It seems to me that Google is in the news everywhere I look. In just the past few months, there have been not one, but two books written about Google. I’ve listened to both books and to summarize: two Stanford Ph.D. candidates worked together to create the world’s best search engine right around the time that everyone knew Search was dead and portals were going to be the source of all potential income on the Internet. They had no idea how to monetize the service, thinking, erroneously as it turned out, that they could license search technology. The Google search technology is the ‘secret sauce’ that makes Google better than every other search engine available. Eventually they found a business model by selling keyword targeted advertisements (Google Adwords and Adsense) and the rest is history. Now their stock is trading at a P/E of nearly 100 and the market cap of the fledging company is over $120B. A P/E rating of over 100 in itself isn’t alarming. For example, when a company is having a down year a P/E can get quite astronomical since when you divide a large market cap with a small earnings, you can get a very large number for the P/E. However, Google is insanely profitable making nearly 50% profit on sales of $5B so a P/E of 100 is truly staggering. In order to quell this embarrassingly high profit, Google appears to be speculating in the high tech market by purchasing really cool technologies whose only common theme is that none of them show any obvious way of making money.

Don’t get me wrong, I love Google. I use it as my home page. Making things like Blogger, Google Earth, Picasa, and Google Maps available for free without the ad spam usually associated with such services is extremely generous. But I can’t help feeling that their recent buying spree shows some similarities of teenagers with a pile of cash. You won’t find them investing in any blue chip stocks, but you can rest assured that all the latest high tech toys and cool technologies are under consideration. I could hardly believe it when I read that Google bought a Boeing 767. I’ve been a pilot and aircraft owner for 15 years and have some experience with the costs of owning and operating (admittedly small) aircraft. The costs associated with running a B767 for a few executives is in the stratosphere. If you contrast a B767 with a Gulfstream 5, today’s gold standard for bizjets, it will be many times the operating cost. Also, a B767 won’t get into smaller regional airports, which is one of the attractions of bizjets in the first place, i.e., to avoid the expense and inconvenience of international airports and to arrive closer to your target destination. The complete story on the Boeing 767 purchase has yet to be written, but it’s in stark contrast to the frugal practice of purchasing Google’s 175,000+ servers as parts and assembling them by hand, presumably to save money.

It’s really not Google’s fault the stock is trading so high. People fall in love with stocks of companies whose products they use all the time, and when that company happens to be profitable, then all reason can fly out the window. Just about all companies that come in contact with such windfalls have to do something with the money, before it evaporates into thin air. So a buying spree induced by high valuation is nothing new. AOL used its unrealistic valuation to purchase Time-Warner, a company with real assets, and Time-Warner has been trying to forget about it ever since.

One of the reasons I think the Google stock price is not sustainable is because more than 99% of its income comes from Adwords and Adsense, and these revenue streams are in persistent danger of being co-opted by spammers who are creating link farms and splogs to exploit them. If there were other sources of income, or even other potential income sources on the horizon, that would add some stability. But I just don’t see it coming with the other services they’ve acquired.

I’ve been experimenting with Adsense recently on my own webpages just to see what the fuss was about. With a .4% click through rate and an average of $.30 commission per click, I won’t be quitting my day job any time soon. If I had a Starbucks habit, the Adsense income could cover me for a day out of each month. With such meager earnings for a site containing real information that gets thousands of hits per month, it seems like a tough way to make money. I suppose my click through rate could be higher if the algorithms that did keyword searches were smarter. For example, on my Ham Radio page, evidently a company that sells hams (as in the meat) has outbid the companies that have Amateur (Ham) Radio equipment for sale ;-). Similarly, the rest of the ads are equally lame pitching items that I’m embarrassed to see on my web pages. I wish I could provide Google with a list of sure-fire keywords that I know would be better target readers rather than letting the algorithms do the choosing based on words on my pages. I’ll continue to run this experiment for a few more weeks and report back if things have improved at all. If not, I’ll try something else. It won’t be for the money, but just so I can have some first hand experience with keyword advertising services.

In reading about the recent AOL stock deal where Google bought 5% of the company, all I could think of was “Why AOL?”. Considering Google’s mantra is ‘Don’t be Evil’, teaming up with AOL seems to me as the ultimate sellout. AOL is completely bereft of anything of value other than their captive audience that they hang on to with a maniacal death grip. Like many others, I was an AOL member in the 1990’s. My difficulty with them occurred when I tried to drop the service after I signed up for broadband. First of all, AOL makes it impossible to forward or even export your email, so that works as a deterrent for dropping the service quickly because you periodically need to check it for email until you’re able to notify everyone of your new email address. But the true face of evil showed itself when I called up to cancel the AOL account and got the run around from their people who would make up any excuse to prevent me from quitting the service. I was told lie after lie and thought that I’d have to hire a lawyer to get them to stop charging my credit card. The depths that they stooped to prevent me from leaving were unbelievable. The only way I was able to quit was when my credit card number got stolen and they were unable to continue charging it. So I don’t have a lot of respect for AOL. And since dial-up is so completely dead, I have to wonder what keeps their considerable, yet dwindling, user base hanging on to them. Buying into AOL seems a little like jumping the shark and I expect that the end is near. Not the end for Google, which still has the best search engine available, just for its over-inflated stock valuation.

I rarely go into rants in my blog, but I’ve been listening to the June 3rd podcast from the Gillmor Gang and I guess I’m going to have to make an exception. The ‘gang’ was going into a lot of arcane details about what rich standards will take over the web. I had to consult Wikipedia for many of the esoteric topics like Ajax (not the detergent) and Infopath. To make matters worse, there was definitely a kind of “who’s the smartest man in the room” contest going on among the guests. One of the guests (Jon Udell) was disagreeing with the others in a rather condescending manner and ending every sentence with the word “Right?”, not waiting for any reply, just continuing to monopolize the conversation while seeming to alienate the others. At one point the Steve Gillmor said that he caused the rest of the guests to ‘glaze over’, which was pretty funny because I was glazed over at that point too.

I guess the thing that amazed me most was that they were talking about Adobe in the sense that it had the potential to influence ‘rich web services’ because of their recent acquisition of Macromedia’s Flash technology for $3.4 billion.

A better name for a Macromedia’s “Flash” could not have been selected if they had employed all the consultants in the world. I’m reminded of the expression, “All flash and no substance” and that describes that technology perfectly. The only button I look for on a website that uses flash is the ‘Skip Intro’ button, and if I can’t find one, I leave immediately. How in the world does an inane animation improve someone’s ability to interact with your website? I consider it the height of arrogance to waste my time with a ridiculous animation that has absolutely no point other than to delay me in getting information. It seems that gimmicky companies like to use it, perhaps to cover up the fact that they have no substance worth mentioning. The only legitmate use I’ve seen for flash is to make silly little animations that waste time, both in the creation and in the viewing. I’m guessing that each minute of a Flash animation takes many, many hours to produce, but that pales in comparison to the time wasted while thousands suffer through it if it’s part of your company’s home page. But to think that owning Flash technology will help secure some kind of prominent position in the next generation rich web standards is pure nonsense. Adding ActionScript to Flash does little to more than JavaScript already did for handling forms and why would anyone want to learn yet another scripting language for the web, particularly one that requires a proprietary player that has to be downloaded before the webpage will display?

I will admit that listening to the Gillmor Gang is a much more educational experience than most of the other podcasts out there, even the other tech podcasts, and Jon Udell is a genius, but they really need to work on the guests’ interaction skills to make it more enjoyable.

I’ve been hearing a lot about blogs and wikis lately. I first heard about blogs back in 2001 when a high school girl was profiled in the local newspaper and was getting upwards of 10,000 hits per day on her blog. This got my attention, and so I decided to check it out. I started my own blog at the time, primarily to figure out what it was all about but didn’t bother to make it public. I was just writing notes to myself. I’ve since resurrected that blog here and try to post to it about once a week. In 2002, my high school class was planning a reunion and so I started a group blog for that activity. It was quite active for several months before and after the reunion and was a lot of fun. It still gets a few postings a month, mostly from me, and I can see from the web server logs that it gets checked out about 10 times daily on the average, which is a lot since we only had about 170 members in our graduation class.

Wikis are a newer phenomenon. They are pages that allow anyone to edit them. In reality, there are some checks and balances to mitigate vandalism such as moderators that can remove defaced entries by reverting to a previous version of the page. The most famous Wiki is Wikipedia, which is a free on-line encyclopedia and it really seems to work well. Wikis do seem like they have the potential to become FAQ/Knowledgebase replacements.

Today I was reading the Social Customer Manifesto weblog and came across a link to another blog that talked about using blogs and wikis for product support purposes. As some of you reading this may know, I do ‘volunteer’ product support for several products, such as the Yaesu FT100 radio, the HP de100c Digital Entertainment Center, and the HP DVD Movie Writer products. This is done using Yahoo groups and associated FAQs. From time to time, I’ve thought about other approaches, such as using a user community/content management system like PHP-Nuke, vBulletin, or Infopop but decided I didn’t want to immerse myself in the headaches associated with learning and supporting that kind of infrastructure for 3 separate communities. Yahoo Groups is easy to use and although it’s far from perfect, it’s free and people often times already are members of other Yahoo groups so they know how to use the system.

A few months ago, I was having an on-going email discussion with some of my Entcon buddies regarding corporate blogs and how they were the up-and-coming way to help connect the corporate world with its customers without the extraneous layer of the PR department and information filtering that exists between people creating products and those purchasing the products. I’m not sure that today’s corporation is ready for that kind of unedited, unscripted PR quite yet. Sure I do a little of it on the user groups I mentioned, but it’s very limited in scope. If I were to become a product support conduit for every question about all of HP’s products, I’d probably never have a minute’s rest. There are a few HP execs blogging now. I even noticed there are podcasts from Nora Denzel.

GM is doing some corporate blogging now, but it’s mostly to promote new products, not to get feedback or provide product support. It’s interesting to note that they are getting some feedback on a few of their blogs from their own employees!

So it remains to be seen if corporate blogs and wikis will emerge as a sort of kinder, gentler and more intimate way of connecting companies with their customers, and I’ll be keeping lookout for any evidence that it’s actually occurring.