Organic SEO Blog > Organic Search Engine Optimization Blog

LA Times

We always imagined how this might end: GeoCities would finally take down all of the animated "under construction" signs, and we'd hear one last Midi file to the tune of horns playing taps.

Instead, GeoCities will probably go down with a whimper today.

Time is up for Yahoo Inc.'s scheduled closing of perhaps the most significant virtual museum in recent history. Years ago a central meeting place for a massive chunk of American Web surfers, GeoCities will lock its doors and take millions of pages offline.

GeoCities allowed anyone to build a custom Web page for free and reserved a small amount of virtual storage to keep pictures and documents. It was perhaps the first mainstream example of an open, participatory and personal Internet.

At the turn of the century, GeoCities was nearly ubiquitous. Fathers created websites about their families; kids created sites about Pokemon; teenage girls created sites about the Backstreet Boys. Practically every facet of culture was documented and thanks to search engines, easily accessible.

All of those documents are about to disappear.

GeoCities stopped accepting new registrations earlier this year. Existing users could continue to update their pages and save sites to a personal hard drive in advance of the impending closure. Yahoo is encouraging the relatively few remaining users to transition their accounts to the company's $5-per-month Web hosting service.

The decision to shut down GeoCities rather than keep it around for historical reference and, say, slap ads all over it is curious. Especially when you consider that the network is still among the top 200 most-trafficked sites on the Internet, according to metrics tracker Alexa.

"Yahoo continuously evaluates and prioritizes our products and services in alignment with business goals and our continued commitment to deliver the best consumer and advertiser experiences," according to a company spokeswoman. GeoCities' closing is "part of our ongoing effort to prioritize our portfolio of products and services in order to deliver the best products to consumers."

The company downsized in a different way on Friday when billionaire financer Carl Icahn announced he was resigning as a director.

Yahoo boasts that it has closed nearly 20 services in less than a year, which includes a sort of competitor to GeoCities called Yahoo 360 as well as My Web, which was similar to Delicious, another Yahoo property.

The collapse of GeoCities, though, is perhaps the most epic failure in Yahoo's portfolio. After going public in 1998 during a period when GeoCities rose to unprecedented prominence as a top-five player on the Web, the following years practically embodied the grander burst of the Internet bubble.

Yahoo paid about $3 billion in 1999 for a company that seemed poised to continue its domination of the user-driven Net. Failing to turn any significant profit from all of those pop-ups and banner ads (in fact, there's questions about whether GeoCities was ever cash-flow positive), the purchase -- or perhaps Yahoo's inaction once GeoCities was acquired -- turned out to be one of the company's most costly mistakes.

But Yahoo's folly spelled unimaginable fortunes for two Los Angeles entrepreneurs.

David Bohnett, a tech-savvy businessman from Beverly Hills, took an interest early on in emerging technologies. In 1994, he decided that everyone should be able to have their own website. He purchased a computer server and connected with John Rezner, a friend of a friend with the know-how to build Web applications.

"He unpacked the very first server out of the box," Bohnett said about his colleague.

From the beginning, Bohnett's idea was focused on bringing the real world to the Web -- be it who people are, what they're doing or what they're interested in.

GeoCities was originally called Beverly Hills Internet (and, for a short while, GeoPages). Its initial feature focused on two cameras situated in different parts of Los Angeles -- one at their headquarters near Rodeo Drive and another at a friend's office at Hollywood Boulevard and Vine Street -- capturing video 24/7 and broadcasting it to the Web.

Before banner ads, EBay, Google, Friendster, MySpace or Facebook, there was GeoCities and its concept of site neighborhoods.

The neighborhood analogy required users to self-categorize based on what they would write about. Choose Beverly Hills for a site about shopping, Capitol Hill for politics or Hollywood for entertainment.

"People were very selective about where they wanted to live," Rezner said. "They wanted to live next to people with good pages or ones that were similar to theirs."

As the site grew, the neighborhood system had some trouble scaling. They created more addresses, new neighborhoods based on more selective areas of interest and things like sub-neighborhoods. Real estate boomed, and in order to keep residents happy, they began evicting bad neighbors.

Eventually, after Yahoo got a hold of GeoCities, it killed the entire concept and let people pick their own unique names. "It's a shame," Rezner said. "There's nothing like that in the 2D world."

"The Yahoo sale was sort of bittersweet -- obviously, financially, it was great," Rezner said. "Nothing ever happened. GeoCities stagnated from Day One."

"We could have gone into search because we had all of this data. At that time, we had a huge portion of the Web on our servers," Rezner said. "I was screwing around with algorithms, trying to do search, that were remarkably similar to what Google was doing."

Other ideas Rezner was kicking around in 1999 included profiles similar to Facebook's and an open API for developers -- a system that has worked extremely well for Twitter. But by that time, his co-founder and former GeoCities chief executive was gone. And Rezner's involvement within day-to-day operations were beginning to diminish.

"Social networking sites are very fadish," Rezner said. "They constantly have to evolve. I think GeoCities had to do that."

Bohnett echoes those sentiments. "It's not uncommon that a larger company isn't able to focus on doing a lot of different things well," he said. (Both Bohnett and Rezner agreed on one thing: Facebook won't be on top forever.)

Likewise, Jonathan Linner, an outsider working as chief executive on a location-based social network called Brightkite, suggests Yahoo spin off GeoCities to a start-up team or shop it around, rather than pull the plug.

But unlike Skype's co-founders, Bohnett and Rezner don't appear to be interested in reacquiring their baby. They now spend their time and fortunes investing in start-ups.

Bohnett with Baroda Ventures has funded companies that include NetZero and Maps.com. Rezner has invested in numerous companies, none of which have really taken off.

The Bohnett Foundation was founded in 1999 and provides funds to social activism groups in gun safety, voter registration, transportation, language research and support for the gay and lesbian communities. "It is in fact consistent with my personal philosophy of giving people a voice, ensuring that the Internet is accessible to everybody," Bohnett said.

GeoCities was a cornerstone of today's young Internet entrepreneurs. Many say they got started on the Web using GeoCities' site builder.

"I lost my 'HTML virginity' with GeoCities," wrote Reddit founder Alexis Ohanian in an e-mail. "Somewhere in SiliconValley/Grid. ... I wish I could find it."

Some GeoCities pages appear to have been lost over the years. But an independent group called Archiveteam, headed by Jason Scott, has been trying to save everything left before Yahoo closes the building.

The group of dedicated digital historians have been pointing about a hundred computers at the GeoCities domain 24 hours a day for months. First, the machines crawled the neighborhoods, duplicating copies of everything in sight.

"The hard part was going through and trying to find random user names," Scott said about the obstacle Yahoo introduced later in GeoCities' life. "Basically, we're hitting Google and crawling in every direction."

So far, Archiveteam has captured about a terabyte of data, or about a thousand gigabytes, in its mission of mirroring the entire site.

"That's a lot of data," Rezner said when we told him about Scott's project.

You have no idea. Neither do any of Archiveteam's dozens of volunteers. Yahoo won't tell them how big GeoCities really is. The amount of allotted storage fluctuated over the years, making it even harder to estimate, Scott said.

"We're running blind," Scott said.

Scott, an unemployed systems administrator looking to transition into a career as a historian, has found a lot of history in his quest. He's dug up countless family trees, computer software directories and a document on Romania that he believes was compiled over years.

Even the endless "Saved by the Bell" fan sites -- these are history. Scott put together a page populated with a bunch of the "under construction" Gif files that were synonymous with the early Web. The spiritual successor is the "beta" tag, Scott notes.

"I was trying to illustrate quickly the things that could be lost," Scott said. "All of these discussions are happening at the function of having these artifacts laying around."

Scott is also working with Archive.org, the group behind the Wayback Machine, to hit the project from two sides. But only a few grains of sand are left atop the hourglass, and scores of pages are sure to be lost.

The story of GeoCities this decade is one of a skydive from the clouds without a parachute or supervision and a sack of missed opportunities.

"Yahoo never knew the value of GeoCities," Rezner said.

Wall Street Journal

WASHINGTON -- Federal regulators are considering whether the government should take greater control of the Internet and ask consumers to pay higher phone charges in order to provide all Americans with cheaper access to broadband Internet service.

The Federal Communications Commission Wednesday will lay out the case for expanding broadband Internet service, outlining current obstacles to making it widely available. The agency is considering whether to force Internet providers to share their networks with rivals and raise fees charged on consumer phone bills to pay for the broader access.

The proposals, which have sparked criticism from telecommunications and cable companies, represent a reversal from the Bush Administration, when regulators cut back on government control of Internet and telephone service.

The new commission, controlled by Democrats, is considering whether more government control is needed to ensure competition and more affordable Internet service.

The FCC staff will float possible solutions in December and make formal recommendations in February, when it is set to release its National Broadband Plan, a blueprint for improving broadband speed and access. Congress asked the FCC for the plan earlier this year.

FCC officials estimate it could cost anywhere from $20 billion to $350 billion to connect all American households to high-speed Internet service, depending on speed offered.

They haven't yet said how much of that investment might come from taxpayers.

The agency is looking at three politically charged proposals to reach its goal of universal broadband access.

One is to as much as double a $7 billion federal phone-subsidy fund, called the Universal Service Fund, which subsidizes phone service in rural areas for low income Americans, and expand it to subsidize construction and operation of broadband networks in rural areas. Money for this fund comes from a small charge tacked on to consumer phone bills.

Previous efforts to overhaul the fund have run into significant resistance in Congress, particularly among congressman and senators who represent rural areas where phone cooperatives and small phone companies don't want to lose the federal subsidies they get to provide service.

FCC staff also are studying whether to revive "open access" rules, which would require Internet providers to lease their networks to rivals at government-regulated rates.

Similar rules are in place in Europe and some Asian countries -- and some consumer advocates say open access is one reason why Internet service is cheaper and faster in those countries.

FCC officials have made no decisions yet on whether to adopt any of these proposals. The five-member FCC board will be the final say and they haven't been presented with any options yet.

Still, large phone and cable companies are against any effort to allow open access, arguing they will have little incentive to invest billions in networks if they are required to offer below-rate access to rivals.

In recent weeks, they have resisted efforts by the FCC's staff to gather data for pricing models. They are concerned the data-gathering might be used to help justify government rate setting, according to industry executives. FCC officials say they wanted the data for different purposes.

Consumer groups say open-access rules will spark competition and lead to more choice and lower Internet prices.

"It provides a way to bring more competition into the broadband marketplace which could drive down prices for consumers," said Joel Kelsey, policy analyst at Consumers Union, publisher of Consumer Reports.

The issue bubbled up last month, when Harvard University's Berkman Center for Internet & Society released an FCC-commissioned study which concluded that other countries have faster and cheaper Internet access because of open-access rules.

On Monday, AT&T told the FCC that the Harvard study's conclusion, "that open access is the talisman for success in broadband, is nothing short of astonishing."

The Harvard study "seems to assume throughout that we should apply the lessons of the past to the future," wrote Link Hoewing, a Verizon assistant vice president for Internet issues, on the company's policy blog. He argued it didn't make sense for the FCC to look at applying old rules, which were designed for the traditional phone system, to the fast-evolving Internet. Verizon declined to comment.

The National Cable & Telecommunications Association said the FCC shouldn't reach a "false and foregone conclusion" that such rules would increase the availability of high-speed Internet service "when a clear preponderance of empirical evidence reaches the polar opposite conclusion."

The FCC's third option for broadening Internet access, floated last month, has already stirred controversy.

The agency suggested that it might reclaim some airwaves from TV station owners and auction them off to wireless companies for more high-speed wireless Internet services.

Broadcasters, including PBS executives and station owners from Texas and other states, have been up in arms, streaming into the FCC over the past two weeks to lobby against the plan.

"The political realities of this are huge," said Gordon Smith, a former Senator from Oregon who recently became head of the National Association of Broadcasters on Tuesday. The FCC's proposal has "a long way to go," he predicted.

Phone and cable companies are already concerned by a separate FCCinitiativewhich would prevent Internet providers from favoring some Internet traffic. These net-neutrality proposals are opposed by Internet service providers, who argue that they need flexibility to manage their networks and potentially offer premium services to customers willing to pay more for faster delivery.

The FCC hasn't formally proposed any open-access rules, which require companies to lease space on their networks to competitors, and may decide not to do so. "We're looking at lots of things in the entire ecosystem. It would be premature to suggest we're moving in a particular direction," said Blair Levin, a former telecom analyst who's overseeing development of the National Broadband Plan for the FCC.

He said that the Universal Service Fund, which is financed by fees charged on consumer phone bills, is flawed because it only covers phone service and not broadband as well.

If the agency heads down the open-access road, it would be returning to policies the FCC adopted in the wake of the 1996 Telecommunications Act, which opened the local and long distance phone markets to more competition.

Congress required phone companies to lease part of their networks to competitors, but it took the FCC the better part of a decade to write rules that withstood legal challenges from the telephone companies. The FCC exempted broadband lines from such regulation in 2002.

Wall Street Journal

AOL plans to cut its workforce by one-third in the coming months as the Internet company continues to restructure and refocus its strategy while preparing to be spun off from Time Warner Inc. (TWX).

The company, which employs about 6,900 people, said it will reduce its annual operating costs by $300 million. As a result of the layoffs and other measures, it expects to take charges of up to $200 million in the first half of next year.

AOL Chief Executive Tim Armstrong is in the midst of a campaign to sell the company to investors as an independent, publicly traded business after years of strategic shifts and disappointing financial performances under Time Warner's ownership. He launched an effort to reduce the company's cost structure called "Project Everest" four months ago.

At its height, AOL had more than 20,000 employees in 2004, a number that was roughly cut in half three years later. Many employees worked in call centers to serve the company's dial-up Internet access customers.

In January, Armstrong's predecessor, Randy Falco, said AOL would cut 10% of its workforce, or about 700 employees, and several rounds of layoffs occurred in connection with that plan. The company also hired a number of journalists over the course of 2009. Armstrong has said the company will focus on expanding in online media content and branded display advertising as its dial-up Internet access business declines.

"This shows that at least they are proactively trying to figure out the best business model going forward," said David Joyce, an analyst with Miller Tabak & Co.

Armstrong told employees Thursday that he will ask for 2,500 volunteers to be laid off, according to AOL spokeswoman Tricia Primrose. The voluntary layoff program will begin on Dec. 4 and run through Dec. 11.

"We will need to do an involuntary layoff if we do not reach the target numbers through the voluntary option," Primrose said in an email. "We believe the voluntary program gives people more choice and decision-making ability instead of waiting for the final cost recommendations and involuntary layoffs."

Meanwhile, Armstrong will surrender his 2009 bonus, which was expected in a range between $1.5 million and $4 million.

"That decision is a personal one and is not a sign for the future payout of the overall bonus plan for employees," Armstrong said in an email to employees.

Time Warner holders will get one share of AOL Inc. for each 11 shares of Time Warner they own in the spinoff, which is scheduled to take place Dec. 9.

PC World

Google's mammoth $750 billion purchase of mobile advertising company AdMob signals a new era in online advertising. Google is looking to take its online search advertising success to its Android mobile platform and create a new lucrative revenue stream.

Google is somewhat new to the mobile operating system and mobile device markets, but one market it understands, arguably better than any other entity, is online advertising. So, there is reason to raise an eyebrow when Google throws down $750 million to purchase a company like AdMob that is focused on mobile advertising.

Mobile advertising is a nascent market, but Google is placing a pretty hefty bet on its continued success. AdMob has built a solid reputation among the emerging mobile ad competitors, serving ads to both the iPhone and Android platforms. The purchase keeps Google a step ahead of the competition and provides it with an opportunity to help define the market as it has defined the online search advertising industry.

Google developed the Android mobile operating system as a license-free open source project. Now that Android is gaining a significant stake among mobile phones with devices like the Motorola Droid, Motorola Cliq, Samsung Behold II, and HTC Droid Eris, Google is ready to cash in. The purchase of AdMob provides Google with a revenue stream it can use to capitalize on the popularity of Android.

Google has made other purchases this year, like On2, reCAPTCHA, and the rumored purchase of Gizmo5. Those purchases pale both in the investment made by Google and the potential impact they have on Google's business model and revenue.

You have to do a double-take when any company invests three-quarters of a billion dollars to purchase another. Whatever Google's plan is, you can bet that it has mapped out the strategy for recovering the investment. Google wouldn't spend $750 billion without a pretty solid plan for leveraging the purchase and turning it into a lucrative revenue stream.

The AdMob purchase is sort of the mobile seo advertising equivalent of Google's $3.2 billion purchase of DoubleClick a few years ago. Google had begun developing an in-house solution with AdSense for Mobile, but why waste time and money reinventing the wheel when AdMob already has a successful platform for serving feature-rich ads across mobile platforms.

Google is preemptively pleading its case against any potential claims of antitrust concerns. Google is quick to point out that the availability of mobile advertising that can be embedded in apps like those found in the Apple App Store and Google's Android Market help developers deliver a more diverse selection of functionality for mobile devices.

There are more mobile devices in the world than computers, and as those mobile devices have evolved to become portable computing platforms complete with broadband web access, search engine advertising like that provided by Google and Bing has to evolve as well.

The AdMob purchase is almost guaranteed to have a ripple effect, with Google competitors either expediting their own competing services, or purchasing an AdMob competitor to get in the game as quickly as possible like Google is doing.

When Verizon Wireless and Google Inc. set out to challenge the iPhone, they started from less than scratch. They stood on opposite sides of major industry issues and had never worked closely together.

Now they're counting on an unlikely but growing friendship between their chief executives, Eric Schmidt of Google and Lowell McAdam of Verizon Wireless, to pave the way forward.

On Friday, Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone PLC, started selling two phones that are the network's first to run on Google's Android software. Verizon is putting the muscle of its largest marketing campaign ever behind the Droid from Motorola Inc., one of the two new devices.

In recent weeks, Messrs. McAdam and Schmidt have appeared at joint news conferences and co-authored a blog post on telecom regulation. They regularly visit each other when they travel cross-country. Mr. Schmidt even likes to send Mr. McAdam updates on his visits to Verizon stores.

While both men are trained as engineers, they have different personalities. Mr. Schmidt, a Silicon Valley veteran with a professorial demeanor, is comfortable in the spotlight. Mr. McAdam, who served six years with the Navy Engineer Corps and is a telecom veteran, is soft-spoken and publicity shy.

The relationship had a lot of history to overcome, including differences over "net neutrality," a hot-button idea about how the Internet should be managed. Google had called for stronger regulation to prevent telecom carriers like Verizon from slowing certain data traffic in favor of others. Carriers said new regulations could hurt their ability to manage the quickly growing demands on their networks. The Federal Communications Commission is deliberating on new net neutrality guidelines.

The two companies have butted heads elsewhere. Last year, Google participated in a government auction of wireless spectrum on the condition that the winners open the airwaves to any device. That condition forced Verizon, which paid $9.36 billion for its share of licenses, to further open up its network.

But soon after the auctions ended, in March of last year, Mr. McAdam visited Mr. Schmidt at Google's sprawling campus in Mountain View, Calif., and lobbed a pitch at him. The two men, who had spoken only sporadically before, talked for an hour and a half, taking a late-morning meeting into lunch at Google's free cafeteria.

Mr. McAdam said Verizon was willing to relinquish some control over the applications that run on its network. "We thought: Why don't we try to do something like Android on steroids?" Mr. McAdam says. Given the opportunity to work with a big player in the wireless industry, Google bit.

When Google released Android in 2008, it made it free and customizable, in hopes that some phone makers would just incorporate it into their devices without serious assistance from the company. Since then, however, it has given special attention to wireless carriers including Deutsche Telekom's T-Mobile USA and now Verizon, to build products that highlight Google services such as search and mapping.

Overshadowing—and spurring—the talks were rivals AT&T Inc. and Apple Inc., whose iPhone has been the main engine of AT&T's recent growth. In the last quarter, AT&T added two million new subscribers, more than half from new iPhone activations, while Verizon added 1.2 million customers in the same period.

But making Google and Verizon work together wasn't that easy. For one thing, Verizon was jittery that it had only a handshake agreement, without the contract it usually requires, according to Mr. McAdam. But the two CEOs kept meeting over the next months, bonding over episodes like a snake escaping from its tank while they were meeting in Google's New York office.

Meanwhile, the talks "oscillated" between various layers of Verizon and Google executives, says Andy Rubin, a Google vice president of engineering who was involved in the negotiations. Mr. Rubin and John Stratton, Verizon Wireless's chief marketing officer, began to hone the fine points of the phone that would become the Droid.

The companies brought in Motorola to design and make the flagship Android phone, the Droid, and roped in Motorola's co-CEO Sanjay Jha to take the lead. Mr. Jha, looking to add a much-needed hit product to Motorola's lackluster lineup, started talking every couple of weeks with Mr. McAdam as the phone's design reached its conclusion.

Mr. McAdam pushed Google's Android programmers to write more applications, a key match-up to the more than 100,000 applications available on the iPhone's App Store. He was looking to be "wowed," Mr. McAdam says.

Verizon, in turn, had to give over some decisions to Google, an unusual move for carriers, which have traditionally exerted strong control over the development of phones.

"Lowell, you can't be open if you don't have Google Voice on this," Mr. Schmidt said at one meeting, referring to the controversial mobile application that lets Google route calls to multiple phones. Mr. McAdam acquiesced. (Apple has yet to allow Google Voice to run on the iPhone, a dispute the FCC is investigating.)

Another challenge was balancing the phone talks with ongoing negotiations on a separate search deal. Verizon was looking for a search engine to feature on its phones and was nearing a final agreement with Google. In November, Microsoft Corp. put in an offer of about $600 million for its Internet search engine, nearly doubling Google's offer, according to people familiar with the deal. Google declined to comment. Verizon went with Microsoft. The search deal didn't derail talks on the Android phones, thanks in part to the growing relationship between Messrs. McAdam and Schmidt.

Wall Street Journal

Behind the scenes of a recent online shopping trip, Blue Kai , a startup company that collects Internet user data, was tracking when a Web surfer browsed for electronics on eBay, searched for cruises and checked out snowboards. It also tracked when a Web surfer researched Chevrolet sport utility vehicles on auto site Autobytel and priced flights to Durham, N.C., at travel site Expedia.

After collecting that kind of information, Blue Kai groups Web visits into categories of consumers. It then immediately auctions off the data from some of the sites to marketers and Internet companies, which in turn use it for consumer research and ad personalization.

The Web companies make money for selling the data about visitors to their sites, and Blue Kai takes a cut. The advertiser gets its coveted targeting.

While the idea of target marketing has been around a long time, marketers until recently have had a hard time buying on enough Web sites to make the targeting truly effective.

Blue Kai, like data-mining firm eXelate Media and others, are striking deals with thousands of Web sites to collect and sell data on their visitors that will be used for consumer research or ad targeting. Marketers, in turn, are using the information they buy to make better choices when buying ad space. It is a process that's proving especially useful when buying through ad exchanges, which are new systems that allow advertisers to bid directly on the ad space available on a large group of Web sites.

Buying such data would let a hotel chain, for instance, show ads featuring discounts in North Carolina to a person who recently shopped for a flight to Durham—and not just on the travel site, but on any of a number of sites across the Web.

Some Web sites are hesitant to sell data about the consumers visiting them to outside firms. Historically, the only way a marketer could buy ads on a Web site was through striking a deal with that site directly. Now, buying ads based on the data about visitors, rather than the content published on the site, could drastically change how media companies do business.

Refining digital ad buying practices could bring some steam back to the market for online display ads—those with text and pictures that border a Web page—a market estimated at $20.8 billion in 2009, down from $23 billion in 2008, analysts say. U.S. online ad spending on targeted ads will reach $1.1 billion this year, up from $775 million in 2008, according to research firm eMarketer.

"These companies are adding tremendous value to the whole advertising ecosystem," says Ross Sandler, an Internet analyst with RBC Capital Markets.

Tapping such data gives marketers a way to buy ads according to specific groups of consumers who are likeliest to be interested in a given product, says Curt Hecht. Mr. Hecht is president of Vivaki Nerve Center, a unit of Publicis Groupe that buys hundreds of millions of dollars of online ad space a year for companies such as Procter & Gamble and Wal-Mart Stores.

For instance, a credit card company can buy ads targeted to small business owners it knows are in the market for a new card, instead of buying ads on business-related Web sites.

Neither Blue Kai nor eXelate discloses specific Web sites that they buy and sell data from, citing agreements with those Web sites. In their privacy policies, some Web sites reveal that they sell data to third parties, but often do not list the particular company. EBay says in its privacy policy that it works with Blue Kai but doesn't allow the company to collect any personal information about consumers.

Travel sites Expedia and Kayak say they both sell consumer data in Blue Kai's auction, noting that the information is anonymous and not tied to the specific Web site.

The data brokers have different formulas for collecting and selling information on millions of Internet users across thousands of Web sites, from top retail and travel sites to social networks. Blue Kai, a Seattle company launched in September 2008, regularly records information on more than 160 million unique U.S. monthly visitors shopping on retail, travel and auto sites across the Web.

"The data is becoming the most important component for marketers and Web sites. It tells them who their audience is," says Omar Tawakol, chief executive at Blue Kai.

Some lawmakers, concerned about Internet privacy, are preparing legislation to make more transparent Web sites' tactics for collecting information on their users. In an effort to fend off legislation, data brokers say, they abide by industry standards and do not collect any personally identifiable information and sensitive data, such as health information. They also tout efforts to make their business practices more transparent to consumers.

Both Blue Kai and eXelate, for instance, feature sections on their Web sites to show consumers what information the company tracks and giving consumers the option not to be tracked.

Not all Web sites where Blue Kai tracks information sell data to outsiders. Some use the information to personalize their sites for individual users or for their own advertising purposes.

Some publishers fear that their competitors could buy data about the consumers visiting their sites and use it to steal customers.

IAC/InterActive, for instance, is testing the sale of consumer data tied to its e-commerce site Pronto through eXelate. "If we sell that data, it allows another sales team to sell our audience and compete against us," says Greg Stevens, president of IAC Advertising. "But if it is worth millions and millions and millions of dollars, then hey, maybe the paradigm has turned upside down."

Wall Street Journal

Google's announcement last week that it would offer free turn-by-turn navigation software prompted a nosedive in the stocks of Garmin and other navigation device makers. The jolt was just the latest such disruption caused by Google since its founding in 1998 by Larry Page and Sergey Brin. During that time the company has grown into a $22 billion behemoth—yet, remarkably, it is still in the early stages of a long growth phase. Eric Schmidt, Google's chairman and chief executive, expects that one day it will be a $100 billion enterprise. Being the gatekeeper for the world's information turns out to be a lucrative business, especially without the expense of creating any of it.

In "Googled," New Yorker writer Ken Auletta tells the familiar story of the company's rapid transformation from Silicon Valley start-up to global corporation. As expected, we hear about the young Rollerblading employees at Google's Mountain View, Calif., headquarters, with its massage rooms, pool tables and free meals. But thanks to the unusual degree of access that the company granted the author—and thanks to his sharp eye—"Googled" also presents interesting new details. The book describes, for instance, Google's close relationship with former Vice President Al Gore—during a meeting with him, back in his hirsute phase after leaving office, Google executives showed their solidarity by donning fake beards.

While the story of Google's creation and evolution still holds interest, what fascinates is the company's growing power and expanding horizons. Mr. Auletta observes that the "Google wave has crashed into entire industries: advertising, newspapers, book publishing, television, telephones, movies, software or hardware makers." This impact has forced companies to make difficult choices. One response has been to try to emulate Google, redrawing business plans to emphasize online advertising—although few other companies have so far managed to build a large, profitable business from it.

Google's focus on advertising has led the company to maximize usage by giving away most of its services. For companies selling similar products—like navigation systems—Google's approach is alarming. And even its partners are wary. Martin Sorrell, the chief executive of the advertising giant WPP, describes Google as a "frenemy"—a valuable ally and formidable competitor. Advertising firms worry about being "disintermediated" by Google. Content providers appreciate the traffic that Google sends their way but worry about the erosion of their franchises by aggregation that emphasizes Google's brand, not their own. Some businesses that rely on Google to generate both their traffic and their revenue risk becoming the chimp in the survival maxim "eat what the monkey eats and then eat the monkey."

In contrast to all this corporate anxiety, consumers so far have been upbeat about the extraordinary power that Google wields. As Mr. Brin explains, Google's importance in people's lives comes from "determining what information they get to look at." Lawrence Lessig, who was an expert in the Microsoft antitrust case (and is now a professor at Harvard Law School), tells Mr. Auletta that Google will soon be more powerful than Microsoft ever was, since primacy in search gives the company unprecedented control over commerce and content.

Remember when Google used to point to Mapquest for maps and Yahoo Finance for stock quotes before they substituted Google Maps and Google Finance? Google's favor turned Wikipedia into the world's leading reference source, but a few algorithm tweaks would easily send that torrent of Google SEO traffic elsewhere. Mr. Lessig says that, for the moment, we take comfort from the fact that Google has been led by "good guys." But then he asks: "Why do we expect them to be good guys from now until the end of time?"

Mr. Auletta notes that many successful companies have appeared "impregnable"—until they didn't. IBM once had a 70% share of the massive mainframe computer market. Then came antitrust action and the personal computer. A company expanding into as many arenas as Google is will almost certainly "wake up the bears," as Verizon Chairman and CEO Ivan Seidenberg puts it.

Google faces challenges on multiple fronts, including the real-time Web (where users can access information the instant it's published). Of most concern are the more than 800 million global users on social networks—where much of the information is unavailable to Google. In some parts of the world—for instance, China, South Korea and Russia—Google is even the underdog, trailing such search engines as Baidu, Naver and Yandex. Microsoft remains a formidable competitor, with a newly invigorated search strategy. And of course, given Google's increasing market power, regulatory intervention may be lurking, although perhaps not anytime soon in the U.S., where the company is very friendly with the current administration. Perhaps the greatest risk, as entrepreneur Yossi Vardi notes, is the "hubris" that often afflicts wildly successful companies.

Problems for Google might lie beyond the horizon, but the immediate future promises more success: Google is well-positioned for the transition to "cloud computing," where software and data are stored online rather than on personal computers. Mr. Schmidt says that cloud computing will be "the defining technological shift of our generation." Accordingly, Google's greatest value creation probably still lies ahead.

from Media Buyer Planner

Rupert Murdoch is determined to change the way print content is treated on the web. In addition to being one of the first and largest media companies to plan a full-scale switch from free to paid content models for its newspapers, Murdoch is saying he will block News Corp content from being indexed by Google.

The move will certainly significantly decrease by a large margin the amount of traffic that goes to News Corp.‘s news sites. Jonathan Miller, News Corp’s chief digital officer, says the company will survive both economically and audience-wise without Google driving traffic to its sites.

News Corp. is expected to block Google’s access within months.

The issue involves the debate surrounding free versus paid content. Murdoch has made it clear for months that he believes free content online devalues the worth of the content. With that in mind, News Corp plans to stop offering its news sites for free, though Murdoch has said the company might not meet its own deadline of charging for content across all sites by the middle of next year. Murdoch’s company has clearly been at the forefront of the debate, and Murdoch expects a paid model to begin to be played out more and more often over the next two years.

News Corp, if it does indeed block Google’s access to its content, will be the first major media company to do so. “The traffic which comes in from Google SEO brings a consumer who more often than not reads one article and then leaves the site,” Miller says. “That is the least valuable traffic to us… the economic impact [of not having content indexed by Google] is not as great as you might think. You can survive without it.”

Google, for its part, claims to send news organizations about 100,000 clicks every minute. “Publishers put their content on the web because they want it to be found,” said a spokesperson (via the Telegraph). “But if they tell us not to include it, we don’t.”