[Ecommerce] story on Google sees future of web video

[Manon Ress]

Google Sees The Future Of Web Video
By Larry Greenemeier
InformationWeek Fri Oct 13, 4:18 PM ET

http://news.yahoo.com/s/cmp/20061014/tc_cmp/193301984

Google may have landed a knockout punch to the rest of the Web video
market with its planned $1.65 billion acquisition of YouTube, but
it's clear that the company is quite aware of the dangers of sitting
on top of this market. The acquisition will test Google's ability to
navigate copyright issues and push its technology infrastructure in
new ways.

YouTube has been viewed by some content providers as a haven for
pirated intellectual property, a player at the fringe of the legal
system that would ultimately have had to open its wallet and curtail
its rogue nature if it wanted to survive the first wave of lawsuits.
Under Google's aegis, however, YouTube gains a certain degree of
credibility, with Google promising to be attentive to complaints over
misuse of copyrighted material. "We're aware of cases where video is
offered by someone other than the copyright holder," Marissa Mayer,
director of Google's consumer Web products, said Friday at a seminar
presented in New York by Syracuse University's S.I. Newhouse School
of Public Communications.

Mayer, who's one of the first 20 people to have been hired at Google,
also made assurances that her company removes pirated content when
it's contact by legitimate copyright holders.

"The only way to know if a deal is good or bad is in retrospect,"
said Nathan Myhrvold, founder and CEO of Intellectual Ventures, who
shared the stage with Mayer on Friday. Myhrvold, former chief
strategist and CTO of Microsoft, added that video is certainly a
valid investment, noting that as the communication infrastructure
improves it won't be long before Web videos are of high-definition,
or HD, quality.

While it's unclear if YouTube can mature beyond grainy videos of
synchronized dance moves on treadmills, as with the "OK Go" series,
Myhrvold asked, "What happens when YouTube goes HD?"

Web video is an irresistible draw for Google, whose success is
predicated on its ability to lure the audience that its advertisers
crave. Search is major component of video's success on the Web. If
you can't find what you're looking for, what good is it? That's why
Microsoft earlier this week said it would use technology from
Blinkx.tv to provide search in some parts of its MSN Internet sites
and Live.com.

The rivalry between Google and Microsoft will only grow more heated
as they expand into new markets like video, Myhrvold predicted. But
he also pointed out there are different types of competitors in the
business world. Some competitors will go toe-to-toe with similar
products. Other moves are more strategic, where one company will dip
a toe into a competitor's market just to stir up a bit of fear.
Specifically, Myhrvold sees Google's Writely online word processing
application as "a thumb-in-the-eye kind of deal" to Microsoft. Google
bought Writely in March and plans to pair the application with its
Google Spreadsheets.

Mayer acknowledged that not every move Google makes is designed to
propel the company to the top spot in a given market. She sees
Writely and Google Desktop as advancing technology and concepts,
including Ajax and Web 2.0, that the company wants to succeed.

Of course, Web-based applications that resemble Microsoft's cash-cow
products send a message to Microsoft's customers that there are
alternatives to PC-based productivity tools.

The key to Google's continued success as it branches out in new
directions is putting the right talent in place to execute on its
vision, rather than thinking too much about the competition or even
its own past successes, Mayer said. As successful as Google's search
engine is, Mayer feels it could be better. "Search is super-
primitive," she said. "It's disappointing that it's not advancing as
much as we had hoped."

The ideal would be to bring the user the exact content they're
looking for, regardless of whether it's text, photos, or video.
Search will ultimately become more personalized, with the Google
search engine having a profile of the user that can help better
tailor search results based upon factors such as where a customer
lives and his or her occupation and preferences. Adding voice-
controlled search queries that drivers can use from the road is
another option on the horizon.

Google's success in the Web video space will be determined by a
number of factors that all depend upon the company's ability to
expand YouTube's rudimentary capabilities. Google has to build out
more bandwidth to ensure that video can be uploaded and downloaded
without network bottlenecks.

The company is also exploring new advertising models that accommodate
video, including having advertisers sponsor different videos. This
model will have to be further developed to ensure that advertisers
can accomplish their own objectives. A 30-second commercial isn't a
good fit with a 30-second video, so advertisers will have to explore
new models for getting their messages across. To the extent that
Google can expedite this process, the company will ensure that the
sponsored video advertising model works.

Google has shown itself to be a company unafraid of taking risks and
taking on institutions like Yahoo and Microsoft. The legal,
technical, and marketing questions surrounding Web video make YouTube
Google's riskiest move so far, but also one with a huge potential
payoff.


************************************************
Manon Anne Ress
manon.ress@cptech.org,
www.cptech.org

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