be increasingly obvious that consumers are inevitably moving away from the only-search paradigm to that of discovery through social and other jacked-up affiliation networks.

Of course, this puts a site like Facebook in the catbird seat, given that vast seas of rich data flow through it all the time.

In fact, Facebook is already one of the bigger sources of traffic to media sites, behind just Google, Microsoft (MSFT) and Yahoo (YHOO).

That’s because, at any given moment, Facebook users are trading bazillions of links to articles, blogs, videos, photo images and more, pointing the way to their friends in a giant did-you-see-this mosh pit.

While this is dispersed widely all over the social networking service–on the Wall, on fan pages, in email, in comments–one has to wonder what would happen if Facebook ever decides to start corralling the information with some kind of aggregation method.

Could it pick the most linked and emailed stories of the day? Could it select the most popular photos? Could it tell you accurately what its little slice of humanity was buzzing about on a minute-by-minute basis?

Of course it could, but as more of a new sparkly “Twilight” vampire than the scary old-time one Cuban described.

Not that it will. I once queried Facebook COO Sheryl Sandberg about the idea that Facebook could make some sort of newfangled competitor to the still-powerful Yahoo News.

No, she replied pretty flatly, noting that the whole service was already about people sharing all kinds of news and information with their friends.

But, it is clear to me, that–much as Google moved into the automated new business–Facebook could do the same anytime it wants to and create what would probably be one of the top aggregation sites for any topic on the Web.

The Silicon Valley phenom certainly could not be as easily de-indexed as Google by worried media companies, because the skeins of information are so enmeshed that separating them is impossible. And why would you?

In his speech, Cuban urged traditional media creators to stop the aggregation madness.

“Show some balls,” he said. “If you turn your neck to a vampire, they are [going to] bite. But at some point the vampires run out of people’s blood to suck.”

In a deeply socially connected world though, it’s a very different story. And in that world, vampires really do live forever.

Please see this disclosure related to me and Google.

MySpace, along with Twitter, Facebook and other sites that collect real-time, user-generated stuff, has opened up its stream to third-party developers, which means Collecta isn’t the only place you can see what the social network’s users have to say.

But it is, as far as I can tell, the only site offering a dedicated vertical to MySpace. (Disclosure: MySpace is owned News Corp., which owns this Web site.)

I’m still a little fuzzy about the endgame for Collecta, One Riot and all the other search start-ups that are mining real-time data. Each promises a different take on the problem: This one claims to be faster, that one says it’s more comprehensive, this one says it does a better job of sorting the data pouring out of the firehose, etc.

But it seems to me that the default winner should be Google (GOOG), which is able to index the real-time stuff and integrate it into its search results. And if Google screws that up somehow, the likely winner will be a site like Twitter or Facebook, sources for much of the data in the first place.

Then again, if we take this approach toward every new search development, there’s really no reason for anyone to innovate again. So more power to these guys for trying.

If you follow the media-versus-Google meme, you know this instinctively. But here are some numbers that spell it out: Of the 25,000-plus sources cataloged by Google News, “less than 100″ have opted out of the index, says Google’s Josh Cohen, who runs the service.

It is theoretically possible, of course, that more publications have opted out of Google’s main search results than out of the narrower Google News product. But I doubt it.

I also doubt that we’re going to see a significant number of publishers opt out of Google (GOOG) in the future, despite noisy saber-rattling from media outlets–most notably the Associated Press and News Corp. (NWS), which owns this site.

That said, if we are going to see some movement, it will be in the next few months. The AP, for instance, has a licensing deal with Google that runs out in the very near future.

I chatted Friday with Cohen (see video interview below) about the negotiations, and he gave me the polite equivalent of a “no comment.” But from what I can tell, the two sides remain pretty far apart on just about every point of contention.

Some other items of note from my conversation with Cohen:

• A reminder that even publishers that put their stuff behind a paywall don’t want to cut themselves off from Google, which is absolutely true. Just ask News Corp.’s Wall Street Journal, which has gone through considerable effort and expense to boost its presence in search results.
• Even though Google is already integrating “real-time” search results from Twitter (with Facebook and MySpace on the way), those results have not worked their way into Google News, and Cohen and his team are still trying to figure out the best way to do that.
• I got an English-language explanation of the “Living Stories” project Google is working on with the Washington Post (WPO) and the New York Times (NYT).

Apologies: I still have not mastered vagaries of audio for Web video, or at least for our Web video publishing system. You’re probably going to want to turn the volume down during the introduction in this clip and then turn it back up once the interview starts.

]]> http://allthingsd.com/20091221/a-very-short-list-publishers-whove-actually-told-google-to-take-a-hike/feed/ 0 http://allthingsd.com/20091209/will-googles-goodwill-campaign-appease-publishers/ http://allthingsd.com/20091209/will-googles-goodwill-campaign-appease-publishers/#comments Wed, 09 Dec 2009 15:10:32 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=13729 Here’s how the battle between Google and the news business is playing out: Big publishers, including the Associated Press and News Corp. (NWS), huff and puff loudly about the way the search giant treats them. They threaten to take their ball and go home, but they don’t actually do it.

And Google (GOOG) shrugs and says it can’t understand what the publishing guys are complaining about it, but goes ahead and makes goodwill gestures anyway.

By my count we’re up to three such gestures in the last nine days:

• Dec 1: Google changes its “First Click Free” program, making it easier for news sites to wall off access to their premium stuff–or harder for users to game the sites, if you want to think of it that way.
• Dec. 2: Google makes it easier for publishers to delist themselves from Google News.
• Dec. 8: Google launches a “Living Stories” experiment with the New York Times (NYT) and the Washington Post (WPO), which offers a new way to sort and read the papers’ stories. If it makes sense to you, let me know.

None of the above has anything to do with the publishers’ main complaint, which is that Google is simultaneously profiting from and devaluing their product. But it does allow Google to say that it’s listening to, and even working with, publishers.

Google could appease publishers simply by cutting them bigger checks, but that’s a slippery slope the search giant is trying to avoid. And the biggest publishers could put more oomph behind their argument if they really did cut themselves off from the search giant’s index. But tellingly, none of them have actually done this to date.

So I think we’re going to be stuck here for some time.

]]> http://allthingsd.com/20091209/will-googles-goodwill-campaign-appease-publishers/feed/ 0 http://allthingsd.com/20091124/going-going-most-of-whats-left-of-joost-goes-to-adconion-ad-network/ http://allthingsd.com/20091124/going-going-most-of-whats-left-of-joost-goes-to-adconion-ad-network/#comments Tue, 24 Nov 2009 13:57:21 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=13236 The tale of Joost, the would-be online video heavyweight, is almost at an end. Most of the company’s remaining assets have been sold off to Adconion Media Group, the two companies announced today.

What exactly did Adconion buy? Some of Joost’s technology, as well as its trademark, and about a dozen of the company’s remaining 25 employees, a spokeswoman says.

So what does that leave? Does any part of the original Joost survive as an operating company? “I believe so,” says the spokeswoman, who is going to get back to us about that.

Price? Your guess is as good as mine. But I’m guessing it’s not going to be very much, and nothing close to what investors like Sequoia, Index and Viacom (VIA) were hoping when they plowed $45 million into the company more than two years ago. Index, by the way, is also an investor in Adconion and led an $80 million C funding round in February 2008.

In any case, this is all a matter of “i” dotting and “t” crossing, as Joost has officially been in hospice mode since June, when the company laid off most of its employees and replaced CEO Mike Volpi. Prior to that, Volpi and his investors had been trying to broker a sale of the company, hoping that they could convince a big infrastructure player like Comcast (CMCSA) or Time Warner Cable (TWC) to bail it out.

No dice, though Time Warner Cable did end up hiring some technical help from Joost.

ADCONION MEDIA GROUP ACQUIRES JOOST ASSETS

New Capabilities Provide Advertisers, Content Owners and Publishers with an End-to-End
Cross-Channel Video Solution

SANTA MONICA, CALIF. – NOVEMBER 24, 2009 — Adconion Media Group (www.adconion.com), the largest independent global audience and content network, announced today that it has acquired certain assets from privately-held Joost, the online video service. Terms of the transaction were not disclosed.

“Video is a top priority for our company, and through the acquisition of the Joost assets we will be able to provide advertisers, content owners and website publishers with an end-to-end global video platform and cross-channel video and display ad-serving solution,” said Tyler Moebius, CEO, Adconion Media Group. “This acquisition immediately brings additional scale and content to the Adconion video pre-roll network for clients who are looking for a safe, cost-effective alternative to achieve the maximum value of online video advertising. We’ll also continue to operate Joost.com, providing clients with a destination site to showcase and distribute their branded entertainment content.”

In June, Joost announced a change in its business strategy to focus on providing white-label video platforms, and Adconion plans to pursue this strategy. On Friday, Adconion announced its first long-term licensing partnership as the exclusive display and video ad-serving solution for the Goldbach Media Group in Europe.

The acquisition of Joost assets adds many dimensions to Adconion’s existing video services and further will solidify its position in the online video and content syndication market. Prior to the acquisition, Adconion offered targeted distribution of content, including video and television commercials, to audiences around the world via Adconion.TV; as well as customized branded entertainment solutions for clients through its exclusive relationship with the digital studio RedLever. Through the Joost acquisition, Adconion.TV will add to its library of professionally-produced video content available for targeted pre-roll advertisements across 2,000 premium publishers.

Janus Friis, co-founder of Joost, said, “Over the past few months we have been actively exploring strategic options for Joost, and have concluded that the sale of certain of its assets to Adconion is in the best interests of Joost. Adconion has a strong technological platform and a compelling business model, and we believe that both businesses will benefit as a result of this acquisition.”

A leader in advertising innovation, targeting and distribution, Adconion reaches nearly 300 million unique users on a monthly basis. Prior to the Joost acquisition, Adconion was serving more than 80 million video streams per day to targeted audiences across 2,000 global websites.

]]> http://allthingsd.com/20091124/going-going-most-of-whats-left-of-joost-goes-to-adconion-ad-network/feed/ 0 http://allthingsd.com/20090618/just-how-much-search-share-does-twitter-really-have/ http://allthingsd.com/20090618/just-how-much-search-share-does-twitter-really-have/#comments Thu, 18 Jun 2009 19:04:16 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=8344 Twitter notched yet another milestone yesterday when it finally showed up on comScore’s index of Web search milestones. The catch: It barely registered, pulling down a search share of just 0.001 percent.

ComScore says Twitter logged 30.1 million search queries in May, more than Time Warner Cable (TWC), but not even on the same playing field as search also-rans like Ask.com.

But what if comScore is dramatically undercounting Twitter’s search–not just the standard undercounting that Web publishers always complain about, but something more significant?

It’s a given that comScore is undercounting. I know this because the research outfit told me so: The company confirmed today that it only measures searches executed at Twitter.com. But at least half of Twitter’s users are accessing the service without visiting the site, via third-party clients like Tweetdeck. And within that group of users is the power-user set, which is far more likely to be executing searches, many times a day in some cases, than Oprah fans who just joined the service last month.

So it’s easy enough to conclude that the majority of Twitter’s searches are going uncounted by comScore (SCOR). But how big is the gap? I’ve asked Twitter to share its search numbers, but I’m not holding my breath on that one. (UPDATE: See bottom of post)

In the meantime, let’s do some guesstimating.

Start with this year-old post by John Borthwick of Betaworks, who at the time was an investor in Summize, a Twitter search engine at the time (Twitter later bought Summize outright).

Borthwick reports seeing a huge number of search queries on Twitter on the opening day of Apple’s (AAPL) 2008 developer conference, topping out at an average of 190 queries per second. Tease that out over a full day, and you get 16.4 million searches in 24 hours.

For argument’s sake, let’s say that most of those searches occurred in an eight-hour stretch before, during and after Steve Jobs’s pronouncements that day, and knock that total down by two-thirds, to something like 5.5 million queries.

Steve Jobs pronouncements are rare things so it would be wrong to assume that Twitter sees similar usage patterns every day. But then again, Twitter has had an insane growth spurt in the last year: The most recent comScore traffic numbers peg monthly visitors at 32 million world-wide, up from a couple million a year ago.

See where this is going? Again, for argument’s sake, let’s say that Twitter’s peak traffic a year ago is now close to daily traffic today, and extrapolate that 5.5 million query guesstimate out for a month: You get something closer to 165 million queries.

Want to tweak any of my assumptions above? Be my guest. But no matter how you cut it, I’m sure that Twitter’s real search numbers are going to be several times higher than comScore’s number, at the very least.

Again, this matters in the end because Twitter’s most compelling investment thesis is that it can provide real-time search. And for that to mean something, the company is going to have to start registering as an actual search competitor at some point, not just to Time Warner Cable but to Yahoo (YHOO), Microsoft (MSFT) or even Google (GOOG). So how close, or far away, is that from happening?

UPDATE: Twitter cofounder Biz Stone responds, but declines to hand out any numbers. No surprise. I am a bit surprised to see him play down the importance of search at Twitter. I wonder if his investors are also surprised.

We don’t share absolute data such as total requests or queries per day but we do look at the whole ecosystem when we measure these things (not just Twitter.com).

Also, we are focused on the sharing and discovery of tweets so comparing Twitter to web search is interesting but not necessarily how we would measure success.

]]> http://allthingsd.com/20090618/just-how-much-search-share-does-twitter-really-have/feed/ 0 http://allthingsd.com/20081118/baidu-bars-some-unlicensed-medical-firms-from-paid-listings-those-customers-account-for-10-15-percent-of-revs/ http://allthingsd.com/20081118/baidu-bars-some-unlicensed-medical-firms-from-paid-listings-those-customers-account-for-10-15-percent-of-revs/#comments Tue, 18 Nov 2008 19:55:06 +0000 Eric Savitz http://voices.allthingsd.com/?p=6095 Baidu (BIDU) today issued a press release to address allegations in a China Central Television report that yesterday drove down the Chinese Internet search company’s shares $44.80, or 25 percent.

As I noted in several posts yesterday, a CCTV report broadcast on Nov. 15 and 16 asserted that some unlicensed medical companies appeared high in the company’s search results due to their willingness to pay for popular keywords. Baidu’s search engine mixes paid and unpaid search results. The company was also accused of pulling from its search index some organizations that declined to buy keywords.

Read the rest of this post

]]> http://allthingsd.com/20081118/baidu-bars-some-unlicensed-medical-firms-from-paid-listings-those-customers-account-for-10-15-percent-of-revs/feed/ 1 http://allthingsd.com/20080701/back-from-whence-ye-came-yhoo/ http://allthingsd.com/20080701/back-from-whence-ye-came-yhoo/#comments Tue, 01 Jul 2008 18:00:45 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=2664

[ See post to watch video ]

]]> http://allthingsd.com/20080701/back-from-whence-ye-came-yhoo/feed/ 0 http://allthingsd.com/20080701/flash-a-ah-savior-of-the-universe/ http://allthingsd.com/20080701/flash-a-ah-savior-of-the-universe/#comments Tue, 01 Jul 2008 12:18:00 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=2657 Flash content on the Web may be slow-loading and occasionally nonintuitive, but at least now it’s searchable.

Adobe (ADBE) has conceived of a way for search engines to index Flash content, even pre-existing Flash content, without the need for developer intervention. It’s made content encoded in the Flash file format (SWF), which was previously undiscoverable to search engines, discoverable–and it’s given Google (GOOG) and Yahoo (YHOO) the tools necessary to discover it.

As Ryan Stewart, an Adobe evangelist, explained: “We are giving a special, search-engine optimized Flash Player to Yahoo and Google, which is going to help them crawl through every bit of your SWF file. This Flash Player will act just like a person would in some cases. It will click on your buttons, it will move through the states of your application, get data from the server when your application normally would, and it will capture all of the text and data that you’ve got inside of your Flash-based application. We’ve basically provided a very powerful looking glass into SWF files so Google and Yahoo can pull out meaningful information.”

Google will begin doing that today; Yahoo, whenever it manages. A big change for both companies, especially Google, which has long advised Webmasters concerned about their PageRank to use Flash sparingly. “In general, search engines are text based,” the company explains in its “Creating a Google-friendly site” FAQ. “This means that in order to be crawled and indexed, your content needs to be in text format. This doesn’t mean that you can’t include images, Flash files, videos and other rich media content on your site; it just means that any content you embed in these files should also be available in text format or it won’t be accessible to search engines.”

Today that changes. And now, developers can use Flash to their hearts’ content, without mucking about with workarounds to ensure the dynamic content it makes possible is properly indexed and ranked.

]]> http://allthingsd.com/20080701/flash-a-ah-savior-of-the-universe/feed/ 0 http://allthingsd.com/20080701/flash-a-ah-savior-of-the-universe-2/ http://allthingsd.com/20080701/flash-a-ah-savior-of-the-universe-2/#comments Tue, 01 Jul 2008 12:18:00 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=2657 Flash content on the Web may be slow-loading and occasionally nonintuitive, but at least now it’s searchable.

Adobe (ADBE) has conceived of a way for search engines to index Flash content, even pre-existing Flash content, without the need for developer intervention. It’s made content encoded in the Flash file format (SWF), which was previously undiscoverable to search engines, discoverable–and it’s given Google (GOOG) and Yahoo (YHOO) the tools necessary to discover it.

As Ryan Stewart, an Adobe evangelist, explained: “We are giving a special, search-engine optimized Flash Player to Yahoo and Google, which is going to help them crawl through every bit of your SWF file. This Flash Player will act just like a person would in some cases. It will click on your buttons, it will move through the states of your application, get data from the server when your application normally would, and it will capture all of the text and data that you’ve got inside of your Flash-based application. We’ve basically provided a very powerful looking glass into SWF files so Google and Yahoo can pull out meaningful information.”

Google will begin doing that today; Yahoo, whenever it manages. A big change for both companies, especially Google, which has long advised Webmasters concerned about their PageRank to use Flash sparingly. “In general, search engines are text based,” the company explains in its “Creating a Google-friendly site” FAQ. “This means that in order to be crawled and indexed, your content needs to be in text format. This doesn’t mean that you can’t include images, Flash files, videos and other rich media content on your site; it just means that any content you embed in these files should also be available in text format or it won’t be accessible to search engines.”

Today that changes. And now, developers can use Flash to their hearts’ content, without mucking about with workarounds to ensure the dynamic content it makes possible is properly indexed and ranked.

]]> http://allthingsd.com/20080701/flash-a-ah-savior-of-the-universe-2/feed/ 0 http://allthingsd.com/20070614/kara-visits-index-lunch-and-tests-the-entrepreneurs/ http://allthingsd.com/20070614/kara-visits-index-lunch-and-tests-the-entrepreneurs/#comments Thu, 14 Jun 2007 10:40:31 +0000 Kara Swisher http://kara.allthingsd.com/20070614/kara-visits-index-lunch-and-tests-the-entrepreneurs/ So I went to the getting-to-know-you lunch thrown by Europe-based Index Ventures, the venture firm that has made some splashes in Silicon Valley, with its success investing in Web phone pioneer Skype and its flashy new investment in online video service Joost.

The group, which includes former Silicon Valley player Danny Rimer, whom I interviewed in this post yesterday, threw a schmoozy gathering for its tech partners and some of the start-ups it is investing in and the press at the Four Seasons in Palo Alto.

Thus, I decided to play make-an-elevator-pitch with some of the entrepreneurs of the start-ups there, seen in this video. I also talked to Danny Rimer’s two older brothers, also at Index, and included in the video my chat with Neil Rimer, who talked about the difference between doing tech in Europe and in Silicon Valley.

[ See post to watch video ]

]]> http://allthingsd.com/20070614/kara-visits-index-lunch-and-tests-the-entrepreneurs/feed/ 0 http://allthingsd.com/20070613/danny-rimer-comes-back-to-valley-both-of-them/ http://allthingsd.com/20070613/danny-rimer-comes-back-to-valley-both-of-them/#comments Wed, 13 Jun 2007 14:42:37 +0000 Kara Swisher http://kara.allthingsd.com/20070613/danny-rimer-comes-back-to-valley-both-of-them/ It will be nice to see Danny Rimer back in Silicon Valley this week.

Now London-based, the former SV investment bank analyst and venture capitalist is here for a lunch hosted today by Index Ventures, the juice behind Joost and also a previous little start-up you might recall called Skype.

“From Index Ventures perspective, the world is much smaller and flatter now,” said the invite to the event, which will feature the entire technology investment team of the venture firm, which operates out of both London, Jersey and Geneva.

“Five years ago,” the invite continued, “it felt Herculean to have a small, globally focused business and, today, it is commonplace.”

That, in fact, is the one thing that has struck the 36-year-old Rimer as the difference from when he left California in 2002. He worked here first at Hambrecht & Quist covering then-nascent Web companies (and where I first met him) and then as a fledgling VC at the short-lived Barksdale Group, whose fortunes were buffeted by the first dot-com bust.

“If anything has changed, it is that the Web is really now completely a global phenomenon, which is hard to sometimes see while you are in the middle of Silicon Valley,” said Rimer. “I think I have the best job taking the Silicon Valley model and applying it in totally underpenetrated geographies.”

Rimer thinks that every digital company has to be building on global opportunities now. “You need to be aware what is happening in Bangalore, Estonia, Tel Aviv,” he said.

That’s what brought him back to Europe and to a firm that was started by his brother and another VC in 1996, and which also includes yet another Rimer brother. The various Index funds now have about $1.5 billion under management.

That’s a good size to be flexible, said Rimer, while also allowing it to make big bets and, in tech, often in open-source companies.

It has paid off well in the case of Index’s investment in Skype, the Internet phone company that was sold to eBay in the fall of 2005 for $2.6 billion in cash and stock. It also recently scored when its Last.fm social-music network was sold to CBS for $280 million in cash.

Other Index investments include MySQL, the open-source database, and open-source business-intelligence company Pentaho.

And today, Index announced that it was leading a $5 million financing of London’s Openads, the developer of a free, open-source ad-serving system, a competitor to companies like DoubleClick. While Openads was started as part of Britain’s digital-ad business Unanimis, it will now stand alone.

But Index’s most recent notable bet has been its lead role in handing over $45 million to Joost, along with Silicon Valley’s famed Sequoia Capital (backers of Yahoo, YouTube and, of course, Google), as well as CBS, Viacom and the wealthy Hong Kong investor Li Ka-shing.

The much-hyped video online service was created by Skype’s Janus Friis and Niklas Zennström, who are also Index advisers and investors. In further insider baseball, Joost’s new CEO, Mike Volpi, spearheaded a Cisco investment in Index when he was there as the networking company’s top mergers-and-acquisitions exec. Volpi has been on Index’s advisory board, too.

Joost aims to do for professionally created content from media companies big and small what YouTube did for user-generated video. I like this on-demand idea, but I am a bit cool on Joost so far, finding its beta claustrophobic, noisy and underwhelming. Also, I seldom go back in the way I do to other video sites.

Rimer, of course, disagrees. “We are essentially creating a new kind of network, although there is a lot of work to be done to make it a compelling and diverse experience,” he said. “It will be interesting to see its adoption and use over time.”

Indeed, although you will not see Joost making any of its own content–relying instead on Hollywood connections. Joost is, in fact, throwing a party in Los Angeles next week to show the flag to that town’s players.

After becoming terrified by the huge growth of YouTube, with its nest of copyright issues, Joost could be seen as a Hollywood executive’s salvation.

“Making great content is a whole different set of skills than we have and we appreciate that,” said Rimer, who now has to become as comfortable in the Valley of Burbank as he has been in Silicon Valley. “But we will definitely be doing a lot of hugging down there.”

]]> http://allthingsd.com/20070613/danny-rimer-comes-back-to-valley-both-of-them/feed/ 0 http://allthingsd.com/20070604/volpi-in-at-joost/ http://allthingsd.com/20070604/volpi-in-at-joost/#comments Mon, 04 Jun 2007 22:53:13 +0000 Kara Swisher http://kara.allthingsd.com/20070604/volpi-in-at-joost/ As has been rumored and even reported on last week, sources say former Cisco exec Mike Volpi will be announced later tonight by Joost as its new CEO.

Volpi knows the founders of the online video service, Janus Friis and Niklas Zennström, as he has served on the board of their last hit, Skype.

Before he left, Volpi was in line to run Cisco, which is now under the leadership of CEO John Chambers. But as the ebullient Chambers told me in an interview onstage at D last week, he was not planning any move from the tech giant anytime soon (not even for an offer made onstage by Sen. John McCain at the conference to serve in the cabinet if he won his presidential bid).

The company needs a tech-savvy CEO, and one familiar with Silicon Valley, given that it recently got a $45 million boost of cash from a group of big venture firms and media companies, as I wrote here, including Index Ventures and Sequoia Capital, as well as CBS.

While a lot of Joost’s success rests on getting a lot of great content for its service to deliver quality video content on the Web, how well it works and how easy it is to use (not so easy in my beta tests, so far) will be key to its success. And also how it works with all its multiple partners.

In that vein, Volpi is a good choice. Though his last Cisco title sounded geekish–SVP of Routing and Service Provider Technology Group–he was deeply involved in all of the company’s wheeling and dealing, including its aggressive acquisition sprees.

He was born in Italy, lived in Japan, attended Stanford University and also worked at Hewlett-Packard, so he is also perhaps a perfect balance of international and local (tech-wise) for the internationally based Joost.

Interestingly, sources told me that Volpi also talked to Yahoo about running its Audience Group.

]]> http://allthingsd.com/20070604/volpi-in-at-joost/feed/ 1