Google news

There have been a couple of items related to Google lately that caught my attention (I have posted on some of Google's (apparent) strategic intentions before, if you search this blog).

The first thing is this item, which purports to reveal Google's "wireless plans". According to the Wall Street Journal:

Within the next two weeks, Google is expected to announce advanced software and services that would allow handset makers to bring Google-powered phones to market by the middle of next year, people familiar with the situation say. In recent months Google has approached several U.S. and foreign handset manufacturers about the idea of building phones tailored to Google software, with Taiwan's HTC Corp. and South Korea's LG Electronics Inc. mentioned in the industry as potential contenders. Google is also seeking partnerships with wireless operators. In the U.S., it has the most traction with Deutsche Telekom AG's T-Mobile USA, while in Europe it is pursuing relationships with France Télécom's Orange SA and Hutchison Whampoa Ltd.'s 3 U.K., people familiar with the matter say. A Google spokeswoman declined to comment.

The Google-powered phones are expected to wrap together several Google applications -- among them, its search engine, Google Maps, YouTube and Gmail email -- that have already made their way onto some mobile devices. The most radical element of the plan, though, is Google's push to make the phones' software "open" right down to the operating system, the layer that controls applications and interacts with the hardware. That means independent software developers would get access to the tools they need to build additional phone features.

Developers could, for instance, more easily create services that take advantage of users' Global Positioning System location, contact lists and Web-browsing habits. They also would be able to interact with Google Maps and other Google applications. The idea is that a range of new social networking, mapping and other services would emerge, just as they have on the open, mostly unfettered Web. Google, meanwhile, could gather user data to show targeted ads to cellphone users.

-----snip----

Google helped push through controversial rules for a coming spectrum auction at the Federal Communications Commission that would result in a new cellular network open to all devices and software applications, even those not favored by an operator. Google has said it will probably bid for the frequencies.

For now, the company knows it has no choice but to work with operators to make its open platform successful. D.P. Venkatesh, CEO of mPortal Inc., which makes software for wireless operators, puts it this way: "There are a few things carriers control that will always keep them in charge at the end of the day."

But broader (and deeper) thoughts come from Robert Cringley and Nicholas Carr. In his recent article, Cringley writes:

Here is what's significant about Google putting code into MySQL: they haven't done it before. Google has been a MySQL user from almost the very beginning, customizing the database in myriad ways to support Google's widely dispersed architecture with hundreds of thousands of servers. Google has felt no need previously to contribute code to MySQL. So what changed? While Google has long been able to mess with the MySQL code in ITS machines, it hasn't been able to mess with the code in YOUR machine and now it wants to do exactly that. The reason it will take so long to roll out MySQL 6.1 is that Google will only deliver its MySQL extensions for Linux, leaving MySQL AB the job of porting that code to the 15 other operating systems they support. That's what will take until early 2009.

Then what? I think the best clue comes from the agreement Google recently signed with IBM to co-promote cloud computing in universities.

Cloud computing is, of course, the ability to spread an application across one or many networked CPUs. You can think of it as renting computer power or having the ability to infinitely scale a local application without buying new hardware. Cloud computing can be anything from putting your entire business on other people's computers to running a huge Photoshop job from the lobby computer at Embassy Suites before jumping on the shuttle bus to Disney World with your kids. For all its promise, though, cloud computing has been pretty much a commercial failure so far.

-------snip----------

But Google wants us to embrace not just cloud computing but Google's version of cloud computing, the hooks for which will be in every modern operating system by mid-2009, spread not by Google but by a trusted open source vendor, MySQL AB.

Mid-2009 will also see the culmination of Google's huge server build-out. The company is building data centers large and small around the world and populating them with what will ultimately be millions of generic servers. THAT's when things will get really interesting. Imagine a much more user-friendly version of Amazon's EC2 and S3 services, only spread across 10 or more times as many machines. And as with all its services, Google will offer free versions at the bottom for consumers and paid, but still cost-effective versions nearer the top for businesses and education.

If you are completely OK with this and are looking forward to this environment -- and there is much to look forward to -- you might read and consider Nicholas Carr's allegory (that is in the spirit of Halloween), which is difficult to summarize here.

Thoughts on Google and business strategy

I succumb to the temptation to write about Google from time to time (why? search me... ha ha). This article was prompted by this item by Nicholas Carr and this one by Om Malik. Both of these analyses are focussed on strategy rather than technology.

In his analysis, Malik writes:

By squeezing the supply chain as hard as he could, he turned Dell into a fearsome (and loathsome) competitor. With his help, the supply chain for the PC era came to consist of foundries, ships, U.S. assembly plants and UPS trucks. Google (GOOG), with over $200 billion in market capitalization, is following a similar strategy, fine tuning and adapting it for the Web & broadband.

Instead of trucks and assembly plants, however, Google’s supply chain is made up of fiber networks, data centers, switches, servers and storage devices. From that perspective, its business model is no different than that of Dell’s (DELL): Google has to deliver search results (information, if you want to be generous about their other projects) as fast as possible at as low a cost as possible.

To better understand Google and its business model, one needs to break it down into three data inputs.

• Relevancy of results.
  


• Speed of search.
  


• Cost of executing a search query.
  

Malik goes on to argue that these foci are the driving force behind Google's efforts to build their own switches, data centers, etc. Indeed, Carr refers to this as Google's third innovation: "Google’s third great innovation — and it may well be the one most critical to the firm’s future success — is the design of its parallel-processing computer system." However, Carr notes that:

The way Google makes money is actually straightforward: It brokers and publishes advertisements through digital media. More than 99 percent of its sales have come from the fees it charges advertisers for using its network to get their messages out on the Internet.

This is useful because profit is, in the end, the difference between revenues and costs. I don't think that Google's efforts to build a switch can be explained in terms of cost alone, because the market provides switches at competitive costs. Instead, following Carr, I can only rationalize this effort as one that gives Google a special leverage in the way that it is able to improve its revenues. Going back to Carr:

Any understanding of Google as a business has to begin, I'm convinced, in the idea of complementary goods. In The Google Enigma, an article in the new issue of Strategy & Business, I argue that the wide scope of Google's interest and activity is a natural and inevitable result of the fact that everything that happens on the internet is complementary to the company's core business.

Thoughts on the G-Phone

Google's much anticipated wireless strategy was finally publicly revealed this week, after much speculation and anticipation. Google's approach was inspired by Tim Wu's "Wireless Carterfone" proposal (which I have blogged about earlier). Unlike Apple's iPhone, Google is proposing an open software platform (Android) that is open and will run on a variety of hardware. The platform, which is based on the Linux kernel, will be developed and maintained by the Open Handset Alliance. According to OHA:

Android does not differentiate between the phone's core applications and third-party applications. They can all be built to have equal access to a phone's capabilities providing users with a broad spectrum of applications and services. With devices built on the Android Platform, users will be able to fully tailor the phone to their interests. They can swap out the phone's homescreen, the style of the dialer, or any of the applications. They can even instruct their phones to use their favorite photo viewing application to handle the viewing of all photos.

It is interesting to note that the carriers Sprint and T-mobile were quick to endorse this initiative. They are, after all, the smallest of the "big four" in the US. Is this an attempt to ride on Google's coat-tails (following the boost that AT&T's earnings had after their exclusive deal with the iPhone)?

The responses of industry analysts have been mixed:

• Om Malik wrote "This is one massive PR move, with nothing to show for it right now, and it seems like there are other unknown reasons (Facebook ad platform launch perhaps) for the motivation here. No phones till second half of 2008 — in our ADD culture that is a lifetime."
• Kent German wonders if T-Mobile and Sprint will hue to the spirit of openness once the phone ships.
• Scott Anthony concluded that this is not a disruptive innovation. He writes that "[c]arriers have already placed big bets in the anticipation of earning service revenues from advertising and other future applications, which appears to be Google's plan as well."


• According to this item, ""I have yet to be convinced that Google's mobile strategy will create a big dent in the industry," said RBC Capital Markets analyst Jordan Rohan, who added that Yahoo appears right to focus on distribution deals of its services instead."
  

It seems that Android is a platform that will compete in substantial ways with Microsoft Windows Mobile, Symbian, PalmOS, and the Blackberry operating platforms. So why would developers and phone manufacturers be interested? According to this article:

• "Unlike with other mobile-platform providers, developers working with Android pay no licensing or other fees. They also will be able to sell their applications through a Google-created online marketplace without sharing revenues with the search giant. Google will make money on the ads served through the phone's browser, according to Google."
• "By not having to pay licensing fees to Symbian or Microsoft, cell-phone companies will save about 10% of their costs, according to Google."

What about carriers?

• How will it help carriers be more profitable in a business that is rapidly commoditizing?
• Large carriers like Vodafone have already made it clear that they want to reduce the number of operating platforms that they support so that they can roll out applications and services more quickly. Does Android help them? Will this affect the other platforms?

Update (2007-11-13): This item contains some videos that show prototypes of a phone running Android.

How open is open source Android?

I have found the Android project to be interesting to follow. There have clearly been some successes in using open source for product development (Linux, obviously but also Apache). The success of open source seems to be a bit uneven; for example, I am not aware of a huge development community around Solaris, which was open-sourced by Sun. So when Google launched Android as an open source development project, I was most interested, especially given Google's market clout and user following.

So this item really caught me by surprise. I especially found this paragraph interesting (and a bit counter-stereotypical):

Google, however, appears to be significantly less permissive on this front than Microsoft. The company's legal department objects to the Cyanogen mod on the basis of its inclusion of Google's proprietary software. They sent Kondik a cease and desist order compelling him to remove the mod from his Web site. The Android enthusiast community has responded fiercely, condemning Google for taking a heavy-handed approach. Even Google's own Android team appears to be frustrated with the legal department's zeal.

I fully expect that some bright and committed programmers will find a work-around. The whole reason for the mod, of course, is that Google's ROM doesn't work as well. Isn't that how open source is supposed to go? Has Google discovered the hazard of this approach? I wonder if they'll encounter similar problems when Chrome OS goes open source?

Android and standards sponsorship

The story of Google's "sponsorship" of Android has been making the rounds on various mobile phone and gadget websites in the past days. This story appears to be the source. The essence of the story is this:

In just 18 months, the number of Google (NSDQ: GOOG) Android phones being shipped has soared to 60,000 a day, and over that period countless new devices have been released by handset makers for sale by carriers worldwide.

Nothing typically moves this fast in wireless. So how has Google done it?

Well, at least part of the answer appears to be that Google is sharing advertising revenues with carriers that use Android, according to multiple sources who are familiar with the deals. In some cases, sources said, Google is also cutting deals with the handset makers. The revenue-sharing agreements only occur when the handsets come with Google applications, like search, maps and gmail, since that is not a requirement of Android. Google declined to comment, and said terms of its agreements with partners are confidential.

When researchers began studying standards in the 1985-1995 timeframe (see, for example papers by me, Joe Farrell, Garth Saloner, Michael Katz, Carl Shapiro, Marvin Sirbu, Michael Spring and others), we focussed on understanding the market dynamics of standards wars -- why did one standard dominate the market? How did markets prone to standardization behave? Why do firms use the committee process and what is effective in this process?

Mobile phone operating systems for smart phones arguably represent a market prone to standardizations because of the application ecosystem demanded by users and because of the operating efficiencies demanded by carriers. So, why is Android succeeding where WebOS is struggling? One of the significant answers to this question is sponsorship. The endorsement of key handset manufacturers would encourage carriers to adopt the handsets because of operating efficiencies; however, that is perhaps a weaker form of sponsorship. Google's more overt sponsorship is far more compelling because it results in direct revenues for carriers and would account for the more enthusiastic reception of Android. In contrast, Palm has arguably a superior operating system in WebOS (also Linux-based) but does not have the resources to credibly sponsor its OS. As a result, its system and phones have received an embrace by carriers that is far more lukewarm than Android; indeed, it is perhaps only because of its compelling OS that Palm is getting any interest at all! Its Treo Pro phone, based on Windows Mobile, was treated with much less interest than its WebOS phones.

It is nice when reality lines up with theory!

Google and others to build submarine cable

I found this item interesting, in light of the ongoing posts on submarine cables and in light of Google's emerging business model. Quoting the article:

Google and the five telecoms companies said in joint statement that the 10,000 km (6,200 mile) undersea fiber optic cable, connecting the United States to Japan, will cost $300 million.

Google's partners in the consortium, dubbed Unity, comprises Bharti Airtel, Global Transit, KDDI Corp, Pacnet, and Singapore Telecommunications.

The cable will provide much-needed capacity to sustain unprecedented growth in data and Internet traffic between Asia and the United States.

The consortium said it has picked NEC Corporation and Tyco Telecommunications to construct and install the system, which is expected to be ready for service in the first quarter of 2010.

The cost per kilometer of this cable is approximately US$30,000.

What is also interesting to me is that it continues to mark Google's engagement in carriage. Do you view this as a long term contract to assure supply (like one might do in a futures market)? This, by the way, is what Google implied in this statement. Or, do you view this as a part of a continuing effort at Google to build an integrated information utility?

700 MHz auctions, Google and more

There has been a bit of talk over the past months on Google's wireless ambitions. Certainly, Android is a part of it, but the speculation has also centered on Google's ambitions to be a wireless operator. To that end, this item over at GigaOm was the most insightful analysis that I have yet read. Om Malik concludes that it is unlikely that Google will become a wireless operator, and is instead using the upcoming 700 MHz auction to beat current carriers up over their network policies.

To that end, the NY Times is anticipating higher auction returns in this article because of the WRC agreement that was just concluded. I really doubt it, because there is no tangible value that the WRC reallocation added for US carriers.

Finally, I found this item, also from GigaOm intriguing. If Google is indeed making its own 10 Gbps switches, it seems as though we may be witnessing the re-incarnation of the vertically integrated Bell System (albeit without the market power). Interesting how times change ... I think there is little doubt that the Bell System benefitted from having a captive R&D and manufacturing capability. Is Google discovering that as well?

Update (2007-11-20): You might find this item interesting. Do you think Google should pay attention to analysts?

Google and the spectrum auctions

I found this article in Forbes interesting. Quoting the article:

A Google win could also spark a hiring spree in the mobile sector. The company has zero experience building and operating a network, and would need to bring on folks who do.

Investments in wireless technologies could rise as well. "You'll see a flood of investment capital come back to the wireless market," Ellison says. "The mobile operators are a barrier to innovation. They move really, really slowly."

[snip]

Still, analysts say there are good reasons for Google not to win. The costs involved in acquiring the spectrum, and building and operating a wireless network, are sky-high. The starting bid for the spectrum is $4.6 billion, and analysts predict it will sell for more than that. All told, the entire cost of a new network could reach $15 billion--and take a few years to build.

Plus, profit margins for wireless service are extremely low. "As a Google shareholder, you'd have to question a wireless network, which doesn't have the same margins as [online] advertising," says Forrester Research analyst Charles Golvin.

Mathias speculated that Google can lose and still win. For instance, the company might drive up the spectrum price and then drop out of the auction. Another company could win it and possibly take on enormous debt, which could give Google great bargaining power later on. "This is a game; make no mistake," Mathias say. "There are all kinds [of ways] of getting what you want without winning anything and spending money."

Google and DNS

I found this commentary on Google's entry into the DNS domain the most worthwhile (from this article in the NY Times):

“You have to remember they are also the largest advertising and redirection company on the Internet. To think that Google’s DNS service is for the benefit of the Internet would be naïve,” Mr. Ulevitch wrote. “They know there is value in controlling more of your Internet experience and I would expect them to explore that fully.”

In an interview, Mr. Ulevitch said OpenDNS was steering customers who mistyped addresses to Yahoo search results and ads. “I have no doubt they see that as a competitive threat,” he said. He also stressed that there is valuable information in the DNS layer — like where servers are located, what Web sites people are looking at and how frequently they are looking at them. “I have no doubt they will be monetizing this by increasing intelligence on people’s surfing habits,” he said.

Ulevitch runs the "Open DNS", which has provided this service for some time. He differentiates Google DNS from Open DNS here; you should bear in mind that Google is offering him competition. Finally, I think it is important to remember, as Ulevitch does here, that Google is a profit-making organization.

Lock-in and smart phones

This item over at Ars Technica is interesting. The article itself is an analysis of Palm's WebOS and why it failed to attain economic success. While many articles have been written about this (and even though the reports of Palm's death may be premature), I found this section of the article most interesting:

In at least one way, Palm's webOS was a victim of its own success. I ultimately found that the Pre's thoroughgoing cloud orientation, which I made a big deal about in my review of the device, meant that there was nothing tying me to Palm. And unfortunately for Palm, the Pre had to compete with client platforms from companies that also provided important cloud services, with the result that those providers could privilege their own clients and thereby gain a certain amount of vendor lock-in.

Three examples serve to illustrate my point that it was too easy to leave Palm, and that Palm's decision to be solely a client platform put it at a permanent, structural disadvantage against competition that offered both clients and services.

Back in January of this year, after unboxing my new, Google-provided Nexus One, I logged into a few accounts (Google, Facebook, Twitter, Evernote, Amazon) and voila—I had all my data on this new phone, along with my existing phone number (courtesy of Google Voice). Think about that for a moment: I ported all of my data and my phone number to a new phone on a new carrier, without so much as swapping a SIM card or calling a customer service number. And every cloud service that I used on Pre was immediately available on the Nexus One.

So it was that on the day that I got the Nexus One, I dropped my Pre in a drawer and didn't turn it on again for two months, all without missing a single message.

Leaving the iPhone was a lot harder, because—and this is my second example—I was in the habit of syncing my music with iTunes. iTunes syncing was the main way that Apple got its hooks into me, and everyone who followed the Apple vs. Palm battle over iTunes and Pre sync support knows that Apple guarded that key source of lock-in jealously.

....

In the end, Palm's fundamental problem wasn't the lack of reliable, first-party Google Voice or iTunes support, but the fact that Palm itself never offered a similarly essential service that it could use to lock users into the Pre. Google had Voice, Apple had iTunes, and Palm had nothing. The Pre didn't have first-party support for anything that I depended on or enjoyed, so it had no hold on me at all.

By not having any way at all to lock the user into webOS, Palm ended up betting the farm on the proposition that the Pre could and would deliver an overwhelmingly superior mobile client experience for a common slate of cross-platform cloud services. In other words, because Palm doesn't own any part of a user's data or identity, the user experience is the only thing that could tie a user to webOS.

There is economic research that supports the notion that lock-in is good and desirable for companies; in fact, companies work hard to achieve lock-in to avoid being commoditized. So, as we migrate to cloud-based services, how do firms and carriers create compelling lock-in for consumers? Is this a good thing for consumers?

One of the interesting things for me is that Google, with its Nexus One and Android experience, is trying to drive the value to the cloud through a device that works hard to NOT provide lock-in (i.e., contractual or standards), while Apple is trying to create as much lock-in as possible. This is no surprise, given their rather substantially different business models.

More on GoogleNet ...

So the "stealth" GoogleNet appears to be taking form ... see this post. I was intrigued by the notion of letting the "buzz" do the marketing for them.


ZD Net noted the following:

"Maybe Google Ads, tied to mobile presence?

"Say they know you are in NYC's Bryant Park. Bryant Park is right next to the main branch of the New York Public Library. That's a place frequented by lots of educated readers, computer users, researchers - and hmm, Google users, too.

"OK, let's think about it some more. Maybe if I am a Google salesperson in the NYC office, I visit nearby merchants and sell them Google AdWords?

"Google AdWords or Google AdSense tied to mobile presence? Definitely.

Google WiFi service?

There have been a few stories around lately about Google's entry into computer networking, starting with a report in Business 2.0 in addition to this Reuters article from today. The Business 2.0 article claims that Google could save money by avoiding transit fees it incurs from interconnecting with Internet backbone providers.

I am doubtful about this claim, because backbone providers are willing to peer with others only when traffic flow is symmetric. Going to a separate network, as these articles suggest, would enable Google to bypass backbone providers entirely for at least a portion of thie search. Is this a reasonable strategy? Is this a way for Google to leverage network economics to its advantage? Would Google be able to offer new services? Is this effectively a replay of the Western Union/AP deal of the 1860s?

Apple, Google, AT&T and Verizon

This article over at Seeking Alpha is interesting. It describes the "small numbers bargaining problem" in telecom. Quoting the article:

Verizon has already shown resistance to putting the Apple iPhone on its platform for fear that it will use tremendous amounts of data without sharing any of the third party application profits with the carrier. Now VZ is beginning to play games with Google saying that they won’t pick up the Nexus One, planned to be released spring of 2010. Google loses access to the carrier’s more than 90 million users, and seems to have stumbled for the time being in becoming a major player in the mobile handset market.

AT&T has not picked up the phone either. But AT&T has more problems than just Google, they are trapped in a mutually hated relationship with Apple now, where neither party can get rid of the other. It really is the marriage from hell. Apple doesn’t have another carrier, and AT&T can’t throw Apple off for fear that its massive amount of iPhone users will defect from its completely inferior network. So AT&T is trapped having to provide Apple with more and more bandwidth, towers and other infrastructure, as the public and media scream at AT&T to get their network up to Verizon’s standards, not to even mention how well Sprint (S) works. AT&T is for sure frustrated that they have to make these capital expenditures and see no increased profit from them, it’s like bailing out the water from a ship with a 20 foot hole in the bottom. You’re just spending energy trying to stay afloat.

Something has to give here, this can’t go on forever, and I think we are soon to see a resolution to the issue of the telecom giants paying for the network on which Apple and Google make tremendous amounts of money. Maybe the telecoms chose the nuclear option and just stop building their networks holding Apple’s feet to the fire. Steve Jobs can’t revolutionize the content distribution market without a network to do it on, and believe me, the stuff that he wants to do is going to take a lot more bandwidth than is available today. Do we really think the carriers are going to pay for that to happen? Maybe Apple will buy a carrier, or perhaps even build its own network with a next generation technology they have been developing.

I wonder to what extent the independent LTE network proposed by Harbinger (see this) will be the event that shakes things up? In many ways, the situation described above seems to be an analog of the drama being played out over network neutrality in that we have infrastructure investments required for applications that are not easily monetized by the infrastructure owners.

Google in BW (off topic)

I have written about Google from time to time on this blog (see, for example, this item). In light of that, this article caught my eye. Is this an expected outcome of commercial success? Google, as an "underdog" and a "dark horse" was long the public favorite. Is this changing because of America's bias toward underdogs (that Google no longer is)?

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More on Google (less off-topic)

Recently, I posted a piece speculating on Google's future plans. This post featured a reference to an article by Robert Cringley. Cringley has now posted this article in which he further speculates on Google's plans (in addition to correcting some errors in his previous piece). Om Malik adds weight to Cringley's speculations in this posting on his blog.

So how does this frame Google's competition (and competitive position)? Does Microsoft's investment in the Xbox make more sense in this context? Who else might have an interest in competing here? What about Whitacre and his recent comments? What kind of future do you think is emerging, based on these (and other) speculations and analyses?

And then there is this ....

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Google as a telecom carrier

This item is most interesting, and adds weight to some speculation I blogged about earlier (see this, for example). If this happens as reported, Google begins becoming both a service provider and a transport provider. If Google does bid on (and win) spectrum in the upcoming auction, they have the ability to move further in this direction.

How does this play in the structural separation model?

Update (2007-09-24): Nicholas Carr posted this item on his blog, which raises some interesting questions, not so much for Google, but for the kinds of industry trends posited by John Hagel and others.

Google, Android, maps and more

I have been interested in Google's approach to business and, like others, have been a bit wary about it as well (See this search of this blog for more).  Thus, this item resonated with me, especially in combination with this item from the Washington Post (please be sure to read this follow-on from Tech Crunch in the spirit of completeness). This article over in BusinessWeek is another piece of the puzzle, I think, considering that gaming is a major profit business.

It seems clear that Google is building a platform and ecosystem. It is a for-profit corporation, so the question is not if but how this platform will be monetized, how it will compete with other platforms (Apple-centric and Microsoft-centric), and how switching costs will be imposed to deter defections from the platform. Google's interest in certain intellectual property around Android provides some evidence of this. Will monetization come from advertising revenues? Or will we see a series of user fees that will emerge after users are invested in the platform?

The questions matter because our government has historically gotten interested in platform competition and how it relates to control. These questions will be at the core of future anti-monopoly policy, I believe.

YouTube and IPv6

This article over at Network World is interesting. Quoting the article:

IPv6 traffic came into ISPs from all over the world when Google turned up its IPv6 traffic on YouTube," Levy says. "IPv6 is being supported at many different Google data centers. We're talking about a traffic spike that is 30-to-1 type ratios. In other words, 30 times more IPv6 traffic is coming out of Google's data centers than before.

That is some spike! It will be interesting to see if this applications (along with the other IPv6-enabled Google services) will be enough to build momentum for a large scale conversion to IPv6. This is a classic case of standards transition; it will be interesting to observe the dynamics.

Verizon and content control

This article in today's NY Times illustrates the deeper linkage between content and carriage that is occurring in today's networks. This is a feature of walled gardens of any sort ... here Verizon chooses to control content and elsewhere Apple chooses to control applications on the iPhone.

What do I think?

• Verizon is on a slippery slope, just as the FCC was under its "fairness doctrine". I am guessing that they will reverse this policy once they realize this.
  
• This issue will become the "poster child" for the network neutrality folks, even if Verizon ends up reversing its decision.
  
• Verizon, whose opposition to network neutrality is on record, made a really boneheaded decision in what is basically a political issue.
  

Do you think that this is a harbinger of things to come? I build an equivalence between Apple and Verizon ... is this appropriate? If not, what are the differences that are notable?

UPDATE 2007-09-27: On they Cybertelecom Mailing List, Sean Donelan had this to say, which I think adds a bit of nuance:

he article [sic] briefly mentions, but doesn't really explain the difference between standard user-to-user SMS texting and SMS short code campaigns.

For whatever historical reasons, subscribers seem to view user-to-user SMS texting as the wireless company acting as a "common carrier" but subscribers seem to view SMS short code compaigns as the wireless company acting as the "information service" responsible for those messages even those created by third-parties.

Members of the Klu Klux Klan buy wireless phone service and send standard SMS messages to each other; but none of the wireless phone companies will operate SMS short code campaigns on behalf of the Klu Klux Klan.

For example, consider this link to Google's content policy for Google Adwords, which is different than the content policy for Google's basic search index. https://adwords.google.com/select/contentpolicy.html

Here is a link to several SMS carrier policies for SMS short code campaigns, as opposed to standard user-to-user SMS.
http://www.emexus.com/Corp/media/downloads/20060424125933_Emexus%20Carrier%20Requirements%20FAQ.pdf

Update (2007-09-27): According to this article, Verizon reversed its policy (as I expected they would). Still, from their perspective, I believe that the damage is already done.

Google, Microsoft and the smart grid

I have been wondering why Google and Microsoft have been working hard to enter the "smart grid" market. This article over at Seeking Alpha provides the best explanation I have seen so far:

Google, Microsoft (MSFT), Intel (INTC) and others have all launched efforts to control how consumers and businesses monitor and analyze their energy consumption. Why the rush? Neither Google nor Microsoft will charge consumers for PowerMeter or Hohm. However, advertisers will likely pay both companies for the opportunity to hawk energy efficiency services and other energy-related products to consumers who use their respective consoles. Both companies will also mine the data (after it has been scrubbed to protect privacy) to utilities. Don't worry about a loss of dignity or privacy: you'll get a coupon for ten percent off on a new set of storm windows.