Liberty

More patents: http://www.frontsidebus.net/2011/09/14/google-buys-1000-patents-from-ibm-to-defend-android/

I've agreed with that from the start. I just think we disagree on how solid/fragile Google's competitive position is. Well, welcome to my world... A lot of what is written around here is negative about Google, probably because there are so many MSFT shareholders, so most of what I've been writing has been to provide counter-points to those too-enthusiastic posts ("OMG, Bing is totally kicking Google's ass, Microsoft is so great!" to paraphrase with tongue just slightly in cheek). Heh. Agreed. Who suggested that? I suspect that when you do research, you read lots of different sources, and you filter out or mentally adjust some parts because they don't pass through your BS detector or because you know the bias of the source, but you keep other parts which seem reliable, and over time, it all adds up to an ever more precise picture of whatever you're studying, right? Well, you're not the only one who does that, so don't assume that I'm some dummy who gets snowed by the first book that comes along ;)

Sorry about the misunderstanding. It's bound to happen if you only write ambiguous short questions, though. I'm very well aware of that, I know a lot more about ad CTR than about search CTR. The value of users for search is the number of searches they do, what those searches are, and how often they click on ads. Casual users who always search for the same 5 sites (facebook, new york times, hotmail, ESPN, whatever) are basically worthless, while power users who do 30 search a day for all kinds of things and do a lot of their shopping and product research online (including for keywords that trigger ads worth many dollars per click, because each keyword is worth something different based on a real-time auction, and some very specific keywords like 'mesothelioma' can be worth $50 per click or whatever) are worth the most. This is of course also a function of the ad inventory. The more variety you have, the more of the long tail you can monetize. So to answer your original question, yeah, I know a few things about those.

Indeed, but remove the Bing API and the billions that MSFT put into it and I suspect that things would be quite different. Still, I have only respect for DDG. I'm less impressed by Blekko. One that does (did?) all its own crawling is GigaBlast, but it's about on par with Google circa 1998-1999. DDG is my second favorite search engine after Google, so that should tell you that I think they are overall pretty good. There's still a significant gap, though. We'll see how that works out. Adsense isn't as easy to build as it might seem, and replicating or stealing Google's hundreds of thousands of third party publishers won't be easy. Also, Google's core competencies map much better on this than Facebook's ie. indexing vast quantities of data rapidly, analyzing it in real time to extract meaning and matching it to relevant queries/ads (a large number of which are unique, so you can't just cache it all) that are provided in real time in a search box/ad exchange... a lot of skills and infrastructure translates well from one to the other, and I'm afraid it'll be harder for Facebook. They could pull it off, though. Sorry what? Page can smell toxic emissions to .0001 parts per billion? What is he, superman? Sure this is an attributed quote, but what value does it add to the reader or the story? This falsely aggrandizes Page for something completely irrelevant. Google is the search company, not the smell company. Well there's more of that: On meeting Andy Rubin regarding an Android partnership: Classic Page! Partnership is to acquisition as toothpick is to forest. This is laughable, especially in Silicon Valley where deals are on every entrepreneur's mind all the time. This leap in vision is made every day by every winner and loser in California. And here's another one on Page's ability to measure load times on web pages: That's because it is unexceptional. Anybody who has played a video game knows that 200ms is an eternity. Another example is film, which traditionally runs at 30 fps. Why use 30fps if the limit of human perception is 5fps? This assertion by the author is clearly false, and again serves to falsely build up Page's image rather than add actual value to the reader. Levy paints this picture of Page being superhuman, and it really bleeds out in these examples. How can you take the rest of the book seriously with the backdrop of this nonstop mancrush? It's not a balanced review of Google, it's greatly influenced by one person's fawning over another. The other issue I take is that In The Plex doesn't do any of Google's many failures any justice. Only Book Search and Buzz get any play.. Everything else is sidestepped. It's such a biased review that doesn't critique but often compliments. I would expect more journalism from a guy who's a journalist. Bring your salt bucket is what I'm saying. If those are your criticisms, then fine. I thought it was going to be things that mattered or at least were more blatant and not the kinds of complaints that you can make - if you search for them - about just about any book about any individual or company. I'll bet you I open my biography of Benjamin Franklin by Walter Isaacson at any chapter and I can find the same kinds of complaints. I guess it would matter if I didn't have any judgement and took everything literally, but I'm just as capable as you to take some things with a grain of salt -- it doesn't mean that there's isn't a lot of very insightful stuff in Levy's book, much of it is corroborated in other books and articles written by other people. btw, if I remember correctly, your last quote about lag says something slightly different in context. Page had trained himself to estimate sub-second lag to a fairly accurate degree (not just notice that there's lag, which is unexceptional), which isn't something that everybody does and certainly something that could impress a journalist if performed out of the blue. It's not material to Google's prospects, but it certainly gives us color on Larry Page and his engineering mindset.

http://www.cnbc.com/id/44504271

I like DDG. I've had a few conversations with Gabriel Weinberg, its creator, and I've used it as my main search engine for a few months to test it out. I expect them to be successful as a niche player mostly because they'll keep costs low (1-2 employees) and so will do well even with very little revenue, but I don't expect them to be a competitor for Google (or even Bing, who's API they use exclusively now that Yahoo's API is offline - DDG isn't really an independent player, it's more like an App built on top of Bing). Sadly, a lot of what DDG does wouldn't scale very well (like hand filtering lots of spam - when you're a big source of traffic, that stuff becomes extremely contentious in borderline cases). I don't expect Twitter to do much in display. Their firehose is valuable, and they should do well with it, but it's still just one of many things (and I say this as a guy who has 7k followers on Twitter). Facebook will no doubt make mountains of money with display, but their offerings are limited. They're only selling ads on Facebook, and when people are on facebook they are generally in a certain mindset, just like when people are in their email. Adsense ads on third party sites have a higher chance of catching people when they are in a mindset that is more valuable to advertisers. F.ex. you Google something about cars, end up on a NYT article about cars and there's an adsense ad about cars. The page that you are reading (something about cars) is a signal of your intent, you aren't thinking about diner with your grandma on sunday or funny cat pics like on social networks. Please provide examples of what you didn't like in Levy's book. I'm not saying it's perfect, but I'm curious to know what you didn't like.

http://www.zdnet.co.uk/news/processors/2011/09/14/intel-and-google-join-hands-on-android-development-40093922/

Allow me to reply in the same way that you did :) -A wide range of data points. -I do. They cover a wide range. I've seen that in the past, and like the comscore data, I think it is misleading, and I think many people draw the wrong conclusions from it. For example, consider that Google's snippets are extremely relevant and many people find the answer they're looking for from them without clicking, or use Google as a spellchecker or calculator. At first glance this makes it sound like low quality users, yet despite that Google still sends massively more traffic than its comscore share would make you think. It makes me think that CTR rates are a flawed metric; f.ex., if you mispell 'facebook' in your IE URL bar and then click on the Facebook result, that's considered a successful hit, while if you search for Galileo's birth date and see it in the snippet without clicking, that considered a failed search. Also, power-users (or even just above-casual users) will tend to do tons of searches and refine them over iterations of many keywords (mostly because they're looking for harder-to-find things) while casual users usually just try one thing. Does this lower CTR from power users mean that results are of lower quality? CTR doesn't mean what most people think it means... I'm sure Chrome also sends a bunch. But IE is the most popular browser in the world, and it can have a disproportionate effect on a search engine with a smaller market share, as opposed to the impact of one of the browsers with a smaller marketshare on the search engine with the biggest market share (in the abstract: a big thing can have a bigger impact on a small thing than a small thing on a big thing).

I like how fast and clean it is. Looking forward to the Canadian version.

A company with a strong moat, nice margins, strong growth potential, and apparently a big advantage over Visa in China. I've only just started digging, so I don't have an IV estimate yet, and I could find things I dislike, but so far it certainly looks like a company that deserves its own thread here. For those also looking, there's a year-old writeup on the VIC that might be a good starting point. Feel free to share your MA insights here :)

So if Bing will remain marginal (if even profitable), who's going to beat Google? You realize that to offer something comparable to them will require billions and billions of capital investments and thousands of top engineers with expertise in search/artificial intelligence/data mining/large scale hardware deployments? And even if you have all that, the size of the user data-set that you can to play with matters (Google optimizes results in part by analyzing user behavior - the more users you have, the more accurate your results can be). And they're the low cost producer of computing hardware in the world as far as anyone knows (they actually assemble more servers than HP and Dell, according to Steven Levy who had inside access), own tons of strategic fiber that they bought for cents on the dollar after the dotcom bust, etc. Their ad exchanges benefit tremendously from a network effect and have great pricing power. And I won't even mention how powerful the brand is (it's a verb!) and how users are becoming stickier by the year (6 years ago people mostly just searched, but now they have a GMail account, use google maps, read google news, use google docs, G+, Android, chrome, google translate, they just launched Google Flights (http://www.google.com/flights/), etc, making them less likely to go away). Basically, Google's out of reach for startups (most aim to be acquired by Google anyway), and of the big companies with the resources, I don't see any who have the ability to beat it, and it's not because they haven't tried (MSFT likes to pretend Bing is a few years old, but it's just a rebranding of what they've been doing unprofitably for over a decade). Anyone who makes their living on the internet, either as an advertiser or a publisher, knows very well that Bing is a marginal player at best. They're not nothing, but like Yahoo, if they disappeared tomorrow, you would probably notice the bump in traffic, while if Google disappeared, you'd go out of business (doubly so if you ran their ads on your site on top of getting most of your traffic from them). In fact, a change in Google's ranking algorithm can have a bigger impact on a site's traffic than the whole existence of Google's competitors. As an aside, I think it's also a sign of Google's moat that Bing was caught copying Google results (Google made up fake search results for random unique non-words like "hhhhshhdfiidsfjfkfkfffsdffffftss" and these later showed up in Bing linking to the very same fake results -- Bing responded that they didn't copy anything ever, but their explanation for the results was unconvincing). It's like finding out that Washington Post articles that you thought were independently reported, and were advertised as such, were actually plagiarized from the New York Times. Kind of a sign they're having trouble compete, IMO. I'd be curious to ask Sanjeev if around 35% of visitors to this site who come from search referral come from Bing sources (and if that's the case, I'll be very surprised)...

Thanks. Interesting take on Google on p.3

It is. I just don't think it's nearly as bad as some people think. Frankly, I wrote many long posts about this in the past and I don't really want to rehash them. Maybe it was when you had left the board? Some of it is in this thread, some is in the MSFT thread, and possibly some in the RIM thread, if you're interested. I've shared some of it, I'm sure you can find it. I don't want to go into too much detail there because that's not data I want to share too much for a variety of reasons. Let's just say that when I look at the numbers for many big US sites (where Bing is stronger than internationally), sites that cover very mainstream topics and/or brands that everybody knows (where Google doesn't have an advantage over Bing), and see that Google often represents over 80% of search referrals and that some international Google sites (.ca, .co.uk) send more traffic than Bing.com, it makes me wonder where all the Bing users are linking off to after their searches... There's also a nice phenomenon that I'm sure Munger would find interesting: The only place where I see much enthusiasm for Bing is on investing forums, mostly from people who have bought MSFT stock :) I don't know a single person who 'bings' stuff when they have a question they want answered... I know they exist, I've just yet to meet them (I suppose this is the cue for people here to tell my how their whole families have been converted to Bing and they love it and such... But I'm still waiting to meet Bing users by accident, without this kind of sample bias).

No worries, sometimes I just have this compulsion to state the obvious :) About Motorola: I'm not sure what to think about it. I suspect there's a behind the curtain story that explains it, like they couldn't get InterDigital or another patent holding shell, so they had to spend for a whole company. I would prefer for Google to stick more to the software business, but if the patents help reinforce the moat around Google's other businesses (mobile will be a bigger part of search over the next decade, so defending it will become more and more core), they might pay for themselves + the rest of Moto over time (though probably not in the short-term). Problem is: It's always harder to value the absence of an event than the presence of one (ie. no lawsuit happens, but you might never know that in an alternate history it would have happened).

Dazel, do you own any Alderon directly or do you get all your exposure through Altius?

Which isn't what I'm saying. F.ex. If Google has a ration of X 'low quality users' and Bing has a 'more than X' ratio, it's possible for Bing to grow both high and low quality users in a roughly proportional manner such that the 'more than X' ratio stays pretty much intact, viz. higher than Google's. You are basically pushing my own argument farther than I am pushing it and then saying that I'm going too far. All I was saying was that marketshare numbers aren't all that to me, and that I use other sources of data to form my judgement on Google and Bing's respective competitive positions. I'm not saying they can't change, I'm not saying that Bing isn't making a better effort than past competitors (though Bing itself is just a continuation of Microsoft's past search efforts that have been around since the 90s, despite the rebranding and increased marketing). You can use the metrics and data you want, but please don't say that what I'm doing is stupid when you don't know what I'm doing.

The text and banner ads on the adsense/Doubleclick network are separate from search, as is GMail, as is Android, as is the nascent G+. These aren't as profitable as search - and it's probable that nothing ever will be, as search is the holy grail product of the internet, and so it makes sense to develop complementary products that augment search rather than totally separate ones - but if they were standalone tech companies they would be worth a nice sum, especially the ad network.

Oh boy, I probably shouldn't have written anything. Every time I make any comment about Google people challenge me to a duel in front of the saloon, nobody ever agrees with anything I write :D It's entirely possible for Bing to grow while having a larger % of 'low quality' users than Google. These are not mutually exclusive. When search ads are well targeted, they are actually useful, so the paradigm of stupid newbie users mistakenly clicking on ads leading to higher revenue doesn't quite apply as well (that was more a banner ad thing - but now even banners are more targeted and relevant). If I search for a standing desk or a pizza place and the top result looks relevant and it happens to be an ads, I won't mind clicking on it even if I'm a savvy power-user. Because Google's ad inventory is so freakingly much bigger than Bing's, they have many more relevant ads to show for a much longer tail of searches, thus monetizing their searches much better. Through my work I have access to stats from all kinds of sites, from thousands of visits a month to tens of millions. It covers a pretty nice range and should be pretty representative. I'm not asking you to trust me or change your metrics, do whatever you want. I'm just saying that I take the usual marketshare numbers with a big bucket of salt, and I've explained many times in multiple discussion threads why that is. I don't really have anything to add on this.

Ha! I just never heard Comb describe how MA did a deal with China Unipay while Visa got itself pretty much locked out of China ;) I always kind of had V and MA and AXP on my peripheral radar, but this made me take a second look. About this Manitoban Oracle... After some digging, it looks like this guy might not be quite as clean as it first seems (look at the comments in the link below). Not sure what the real story is, maybe just people stupidly complaining about losing money in the market crash of 2000-2001 and nothing unethical took place on the broker's side, and I'm not sure it means that his analysis is worth any less, but it doesn't look entirely good.. http://www.forbes.com/forbes/2008/0616/068.html http://www.investorv​oice.ca/PI/031.html

Done listening. I like that guy. He made me want to dig deeper into Mastercard :D

He's pretty eloquent, so it's worth listening to the audio, which contains more details. I'm not yet all the way through, but it's interesting so far.

http://abstrusegoose.com/strips/mr_market_is_a_drunken_dirty_old_man.png

Marketshare isn't everything. The quality of users matter. As I've previously written about here, Bing seems to have a large number of users that end up doing a search because they made a typo in IE or something like that. If you look at the traffic statistics of many big websites, you see that Google actually has a much higher share than 60-70% (and even moreso internationally). This is important because random typo users aren't worth much, while people actively searching for something specific are worth a lot to advertisers, as these are the people clicking on ads and doing multiple searches. It also matters that Google's ad system is the best in the world and squeezes much more money out of users and advertisers. In any case, I sold my GOOG shares when the markets melted because I wanted to buy something that I felt was more undervalued and has more upside (size is an anchor - I ended up buying stock in a company that is less than 1% Google's size). I still made over 20% profit in a little over a month, and I could have made 30% if I had sold a bit earlier, so I can't say I'm disappointed. Despite having sold, I still believe they are a very attractive business and if bought cheaply enough they should provide attractive returns over the next decade. I'd look at them and Apple before MSFT, HPQ, DELL, etc.

Thanks for posting, I've added it to the pile!

That's great news!