Google’s already tipped

WSJ.com – Article:

Speaking at an investor conference hosted by Credit Suisse First Boston, Google Chief Financial Officer George Reyes said the company’s aggressive hiring efforts are, in part, designed to increase Google’s size as it prepares to face off with a larger, wealthier rival – presumably a reference to Microsoft.

“Our objective is to get to substantial scale as quickly as possible,” Reyes said, because that lets you “brace yourself to compete with anybody, within reason.”

Reyes also said that Google’s September secondary offering of stock was mainly designed to build “a defensive war chest” against competitors.

This is an admission that Google sees only its own risks in the road ahead, as it is all defensive strategy and added costs that define the company’s strategy.

John Battelle, who has studied Google as deeply as anyone, had this say earlier today in Thinking About Google and The Turning Point:

In seven short years, Google has gone from a geeky startup with one good idea into an agenda-shaping player responsible for navigating complex relationships with world governments, the personal privacy of millions, major trade organizations, and hundreds of thousands of businesses small and large. It’s an extraordinary weight to bear, it seems to me. It’s the kind of position that requires a balanced mixture of leadership, will, and diplomacy. There’s very little room for the go-it-alone mentality which got the company to where it stands today. Can the company shift its culture and avoid the fate which ultimately hobbled Microsoft? That, more than anything else, will define the next chapter in the company’s fascinating story.

And Fred Wilson adds in his posting about John’s Google comments in The “Worm Turning” Moment:

John says the “worm turning” moment is “when the world realizes that the company is *too powerful* and its ambitions are *too great.*”

If that is the definition, then we’ve clearly reached that moment, maybe as long ago as last year.

I, too, have been saying Google’s over-reaching and broad-ranging product offerings of recent months, combined with its belief that adding searchability to any content is sufficient to justify extensive changes in other firms’ business models, is ample evidence that the company has decided to go its own way, come Hell or high water. Microsoft isn’t the only model for such hubris, as many companies have believed their early growth established a right to manifest destiny; Microsoft is one of the few that have survived that decision.

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News is growing laterally

Dispelling the Myth of Readership Decline:

The industry has touted the notion of readership — a metric that takes into account how many people read the paper whether they buy it or not — for years, but has often taken halfhearted steps toward giving it true legitimacy.

Then there’s the confounding, if promising, online angle. If you count Web traffic, newspapers are actually more popular than ever.

More thoughtful confirmation of the point I’ve been making: The crisis is not in the business of publishing, but in the resistance of the publishing industry to changing delivery mechanisms. Then, there’s the potential in bringing new contributors into the news gathering and production process.

Folks like to talk crisis, because it is good business to declare change is afoot. The reality is that there is nothing but opportunity in change.

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Some will….

‘Podcasting riches’:

Unfortunate, because successful podcasts will not come from those with dollar signs popping up in front of their eyes.

It would be unfortunate if podcasters only assume success will come pursuit of wealth, but J.D.’s categorical statement is incorrect. Some podcasters will become stars and earn their living—even very good livings—from their work. The lure of success can spur dedication, too.

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Another corrupt Republican bites the dust

Rep. Randy ‘Duke’ Cunningham to Plead Guilty to Tax Violations – Los Angeles Times:

Rep. Randy “Duke” Cunningham will plead guilty today to tax evasion in a political corruption case, according to a source close the investigation.

The veteran Republican from a conservative north San Diego County district called close supporters last night to tell them of his decision.

“It’s over. I can’t fight anymore,” Cunningham was quoted as saying. Cunningham sold his home to a defense contractor at an inflated price, sparking a wide-ranging federal corruption investigation. The eight-term congressman announced earlier this fall that he would not seek reelection next year, setting off a scramble among would-be successors.

This is the kind of tragic corruption that comes when one party becomes over-bearing in its exercise of power. Cunningham seems to have taken an inflated price for his home from the owner of defense contractor MZM Inc. in exchange for political favors (the contractor sold the house in less than a year for a $700,000 loss—in this over-heated market!), but will only be hit with tax evasion charges. Real Al Capone stuff, which is the logical result of turning Washington into an influence yard sale.

The committee Cunningham chairs, the House Intelligence Subcommittee on Human Intelligence and Counterintelligence, was directly responsible for the type of work the contractor has received more than $163 million in federal funds since 2002 to perform (here’s the link to the DOD archives, which are unsearchable). The company has also hired members of the family of the director of DOD facilities it serves, another smarmy corruption. Here’s who the company’s PAC supports: Senator Ben Nighthorse Campbell (R.—Colorado); Cunningham; Rep. Randy Forbes (R—Virginia); Rep. Virgil Goode (R-Virginia); Rep. Katherine Harris (R-Florida); Rep. Duncan Hunter (R—California); Rep. Richard Renzi (R—Arizona).

Anyhow, Cunningham, who was one of the Congressmen who urged the First Bush to smear Bill Clinton with the communism brush because of his college-era exchange trip to Russia, further besmirches the honor of public service. This after a career as one of the most-decorated airmen in Vietnam, certainly the highest order of valor and integrity. How the mighty fall, eh? Unbridled payola is what you get when one party takes and holds power at any cost.

UPDATE: Cunningham’s letter of resignation, which Daily Kos calls “quite classy” begins:

I am resigning from the House of Representatives because I’ve compromised the trust of my constituents.

It is an abject admission of guilt, does not beggar forgiveness and is contrite. All criminal pols should be so straightforward, but most won’t be.

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Your house isn’t a credit card anymore

FT.com US housing market shows signs of cooling:

The US housing market showed signs of cooling as sales of existing homes eased last month, according to the National Association of Realtors.

The NAR said there was a “moderate decline” in both single-family and condo sales.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – were at a seasonally adjusted annual rate of 7.09m units in October, down 2.7 per cent from September’s 7.29m. Sales were 3.7 per cent above the 6.84m-unit level in October 2004.


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Own a home? Settle in, because the gains you’re used to are going to return to the historical norm.

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A twelfth rule

evhead: Ten Rules for Web Startups:

#11 (bonus!): Be WaryOvergeneralized lists of business “rules” are not to be taken too literally. There are exceptions to everything.

Evan Williams has a list of ten rules for startups, all of which are thoughtful and accurate. From being small and focused to humane, the startup is a remarkable opportunity to make something new, not just a product or service, but also a way of life for a group of people—including your investors.

I’d add one more rule, regarding financing:

Ratcliffe’s Financing Rule-of-Thumb: Spend more than you think you’ll need to and less than you want.

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What conservatives fear is change itself

Age of Anxiety – New York Times: Paul Krugman writes:

We like to think of ourselves as rugged individualists, not like those coddled Europeans with their oversized welfare states. But as Jacob Hacker of Yale points out in his book “The Divided Welfare State,” if you add in corporate spending on health care and pensions – spending that is both regulated by the government and subsidized by tax breaks – we actually have a welfare state that’s about as large relative to our economy as those of other advanced countries.

The resulting system is imperfect: those who don’t work for companies with good benefits are, in effect, second-class citizens. Still, the system more or less worked for several decades after World War II.

Now, however, deals are being broken and the system is failing. Remember, Delphi was once part of General Motors, and its workers thought they were totally secure.

What went wrong? An important part of the answer is that America’s semi-privatized welfare state worked in the first place only because we had a stable corporate order. And that stability – along with any semblance of economic security for many workers – is now gone.

Here’s why we should all be liberal: The conservative system assumes change is good only if it preserves the old order, with certain people at the top. The lack of social mobility—don’t quit your job, because you’ll lose your benefits!—engineered into the economy is profound. When, instead, the nation invests in social mobility by spending on education, health care and the preservation of resources that can’t be replaced with consumer goods (nature, for instance), people have the opportunity to overthrow the economic order while preserving the social agreements that make change and liberty coexist peacefully.

Krugman points out earlier in the column that we already have, with the built-in spending on private health care and pensions, a welfare state as large as those in other advanced economies. But ours is designed and ample money is spent to prevent those who occupy the highest rungs of the economic ladder from giving up anything to new competitors. The deep links between staying in our economic places to preserve the private relationships with sources of health care and retirement funding are not accidental, they are the product of the dismantling of liberal programs that made the 20th century an American century.

As I and others pointed out last week, there are new rules for workers. We also need to recreate—modified for the times, of course—the system that enabled so much innovation and social mobility. Krugman points to the late Peter Drucker’s 1969 book, The Age of Discontinuity, calling out how antiquated the current system built for a stable corporate elite really is. We all need to wake up to the fact that the system is choking this country and this world, holding it back, conserving only the wealth of a very few, at the expense of individual opportunity and progress itself.

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This singularity will be branded

Does Google have an “artificial intelligence agenda”? According to this ZDNet article, that was the conclusion arrived at by George Dyson during a visit to the Googleplex:

“‘We are not scanning all those books to be read by people,’ explained one of my hosts after my talk. ‘We are scanning them to be read by an AI,’” Dyson wrote in a posting on Edge.org following a visit to celebrate the sixtieth anniversary of John von Neumann’s proposal for a digital computer.

This suggests, to me, that Google has forgotten who its real customers are. If they can’t link how “AI,” a dubious term in the first place, will serve its customers when making such statements, they really aren’t paying attention to people, but to redefining people’s world without regard for them.

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