Company / division: Alphabet
Several trade groups representing parties involved in online advertising have sent an open letter to the Coalition for Better Ads (of which they are themselves among the largest members) pushing for faster implementation of self-regulatory moves intended to stave off the threat of browser-based ad blocking. The context here is moves by browser makers – notably Google and Apple – to get tougher on bad ads and cookie-based tracking respectively, both of which threaten the online ad industry. The industry would therefore like to put in place self regulatory measures which have been discussed for some time but not implemented as a way to try to stave off more of this stuff, though the Apple changes have already gone into force and Google’s are likely to do so as well. The online ad industry only has itself to blame for failing to self-regulate sooner and more effectively and thereby maintaining an environment in which such moves by tech companies are deemed necessary. Poor online advertising really serves no-one well in the long term but the industry’s short-termism in allowing it to continue unchecked is now leading to nasty long-term consequences which it is essentially powerless to reverse.
via Marketing Land
Target and Google have announced a nationwide launch of their partnership to offer voice shopping from Target through Google Home (and eventually the Google Assistant on smartphones too). This follows on from Google’s earlier announcement with Walmart, and these partnerships feel very much like a new front in the escalating war between Google and Amazon. This also opens up potential new revenue streams for Google around voice, a medium far harder to monetize through advertising than its traditional businesses, and which Amazon is certainly going to leverage for e-commerce sales. On the other hand, an indirect relationship will make this a little more complex than a single-company solution – customers will have to train the Google Assistant to know which retailer to use for which items if they have several integrations set up. And of course for now shopping is still a minority use case for voice speakers, well down the list of actions people use regularly, though that may change over time.
Google today announced an effort to give a billion dollars to various philanthropic causes aimed at mitigating the effects of technology on jobs and work over the next five years. It has apparently already given away a tenth of that sum over the past few months, with 1% of the total coming in a donation to Goodwill to create educational programs. Much of the money will likely go towards programs which help workers learn new skills which will be more relevant in the future workplace, a worthy and important goal in a world where educational systems are mostly still the same ones designed over a hundred years ago by industrialists looking to train good factory workers. Google and other big tech companies have obviously played a role in creating this change, for better or worse, and so aligning their philanthropic efforts with mitigating its negative effects is a sensible strategy, if nothing else than as a useful PR counterpoint to recent criticism of the company on other fronts. Google joins Microsoft as a big philanthropic spender, with the latter recently announcing a big project to help provide broadband in rural America.
via USA Today
Reuters reports that Waymo had sought a billion dollars and a public apology from Uber in settlement talks over the lawsuit the companies are embroiled in. Uber apparently quickly dismissed those requests as unreasonable, which isn’t all that surprising, given that it’s still far from clear that Waymo has the evidence it needs against Uber as a company rather than merely against Anthony Levandowski around the stealing of LIDAR technology. It’s also a sign that Waymo is perfectly happy for the court case to continue and for it to continue to distract Uber at a time when the latter already has a lot on its plate including several legal actions and more.
A reviewer at Android Police reports that he discovered the Google Home Mini unit he was testing was recording nearly everything he said while in its vicinity, because the device erroneously thought he was holding down the button which acts as an alternative to its wake word. Google has now pushed a software patch which disables that button entirely for the time being, to ensure that doesn’t happen to others. Given that many people already feel uncomfortable with the idea of an always-listening device in their home, the idea that it could be recording and transmitting to Google’s servers everything that’s being said because of a bug will not instill confidence. This is something of a nightmare scenario for these devices, and the fact that Google turned off a feature of the device to fix it indicates just how seriously it’s taking the issue. Reviews of the Mini have dribbled out here and there and have mostly been positive, while this is the first mention I’ve seen of this issue, but it’s certainly not a great start for the Mini.
via Android Police
Google Acquires Podcast App 60db (Oct 10, 2017)
Business Insider is reporting that Google has acquired a podcasting app called 60db, which specialized in shorter audio segments, among other things. Interestingly, 60db had earlier published a blog post on Medium announcing the acquisition, only to take it down immediately after, though not before it was captured by a publication covering the podcast market. In that post, the company said it was joining Google News, which is an interesting wrinkle given that Google’s current podcasting efforts sit within Google Music and not Google News. That suggests that the podcast app might perhaps complement web-based news with audio news, conceivably as part of Google Home. Podcasts have become a big focus for other companies in the last couple of years after Apple was almost the only big player in the market for a long time, and it still dominates overall listening, in part by virtue of being the only platform with a dedicated podcast app installed on its devices. But Spotify, Amazon, and now Google are all taking the space more seriously, which will mean some meaningful competition for those users who care enough to look for alternatives to the default apps that come with their phones.
via Business Insider
I haven’t seen an official announcement around this, but Windows Central reports that Microsoft has quietly added support for four smart home vendors – Nest, SmartThings, Hue, Wink, and Insteon – to its Cortana virtual assistant. On the one hand, this is good timing with the Harmon Kardon speaker apparently getting ready for launch, but on the other it’s odd given the recent voice assistant partnership between Microsoft and Amazon, a big selling point of which was being able to control smart home gear through Alexa. In fairness, the latter still has much broader support for smart home ecosystems than Cortana, but Microsoft’s assistant now talks to several of the largest, and these plans must have been in the works for months now, certainly before the Alexa partnership was announced. At any rate, it’s going to be much simpler to control these devices directly through Cortana than through the awkward two-step process the Alexa partnership would require, and this is a good addition ahead of the launch of Cortana-based speakers.
via Windows Central
Alphabet’s Waymo subsidiary and chipmaker Intel have launched separate campaigns to promote autonomous driving technology. While Intel seems to be going it alone and focusing on TV ads with celebrities like LeBron James, Waymo has partnered with several safety and advocacy groups for its campaign, which seems more aimed at starting a conversation using the hashtag #letstalkselfdriving than pushing out its message via ads, at least for now. Waymo is an obvious company to be pushing the technology given that autonomy is its raison d’être and it has its own cars on the street in various markets, while Intel is clearly aiming for the same kind of indirect approach it took to its famous “Intel Inside” campaigns back in the day. These are, after all, mostly awareness campaigns at this point – there’s nothing any consumer could buy after seeing the efforts from either campaign, and most consumers aren’t even aware of regulatory efforts in this area yet either. But both campaigns are clearly aware of broad skepticism shown in recent surveys about autonomous driving and want to start the education process early. Waymo’s campaign is particularly focused on the accessibility and safety benefits and its partners – which include an organization serving the blind and another serving seniors. That gels well with the NHTSA stats I shared earlier today, which demonstrated again the potential safety benefits of a computer not prone to alcohol use, speeding, or distraction driving a car.
Google has apparently now, like Facebook and Twitter, found at least some spending by actors tied to the Russian government on its platforms, including YouTube and Gmail, and the Washington Post says the amounts spent were in the tens of thousands of dollars. However, the New York Times reports that the actual amount definitely spent by entities connected to the Kremlin was much smaller, at around $4,700, while there is another $53,000 that was spent by Russian entities which have not yet been proven to have a connection to the government. Unlike the money spent on Facebook, of course, ads on Google’s platforms have far less potential to drive viral activity, meaning that the direct reach of the ads was likely much of the total reach, and that amount of money wouldn’t have bought much of that. Google doesn’t seem to have commented on the record about any of this yet, but my guess is that the Times story was pushed by Google PR to provide context on the Post one. But this does draw Google further into the mire that’s already engulfing Facebook and to a lesser extent Twitter, something of which we saw further evidence over the weekend.
Alphabet’s Project Loon, which uses high-altitude balloons to deploy internet connectivity to areas underserved by more traditional methods, has received rapid FCC approval to deploy its technology in Puerto Rico, where cellular service continues to be widely disrupted after the recent hurricane. Project Loon has relatively few real-world deployments out there despite testing for years, but this seems like a fantastic application for the technology if it can work out some of the kinks, and if it can deploy much more quickly than it has elsewhere. Interestingly, Facebook’s connectivity group has also worked on some airborne technologies for deployment in disaster zones, including a “Tether-tenna” it described at F8 earlier this year. Given that neither company’s connectivity efforts has had a massive impact yet, perhaps it’s best deployed in these scenarios, where the flexibility it offers is arguably a better fit than land-based approaches typically used by traditional cellular carriers in these situations.
Janko Roettgers at Variety has done a great bit of analysis on the impact of the removal of YouTube from the Echo Show on sales and reviews of the devices. What he found is that the sales ranking in Amazon’s bestseller list seems to have fallen significantly over the past week or two. That’s not surprising given that as I said when the news was first announced, YouTube was a somewhat integral part of the value of the device’s screen, and Amazon had far more to lose from the end of the partnership than Google. It’s still not clear what exactly prompted the end of that relationship – right at the end of the Variety piece, there’s a quote from the Google executive who manages its competing Home portfolio there, in which he says the company is still evaluating the speaker-with-screen segment. So that competition may or may not have prompted it, and I’m still inclined to believe that it may have been a tit-for-tat against Amazon for scheduling a big hardware unveiling the week before Google’s own.
Quartz reports that Alphabet’s DeepMind subsidiary, which is still registered as a separate private company in the UK and therefore has to report its own financials, lost $162 million in 2016, on revenues of just $40 million, all of which came from Google. It’s a quirk of accounting that DeepMind is still reporting as a separate company, but it gives some insight into the cost of running such a business, which is focused on cutting-edge AI work, much of which is not ready for direct monetization in revenue generating products. Given that Alphabet as a whole spent over $15 billion on Research and Development in the past year, this is a tiny fraction of the total, and an operation the company can easily afford to keep going along these lines. Much of the losses, incidentally, stem from the $137 million the company spent on staff and related costs, of which I would guess a big chunk is stock-based compensation, which runs at $2 billion per quarter for Alphabet as a whole and $100-150 million per quarter in the Other Bets segment. And of course there are big chunks of Google itself working on AI as it relates to specific products too, so this is far from the scale of Alphabet’s overall investment in AI, which is increasingly filtered into everything Google does.
Google Fiber is rolling out in San Antonio and Louisville, two markets to which the company committed to before halting expansion, but won’t be offering pay TV service in those markets alongside its broadband service. That’s a first, as Google Fiber has always offered broadband and TV (though not always phone service) in its previous markets, in keeping with the most popular pairing of services taken from cable and telecoms operators. The reality is that Google Fiber TV wasn’t nearly as popular as its broadband offering, with just over 80,000 subscribers at the end of 2016, a small fraction of its broadband base, which is thought to be in the high hundreds of thousands at this point. Besides that, the economics associated with pay TV, especially for smaller providers, are not that attractive, with much of the revenue being passed straight through to channel owners and little opportunity for real differentiation. So, with all that as context, it makes perfect sense for Google to drop TV from its bundles and go purely for the broadband market, where its differentiation is far stronger, and where the economics should be quite a bit better. With the launch of YouTube TV in many markets, Google even has its own streaming TV service to offer now too.
, via 9to5Google
YouTube has licensed nine of its original shows and movies, which were until now exclusive to its Red subscription service, to a third party in order to generate additional licensing revenue. Two of the great advantages of producing original content are exclusivity and licensing rights, though the two are often somewhat mutually exclusive, but YouTube appears to be playing both sides here, keeping the shows as exclusives for a period of time before broadening availability to develop a content licensing revenue stream too. That’s not a strategy I would ever see most of the other companies developing original content employ in such a windowing approach, but it likely suits YouTube reasonably well given its smaller subscription footprint and the increasing presence of aggregators and others who want to show YouTube content to fans on other platforms like traditional TV, somewhat ironically. But this will also allow YouTube to monetize its content in other geographies where the Red service hasn’t launched, whereas Netflix is now very focused on its near-global presence.
Google has created a pair of machine-learning-powered filters for website owners which will allow them to avoid hosting racy or seedy ads on their sites. Neither of these categories are banned by Google’s policies today, and anyone who’s visited many news sites online has seen the types of manipulative, low-class ads caught by the second set of filters, while the first set will use an algorithm for skin detection to weed out ads tending towards the racier side. This set of moves is on the flip side of the controversy around YouTube and Google’s broader ad platforms earlier this year, when it was the advertiser brands that didn’t want to be associated with undesirable content, while this deals with the opposite problem of undesirable ads showing up next to high-quality content. Both are part of the challenge for Google and other online ad platforms in a highly automated, entirely price-driven system for placing ads, and it’s good to see Google offering site owners some more quality controls, just as it improved controls for advertisers following the boycott earlier this year.
At its Build developer conference earlier this year, Microsoft laid out a vision for an ecosystem that would bridge its first party Windows operating system running on PCs and a variety of software experiences running on the two major mobile platforms, iOS and Android. At the time, it wasn’t entirely clear how that would work, and on iOS in particular there are major barriers to third parties providing deep integration. But it was a novel concept, and intended to offer an alternative to Apple’s hardware-based ecosystem lock-in and Google’s software-and-services-layer lockin by combining some of the best of both while offering more neutrality and flexibility.
Today, Microsoft announced two new mobile products intended to further that vision: a version of its Edge browser for iOS and Android, and an Android launcher that builds on an earlier, subtler effort. The Edge browser offers integration with the PC version, in a manner very similar to what Chrome and Safari already offer when used across platforms. The launcher, meanwhile, takes advantage of Android’s flexibility to integrate third party experiences directly into the operating system and offers some clever integrations for hopping between Android and PC experiences. This is the closest Microsoft is going to come in the near term (or probably ever) to having its own platform on mobile again, though of course it’s absent on iOS. Although Apple obviously offers tight integration between Macs and iPhones, the vast majority of the iPhone base doesn’t own a Mac, and many use PCs for work, school, or in their personal lives, so there’s clearly a need here Apple itself hasn’t worked all that hard to meet. That opportunity is likely even larger on Android, where an even higher portion of the base uses a Windows PC. These are early steps, and they certainly don’t execute on the vision Microsoft laid out at Build in its entirety, but it’s a good start.
Here’s a roundup of some of the smaller announcements Google made today, including the Pixelbook Chromebook, PixelBuds wireless earbuds, and an intriguing AI-powered camera called Google Clips. The Pixelbook is true to the original Pixel Chromebook from Google, which was equally bizarrely positioned as a premium device in a category which is mostly appealing for its low cost. It’s added some hot recent trends like convertibility and a $99 pen, ChromeOS has added Android app support, and Google is debuting its Google Assistant on a laptop here as well. None of that is likely to overcome the inherent funky positioning of a $999-plus Chromebook, and it’ll continue to be a marginal device. That Google should continue to compete here rather than entering the smartwatch market directly feels funny given how much more the Android Wear ecosystem needs first party hardware from Google than ChromeOS does.
The PixelBuds earbuds are in the “neckbud” category rather than the truly cordless earbud category Apple’s AirPods dominate today, and I think that’s fine – I’m wearing BeatsX on a plane as I write this, and continue to like these better than AirPods, and I think this category has a lot of value. The earbuds are priced the same as AirPods, and as with those buds, come with a voice assistant built in, though Google’s big differentiator is real-time language translation, which was successfully demoed on stage. Of course, most of us only rarely (if ever) need such a function, so this is more of a gimmick than a useful feature for now, but it’s a great gimmick.
Lastly, Google’s big surprise at today’s event was one of the last things it unveiled, which is a small standalone camera which is designed to unobtrusively capture pictures and video in the home, powered by AI which will determine when and how to take them. That’s a brand new concept, though it obviously competes to some extent with both Samsung’s Gear 360 line and cameras from the likes of GoPro, whose stock took a big hit today. In reality, of course, this product likely won’t sell in any big numbers because the category doesn’t exist, because it’s priced at $250, and because Google doesn’t have the presence or history in hardware to launch a new category, and it’s best seen – like the real-time translation feature in the PixelBuds – as evidence of Google’s AI chops, and as something which might therefore come to other Google products in time and thereby reach a broader audience.
Google today announced both larger and smaller versions of its Google Home device, while adding software features to its existing hardware, as part of its second generation hardware launch event in San Francisco (see here for my comment on the Pixel 2 smartphones it also announced). It’s a busy time for voice speaker announcements, coming a week after Amazon’s big update of its Echo line, and the same day as Sonos’s voice speaker launch, but we now have a much clearer picture of how the lineups of major vendors will be positioned to finish out the year and going into next year.
Amazon has a pretty mature product line now, but still no direct entry in the premium audio space, a segment it seems willing for now to cede to partners and competitors. Apple is entirely focused on the high end market, with its HomePod priced at $349 and coming in December, while Sonos is trying to find a niche between these two markets with its $200 Sonos One speaker and a neutral approach to voice assistant and music ecosystems. Lastly, we now have Google pursuing a good, better, best strategy like Amazon, but with its best much more focused on premium audio than Amazon’s new Echo Plus, which seems more geared towards smart home support and costs far less.
It’s fascinating to see Google come in above Apple in its pricing for the Google Home Max, at $400, suggesting it’s not going to be dragged down the pricing slide with Amazon but wants to make real margin on its products in the category. Given how much complaining I’ve seen about Apple pricing itself out of the voice speaker market, this new announcement certainly adds an interesting wrinkle. Of course, Google is also providing a cheaper speaker at $50 to compete more directly with the Echo Dot from Amazon, and is smartly focusing there as in its core Google Home product on design which will fit much better (and more subtly) in a home environment. Google should take significantly more share than it did last year with this new range of devices, especially the Mini, and it already took decent share with the first generation products. All in all, this is a great set of announcements from Google that should do pretty well, with the possibility of more to come in the speaker-with-screen segment early next year.
★ Google Announces Pixel 2 Smartphones (Oct 4, 2017)
I’m breaking up Google’s announcements today into several chunks, starting with the Pixel smartphones it revealed here. Much was already known about these new devices, starting with external images and some of the features, but there were some details such as pricing and availability, as well as one or two additional features which were more of a surprise, as well as the marketing and positioning, which is always one of the most important parts of these launches but which doesn’t leak ahead of time. What we got from Google was a pretty confident launch, building on last year’s decent start, and emphasizing even more than last year the software and AI capabilities behind what the phone can do, while de-emphasizing the hardware itself, which got fairly short shrift. That reflects Google’s relative strengths and weaknesses in this space, but it forces it to ignore the big hardware advancements being made in things like dual cameras, 3D depth perception, wireless charging, and so on, which have been themes in other flagship phone launches this year.
Last year’s Pixels suffered from four big challenges: firstly, the phones were competitive but not notably better than other phones on the market in any key ways; secondly, Google’s marketing was handicapped by targeting the iPhone whereas the most likely buyers are existing Android owners; thirdly, devices were in short supply; and lastly, distribution was limited, with just Verizon as a US carrier partner. This year’s phone looks a little stronger relative to the competition, but not enormously so given the big advances from the other major players. From a marketing perspective, we’ll have to wait and see what Google does as the time of launch approaches, but I’m not holding my breath for anything dramatically better or different relative to last year. There was at least one reference to short supply by Google hardware exec Rick Osterloh at today’s event and so I’m guessing it’ll fix that this year. But distribution remains limited to Verizon in the US, which is a baffling choice given how much Google is pouring into this hardware effort – why go to all that fuss and expense in making hardware that three quarters of US smartphone buyers won’t even consider?
All told, I’d expect this year’s phones to sell better than last year’s, but not nearly as much as if they’d launched on all four carriers as they should have. That should leave other premium Android OEMs breathing a big sigh of relief, because it means Pixel 2 won’t even be a consideration for most of their buyers. This marks two straight years of Google making somewhat puzzling strategic choices with regard to the Pixel launch, something I wrote in depth about last year.
YouTube TV Will Advertise During World Series Games (Oct 3, 2017)
Google’s YouTube TV online pay TV streaming service will be a sponsor of this year’s baseball World Series, marking its first big ad push to gain new subscribers. That’s a reflection of the service’s broad reach now that it’s secured rights for local channels and launched in 49 of the 50 largest US markets, covering 2/3 of the US population. But it’s also something of a funny choice given that YouTube still doesn’t have the Turner channels, of which TBS carries the National League playoff games leading up to the World Series, though of course it’s possible that YouTube TV will have added those channels by the time baseball season rolls around again. In general, though, YouTube TV feels like it has very low awareness among cord cutters in general, in part because it has limited its rollout to areas where it can offer local channels, and hasn’t made a ton of noise about launching in new markets. With a big sponsorship like this, that could change, and it could quickly become one of the more popular pay TV streaming services out there, giving existing brands like Sling, DirecTV Now, PlayStation Vue, and others a run for their money.