Sponsored calls

Telephony reduced distance. We have been able to speak to others far away. But really? Has the distance disappeared? Imagine the world without the Internet (I know it's hard, almost as hard as trying to explain the Internet twenty years ago). No emails. No bulletin boards. No web. So how did people communicate? They were fed with one way TV stream and they made phone calls. Telephony really reduced distance. And many made fortunes living in the supply chain that ultimately charged the consumer for reducing the distance. So distance did not disappear. It was exchanged for money. Fortunately, early on phone companies found out billing was more expensive than they were making on local calls. So the local calls started to be free. And they started to make money on so called long-distance services. But hey, how do you define long distance? A few microseconds at light speed? Or an opportunity to collect fee because there was no alternative for the service?
With the advent of the Internet and things like email, instant messaging, and VoIP (Voice Over IP, or talk over the Internet), the alternative ways to communicate will eventually take over the telephone networks. The cost of carrying voice over the Internet is so marginal, that it does not make sense to charge for it. Like it did not make sense to charge for local telephone calls in the past. But somebody has to pay for the infrastructure, right? Right, but this model is changing. We - the users - have been so far the customers, financing the networks. This is going to change.
I wrote a lot about Google in this blog. This is a company that gives out its services for free, yet makes an awful lot of money. The secret? It is not a secret anymore. Clever targeted ads we get with each search result are such a value to the advertisers, that they are eager to sponsor all of Google's activities. There is another company - eBay - which seems to understand the future. Meg Whitman (eBay CEO) told analysts during the earnings call on October 19th, 2005: "In the end, the price that anyone can provide for voice transmission on the 'Net will trend toward zero," and that "service providers would make money from the phone calls through advertising".
You may ask if this model will affect traditional (fixed and mobile) telephone networks as well? In other words, will somebody else pay my phone bill? Yes. They will. But for that to happen, the operators have to realize two things.
First - their value will go down over time. Ultimately they will be just Internet providers. All the fancy intelligence of their networks will be superseded by the intelligence in the handsets. The handset - your intelligent Teleputer - will find you the best way to reach the other party. Today it is the network that knows the whereabouts of the called party. Tomorrow the Teleputer will use the network just to transfer the information packets and will communicate with galaxy of various services (like presence, instant messaging) to reach the other side. Some already know. And fear. Fear things like the version of Skype that is being developed for the Symbian operating system, that will eventually put Skype on millions mobile phones.
Second - it is precisely profiled advertising that pours billions of dollars into Google's bank account. And operators have all that profiles in their databases. They know who we are, how much we spend (at least on phone bills, but this is a good indicator on overall spending habits), where we are when making a phone call. So why don't put this knowledge to work? All it takes is an intelligent profile manager that selects the proper advertising content to be played instead of a ringback tone when somebody is calling. There is technology available today to do this.
With costs of provisioning a voice service coming down, it is very likely the ringback ads will eventually pay for our phone bills. And all of our calls will be local. And free. Planet - wide.

LAN, PAN, WAN and... BGAN

A few days ago Wired News reported the new development at Inmarsat. We are going to have a global hot spot. The new Broadband Global Area Network will operate at speeds up to 500kbps. Promised coverage is "88 percent of the globe's landmass". Even parts of the Arctic Ocean and Antarctica are covered, but unfortunately the poles will not get the signal (not enough market there, yet?). BGAN supports IP streaming, simultaneous voice calls, SMSes and ISDN.
I think BGAN may soon be available as an option for cars, with flat, roof-mounted antenna and local LAN (WiFi) or PAN (Bluetooth) hotspot inside a car. Us, who love the satelite radio, would love BGAN connectivity in a car too...

Google: Life After Television

Our window to the world, TV, is dead. George has been telling us this for years. But it looks like not many of us have realized this has already happened and we have not noticed... I have a TV in my house. But I have not turned it on for 7 months now. I have 4 computers here as well. And a WiFi network connected to a DSL line. They all have their start pages set to Google Portal (http://www.google.com/ig). Our new windows to the world. We do not buy newspapers. Whenever we need an information or to communicate or to entertain or to learn or... we turn on one of the machines and fire up Internet Browser, that brings personalized view of the information world. OK, you say, but this is still computers, and we want a traditional screen with remote and 100 channels to choose from. Coming soon. So how does the TV of the (near) future looks like? Let us see...

It is flat, thin (high definition LCD), has two remote controllers (one with cursor keys and numbers, the other one with alphanumeric keyboard), and one connector at the back. The connector is for wired broadband Internet access. And there is an antenna too. But not for TV broadcasts but for WiFi connectivity. So the input to this television is the Internet. So when you plug it in for the first time it asks you to define a startup menu page. Most likely you will point it to the Google Portal or Google Video or Google News or may be some other "station". And then you will navigate down your preferences from your armchair. The content you want (be it news or movies or some other programming) will be pulled from the Google Big Table over the internet connection to your screen. Your new TV set will learn your preferences. This is important. Very important. After several days or weeks it will know what mood you are in and how to make you feel lucky. So one day you will sit in front of it and ask "play me something I will like". It will take your profile, add some more information, like time of day, mix it with patterns of other people watching their TVs and offer you a page of choices. Or you may just say and it will play the best choice for you. But remember. The station is playing every movie ever made. You have the powers to choose.

It all is so simple. I wonder why the investment community (or at least part of it) still thinks GOOG is expensive (as a stock). You know their business model, right? Advertising. Is it a big market? Yes it is. Is it growing? Look around. Everybody (not just geeks and scientists and students) is connecting to the Internet. And think what their start pages are likely to be? OK, you are getting the message. So Google is growing its market share in a market that is growing. Sounds like an exponential growth? Yes. And how big is the market? It is big. Really. If the death of the traditional television is coming, there is a combined advertising market of all TV stations on the Planet to grab. Google is becoming a one stop shop for advertisers. You have a product or a service. You want to sell it. Let the world learn about it. So you go to Google, bet for some AdWords and wait for orders. It is that simple. Regardless where you are, with a few clicks you start selling to The World.

With the proliferation of consumer broadband, Google will soon become the only TV station on Earth. Simultaneously playing everything ever made. It's pattern engines will feed you with a subtle stream of ads. In fact you will like those ads. They will be exactly what you are looking for. Your personal ads. Generating enormous value to those offering products and services. And generating even more for its shareholders. Remember... exponential growth. So fasten your seatbelts. Life After Television is now. Life After Television is Google.

Sony PSP 4GB Harddrive

Wow, it looks like somebody shares my view on Sony PSP design! Datel has just announced a 4GB hard drive for the console. Using a clever design the hard drive goes around some limitations of original PSP. The sad thing is the MemoryStick interface that is used to connect the drive has a 4GB limit, so we are still far from being a real competition to the iPOD.

In search of a Teleputer: Sony PSP

Teleputer, a great idea originally developed by George Gilder, is a converged device, bringing together functions of many gadgets we use today. Among these are personal computer, digital video camera, telephone, MP3 player and video player. The common wisdom is we still have a couple of years until the real teleputers arrive. But on the other hand there are several devices already on the market, that from the technology perspective could have been treated as teleputers. Could have been - only if the designers or product managers or marketing people did not make some mistakes. Yes, that is right, sometimes (I don't know why?), they just don't want to have a killer device. So for example let us look...

...how Sony blew it with PSP (PlayStation Portable).

PSP seems to be a perfect teleputer candidate. There are several factors that fit the perfect teleputer design.

1. Overall looks. Three years ago when I bought my first iPOD, I was shocked, how an electronic gadget can be designed as a piece of jewelry and packaged like expensive perfumes. After that hundreds of gadgets passed my hands and only Sony PSP was close enough to be considered an iPOD killer in this category.
2. Great screen. We have been hearing applause over latest so-called video iPODs. But they have just 2,5 inch screens. Sony has 4,3 inch, wide screen. Believe me, this does make a difference.
3. Processing power. Sony has plenty of it. Games are one of the most CPU-intensive applications today, and on the PSP the do run fast. And I mean fast. Faster than on my 1,5GHz Pentium.
4. Wireless (WiFi 802.11b) connectivity. PSP is the first broadly available commercial gadget equipped with WiFi.
   
   
5. Built-in Internet Browser. That happened with the release of PSP software version 2.0. Recently version 2.5 has added some minor improvements, but overall this browser seems to be very capable - I can view this blog or access my Gmail or basically any site I use on a daily basis.
6. High quality audio via built-in stereo speakers or a pair of airbuds.

So what is missing? And how close has Sony fallen from delivering the killer device?

1. There is no hard drive. OK, I know they want us to buy more and more memory sticks. But hard drives are still an order of magnitude ahead. Look. If I had a 60GB drive in my PSP, I would sell my old 40GB iPOD and would not consider buying a new one at all. I want to put all my music and all my photos on the gadget. Cannot fit them on a memory stick. Just imagine how brilliant would be a picture slideshow on Sony's screen...
2. Sony is a closed platform. With system version 1.0 there were several exploits available, letting you put third party software on the PSP. Like a game of Chess. But Sony locked out the exploits and I cannot play chess anymore...
3. No audio input. Why? Was it so hard to imagine people would talk to each other via VoIP and WiFi? With open platform (see above) Sony PSP would not wait long for a Skype client.
4. No accessory connector or Bluetooth. Internet browsing is great on the PSP. Gmail would be much better if I could use a thumb keyboard or even connect one like this.
5. No TV-Out connector. I would love to play PSP games or slideshows or videos on my TV set. But there is no connector... Can't understand why, when even some cellphones have one?

So, Mr. Sony, is there an upgraded version of PSP in the works? Or should we send some Qualcomm evangelists to show you the Slingshot? Looking at Sonys, Apples and others, Qualcomm finally decided to show them AGAIN how the gadget of the future should look like. Unfortunately they have just done a proof of concept, so we mortatrs will have to wait for Nokias and Samsungs and Motorolas to put all the pieces together to form a teleputer. Please don't let us wait too long. You have been shown how to do it. So just do it right this time...

Google Enterprise Server

Yesterday I was discussing various Google aspects with a friend of mine. And we came to a conclusion is would be relatively hard for Google to reach for internal information resources within enterprises. OK, so if it is not possible to pull data from enterprise file systems and databases, then let's get inside with our stuff. They have already done that with Google Search Appliance and Google Mini. But this is only search and index - like what Google used to be several years ago. And we try to look into the future. New services are popping up almost every day. And I still think they will do Office suite using web technologies, may be with the help of Sun Microsystems. So it is very likely a new breed of Google Appliances will soon emerge - something I'd call a Google Enterprise Server.

So what is it like? Well... probably a nice looking rack box, several U high. Something you put on a shelf, plug into your LAN and power up. And then you access it from within a company network using web browser. It offers you not only search, but a complete software platform - Gmail, Gwrite, Gsheet, Gcalendar. Everything delivered to your browser and stored on the Enterprise Server. Hey, system administrators, no more installation hassles, no more helpdesk problems, just plug and forget. Give your users a browser, point their homepage to the Google Enterprise start page, and they will be presented a nice and clean menu of services we all know and love. The only difference is the information will not leave the box (or SAN network it is attached to). So you will have to pay for this in real $$$. Would you buy it for your company? I would.

iPod or iPhon?

During my recent trip to the US I saw the nano iPod for the first time. I was really shocked how thin and small and elegant it was. And then in the old copy of T3 I found this picture. So, dear Apple, when will we see the bottom half of the nano iPhon? I want one!

The importance of Google Secure Access

Recently Google has made available a beta version of Google Secure Access. The service is not officially launched yet, but you can access it here and then at the bottom o the page there is a link to download the installer. When first I saw it, I was blown away by how simple and smart this move was.
So let's have a look at what this service delivers and what is the possible overall impact.
First, you probably know WiFi, the synonym of very convenient way to access the network. WiFi however is also a synonym of lack of security. Since the inception WiFi struggled with several approaches to secure the transmission channel. From 40-bit WEP, that was insecure by design, through various improvements like 128-bit WEP, WiFi still has been looked at as very unsafe way to connect. So while sitting in a hotel lobby or an airport lounge and browsing the current online issue of The New York Times has been a popular scenario, not many of us trusted hot spot networks enough to log on to their banks or brokers and check the account statuses, let alone conduct a transaction.
Things have improved in the meantime. The latest WPA (Wireless Protected Access) standard proved to be good and in many areas is being considered to protect traditional wired networks as well. But the problem with WPA is that somebody has to enable it for us in the already existing millions of hotspots.
But as we have struggled with protecting the WiFi transmission channel for years, there has been a technology available on everybody's laptop capable to solve the problem. Yes, it is called VPN (Virtual Private Network). So what actually is a VPN? VPN is a virtual point-to-point communications channel, that is secure. It's like putting your own secure, shielded pipe inside a bigger, public pipe. And yours is secure, so you no longer care how insecure is the outside one. As I said, VPN is point-to-point. As any pipe, it has two ends. One end is your computer. It takes everything you want to send, encrypts and throws down the virtual private pipe. So it really does not matter how the outside pipes are patched. All your traffic travels encrypted on your machine, and nobody can intercept it. But... you ask... "where is the other end of that pipe?". OK. VPNs have been used so far mainly by business organizations to allow their roaming nomads connect securely to the company network. So they were installing VPN gateways (like Cisco or Checkpoint or Microsoft ISA Server) and these gateways were "the other ends" of virtual pipes spanning between the remote PCs and the company networks.
Now you see why VPN technology has not been adopted by individuals. They simply had nothing to connect to... And here comes Google to the rescue. By launching the Google Secure Access, they have become your VPN endpoint, your secure gateway to the Internet.

What Google Secure Access does, it just configures you a VPN connection from your machine to the Google gateway. Your machine encrypts the traffic, it travels encrypted and secure via insecure outside network (any WiFis included) until it reaches vpn.google.com, where it is decrypted and injected into the Internet, wherever your final destination is. This is quite an achievement. VPN gateways have always been expensive to scale. They have to perform lots of computations - encrypting and decrypting the traffic at wire speed, for each and every user. So Google says it welcomes everyone on the Planet to securely connect to them. Just makes you wonder what infrastructure is behind this...
And some may ask the question "why would they do this? (for free)". Well... If you have read my previous post, you already know. They need more and more information patterns to live. And this is a great idea to have all the Internet traffic go through their gateways. Even without analyzing the payload ("Don't do evil"), they can extract a lot of patterns. Who goes where and when and such.
This is the hint why they are building their own network. After all the VPNs reach them, they need to have a way to unload all that traffic.

Google: The Meta Brain

Better late than never, I have finally decided to post my thoughts on Google. Actually I have decided to open this blog because I've had a growing need to share my thoughts on this subject. There is no doubt this company will have a big impact on our lives.

Inspiration

What inspired me to act was Ray Kurzweil's keynote presentation at the recent Gilder-Forbes 2005 Telecosm conference. Ray's keynote was an introduction to his fantastic new book, The Singularity Is Near. There are two main lines of thinking in the book. One is the overall progress we experience is exponential. Second is all the atoms in the universe will soon have their representation in the information domain as bits. Everything is and will be pictured, designed, described, cataloged, measured. While that is indeed true, this is enormous amount of information. So where will it reside? On the Internet of course. And how will we manage this information? Or, to be precise, who will manage this information for us? Well... there is one company you all already know. It's mission is "to organize the world's information and make it universally accessible and useful". Are you aware of any other, better positioned to do this job?
If you watch carefully, you will see every product Google releases is oriented to gather more and more information from you. So for those of you who are not familiar with them, let us have a quick look at what they have.

Services

1. Search. This is obvious. You search. They store all the keywords you put in. And they build the search patterns. So you may actually see the search patterns. What are people interested in. By date, by geography, by time of day. What is more. If you look for several things one after another, they actually build a pattern of sets. BTW - have you played with http://labs.google.com/sets? One thing to note here - Google search is not just an index - they keep the Internet in their cache. So once search pattern algorithms improve, they can rerun them on the information stored on their system.
2. News. They scan and store everything that is published in the news. And for sure they know the patterns of interest in certain news. Again this may be sliced and diced by many dimensions, as date, time, geography and so on...
3. Gmail. They give you 2,5GB (and growing) of storage to use. And based on the patterns they see in your emails and attachments, they build a pattern representing yourself. Don't be afraid. They do not need your personal data like address or a phone number. This is just statistics. And patterns. But these statistics are valuable for them. The value you provide with your input is at least equal to an excellent email application plus server space of 2,5GB.
   And one thing to note - Gmail used to be an invitation-only service. So to open an Gmail account you would have to be invited by someone who already has Gmail. This is an obvious way to collect information on patterns of relationships between people.
4. Personalized portal. I'm not sure how many of you use the portal. http://www.google.com/ig. You have to open an account with Google to use this. Account is free. And set the above page as your home page. And customize it. You may place many so-called web-parts on the page, each containing the items of interest for you. There are many predefined by Google, but as the entire thing is driven by RSS, you can add your own information feeds. As you navigate through many sites, you may notice an orange RSS or XML or ATOM icon. This indicates the site publishes its information in the RSS format. And this can be copied/pasted into Google portal page, so in the end it will contain everything you need. Your own links included. Try to add my blog there: http://headworx.blogspot.com/atom.xml.
5. Orkut. Not sure if any of you have come across this. Orkut (as Gmail before) is not available to everyone. Yet. This is an elite, invitation - only service. The purpose of Orkut is to support virtual communities. So you have a place when a community can gather and share their information with each members. See? Another pattern. By means of Orkut they build a map of who you connect with and what you share.
6. blogspot.com. I will not repeat myself. This is another information - gathering engine that feeds the pattern - building and indexing / storage engine.
7. Gtalk. The same. All your chats feed the beast.
8. video.google.com. This is an important piece of the puzzle. Google indexes video feeds of TV programming (using speech to text engines) and allows you to upload your own video clips. In my opinion this is the closest thing to the "Live-After-television" we have to date. You can then search for your specific video material and play it on demand. Just what Chris Anderson touted during his Telecosm 2005 keynote. See? The ability to upload the private clips is just making the long tail of the Internet!
9. Google answers. Another interesting service. You may post a question and set a price you may be willing to pay if some professional will answer your question. For this service they hired an army of contractors. So you ask, they answer, you pay. And every question and answer is later available for others to search for. So in the end... they will have answers ready for an every question ever asked!
10. Google Network. Then there comes this Google Network rumor. Google is building their own network. WOW! While there are many speculations as to why they would do this, the answer is easy. They need this network, together with the WiFi service they will offer (http://wifi.google.com/faq.html) to funnel all the traffic from people connecting to their (free) WiFi spots via their servers, and again extract the information patterns. These patterns themselves are probably worth enough to build the infrastructure and provide the WiFi service for free. Won't you use these hotspots? You will... The price you pay by means of providing your input to the Google pattern processing engine is not high...

I could go on and on... Generally it is a good practice to visit http://labs.google.com/ from time to time and try the new services they come up with. But you probably already can see Google is a beast feeding with information from any possible source. And you bet they have the technology and brains to transform, index and organize this information. There is not much disclosed information on how their system is organized inside. By all means Google is the most advanced distributed storage and processing system on the planet. May be on October 18 we will learn more? There is a scheduled presentation by Jeff Dean on the BigTable.

BigTable is a system for storing and managing very large amounts of structured data. The system is designed to manage several petabytes of data distributed across thousands of machines, with very high update and read request rates coming from thousands of simultaneous clients. In this talk, Jeff will discuss the basic design of BigTable and its implementation, provide some performance measurements, and outline some current applications of the system. He'll also touch on Google's future goals and directions for the system.

Will be definitely interesting to watch...

Patterns

As I keep reading through Ray Kurzweil's "The Singularity Is Near" I see Google fulfils his vision of the ultimate pattern - based, information processing engine. So again to make things clear. I do not worry they collect any personal information about us. What they do is they build patterns. Patterns representing every user and every information context they look for. Having the patterns (even anonymous) is the ultimate power, once you know how to process them.

Loosening my fantasy a little bit I can extrapolate what they do, to what Kurzweil describes as the new form of machine intelligence. It is not a far shot to say Google may represent the new form of intelligence. The next step in evolution. The meta-brain. In this scenario Google patterns engine and its network may represent a brain-like connections between neurons. And the neurons are us. Yes, we are the basic building blocks for this new meta-brain that will rule the world. Isn't it true? Yes, it is. Think of it that way: how many times you turn to Google to solve the problem or ask a question you are trying to answer? It already is The Brain you turn to.

Business

Now let’s look at the business models. Everything they do is financed by the advertisers. People trying to sell something to you. Classical advertising is not targeted. This means the ad may hit (and it does) many people not interested in it. So typically the yield from placing the ad is very small (a fraction of a percent). But when you target the ad, the yield goes up dramatically. And that is the business power of the information pattern processing engine. The way Google AdSense works. It matches the pattern of the ad (or it’s target audience) with a profile of people browsing the web. And every time the AdSense link is presented to you, it is likely to be relevant to the areas of your interest. Obviously this is not perfect yet. But as they gather more and more patterns from the Web, the accuracy of the AdSense improves. Ultimately you may envision all information (remember, all atoms have their bit representation) is stored on their servers and they have the complete knowledge of what the ad is (its target market) and will serve you only the ads you are interested in. This is enormous power for the advertisers. Having the engine that precisely pinpoints the target market for products you want to sell is a breakthrough. Obviously the traditional ads is just a part of the picture. The future uses are limitless. With IPTV you can imagine a scenario when you sit in front of your TV and say “play me something, I will like”. Then the pattern matching engine goes off and based on the pattern describing yourself matched against patterns of all video programs ever created, will present you a page - long menu of choices, or if you are feeling lucky, the show will start.

What is next?

There are thousands of questions on what Google has up in their sleeves. Again, the answers are really simple. Think of any means of creating new information patterns. Google will try to capture them. Creating many simple to use services, sponsored by advertisers, they will attract more and more people to their sites. So what is in the pipeline? Let us guess... Here are two of my predictions:

1. Google Calendar. There is an address http://calendar.google.com working already. Nothing there yet, but at least the page does not return an 404 error, so it is being prepared...
2. Google Office. The recently announced collaboration with Sun Microsystems brings one thing in mind: Star Office software suite. The Office suite fills the gap. Of course only when it will save the documents on Google's servers. This way the documents will contribute their part to the pattern processing engine.

The company inside

What makes them so powerful? Or... who makes them so powerful? The important thing is to look at the people. Until we have intelligent systems that will design and create even more intelligent systems, we have to rely on people. And to create the best, we need the best people. Google has been very successful in attracting the best talent on the planet to work for them. There are creators and mind breakers rushing from every side to join Google. From Microsoft, from IBM, from top universities. Why? Because they love to create. And Google lets them do it. They have to work fo the company only 80% of their time. And spare 20% time on what they think is most important. Creativity and new ideas are unleashed.

Google seeks to hire only the best. We conduct business following the spirit and the intent of the equal opportunity laws and we strive towards maintaining a diverse community. We encourage excellence at all levels in our organization, and are not influenced by race, color, gender, sexual orientation, age, disability, religion, or any other factor irrelevant to doing a great job.

GOOG

Nobody will guarantee you their achievements will translate into expected stock appreciation. Near term they may be vulnerable to some desperate moves from companies like Microsoft. For example if MSFT buys AOL, GOOG may loose some revenue short/mid term. But in my opinion what is important is the long term view, and that, by all means is very optimistic.

See you next time.
Headworx.