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Video: Google briefly blocked in China

25 06 2009 – Internet users in China were briefly unable to open Google’s main sites late Wednesday, and the company said it is investigating.

According to many reports, the Chinese authorities have temporarily blocked access to the Chinese version of Google Search, Google.cn, as well as Gmail, at 9pm local time. The sites seem to be available again now, but this is a clear sign that even Google is not untouchable anymore when it comes to Chinese censorship.

The dispute between CIIRC (China Internet Illegal Information Reporting Center) and Google – the only company usually considered to be too big to be blocked – began recently, when Google Search started appearing in CIIRC’s reports as a service that disseminates pornographic and vulgar information.

Although Google has promptly promised to do everything in their power to satisfy CIIRC’s demands, it seems that it wasn’t fast or resolute enough, as two of Google’s most important properties – Google Search and Gmail – have been blocked for several hours. The block has been lifted, but Google is no longer untouchable; next time, it might get blocked for days, weeks or months, just like so many other sites. Furthermore, according to some sources, the Chinese censors have even tried to frame Google, artificially pushing some inappropriate results to the list of the most common searched terms.

In some ways, this is good news. Blocking Google Search, the site that merely indexes and provides links to content hosted elsewhere, just goes on to show that everything on the Internet is connected in such a way that it’s nearly impossible to censor one part without censoring the others. Earlier, sites like Twitter, YouTube and Flickr were blocked; with Google Search blocked, Chinese censors are showing their true intent: they’d ultimately like to block every part of the Internet that’s not under their strict control.

It’ll be interesting to see Google’s reaction to this latest slap in the face from CIIRC. Surely, they will try to further cripple Google.cn (they already removed the option to search foreign websites), but at one point it might become pointless, as the service will no longer be what it’s supposed to be: a search engine. Will Google.cn turn into a site that links only to sites approved by Chinese censors, or will Google finally muster the courage to say enough is enough? We’ll see.

Source: mashable.com

Google: The Internet Behemoth and how it profits from YouTube

25 06 2009 – There is an ongoing debate about the size of the losses at YouTube and for how much longer the parent, Google, can afford to fund its errant child’s excessive lifestyle. Credit Suisse put a high price on it; Brough Turner criticised their analysis; RampRate decisively debunked it.

The debate has focused upon YouTube as a standalone service and little attention has been given to the spin-off benefits accruing to the parent. Google controls a significant, and growing, share of the means of production of the entire Internet industry. We argue that ownership of YouTube is a crucial ingredient for Google’s control of the economic rent that Google extracts from the whole of the Internet value chain.

We believe that YouTube is used indirectly to drive profits at the parent, and that Google is currently incentivized to keep these profits hidden from prying eyes. The key indirect benefits accruing to Google of owning YouTube are as follows:

i) YouTube gains Google a critical slice of growing online video eyeballs, which will attract more marketing dollars to the Internet as a whole. This is much more important in the USA, where the main competitor Hulu is ad-funded than the UK, where the BBC iPlayer is taxpayer funded;
ii) YouTube gains Google yet more important meta-data which can be cross-pollinated with data from other Google services;
iii) YouTube traffic strengthens Google specifically in peering negotiations and generally in network design;
iv) YouTube is probably a small fraction of Google’s overall cost base, and the spin-off benefits from lower overall unit costs;and
v) YouTube positions Google very powerfully for a key role as a gatekeeper in the copyright world.

This article explains these indirect benefits in detail and explains a strategy for telcos to adopt in the online video world.

A rising tide raises all boats

On a macro level, the more ‘eyeballs’ and time spent on the internet, the bigger percentage of advertising budgets that advertisers will allocate to internet marketing. Compelling content is an essential attractor of ’eyeballs’. For Google with its massive share of the internet market, it doesn’t matter quite as much whether the video stream itself is monetized today as long as it picks up a share of the increase in the overall digital advertising budget.

What is more uncertain is whether online viewing would have grown regardless of Google owning YouTube. Nonetheless, Google’s ownership ensures YouTube’s survival and gives Google a significant foothold in this growing and potentially important area.


Source: OFCOM – UK Communications Market Review 2008.

In 2008, overall UK advertising revenue was £17.5bn with TV advertising £3.8bn and Internet advertising representing £3.3bn. The overall market declined by 3.5%, whereas Internet advertising grew by 17.5% – not bad in a recession.

We are not saying that video accounts for the whole of the increase in Internet advertising. Far from it. A significant part of the rise will be accounted by other factors: the overall increase in the Internet population, the time spent on social networking and other services, the increase in e-commerce spending, and the relative effectiveness of Internet advertising as a channel. However, video viewing is becoming significant, as the latest US Comscore Video Matrix data for April illustrates:

  1. 78.6 percent of the total U.S. Internet audience viewed online video.
  2. The average online video viewer watched 385 minutes of video, or 6.4 hours.
  3. 107.1 million viewers watched 6.8 billion videos on YouTube.com (63.5 videos per viewer).
  4. 49 million viewers watched 387 million videos on MySpace.com (7.9 videos per viewer).
  5. Hulu accounted for 2.4 percent of videos viewed, but 4.2 percent of all minutes spent watching online video.
  6. The duration of the average online video was 3.5 minutes.

What is more uncertain is whether online viewing would have grown regardless of Google owning YouTube.

Google’s Share of the Advertising Pie keeps on Rising

As well as Internet advertising growing faster than overall advertising, Google’s share of that advertising is growing as well.


Source: IAB/PWC Data and Google SEC filings

In 2008, the Google share of the overall US Internet advertising market had reached 45%, up from 36% in 2006 – pre YouTube acquisition. Again, all of this growth cannot be attributed to YouTube – either directly or indirectly.

In terms of direct YouTube advertising revenues, Google does not publish a figure. Credit Suisse in their infamous analyst note estimates YouTube 2008 advertising revenue at only US$200m (associated with overall losses of US$470m) and the IAB/PWC data estimates video advertising at only 3% of the overall Internet advertising market.

Show me the Meta-Data

One of the little discussed benefits of Google owning YouTube is that YouTube is more than a pure video streaming network. It is a social network in its own right. Accounts are needed to create, comment about and rate content, which is something that is not required for the core search service. It is hard to envisage that at this stage YouTube is directly monetizing this meta-data. Undoubtedly, however, it will be contributing to understanding of user-behaviour, and probably the data is already contributing to the optimization of the Google advertising engine.

Google worldwide revenues have grown by US$11.2bn to US$21.8bn in the two years since purchasing YouTube in 2006 for an all-share cost of US$1.8bn. In the same period, operating cashflow has grown by US$4.3bn to US$7.9bn.

The amount of indirect contribution of YouTube to Google revenues is uncertain, but what is more certain is that Google can afford YouTube.

Marginal Cost = Zero

One of the most important disciplines of Internet economics is to keep the marginal costs of delivering another page or another video stream as close as possible to zero. This doesn’t mean that total costs are zero, but more costs are predictable and not subject to the vagaries of any explosive growth in demand.

To be successful on the Internet, then, costs must be either turned into fixed costs or else made success-based. With YouTube,the key variables are computing and bandwidth costs. Google’s tactic is turning the majority of them into capital costs. Google is deploying more and more capital building out infrastructure, whether vast datacenters or its own network – effectively keeping an ever increasing proportion of its traffic on the Googlenet.

Another key variable costs for YouTube is the cost of the content itself. Google here attempts to minimize its risk by making any payout to third parties dependent upon success of advertising revenues achieved. This is the cornerstone of the Adsense program for publishers. Unfortunately for Google, it is not the traditional way that the video content industry works and therefore is a great source of friction between YouTube and video rights holders.
The Bandwidth Equation

A case can easily be made that Google could make its cost of delivery for video – zero. Every global IP transit provider would love to be the exclusive deliverer of such a significant portion of the world’s Internet traffic, and the transit providers could make money by squeezing the downstream ISPs in their cost of delivery. Such an extreme network design would bear a heavy political cost for Google and would obviously be unpalatable, but it illustrates the power that Google has accumulated through the YouTube traffic.

Instead of focusing on IP transit, Google extensively uses peering, delivering its own traffic to the major peering points in the world, as we made clear in this post, which the people at RampRate used in their critique of Credit Suisse. Peering is not free – it involves buying expensive dark fibre linking the Google data centres to the peering exchanges, renting space in the peering exchanges, equipment to light up the fibre and a team of network engineers to manage the peering relationships. However, most of these costs are fixed. As important for Google is that peering will allow them to control the reliability of delivering their traffic.

A more recent tactic for Google is to build edge-caching servers within ISP networks bringing the content closer to the end-user and thereby improving the speed of delivery. The early indication seem to be that Google is building its own content delivery network in much the same way as Akamai has built one – except that the Google one is for internal use only, right now. Most media companies have to use third party content delivery networks, as they don’t enjoy the Google economies of scale. For instance, the BBC uses Akamai for delivery of a significant proportion of its traffic. The Google costs are fixed whereas the BBC’s are variable – they are paying a third party supplier.

The more difficult question to answer is how much is the sheer volume of YouTube traffic is helping the other Google services, especially the highly profitable search business. We would argue significantly – in terms of cost, reliability and speed. Furthermore, the overall bandwidth economics that Google enjoy are extremely difficult for competitors to replicate and represent a significant barrier to entry.

The Google strategy in distribution seems to be to keep control and only outsource the minimum. Logically, Google would only adopt this strategy if it felt it could gain a competitive edge through distribution. Scale matters in distribution and YouTube brings that scale to Google.

The Compute Equation

In a recent paper about its datacentre operations, Google argued:

“As computation continues to move into the cloud, the computing platform of interest no longer resembles a pizza box or a refrigerator, but a warehouse full of computers. These new large datacenters are quite different from traditional hosting facilities of earlier times and cannot be viewed simply as a collection of co-located servers. Large portions of the hardware and software resources in these facilities must work in concert to efficiently deliver good levels of Internet service performance, something that can only be achieved by a holistic approach to their design and deployment. In other words, we must treat the datacenter itself as one massive warehouse-scale computer (WSC).”

In determining the computing cost for the YouTube service, it is impossible to look at the cost of the service in isolation or approximate it with traditional server and storage costs. The Google strategy is to build vast datacentres and to control the elements within as much as possible. Google does not use standard off-the-shelf components – Google not only uses commodity hardware and designs the whole of the software stack, but innovates on power and cooling systems.

With the capital costs of a large datacentre running as high as US$250m, the cost is more dependent upon overall utilization of the datacentre than individual units such as storage or CPU costs. In fact, as the chart below shows, power costs are as important as server costs.


Source: The Datacenter as a Computer: An Introduction to the Design of Warehouse-Scale Machines – Luiz André Barroso and Urs Hölzle – Morganclaypool

YouTube undoubtedly consumes a lot of compute resources. Most analysts have focused upon storage, but the cost of ingesting and encoding all the video is very expensive as well. But, we are doubtful YouTube represents as high a proportion of overall Google services’ demand for computing as it does for bandwidth. However, we are sure that Google has a significant cost advantage over its competitors.

Google builds its own factories for the digital age. Whilst other individual datacentres are being built of a similar scale, it is doubtful that any other company has reached the same scale as Google.

YouTube and Negotiating Power

Video on the internet is currently extremely difficult to monetize – as we say in the Online Video market study, we are currently in a “Pirate world” where most content is available is available for “free” from a variety of sources. Old media are seeing their revenues cannibalized as content moves online into the “Pirate World”. Eventually, either through legislation or sheer volume of eyeballs, New Players will emerge whose revenues and profits will be significant. Arguably, the effort to increase the percentage of YouTube videos that carry ads is a key indicator of this. The business model for this New World is still extremely uncertain. However, just because of the sheer volume of traffic, Google will have a key seat at the value chain negotiating table. Google will also almost certainly be the lowest cost player, in both aggregation and distribution.

What would make the negotiating position of Google even stronger is control of the method of licensing content. The recent Google Books deal shows that Google is starting to get extremely interested not only in the meta-data around copyright, but also in distributing payments directly to content creators and not through traditional aggregators. In this case, the creators are the authors and the aggregators are the publishers. It does not take a major leap in thinking to see how Google could disintermediate the traditional aggregators of video and music with YouTube.

YouTube Overall Profitability

It is irrelevant to determine the overall profitability of YouTube without considering the spin-off benefits to the parent, Google. These spin-offs are currently considerable but difficult to quantify: in attracting eyeballs to the Internet, therefore attracting more overall advertising spend; and in providing the traffic volume which improves the overall economics for the Google Cloud Computing Platform.

In the future, YouTube will be the key for Google establishing a strong position in the licensing of media content and thus not only controlling its own costs, but being a critical aggregator and distributor for content owners in its own right. Google will try to turn its current Achilles heel, copyright, into a future strength.

In the Telcos Eye

The critical message for telcos is in the scale of investment that Google is making in distribution. Despite BT claiming that the BBC and YouTube are enjoying a free ride, the exact opposite is true. Google is building out both compute and bandwidth infrastructure for delivery. Other video services, for example the BBC, are paying third parties such as Akamai for distribution.

The real battleground is around the share of the value chain. BT is really saying that it is not earning enough from its access fees and the economic table is tilted in the favour of “free-at-the-point-of consumption” video services such as YouTube and other sites, such as Hulu and the iPlayer.

But all is not lost. The growing size of the payTV market proves that advertising alone cannot fund all video services and consumers will pay for premium content. The core strategy for telcos competing is not to replicate YouTube, but by providing tools for the myriad of content owners who are unhappy with the current payback from the online world – these tools are not limited to billing & payment services, but should also include copyright protection.

The war of online value chain is not yet lost: we are still in a pirate world and Google is one of a very small club who can afford to distribute all types of content across the globe.

Source: Telco2.0

China to Google: Remove Your Porn. Google: OK.

22 06 2009 – After being on the end of harsh criticism and even having some of its search features blocked by China, Google has promised to completely remove all pornographic content from its indexes on the Chinese version of its search engine, Google.cn.

According to the BBC, Google has quickly complied; the company’s communications director, John Pinette said that Google is “undertaking a thorough review of our service and taking all necessary steps to fix any problems with our results.”

However, as noted by Techdirt, China’s requests have been oddly formulated, suggesting that the pornographic content they’re objecting to is Google’s property. It definitely seems that way: complaints from CIIRC – China Internet Illegal Information Reporting Center – suggest that Google has been “disseminating pornographic and vulgar information.” From one of CIIRC reports:

Public distribution of pornography is illegal in China. Previously, the country had blacklisted 50 websites, including search engines Google, Baidu and MSN China, which were accused of providing obscene content and of being slow to delete erotic materials.

Of course, had it been some smaller organization, foundation or a group, or even perhaps a smaller country that filed the complaint, Google would probably be quick to point out that they’re merely indexing and linking to this content, and that they are not in any way “disseminating” pornographic content. It’s an ongoing problem, highlighted recently by Chinese demand that all PCs must be shipped with software that blocks certain websites: China’s a huge market for just about anything, and companies are often willing to “tweak” their policies – even when it comes to censorship and online privacy – to conform with their demands. And double standards, especially with issues as important as these, are never good.

Πηγή: mashable.com

YouTube Removes Cookies From the White House

15 06 2009 – Recently, we wrote about the White House taking measures to ensure that the videos that appear on Whitehouse.gov do not set cookies that retrieve information about viewers’ online habits – something that embedded YouTube videos do.

In response, YouTube added an option to set cookies to delayed mode, making sure that YouTube tracks information only from those visitors who actually click on the video.

Now, YouTube has taken it a step further, completely ignoring the cookies collected from visitors to Whitehouse.gov. It’s a step in the right direction, but once again, it’s only an exception that’s been made solely to satisfy the White House’s demands. Thus, the question from the original article still stands: if YouTube’s privacy policy isn’t good enough for the US government – to the extent that YouTube has to make exceptions to its rules – is it good enough for the rest of us?

Source: mashable.com

Ξεκίνησε επισήμως η έρευνα για αντιμονοπωλιακές πρακτικές της διαδικτυακής βιβλιοθήκης της Google

11 06 2009 – Το υπουργείο Δικαιοσύνης των Ηνωμένων Πολιτειών απέστειλε επίσημη ειδοποίηση προς την εταιρεία διαδικτυακών υπηρεσιών, Google, με την οποία ενημερώνει ότι αξιωματούχοι σε θέματα παραβιάσεων της αντιμονοπωλιακής νομοθεσίας ερευνούν τη συμφωνία της Google με τους εκδοτικούς οίκους για τη διάθεση εκατομμυρίων τίτλων στο διαδίκτυο.

Το αμερικανικό υπουργείο Δικαιοσύνης έχει, επίσης, ενημερώσει για τη διενέργεια της σχετικής έρευνας τον εκδοτικό όμιλο, Lagardere Hachette Book Group.

Η συμφωνία, η οποία έκλεισε τον Οκτώβριο, προβλέπει την καταβολή 125 εκατομμυρίων δολαρίων από την Google για τη δημιουργία μιας υπηρεσίας καταγραφής των πνευματικών δικαιωμάτων των βιβλίων, όπου οι εκδοτικοί οίκοι και οι συγγραφείς θα μπορούν να εγγράφουν το έργο τους και να λαμβάνουν αποζημίωση από τις πωλήσεις των βιβλίων.

Στόχος της Google είναι να διαθέσει στους χρήστες της εκατομμύρια τίτλους βιβλίων με κατοχυρωμένα τα πνευματικά δικαιώματα και να δώσει τη δυνατότητα αγοράς αντιγράφων των βιβλίων.

Πηγή: lawnet.gr

Video: Google Squared – Your Search Results in Spreadsheet Form

09 06 2009 – At Google’s Searchology event in May, Google announced the impending arrival of Google Squared, a Labs project that would return search results in spreadsheet form.

Today it appears as though Google Squared has been released out into the wild. Now your search results can take a completely different form, so you can remove content, add suggested columns of your own, and even save your squares for future access.

Since Google Squared is just your search results in column and row form, you’re best off making queries on groups of things. So, you can search for television shows and get back a list of shows, accompanying images, descriptions, language, and run time in a format that’s much easier to consume than typical search results. You can add additional columns and Google will try to help you fill in the blanks.


The cool thing about Google Squared is that columns are dynamic, so they mesh with the content displayed in the squared results. Cell content is also customizable, so clicking on a cell will let you search for other possible values and display a confidence level (eg. low confidence). We’re also big fans of the fact that you can save your Squares, a small but important feature that could turn this into a quick and powerful utility for research.


If you stump the square, you can manually enter a few of the items you want to see compared, and Google will automatically work to find similar entities and build out a comprehensive square.

Based on our initial use, we see Google Squared being a potentially huge time saver for professionals and consumers who need to do quick comparisons. It’s incredibly useful if you know what you’re looking for, ie. photo sharing sites, and are hoping to see side-by-side comparisons.

Though we wouldn’t say that Google Squared is revolutionary, or able to compete with these 5 things Wolfram Alpha does better than Google, we do think that it’s an interesting departure from the status quo of standard list search results. Plus, with the recent release of Bing, it’s important that Google continue to innovate and experiment to maintain their dominance in search.

[via Google Blogoscoped] and mashable.com


06 06 2009 – Google’s street-level mapping imagery – called Street View – can at times be useful if you want to see what a place you’re trying to find looks like.

However, if you’ve ever wanted to explore beyond a snapshot of a location, you’ve likely found the user experience fairly cumbersome, if not downright unusable at times.

The Google Maps team has unveiled a new feature that makes actually navigating through Street View significantly better. Now, Maps will show you, “an oval when your mouse is following a road and a rectangle when moving across the facades of buildings.” Google refers to these shapes as “pancakes,” and once you figure out how exactly they work, they turn Street View into a fairly enjoyable – if not highly useful – experience.

The feature seems to be most useful when looking down a street, as opposed to staring directly at the address you’re looking for, which will just zoom you in further when you double-click on the pancake. This means you can potentially move hundreds of yards at a time in Street View, as opposed to however far Google would let you move previously by clicking forwards and backwards arrows.

The prior problem, and the solution, are explained by Google in the video below:

Source: mashable.com