Google's PageRank Patent in Jeopardy?

John Duffy has written an intriguing article over at PatentlyO about a set of recent cases/decisions putting all software patents running on general purpose computers in question; using Google's PageRank patent to demonstrate what's at stake. There's been a running debate in IP circles whether software patents would hold long-term, and as more online innovation focuses on just collecting and combining data in new ways, the attacks on software patents are getting more precise.

John shares some cases/quotes of note including:

In re Bilski: "[USPTO] takes the position that process inventions generally are unpatentable unless they 'result in a physical transformation of an article' or are 'tied to a particular machine'."

Ex parte Langemyr: “Any and all computing systems will suffice, indicating that the claim is not directed to the function of any particular machine. … Thus, the claimed method is not tied to ‘a particular machine,’ but rather is tied only to a general purpose computer.”

Ex parte Wasynczuk: “the sole structural limitation recited is the ‘computer-implemented system’ of the preamble” and that limitation “is not any particular apparatus” because the computer could be “essentially any conventional apparatus that performs the claimed functions.”

If you're in the software business, this is a topic worth watching...

TinySong: Simple, Functional, and Social Music

I love when a product does what it's supposed to, elegantly, and with little additional, complicating function. That is an attribute of many successful products including the original Google search box and Twitter.

I ran across another example recently: tinysong.com

TinySong was created by the music-heads over at GrooveShark, a further extension from their GrooveShark P2P community, to their GSlite player, and now to full-on music sharing across the broader social graph.

Just as TinyURL allows you to shorten long URLs for sharing in Twitter and elsewhere, TinySong does the same for sharing songs for immediate streaming. Although you could argue that TinySong is just a subset of TinyURL (e.g. you could use TinyURL to do the same thing), I see two distinct benefits:
1) Sharing a TinySong.com URL makes it clear to others they are about to click on a song; and
2) TinySong integrates music search, playback and sharing automatically.

The service works as follows. Go to tinysong.com and type in a search term for a song (e.g. artist, title). I chose "party ben":

Select the song you want to share from the search results. I chose "Another One Bites Da Funk" a mashup of Daft Punk and Queen.

Share that tinysong.com URL with others. I shared via Twitter:

Clicking that tinysong.com URL (try it now http://tinysong.com/Aaj) immediately starts playing the song and sharing other details. From here I can listen, playlist, queue for later, share the song further and even download the mp3 for a small fee that GrooveShark splits between all rights holders and the user who shared that song in the GrooveShark community.


So what does GrooveShark get for providing such a nice, little service? New users are exposed to Grooveshark every time they listen to a shared song. The quality of the GrooveShark lite player also guarantees a portion of those visitors will search/play other songs and join the GrooveShark community long-term...

Now I wonder, how long will it take for Twitter, FriendFeed, Twhirl, Spaz or some of the microblogging clients to incorporate TinySong for sharing songs and playing them in-line with a GSmicro player?

Related posts: BlogSounds, KillerStartups, DownloadSquad, MakeUseOf, SarahInTampa, WebsiteMagazine, FreshArrival, TechDigest, AndrewSWise

SocialSpark Launches: Do You Smell What the Spark is Cooking?

So, today's the day Sparky is let out of his private alpha chains...

IZEA's latest innovation is being unleashed today at Ad:Tech, San Francisco, and the stars of advertising and blogging are already lining up to meet Sparky and the world's first Social Marketing Network: SocialSpark.

I gave you a hint of what to expect when the site was being designed back in November, and as you can see, my tone has shifted from Ricky Bobby to The Rock. This is a seriously powerful platform for bloggers and advertisers, the likes of which hasn't been seen before. In fact, before I even describe it, go signup and come back, I'll wait...

OK, now that you've signed up and, possibly, reviewed the video above, what more can I share. There's so much in SocialSpark, I'll just focus on a few innovations that get me excited:

• 1st advertiser/brand/agency social network with direct publisher friending, blogrolls, street teams and a dashboard to manage diverse social media marketing efforts. Imagine: advertisers proactively identifying relevant bloggers and organizing vertical advertising networks for their brands.
  
• 1st face-based analytics: GOOG analytics plus MyBlogLog (faces for visitors, not just recent readers) plus visitor demographics in one end-to-end analytics, ranking, marketing and blog monetization platform. Imagine: understanding your visitors as people with faces and demographics, rather than pagevisits per unique, bounce-rates or IP addresses.
  
• 1st 100% automated, in-post human disclosure, including audit tools to help publishers and advertisers verify compliance with key corporate or industry guidelines such as WOMMA’s Code of Ethics. Imagine: a marketplace that provides the tools to maximize visibility for readers and 100% Code of Ethics compliance.
  
• 1st 100% automated, in-post machine disclosure via “nofollow”, including audit tools to help publishers and advertisers verify compliance with key search engine policies such as Google’s quality guidelines. Imagine: advertise and blog in the open with SocialSpark, without fear of GOOG penalties from SponsoredReviews, PayU2Blog, TLA or other paid-link companies that violate Google Quality Guidelines. Align yourself with SocialSpark sooner than later, I believe a fresh round of pagerank penalties are in process for those smaller networks and DIY link sellers.
  
• 1st one-click blog sponsorship ad unit requiring no blog design/template editing to position the ad unit and provides 100% publisher approval to match brands to readers. Imagine: brands you trust ask to sponsor you and it's done with one-click. Personally, I'm not a big fan of the Blog Welcome, but I believe that is being decoupled from the easy/valuable bottom sponsorship banner.
  
• 1st clearinghouse for blog writer’s-block remedies called Sparks, providing organic post ideas such as inspiring charities, hot topics, etc. Imagine: more posts = more traffic, but without backstage passes and exclusive press releases like the elites get, how do you ramp your organic post inspirations? Sparks. I particularly like the potential for spreading your favorite posts or charities via free Sparks.
  

What else?

Well, I can share that advertiser appetite from the private alpha is already gobbling up sponsorship of the best tech, mommy and daddy blogs. If you are a tech blogger, a mommy blogger or a daddy blogger -- the sooner you signup, the more likely you are to be added to relevant advertiser street teams. As the marketplace grows, competition will be tougher and getting noticed by your favorite brands could take more effort.

I've shared plenty here, but I probably also prompted some questions -- let me have 'em...

Oh, and given my post title, I'll leave you with a video montage of Method Man's tribute to The Rock -- "Do you Smell What the Rock is Cooking?" He reminds me of Ted Murphy, but with muscles, good looks and personality ;-)

Where is Jason Calacanis's Disclosure, to People AND Machines?

It's a good thing February 29th doesn't come around that often. It's a day Jason Calacanis may want to sweep under a rug.

After yet another episode of Jason jumping up and down for the world to notice him and his company (this time with some affiliate marketer rants and techmeme coverage), a Feb 29 post by Allen Stern over at Center Networks focused on Jason's conflicted, undisclosed PageRank-passing link practices and his promotion of such practices to the rest of his employees. Jason's practices were particularly ironic given he just highlighted the FTC quote: "We wanted to make clear . . . if you're being paid, you should disclose that."

You can read Allen's direct affiliate, employee, paid link comparisons. My post just provides a bit more detail to Allen's dead-on observation. My post isn't about affiliate links. My post isn't about buzz marketing. My post isn't about Mahalo's business model (human scraping is worthy of a whole other post). It's simply about applying Google's standard for machine-readable disclosure to Jason's PageRank-passing links. In fact, it's even more narrow than all of Jason's violations (Andy Beard covers some others) -- I'll just focus on his deliberate PageRank juicing of Mahalo already alluded to by Allen. No rocket science here.

Google's standard:
1) Google's position on disclosure, via Matt Cutts, is that adequate disclosure on the web must be understood by people AND understood by machines. [next 3 images are directly from Cutts presentation]
2) Google has suggested a few ways to meet their standard of machine-readable disclosure; the most straightforward being the use of rel="nofollow".
3) Google has exacted severe penalties against sites failing to provide machine-readable disclosure.
Jason's PageRank-passing:
4) Jason Calacanis gets paid direct cash compensation from Mahalo, and significant equity compensation from Mahalo as a shareholder. [next 3 images are directly from calacanis.com posts]
5) More Mahalo pages in Google SERPs equals more money in Jason's pocket and equity -- orders of magnitude more than the typical affiliate or sponsored blogger that Jason has railed against in the past.
6) To get more Mahalo pages in Google SERPs, and higher in Google SERPs, Jason repeatedly creates PageRank-passing links to Mahalo, with SEO keywords stuffed into anchor text. One or more links are a daily occurrence, with many linkfarm-in-a-post posts.
7) None of Jason's PageRank-passing links provide machine-readable disclosure as required by Google (or human-readable for that matter) -- even though using nofollow would still retain any traffic/branding goals of linking.
The result:
8) Jason's undisclosed PageRank-passing links are working. Pages that no one has found interesting enough to link, reach Google #1 SERPs because of Jason's single PR6 keyword-stuffed link. See this Google SERP and this backlink check as just one example of many.
9) Neither the linker (Calacanis.com, PR6) nor his sponsor (Mahalo.com, PR6), have received any penalties as a result of these clear Google Guideline violations. There are times when I've heard Google say they focus on the most egregious examples, but I can't think of a blogger with more compensation at stake, doing more blatant, conflicted PageRank-passing without machine-readable disclosure.

Google, what are Allen and I missing?

GOOG Will Die an Open Death

I've been digging into open search, playing around with Hadoop, Nutch, Wikia Search and other efforts. I don't think it's close to supplanting GOOG, but it will eventually. It will start with better results and/or better display of results -- particularly to niche/long-tail needs. The key will be when someone applies a sustainable revenue model to Open Search in a manner that allows distribution channels to get off the GOOG candy.

The fight hasn't been about search quality for some time. It's been about buying distribution. However, there have only been a few players with search quality high enough to test distribution models. When Open Search allows anyone to match search quality/display, then creative monetization models will emerge -- unlocking distribution in the process.

Yahoo's recent "An Open Approach to Search" post was nice to see, but it's just the tip of the iceberg...

Related images: yahoo, google, hadoop, nutch, wikia search, open search

RankSpank Makes Me Laugh...What's Your RealRank?

As a VC you get to live vicariously through your portfolio companies. Sometimes that is exhilarating, other times it is frustrating, and quite often it's just plain funny. This morning, I'm laughing.

Given some of GOOGopoly's moves in late 2007, more and more bloggers and advertisers are realizing that PageRank has no direct correlation to traffic and pageviews. A link-savvy PR5 site can have ~100 visitors and plenty of PR0 sites have thousands of visitors. Alexa tries to improve on this with sampling estimates for traffic, but it's common knowledge that sampling errors and gaming drive a wedge between Alexa stats and reality.

Being in the social media marketing business, IZEA saw this as a problem and an opportunity. The result was RealRank, an open ranking system based upon real visitors, pageviews and active links (e.g. links that actually refer people rather than hidden on footers etc.). IZEARanks.com was launched with RealRank tools and reporting. So, how do you let the world know when you've got a better mousetrap? Well, one way is the town crier of our time: funny videos.

Kudos to Veronique, Ashley, Travis, Scott, and even champagne bubbles Ted, for a very professional music video. Keep them coming and keep having fun...

Why GOOGopoly Cannot Buy Yahoo!, Even if They Try to Annoy Microsoft Anyway

Microsoft announced today a bid to buy Yahoo! for $44.6 billion. First, let me say "wow, that's a big number and this deal, if completed, will have big consequences." Steve Ballmer extended the offer by phone to CEO Yang and sent the following letter to the YHOO board:

January 31, 2008

Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: Roy Bostock, Chairman
Attention: Jerry Yang, Chief Executive Officer

Dear Members of the Board:

I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. Microsoft would provide each Yahoo! shareholder with the ability to choose whether to receive the consideration in cash or Microsoft common stock, subject to pro-ration so that in the aggregate one-half of the Yahoo! common shares will be exchanged for shares of Microsoft common stock and one-half of the Yahoo! common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition.

Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use - EBITDA, free cash flow, operating cash flow, net income, or analyst target prices - this proposal represents a compelling value realization event for your shareholders.

We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!’s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years. Microsoft’s share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500. It is our view that Microsoft has significant potential upside given the continued solid growth in our core businesses, the recent launch of Windows Vista, and other strategic initiatives.

Microsoft’s consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers. In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected. While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.

In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that “now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction.” According to that letter, the principal reason for this view was the Yahoo! Board’s confidence in the “potential upside” if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment. A year has gone by, and the competitive situation has not improved.

While online advertising growth continues, there are significant benefits of scale in advertising platform economics, in capital costs for search index build-out, and in research and development, making this a time of industry consolidation and convergence. Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers. Synergies of this combination fall into four areas:

Scale economics: This combination enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale. This includes synergies across both search and non-search related advertising that will strengthen the value proposition to both advertisers and publishers. Additionally, the combination allows us to consolidate capital spending.

Expanded R&D capacity: The combined talent of our engineering resources can be focused on R&D priorities such as a single search index and single advertising platform. Together we can unleash new levels of innovation, delivering enhanced user experiences, breakthroughs in search, and new advertising platform capabilities. Many of these breakthroughs are a function of an engineering scale that today neither of our companies has on its own.

Operational efficiencies: Eliminating redundant infrastructure and duplicative operating costs will improve the financial performance of the combined entity.

Emerging user experiences: Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.

We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities. You should also be aware that we intend to offer significant retention packages to your engineers, key leaders and employees across all disciplines.

We have dedicated considerable time and resources to an analysis of a potential transaction and are confident that the combination will receive all necessary regulatory approvals. We look forward to discussing this with you, and both our internal legal team and outside counsel are available to meet with your counsel at their earliest convenience.

Our proposal is subject to the negotiation of a definitive merger agreement and our having the opportunity to conduct certain limited and confirmatory due diligence. In addition, because a portion of the aggregate merger consideration would consist of Microsoft common stock, we would provide Yahoo! the opportunity to conduct appropriate limited due diligence with respect to Microsoft. We are prepared to deliver a draft merger agreement to you and begin discussions immediately.

In light of the significance of this proposal to your shareholders and ours, as well as the potential for selective disclosures, our intention is to publicly release the text of this letter tomorrow morning.

Due to the importance of these discussions and the value represented by our proposal, we expect the Yahoo! Board to engage in a full review of our proposal. My leadership team and I would be happy to make ourselves available to meet with you and your Board at your earliest convenience. Depending on the nature of your response, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.

We believe this proposal represents a unique opportunity to create significant value for Yahoo!’s shareholders and employees, and the combined company will be better positioned to provide an enhanced value proposition to users and advertisers. We hope that you and your Board share our enthusiasm, and we look forward to a prompt and favorable reply.

Sincerely yours,

/s/ Steven A. Ballmer

Steven A. Ballmer

Chief Executive Officer

Microsoft Corporation

There is plenty of speculation about how GOOG might react. I think the bigger question is whether YHOO will take the offer, but GOOG could still be an annoyance. MSFT and GOOG have been here before, on small deals and on big ones like DoubleClick. However, this one is different.

You see, GOOG currently dominates the market of Search Advertising (direct & indirect) -- already confirmed by the FTC during their DoubleClick review, when they found:

"Google, through its AdWords business, is the dominant provider of sponsored search advertising"

DoubleClick got through because the FTC's review largely focused on Privacy and because DoubleClick didn't add to GOOG's monopoly in Search Advertising. YHOO, on the other hand, would be an acquisition of their largest competitor for Search Advertising (direct); on the heels of manual, targeted anticompetitive actions against Search Advertising (indirect) competitors like TextLinkAds (how, again, is a search for "text-link-ads" more relevant with www.text-link-ads.com removed from the top spot and replaced with TLA competitors?)

GOOG may throw some head-fakes internally or externally to complicate the deal, but they cannot buy YHOO. In fact, their time would be better spent educating their entire organization about the risks created and opportunities foreclosed by anticompetitive behavior. Even if the YHOO shareholders take the 60% premium being offered for their shares, GOOGopoly will still be the dominant provider of Search Advertising. That means power, and consequences -- just ask Microsoft...

Related posts:
http://searchengineland.com/
http://www.lockergnome.com/
http://bhandler.spaces.live.com/
http://blogs.zdnet.com/
http://www.techboggle.com/
http://avc.blogs.com/
http://www.floozyspeak.com/
http://www.techcrunch.com/