Firms


In a recent interview at D5, Eric Schmidt said that Viacom’s Lawsuit against YouTube was “probably just a mistake”. Google said that and Schmidt maintains they respect the terms of the law. The outcome of the case will be really interesting…

In the meantime, here is the video of this interview:

aQuantive Today, Microsoft announced that they’ve just bought aQuantive for $6.0 billion in cash.

It’s the biggest acquisition that Microsoft has ever done in its history. It’s funny because Google has challenged Microsoft when they bought Youtube for more than $1.5 billion and DoubleClick for more than $3.0 billion.

I think that Microsoft has just responded with $6.0 billion. :)

Those two companies are crazy. They’re having a tremendous fight. It’s very interesting to watch.

I was gonna forget to tell you that aQuantive is a digital marketing company…

Everyone would like to be rich (I presume). Everyone would like to be sucessful (I presume again). Everyone would like to have an ingenious idea to make a lot money quickly. Those two guys at Google did it.

How things work in the physical world One month ago, an interesting article from ReadWriteWeb talked about the Google model to make money.

You will see two charts describing how it works in the “physical” world compared to the “online” world depending on the demand on the market.

ReadWriteWeb tells us that Starbucks Coffee is the equivalent of Google in the physical world. It means that they’re making good money but it’s funny when you look at the differences:

  • Starbucks spends money on expansion, but Google ads spread themselves
  • Starbucks spends a lot of money on maintenance, Google spends little
  • Starbucks spends money on marketing, but businesses flock to Google because it just works
  • Starbucks relies on people, Google relies on software

Those four points are so relevant.

I take advantages of this article to give you the financial results for the Q1 2007 of the Internet Giants:

  • Google with a net income of $1.0 billion
  • Microsoft with a et income of $3.48 billion
  • Yahoo with a et income of $142 million
  • Apple with a et income of $1.0 billion

For Apple, it’s a record when for Yahoo is a clear decrease. Is Microsoft gonna merge with Yahoo ? Steve Ballmer doesn’t rule out the idea… We will talk about it !

Stay tuned

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Yes, it’s not a joke. Google has just bought DoubleClick.

Double Click “DoubleClick provides a suite of products that enables agencies, advertisers, and publishers to work efficiently, that will enable Google to extend our ad network and develop deeper relationships with our partners.” (from Google blog)

One more time, Google has beaten Microsoft for this bid. They spent almost twice more than for the acquisition of YouTube last year ($1.65 billion).

I totally agree with Ionut from Google Operating System: “The major Internet player outbid by Google was Microsoft and that was probably the explanation for this huge value paid by Google for the largest and most ungoogly acquisition ever made.”

Windows Vista has been launched on January 30, 2007 for consumers. After two months, we can find some interesting analysis about the impact on the Internet giants.

Logo Windows Vista In my opinion, the main goal for Vista beyond the improvement of security and entertainment is to deploy the Internet strategy of Microsoft. They want to attack Google and this OS is a huge (the last?) opportunity to force Google to put a feet down.

In Vista, you can in a easy way interact with web. Of course, Windows Live Search is the default search engine. So, it’s a huge advantage for MS. We will see in the coming months how people are gonna react to Vista in their daily usage.

At this point, we have an interesting analysis from ReadWriteWeb. It shows with a few graphs that the traffic from Live.com and Msn.com have been increasing since the launch of Windows Vista whereas Google slipped down.

We will keep you updated on this topic

NB: Let’s finish with a geek joke right here .

Viacom has recently sued YouTube and Google for “massive intentional copyright infringement of Viacom’s entertainment properties” and seeks more than $1 billion in damages! Indeed, like on Dailymotion, everybody can watch on YouTube copyrighted video of Viacom such as: The Colbert Report, SouthPark, An inconvenient Truth, The daily Show with Jon Stewards…

pic_youtubelogo_123×63.gif

The legal aspects

Just a reminder: YouTube is protected under the American Digital Millennium Copyright Act (ADMC) of 1998 which has a safe-harbor provision. Indeed, YouTube has to block access to materials once they are notified by copyright holders of specific infringement. Thus, YouTube can not be sued for copyright infringement if they respect this principle; in other words, Google has no duty to monitor its content and the firm is protected from the consequences of its users’ actions. However, Viacom blames YouTube for directly profiting from the availability of popular infringing videos and this point is the main issue of complaint because the safe-harbor is no longer applicable in case of profitability of this video broadcasting. Thus, the outcome of this complaint will be interesting insofar as it will condition the future of video broadcasting via the Internet and the future of Video Platform such as Dailymotion, YouTube, etc.

Google’s Strategy

To anticipate and avoid this kind of complaint, the current strategy of Google is to make contracts with traditional content providers (BBC, NBC, etc) which allow them to provide the content they want and to share advertising incomes with Google. But In exchange, they can not sue YouTube for copyright infringement. We will discuss of this strategy again because its success could have a big impact of this market.

iFilm…

At last, we wonder about the real intent of Viacom. Indeed, iFilm, a Viacom-owned video sharing website also relies on the provisions of the DMCA and meet the same copyright’s issues as YouTube. Thus, if YouTube is violating the law, so is iFilm!

Recently, Thomas Rubin, Microsoft’s associate general counsel, addressed the Association of American Publishers’annual meeting in New York and argued in his speech that Microsoft’s Live Search Books honors copyright protection and fair use whereas Google’s Book Search abuses it. He said that “Google has chosen the wrong path for the longer term, because it systematically violates copyright and deprives authors and publishers of an important avenue for monetizing their works. […] Google has also undertaken this path without any attempt to reach an agreement with affected publishers and authors before engaging in copying“. Indeed, Google’s book’s policy is one of the main chink in Google’s armor and Microsoft envisages to capitalize on it.

googe book

Two different approaches

Google’s concept is to index the World’s libraries and to offer entire books or sometimes just snippets to the public. As books are copyrighted (like websites), Google allows authors to opt-out of the search engine. In contrast to Google, Microsoft has adopted an opt-in approach; in other words, Microsoft only indexes books that are no longer copyrighted or books which have been approved for indexing by their authors via Microsoft’s Publisher Program. However, in this Battle, the arguments of Google are weak. Indeed their opt-out approach is not justifiable and can not be compared to websites indexing insofar as the authors have never come down in favor of an online use of their books. Moreover, opt-out approaches on the Internet are not very popular: take for example the Spam issue.

Microsoft’s opportunity

As Forbes explains it, Microsoft’s attack against Google is strategic. For 10 years, Microsoft has been criticized because of his supremacy and its monopolistic will which has been illustrated by anti-trust trials; whereas Google enjoys a very good image. Thus, by criticizing and bashing Google, Microsoft is trying to differentiate itself from its opponent and position itself on a higher moral ground.

So, its time for Google to adjust its strategy and to remenber its “Don’t be Evil” mantra or else Microsoft is going to use it against it, which is dangerous for Google whose capitalization is in a great extent based on its popularity.

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