10 Things Maybe You Didn't Know About Google's Search Business

We cover Google for a living, so we thought we'd read Steven Levy's feature about Google's search business in this month's Wired and learn nothing, absolutely nothing. We were wrong.
10 things you didn't know about Google's (GOOG) search business:

The people Larry Page and Sergey Brin tasked with figuring out how Google should make money in 1998 were a pair of know-nothings in their early 20s. Salar Kamanger, Google's ninth employee, had been a biology major at Stanford. His partner, Eric Veach studied computer science. Together they implemented Google's now $21 billion business, AdWords. Neat.
The first company to buy and run an ad through Google's automated auction business was a live mail-order lobster store.

The ads above the results on Google search results pages used to be sold by impression, not per click like they are now. Then, only the ads on the side were sold by cost-per-click (CPC) auctions
Many of the big advertising customers that bought these ads sold by impression were pissed when Google decided to switch and sell them based on CPC. Former Googler, now AOLer, Jeff Levick says one "threw us out of his office and told us to fuck ourselves." Yow!

In order to reassure bidders that they wouldn't be way over-bidding their competition for a keyword, Google used to guarantee the winning bidder it would charge them just a penny more than the next highest bidder. This immediately encouraged higher bids.

Now the price advertisers pay is determined by the formula P = (B2 X Q2)/Q1, with P = price paid by the advertiser, Q2 = Quality score of the next highest-placing ad, Q1 = Advertiser's quality score, and B2 = the next-higheset-placing ad's bid.

Obsessed with auctions, Google even makes its own divisions bid for servers by auction.
The order of ads on a Google search results page isn't determined by simply putting the highest bidder at the top. Something called a "Quality Score" also comes into play. Steve reports an ads Quality Score is composed of "relevance of the ad to the specific keyword or keywords, the quality of the landing page the ad is linked to, and, above all, the percentage of times users actually click on a given ad when it appears on a results page."

Google tries to forecast which ads will get clicked on based on the day's temperature. This makes sense when you start to think about queries like "ski boots" and "bikinis."

Berkeley professor Hal Varian, Google's "chief economist," keeps an apartment on campus -- the ranch house where Google got its start. Since Google HQ is called the Googleplex, Steven calls the apartment Hal's "pied-a-Plex." We hope Hal calls it that too.

Google's Next Social Step Screenshots

We just received a screenshot of an iGoogle page, that appears to show a couple interesting new elements of Google’s ever-evolving social blanket. The screenshot supposedly comes from the developer sandbox version of iGoogle (where it tests out new features), and shows options to socially integrate Google widgets. The one shown in the image below is the Google Finance widget, which apparently will be able to access your Google Contacts and place its activity in something called “Updates.”
It’s worth noting that Google just recently rolled out a version of Google Contacts that is wholly separate from Gmail. Why a Google Finance widget would need to access that data, I’m not sure. Perhaps it has some kind of easy-to-use “share this with” functionality. Or more specifically, as our tipster notes, that data may be be used to filter who you share something with in your social sphere. But the more interesting element is the posting to the Updates area. One would have to imagine that this will be a river of information similar to Facebook’s News Feed, that will pipe in new information from you when you update something.
Where such an Updates area resides will be extremely important. I’d guess it will be on your Google Profile, but there needs to be a centralized place for a full contact stream as well — or centralized places. Maybe Google will simply make another widget for all of your contacts’ updates to place on your iGoogle homepage or maybe even in Gmail. That seems like a smart play as it would be taking on Facebook by doing something slightly different than what Facebook is doing — allowing you to choose the area you wish to view the social stream. There would only be a walled garden insomuch as Google itself is a walled garden — a giant walled garden that encircles most of the web. Of course, Facebook is attempting to at least somewhat do this as well by opening its data stream outside of its walls.
I’ve made my distaste for some of Google’s social stumbles very clear. But, if this screenshot is legit, it shows a broader picture that is starting to make some sense. The real question now will be if Google will be able to keep all of this relatively complex tangle of social elements (and the underlying social relationships) simple enough for any user to grasp. Facebook had been really good at that, but it’s getting more complicated. Keep it simple, Google — and it just may pay off.

Update: The iGoogle Developer site has a FAQ which answers more questions about the impending social features.
Here’s the key section:
Who are friends in iGoogle?
For development purposes, you can add friends through the friends manager gadget included with the developer tools. You can only share activities with other friends who have access to the developer sandbox. This is not the final network that will be used in iGoogle. Users will have full control over who their friends are and will be able to easily modify their list of friends. Stay tuned for details.Profiles
What are profiles in iGoogle?
For development purposes, you can modify your profile data (displayname and thumbnail) using the profile gadget included with the developer tools. This is not the final profile or data that will be used in iGoogle. Stay tuned for details.Updates gadget
How often can a gadget post an activity to the Updates gadget?
A gadget can post up to 5 activities per user per day. For gadget development and testing purposes, these limits are not implemented in the sandbox. Posting activities requires explicit permission from the user granted during the installation of a social gadget.
And here’s another screenshot:

Is Google trying to out-Digg Digg?

On Saturday, Mashable's Ben Parr noticed the same new iGoogle gadget I did: What's Popular. He also asked the same question as me: did Google just roll out its own version of Digg?

While the short answer is no, it's easy to see why people would think they did.

Have a site to share? Submit it as a "pop." Like a post? Vote it up and you'll see the pop count increase instantly. Plenty of other sites offer that kind of functionality so why not Google? After all, they've been trying it out in search results for quite some time.

There are fundamental differences, though. Google's service can also figure out certain popular items all on its own, thanks to the massive amount of metrics big G pulls in from all over the internet. Search, Reader, Analytics, GMail, YouTube - they're all providing Google with background data that can be used to compute popular items as well.

While that won't necessarily tell you who liked a particular page or video, it does provide a massive foundation on which Google can build What's Popular. There's also no discussion feature yet, but since we just saw that appear in Google Reader can it really be far behind?

Then there's the whole "Google Short Links service" that was recently added to App Engine. It's produced by Google Labs, and gives anyone the ability to do what PC World has been doing in their magazine for years (think "go.downloadsquad.com/12356"). If they're not already getting data about your blog from Analytics, maybe you'll start using Short Links. Now you, too, can easily brand your own truncated links on Twitter or wherever else you choose in exchange for a little data donation to Google.

Right now Google may not have a complete competitor for Digg, but it's clear that they have the pieces to put one together if they chose to do so. It will be interesting to see if Google decides to push What's Popular beyond its current incarnation.

Google Really Control The News?

Once again, Google is the favorite bogeyman responsible for the rapid deterioration in the health of the news industry. This time it is Nick Carr doing the finger-pointing, describing Google as the most powerful middleman in news:

When a middleman controls a market, the supplier has no real choice but to work with the middleman - even if the middleman makes it impossible for the supplier to make money.

So how powerful is Google when it comes to parceling out traffic to news sites? If you are talking about Google News, the answer is that it is not quite as powerful as you might think. In the U.S., Google News is overshadowed by both Yahoo News and even the sites controlled by the New York Times (which includes NYTimes.com, Boston.com, HeraldTribune.com, and several other newspaper sites). According to comScore, Google News attracted 16.2 million unique visitors in the U.S. in February, compared to 42.3 million for Yahoo News and 46.2 million for the sites operated by New York Times Digital.

So Google News is not the middleman here. Let’s just put that notion to rest. Yahoo News is three times as large, and Yahoo sends even more traffic to newspaper sites from other parts of Yahoo through its online newspaper consortium.

The bigger question is whether Google as a search engine is controlling access to news sites. That really seems to be Carr’s main concern, although it is not clear because he uses a Google News search as his main example. Nevertheless, Google’s main search engine is certainly a major source of traffic to information sites of all stripes. At TechCrunch, for instance, it is the single largest source of traffic, accounting for about a third of the total. I have no idea whether this is representative of other news sites, but it wouldn’t surprise me. Google search is a very important middleman indeed.

Does that make Google like Wal-Mart, as Carr suggests, a middleman of such might that it squeezes everybody else’s margins? Does that give it “monopoly control over content distribution,” as Scott Karp tries to argue? Not exactly. Information economics work slightly differently than retail economics. Let me stick with the TechCrunch example. One third is a lot, but it is not a monopoly. Google sends us all of that traffic because many of our posts rank highly for the topics they cover. We don’t pay them for that traffic. We are not buying keywords.

Yes, Google makes money from other ads shown besides any searches where TechCrunch posts shows up as results. But the money Google makes from those ads does not detract from our revenues. Quite the opposite. Those searches send a considerable amount of traffic to our site, where we have our own ads. The more people who see those ads, the more we can charge for them. It’s all good.

Google does not control the news, it exposes it.

The retail/distributor analogy is all wrong. Information is not the same as a flat-screen TV or a blender. It does not become less valuable the more available it is because all news is not the same. Information dissemination is not a zero-sum game. Carr and Karp would have you believe otherwise. Karp writes:

The more content there is on the web, the less money every content creator makes, and the more money Google makes by taking a piece of that transaction.

Again, that is not how it works. Google doesn’t force suppliers of information to charge less for it as Wal-Mart does with suppliers of packaged goods. The money Google makes from its search ads is not necessarily money that would have otherwise gone to a “news” or content site. If Google didn’t exist, those ad dollars might have gone to an e-commerce site or a travel site or a real estate site or any number of other places. News sites have no claim to those search advertising dollars. It is incumbent upon each of us to attract an audience by having something original or interesting to say. When news sites do that, other sites link to them, and then they rank more highly in Google search results, which sends new readers their way.

And then once those readers do find a news source they trust, you know what? Some of them actually keep coming back on their own volition without Google telling them what to do. That is called direct traffic. Or they come through other sites. Google isn’t the only one who benefits from all those links. If you want to be known as an authoritative source of news, it is no longer good enough to simply proclaim yourself to be one.

Google China Signs Big Music For Free MP3 Search Engine

Google China has taken the beta label off its dedicated, free MP3 search engine now that the local Google branch announced deals with all four major music labels (Warner, Universal, EMI and Sony) at a press conference earlier today. The website, which had been in beta for over a year, can be found here, or you can try the translated version (note that you won’t be able to download or listen to songs outside of the country).
The site offers over a million music tracks thanks to a partnership with Top100.cn (a company co-founded by basketball start Yao Ming which Google has invested in), most of them Chinese but also foreign tunes approved by the government. For example, users can download the latest Metallica album free of charge, of which you can see a screenshot below. Apart from the four labels mentioned above, several major publishers and 140+ indie labels are said to be on board.

Do You have used Google For Vanity Searching?

A new study from the Pew Internet and American Life Project has found that 47% of American adult internet users have undertaken a vanity search in Google or another search engine.
The survey found that more people today have searched for themselves on Google (and others) than in 2002, when the figure was 22%. 53% of US internet users admit to having looked up information about work colleagues of someone they know, such as friends, relatives, colleagues, and neighbors.
Privacy online isn’t the big concern many TechCrunch readers would presume it was, with 60% of respondents saying that they are not concerned about information about themselves online. Interestingly the lack of concern would appear to be more focused on adult users, with the study finding that teens were more likely than adults to restrict who can see their private details online on sites such as MySpace.

Maye you should search your name....

Five unreported Google serious errors

Do you have known the Google errors?There are more than one might have imagined. Here are the Top Five:
1. The Bernie Madoff Scandal. Mr. Madoff, the disgraced money man with long gray hair, will apparently claim a mistaken Google search led to his awful scheme. His story is that he googled 'Fonzi' because he wanted to dye his long locks and copy the look of the famous character from Happy Days. Instead, the search engine gave him results for 'Ponzi' and the rest is history.
Google blamed Vera Stanyan, a 90-year-old grandmother from Idaho for this error. She was, according to the company, an obsessed fan of actor Henry Winkler and had googled 'Fonzi' so many times that the servers temporarily gave out.

2. The Mickey Rourke Incident. A similar tale appears to be unraveling in the case of Mickey Rourke's face. In a moment of weakness, the actor who is now reborn in The Wrestler decided he needed a touch-up to his perfect features. So he googled 'plastic surgery'. However, at that very moment, so many people in Hollywood were googling the same terminology that the Hollywood server--situated in the bunker of the Chateau Marmont Hotel--had something of a heart attack and served up 'drastic surgery'.
Google blamed the error on a bachelor party at the Chateau. Apparently, they made so much noise as to simulate an earthquake of 1.3 magnitude. And, in those days, the servers weren't built to withstand even such an infinitesimal wobble. Naturally, the manufacturer of the servers disagreed.

3. The Case of the UN Weapons Inspectors. Apparently the UN Inspectors who were searching for weapons of mass destruction in Iraq never actually made it to Iraq. Using an early version of Google Earth, they actually landed in the Sahara Desert and found nothing more than peculiar four-humped camels.
Google blamed the error on a teenage programmer from Dubai whom the company had hired on a four-week work experience program. His name, according to the company's records, was Freddy Krueger.

4.The Tom Daschle Miscommunication. Perhaps one of the most unfortunate incidents concerns the man nominate to be Health Secretary--Senator Tom Daschle. He seems to have forgotten to pay $140,000 in back taxes on a car and chauffeur he enjoyed for some three years. I am told that he was in possession of a Google Android phone and sent a text message (to his chauffeur, it appears) for the tax bill to be paid.However, Android was having a bad day and the message appears to have disappeared, as some text messages do, into dead air. Google blamed the problem on three children in Wichita, Kansas, who had hacked into Android HQ in search of alien cartoon characters.

5. The Michael Phelps Fiasco. Then there's the latest, and perhaps most painful error. It involves Olympic swim hero and man with remarkably short legs compared with his torso, Michael Phelps. A photograph was released that appeared to show him partaking of a bong.
Well, I can reveal that Mr. Phelps in fact googled 'Bond', as he believes that he would be a natural, and far taller, replacement for Daniel Craig in the next Bond movie. Unfortunately, the search engine made an unscheduled turn and offered him 'Bong.' With such devastating consequences to his potential future acting career.
The company blamed the error on two fans of the movie Pineapple Express in Kabul, Afghanistan. Apparently, they delight in messing with a large Google server in their country with the aim of turning the whole world into raving potheads.
It is never easy to maintain such a sprawling and complex network as Google's. And we should not be tempted into blaming the company for any of these unfortunate incidents.