Cuil will fail as long as it tries to ‘kill’ Google

Many companies are started to ‘attack’ a sector than is ‘held’ by another company. This sector is usually very valuable, which is the reason why start-ups try to capture these sectors.

The problem is, you don’t capture sectors, you capture markets. And when you have no customer focus, you probably won’t capture customers and as a consequence, you won’t capture the sector.

My thinking here goes as follows. Very successful companies come to dominate or create a sector because they were able to provide a unique (at least when they started) service that was (and probably is) of great value to customers. Subsequent generations of start-ups then try to ‘take that business away’ from the incumbents. This can work. However, it can only work when you manage to win over the customers. You can only win over customers, when you have a value proposition that is significantly better than that of the incumbents and that is actually valuable to the customers. If you don’t, then you can’t win the market. And if you can’t win the market, you won’t be able to win the sector.

The company that people seem to target a lot these days is Google. The reason is obvious, Google makes a lot of money and people want that money.

The latest start-up that seems to try overturning Google is called Cuil. I have probably read some 10 articles about them yesterday. Great press coverage. Indeed, it was so good, people commented on it. However, all that the press coverage seems to focus on is that Cuil wants to ‘kill’ Google. Hardly anybody seems to be raving about the features of the site. I haven’t read once an expression along the lines of: “Gosh, now this is how search should be!” Not once. Read what TechCrunch, GigaOm, and ReadWriteWeb wrote.

Cuil actually has some very interesting technology that allows it to operate its search engine at a faction of the cost that it takes Google to run its operations. This is very interesting and it is actually useful. However, it is in no way useful to the users or the customers of a search engine. Unless Cuil can find a way to translate that advantage into something that actually means users have a significantly better search experience, why should they care?

Cuil’s natural target market is the people who have a pain that they can make go away: search engines. If Cuil can significantly lower operational costs of search engines (and maybe even other companies, who knows), then these search engines would probably be very interested in talking to Cuil.

Cuil has decided to, at least according to the press, ‘kill’ Google. What a shame. There is no unique service there that I can see right now that is of great value to the customer. They could have helped Google and all other search engines to become even more successful by lowering their costs. There is some real pain there and some real customers.

Don’t kill. Make pain go away. Make happy.

UPDATE: Funnily enough, I am not the only person going through this thought process. Just saw a post by Jason Calacanis here and by Fred Wilson here.

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Random Traffic Grows Real Traffic

A few weeks ago, I wrote a blog post on how Microsoft was making some good/viral TV clips for their (at that point) upcoming video game Halo 3. Problem was that these videos were on TV only, nobody at the marketing agency thought it necessary to post them on YouTube, but enthusiasts corrected that. My blog post listed these videos, and can be found here.

Since I posted this article, it has increasingly gathered readers. 100% of them come via search engines, looking for “Halo 3″ (I am amazed that some search engine ranks my article so highly! still can’t figure out who that is exactly). I bet you none of these viewers have any interest in marketing, start-ups or any of the other things tend to write about. So, is this traffic actually worth anything?

Turns out, the answer is yes. Since this traffic has increased, the traffic from search engines to my other articles has increased with exactly the same rate. In other words Halo 3 has the same proportion of overall searches now than it did a month ago. When you look at visits of ‘halo 3′ searchers to my site, this will give you some impression of how much the overall volume has increased:

Traffic

What this means. This is a virtuous circle effect. More traffic drives more traffic. An article that people pick up “for the wrong reasons” can indirectly drive high quality of traffic to the site. When more people click on my site via Google, my Page rank increases. The increased Page Rank drives more traffic. More search clicks increase my Page Rank, etc etc

I think this trend will continue until an equilibrium point is reached at which point the effect will diminish. Or maybe the search engine takes the traffic away again. In any case, until either of the two happens, I am happy to lean back and see the traffic grow. I actually didn’t post any articles this week partially just to see what would happen to he traffic: still growing. Nice.

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Is Facebook the Database of Un-intentions?

Facebook logoJohn Battelle once called Google the ‘Database of Intentions’. What he meant with that was that Google tracks the search terms that people type into its search engine. It catches what they are looking for on the web. Their intentions in other words, hence the ‘Database of Intentions’. It is precisely for this reason that Google works well for advertisers. Searchers have the intent of searching for something. They express their search by keyword and advertisers can bid for these keywords. Thus, advertisers get highly specific traffic directed to their websites at a fair price.

Let’s have a look at Facebook by comparison. As reported by TechCrunch, FlowingData ran an interesting article a few days ago, which showed the sort of applications that are available to Facebook users. Applications are provided by 3rd party developers and Facebook allows them to operate these applications on their platform. In a sense, the type of these applications gives a very interesting insight into the intent of Facebook users. Most interestingly, the vast majority of applications are classified as ‘just for fun’, followed by gaming. Those familiar with Facebook will understand what ‘just for fun’ means. These are all the vampire kisses, hugs, pokes and so forth. I can assure than when you get ‘bitten by a vampire’, there is no serious intent involved.

Today, I read an article by Bob Gilbreath. Bob is a marketing executive who reported on his experience of using Facebook as an advertising platform. Bob’s conclusion is damning. His results for both CPM (cost per impression) and CPC (cost per click) are below industry average, both for targeted’ groups within Facebook and for Facebook as a whole. You can read the whole and well written analysis on his blog. To sum it up: advertising on Facebook in his experience was worse than on any other normal website. Facebook is less effective than the industry average. This impression seems to be mirrored by others whom he refers to, including Chris Anderson, Fred Wilson and Nick Denton.

Wow. Worse than average? How is that possible? Isn’t the theory that social networks are supposed to be highly specific and effective in terms of the kind of traffic that they can send to advertisers?

I still believe that to be true. So maybe this was a Facebook specific problem? Thinking about this, it suddenly hit me. Facebook is the place where people go without any specific intent in mind. This is shown clearly by the kind of ‘just for fun’ applications on facebbok. Facebook users simply go to fool around, ‘just for fun’. Thinking back to Google’s, as John Battelle expressed it, ‘Database of Intentions’, maybe Facebook is the opposite of Google. Maybe, Facebook is the Database of Un-intentions.

If this rationale holds water, then this must make Facebook’s traffic the opposite kind of traffic to Google’s traffic. Given that Google’s traffic is the most valuable of the web, this would make Facebook’s traffic the least valauable. This could explain why advertisers seem to get such a low return on their money at Facebook.
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