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Month: August 2011

It’s official: Google wants to own your online identity

 Updated. Ever since Google launched its new Google+ social network, we and others have pointed out that the search giant clearly has more in mind than just providing a nice place for people to share photos of their pets. For one thing, Google needs to tap into the “social signals” that people provide through networks like Facebook so it can improve its search results. But there’s a larger motive as well: as chairman and former CEO Eric Schmidt admitted in an interview in Edinburgh over the weekend, Google is taking a hard line on the real-name issue because it sees Google+ as an “identity service” or platform on which it can build other products.

Schmidt’s comments came during an interview with in response to a question from Andy Carvin, the National Public Radio digital editor who has become a one-man newswire during the Arab Spring revolutions. Carvin asked the Google chairman about the company’s reasoning for pushing its real-name policies on Google+ — a policy that many have criticized (including us) because it excludes potentially valuable viewpoints that might be expressed by political dissidents and others who prefer to remain anonymous. In effect, Schmidt said Google isn’t interested in changing its policies to accommodate those kinds of users: if people want to remain anonymous, he said, then they shouldn’t use Google+.

Google+ is primarily an “identity service”

But it was the former Google CEO’s remarks about the rationale for this policy that were most interesting: He didn’t just say — as Vic Gundotra, the Google executive in charge of the new social network has — that having real names maintains a certain tone of behavior that is more preferable to anonymous forums (an argument that online-community pioneer Derek Powazek has also made). According to Carvin, Schmidt said the reason Google needs users with real names is that the company sees Google+ as the core of an identity platform it is building that can be used for other things:

He (Eric) replied by saying that G+ was build primarily as an identity service, so fundamentally, it depends on people using their real names if they’re going to build future products that leverage that information.

Update: Google provided me with the official transcript of the interview Schmidt gave in Edinburgh (Carvin’s question comes midway through the interview), in which he says:

If you think about it, the Internet would be better if we had an accurate notion that you were a real person as opposed to a dog, or a fake person, or a spammer or what have you… So if we knew that it was a real person, then we could sort of hold them accountable, we could check them, we could give them things, we could you know bill them, you know we could have credit cards and so forth.

As Union Square Ventures partner Fred Wilson noted in a blog post in response to Schmidt’s comments, this is an admission by the company that it wants to be an identity gatekeeper. Others have made similar observations since the launch of Google+. Programmer and online veteran Dave Winer, for example, said when the real-name policy first started to become a hot-button issue that Google’s purpose was clearly to “provide identity in a commerce-ready way. And to give them information about what you do on the Internet, without obfuscation of pseudonyms.” In his blog post, Fred Wilson said:

It begs the question of whom Google built this service for? You or them. And the answer to why you need to use your real name in the service is because they need you to.

Real names are more valuable to advertisers

As I tried to outline in a recent GigaOM Pro research report entitled “How social search is changing the search industry” (subscription required), there’s an obvious search-related rationale for launching a social network like Google+, since indexing and mining that kind of activity can help the company provide better “social search” results. But the real-name issue has more to do with Google’s other business: namely, advertising. Users who are anonymous or pseudonymous are arguably a lot less valuable to advertisers than those who choose to attach their real identities, including their age and gender, location and other demographic details to their accounts.

What kind of services is Schmidt referring to when he says that Google is looking at Google+ as an identity platform that could support other services? Dave Winer thinks that the company wants to effectively become a bank — something he also suspects that Apple and Amazon are interested in as well — and that’s definitely a possibility. Apple and Google both seem interested in NFC technology (near-field communication), which turns mobile devices into electronic wallets, and having a social network tied to an individual user’s identity would come in handy. Ross Dawson says Google wants to build a “reputation engine” using Google+ as a platform.

Update: In the transcript of his interview, Schmidt gives a couple of examples of how Google plans to use the social signals coming from Google+:

[I]f you and I are friends, and — with your permission, this is very important — we can have slightly better search results if I know a little bit about who you are. What about YouTube recommendations? We have this Leanback model where we suggest YouTube videos that you should just watch one after the other. Well if I know the ones that you like, and again with your permission, I can merge that as a signal in, and get a better result.

Whatever its specific interests are, Google clearly sees Facebook as a competitive threat not just because it has developed a gigantic social network with hundreds of millions of devoted users, but also because it has become a kind of identity gatekeeper — with tens of millions of those devoted users happily logging into other websites and services with their Facebook credentials, thus sending Facebook valuable data about what they are doing and where they are doing it. And the ubiquitous “like” button provides even more data, something Google is also trying to mimic with its +1 buttons.

Google needs a horse in the identity race

The bottom line is that Google needs to have a horse in this identity race, and it has been unable to create one so far. The growth of Google+ provides a reason for people to create Google profiles, and that data — along with their activity on the network and through +1 buttons — goes into the vast Google cyberplex where it can be crunched and indexed and codified in a hundred different ways. And the more people who decide to do it, the better it gets, both for Google and for its advertising strategy. As the saying goes, if you’re not paying for it, then you’re the product being sold.

That’s the obvious background to the real-name issue, something Eric Schmidt has effectively confirmed with his remarks in Edinburgh. Whether users like the position that puts them in remains to be seen.

Post By Mathew Ingram and thumbnail photos courtesy of Flickr user Kat B Photography

Valuation Marketing : Part 1

Over the next 5 weeks, Ingrid Reid Andrews, Brand Future’s Positioning Specialist, will present extracts from different articles that may assist in understanding how to build brand equity online.

Originally published 10 years ago, there is still a fundamental message for marketers especially within the context of a struggling global economy where inflated valuations are perceived as the root cause of financial collapse.

Part 1:

Driving brand equity and share performance through an online presence

In today’s economy, this has to be about valuation with marketers being the key drivers of brand equity and share performance.

However, just getting people to visit your web site is not enough.

About 10 years ago, specifically in the USA, a double reality in business was identified where two economies seem to exist side by side, competing for market share and capital.

At one end, a slower, reliable, bottom-line economy, was represented by more established “bricks-and-mortar” companies, evaluated according to profits. These companies were perceived as the more traditional measure of performance.

At the other end, a flourishing top-line economy, with mostly unprofitable internet-based companies soaring to astounding valuations based on criteria such as site traffic, revenue and market share.

Hardly into 2000, that double reality was already coming to an end: bottom-line and top-line economies had grown together into a top-to-bottom economy.

The message to the bottom-line companies was “get virtual or die” and to the top-line companies, the message was: we are valuing you so highly because of your profit potential and there was no better symbol of this trend than the merger of America Online and Time Warner, each of them, a giant in their own corner of the business world.

Some believe the rule-book for the top-to-bottom economy remains unfinished, but in the meantime the game is all about valuation.

Rather than profit being the bottom-line, the idea is to increase the valuation before executing an exit strategy: by selling to another company or to the public via the IPO (Initial Public Offering) route.

In the final analysis, valuation is all about the return on investment.

A decade ago, many of the investments never produced a true return in the marketplace, which made the top-line economy seem like a pyramid scheme relying on faith, where, similar to the pre-1929 stock market, in the event of a run on the block, it becomes worthless.

Though thanks to the World Wide Web, the economy is influenced more directly by customers and prospects than ever before.

Today, exploration of the internet’s commercial potential is infinite. The top-line economy’s potential-oriented standards, such as revenue and market-share growth, site visits and return visits, have for many companies, evolved into stable criteria for measuring financial potential.

If the thought hasn’t already crossed your mind, these financial metrics are driven by marketing – a fact that has the potential to revolutionise the discipline.

In the top-to-bottom economy, marketing moves front and centre. It used to be a means to a means (revenue) to an end (profit). Now it’s the means to an end (the top-line metrics).
The good news is: no marketer need lose sleep about not being taken seriously enough.

The bad news is: marketers will lose sleep because their performance will be taken seriously – dead seriously – by investors.

Next week – Part 2 : Establishing and Building Market share