For the Week of July 14, 2003

Success is turning Google into Microsoft. By that I mean they are a standard-setter whose every move is scrutinized closely and critically, its motives questioned by a suspicious market.

Along the way Google has become a technology buyer . With technology it has also bought people, and corporate cultures, distinct from its own. It faces the challenge of integration.

Google's most public move recently was the introduction of a new Google Toolbar. It's a major upgrade, Version 2.0, with a lot of nifty features. It's much more customizable, in part because there are now so many parts to Google, and no way to fit all the features on one bar at the top of a browser. (You can get the beta version right now. )

The new Toolbar is becoming a real User Interface, something for Microsoft to fear. One feature I like is its ability to re-direct all your searches to Google, overriding Internet Explorer's command to send them to MSN. The new Toolbar is also an attempt to set a new standard in the Internet ad area, a pop-up blocker that not only works but tells you when it works. There is also an Autofill feature for forms (including those requiring a credit card number) that renders Gator obsolete.

The feature that has drawn the most interest is a "blog this" button, which for now works only with Google's own Blogger software. The feature lets you highlight a link, add a comment, and put it into your own blog for others to read.

Google acquired Blogger (actually Pyra Labs) early this year , resulting in all sorts of blather about the implications . This is the first evidence of integration between the two technologies, technologies that are in fact very different. Google, after all, is about search. Blogger is, at heart, a hosting service.

What I wanna know, however, is whether Blogger has been integrated into Google as a company, or whether it's still basically operating on its own. Certainly its founder, Ev Williams, has not been reined-in at all. His Evhead blog has become more active than ever , its blogroll a guide to those he considers "Kool Kids" -- there's an indirect link to me, but none to Dave Winer .

Dave was (until he left Userland Software to become a Harvard fellow) a competitor of Williams, so maybe that's OK. If Blogger were still a struggling start-up I would have no argument with Williams doing anything he wanted, to or about Dave. But Blogger is no longer just a struggling start-up. It is a division of a company that, as you can see from the Toolbar, now sets Web standards. Ev has a new responsibility, one he may not be aware of.

That is a responsibility to play fair, to be open, and to bring-in the sharp elbows. It's something he has definitely failed to do with regard to upgrading RSS . The failure has become so glaring, so obvious, the Dave actually closed his market-leading Scripting News blog for a time, leaving a "hissy fit" message in its place.

At the technical heart of this is Williams' move to isolate XML-RPC in Version 2.0 of RSS , essentially re-inventing how weblog entries are found for people based on technology created by Williams and Tom Bray of Antartica Systems. Making this even-more confusing (and esoteric) is that Blogger has replaced its old API with a new one that is not backward-compatible, while keeping its name. .

All this smells of Microsoft-like FUD. (That's short for Fear, Uncertainty and Doubt.) The secrecy, the double-talk, the appearance of openness without the reality, the lack of backward-compatibility, these are the kinds of actions a start-up may actively engage in but which a standard-setter cannot engage in. Google has a responsibility to the community, a responsibility it usually takes seriously, to do no harm, and in this case great harm has been done.

My guess is Ev Williams is operating on his own here. My guess is there is no great Google conspiracy to make everyone blog to its tune. These actions are totally out of character for Google, as a company, and as a market leader.

It's time for Google chairman Dr. Eric Schmidt to have a little heart-to-heart talk with Ev Williams. Dr. Schmidt has experience in pushing open standards. He's seen as the father of Sun's Java technology. He also has experience in the executive trenches from his fairly unsuccessful years at Novell. After that talk is finished, Dr. Schmidt needs to deliver a statement to the community, describing how Google will operate as a standards-setter, how Blogger will operate under Google, and where Ev Williams will really fit into it all. Otherwise the ill will Ev has generated these last few months will attach itself to him, and his entire enterprise.

Such is the challenge of leadership in an open world.

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SSP (Shameless Self-Promotion)

Big news. I have started work as a business analyst with Progressive Strategies , a New York research firm that has the ear of the world's top technology companies. If we can get some of 'em to actually follow some Clues, it would be a very good thing indeed.

We have a winner. "The Blankenhorn Effect" has won the Computer/Internet category in the 2003 Independent Publisher (IPPY) awards . The book was also reviewed (favorably) by Ray Troxel of The Web Server Times last week.

"Dana, it is GOOD," raves Pete duPont, lawyer, futurist and once a candidate for President. "This is some really powerful 'stuff.' I think you've got a winner," says Drew Kaplan of DAK Catalog fame. One result is I have begun working on a follow-up book, describing the future direction of technology, to be called "The World Of Always On." Buy "The Blankenhorn Effect" at Amazon.Com , or at least say nice things. You can use the ASIN number, 1553953673, and recommend it to readers of other, similar books. You can also save on shipping when you buy the book at Amazon, over the cost of buying it elsewhere.

If you can convince some more published reviewers to read "The Blankenhorn Effect" and recommend it to their readers, please send me a name and address. In exchange, you'll get the PDF version of my second book, The Blankenhorn Effect: Boom, Bust & Beyond. This is a collection of columns from a-clue.com, organized chronologically and by subject, with additional commentary from yours truly.

You have my permission to forward this newsletter widely. And if you have trouble subscribing let me know . Remember: it's journalism that keeps the Clues coming...

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Shameless Promotion

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If you're serious about Internet Commerce, you need Whitehat Interactive . Get it today.

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Takes on the News

One Channel To Bind Them All

Liberty Media is buying the rest of QVC from Comcast at a price that values the whole thing at nearly $16 billion.

This is a huge price for what is, essentially, an Internet asset. While QVC was founded as a cable shopping network its QVC.Com has long been one of the most clued-in of online merchants. It has used the Web to gain the breadth of a Sears with the depth of an Amazon. It was among the first to hold online discussions about its merchandise. Its customer service is fantastic.

Most talk among financiers involves combining QVC with Barry Diller's HSN. Liberty owns 20% of Diller's USA Interactive, and the combination of the two assets would raise its share of Diller's operation considerably. I am more interested in whether QVC doesn't wind up taking over HSN, or whether Diller is stupid enough to kill a $16 billion asset because it overlaps with something he already owns.

We're about to find out just how clued-in Barry Diller really is.

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Big Boost For Embedded Linux

A group of eight Japanese consumer electronics companies gave a big boost to Linux as an embedded operating system recently, forming a CE Linux Forum (CELF) to push standard solutions using the free operating system.

SCO Unix' Darl McBride has gone to Japan hoping to head all this off but if his Japanese is as good as he claims he should easily understand the response he will get to his claims of patent infringement - "chuck you, Farley."

In order for 802.11 networks and other wireless technologies to really integrate with consumer electronics devices you need an underlying operating system, and applications built on top of it. The more open that system, the more bulletproof, the less expensive, the faster you can get massive consumer adoption. CELF standards would enable entrepreneurs to create the applications needed to make all this work. It's a very big milestone toward the World of Always-On, but remember that the home is just one venue for this technology. Once applications are in place the challenge will be to take them outside, into the world, all over the world.

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The $7 Million Man

What would you do with $7.5 million?

Most people would put it in the bank. Many would spend it on themselves or on their family. Others would give a hefty chunk to charity.

An entrepreneur takes $7 million and turns it into a business he expects will be worth $70 million, or $700 million, or $7 billion. He funds a business plan that can scale, with a business model that draws profits, and he puts together a team to execute the plan.

This is not the way it is supposed to work in politics. Candidates compete in the "money primary," a year before the real race, and generally bank the proceeds for use in TV ad campaigns. Democrats like John Edwards and John Kerry are doing this. So is George W. Bush. In fact, Bush hopes his bankroll will scare opponents away and give him an easy victory.

Bush is acting a bit like Microsoft at this point, but Microsoft can always be beaten. If you focus on a niche, if you do what Gates won't, you can create a huge business and even beat him at his own game. The only way to lose against Gates, in fact, is to go head-on, to let him think you're aiming at his heart. This was the mistake made by Netscape. It may yet be the mistake made by Google.

But Google is the best model for the way to beat Microsoft. Do what they don't do, scale it, make it cool, monetize it carefully, and don't brag about it - lull 'em to sleep.

So what I expect to see over the next six months is the Googling of one Howard Dean .

Dean is the first Presidential candidate in history to run his campaign like an Internet entrepreneur. He invests his money, in things like Meetup, in scaling his server, in building his database. He concentrates on building an infrastructure, a human infrastructure that now has active chapters in every state. He demonstrated the power of that late last month, in drawing $7 million to him for the quarter, $800,000 of it in 24 hours, over the Internet. While even Bush had to hop a plane and speak to a crowd for a few hours to get $3 million, while Kerry and Edwards had to prostrate themselves on the phone begging contributors for more money, Dean could just sit back and call a few folks after they had given, to thank them. (Unfortunately he also attended a New York fundraiser. Maybe next time...)

The question, of course, is what he will do with the money.

The answer is, he will grow what he calls the "netroots," which are in fact the grassroots. For the next few months, Dean's campaign will have all sorts of interesting activities for the troops to engage in. (I call it Camp Dean.) They will write personal notes to Iowa, they will be sent to take over Democratic meeting rooms, they will canvass as much of the country as they can. They will become, in other words, a political party, a party-within-the-party.

Meanwhile the Dean Machine will be scaling. Their site, and its hyper-active blog, needs enough bandwidth and capacity so when people "rush to the rail" next year it can handle the traffic. They must build a database which, while compatible with the technology used by the party, consists mainly of active cadres.

They must also hone the message. Dean started as an anti-war candidate, then he seemed to veer to the center. In fact the "shift" was just a change in emphasis. Dean has always been, at heart, the kind of social liberal, fiscal conservative Americans always say they want but they never get a chance to vote for. Reagan was a social conservative, Carter a fiscal liberal. Clinton governed from the center but seemed to talk entirely from the left.

The policy challenge is to paint Bush for what he is, both socially regressive and fiscally irresponsible. And that means telling a story. Dean needs a book (I'm available), a book that not only tells his life story, but puts the story of modern Vermont into a new context, and describes forcefully what a 21st Century America should look like.

Another way to grow is through merchandise sales. The Dean campaign is presently hampered by a lack of imagination in this area, although the netroots are filled with ideas. (Recently I saw campaign flyers disguised as prescription pads - cool, cheap, effective.) Many states, like Georgia, use plastic "lawn signs" with aluminum legs you can stick into the ground -- Dean has yet to offer them. I've suggested that the Dean Team look to sell imprinted lab coats, surgical scrubs (he's a doctor), and Dean Masks to scare Republicans at Halloween. (How about a Howard Dean action figure that says things like "I want my country back," "what I wanna know," and "you have the power.") Yes, this draws money out of people that can't count as campaign contributions, and won't be matched by the federal government. But as anyone in Hollywood will tell you merchandising is marketing, and it's also profitable.

Despite his $7 million, in other words, Howard Dean is still a start-up. He's a start-up who has been funded, but he faces big deadlines and an opponent with a Microsoft-sized war chest. The only way he can succeed is by exploiting his niche, growing out of sight, drawing people rather than just funding.

Give a man $7 million and he will live off the interest. Give an entrepreneur $7 million and he will build a franchise.

Time to see if Howard Dean really is an Internet entrepreneur.

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Clued-in, Clueless

Clued-in is Alberta's "smart highways" initiative . If Canada can create standards in this area, Canada can win a lot of technology jobs in this vital Always On application area.

Clueless is Hormel's attempt to take back its Spam trademark, starting with a suit against Spam Assassin . That horse left the barn years ago - it's out and you're wasting legal fees buying bad publicity.

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