After months of speculation, Google Checkout has finally been officially launched. The release is, as you'd expect, being covered pretty much everywhere, including the New York Times and TechCrunch. One thing that I'd say is being consistently misreported (at least by the mass media type outlets), in my opinion, is that this is a direct PayPal competitor or “PayPal killer”. While it's true that Checkout is a way to accept payments, it doesn't have the person-to-person functionality that PayPal has, nor many of the other features. It's simply a slightly different beast and is more akin to Microsoft wallet. That being said, this does target many merchants that currently do use PayPal and there is clearly a good amount of overlap. I've had my personal problems with PayPal in the past, and if nothing else this should serve to make PayPal clean up it's act. It will be interesting to see if either PayPal or Google eventually move their respective services to be considered as a banking service, which would open them up to quite a bit of regulation, but also quell the fears many people have with this kind of service. That stands especially true for PayPal, which allows you to store money and carry a balance. The one thing that worries me about the system is that, as Google adds new services to their lineup, they continue to do so under a unified Gmail username. That means that if your email username and password get compromised, you could be in a world of trouble. Considering that most people are way too lax with their email credentials and even use unencrypted protocols over shared wifi, this could be a recipe for disaster.
On to the actual service, Checkout is “a checkout process that you integrate with your website, enabling your customers to buy from you quickly and securely, using a single username and password. And once they do, you can use Checkout to charge their credit cards, process their orders, and receive payment in your bank account”. Unlike PayPal, you can't use the service to pay for goods without an account (recall that PayPal was like this for a long time also). Like most Google offerings, the API to this looks pretty nice. What's more, if you participate in Google AdWords, which generates the lions share of current Google revenue, you stand to potentially use Checkout for free. For every $1 you spend on AdWords, you can process $10 for free with Checkout. It should be noted that an AdWords account is not a requirement of using Checkout. This marks a turning point for Google I think. While Checkout is clearly very tied to AdWords and will certainly increase the amount of users that advertise with the Google network, this represents the first real alternative income stream that Google has added in a long time. This could be good and bad. Of course you don't want 100% of your revenue coming from one place, but that setup does allow you to focus your energy with laser-like precision. The more revenue streams you have, the less focused you become. I think Google struck a pretty good balance here, considering the two stream are so intertwined.
This focus issues brings up another interesting point with Google though. Google has traditionally been a very nimble company that has a corporate culture all its own. As they continue to grow and continue to add “seasoned veterans” from the likes of Microsoft and other big players, one has to wonder if they can keep their culture intact. These seasoned veterans come with a lot of history and a way of doing things that is steeped into who they are. It's hard for people to change and there is a very real chance that as the number of these type of employees grow, Google will becomes less nimble and more stodgy. There's certainly no sign of it yet and Google somehow has a way of avoiding pitfalls that it seems certain to fall into, but it has to be something that's on the minds of both the Sergei/Larry/Eric triumvirate and the lower level Google employees. It's a topic I'll certainly keep my eye on moving forward.
–jeremy
Google, GOOG, PayPal, Ebay, Checkout, AdWords
Archive for June, 2006
That's the title of this Business 2.0 article. From the article:
Another prominent Google-fighter leaves Redmond. This one concludes: If you can't beat 'em, join 'em.
Vic Gundotra, a general manager for platform evangelism at Microsoft and a 15-year employee, has agreed to join Google after first spending a year working on charitable endeavors, Business 2.0 has learned.
While not as high on the org chart as some other recent departures, Vic was integral in the recent Microsoft push to attract developers. He's also the one who hired Scoble, whose last day at Microsoft is today. Vic won't be able to start at Google for one year due to a non-compete clause and his role at Google isn't even defined yet. Mini-Microsoft is also reporting on the departure, but also adds that a wide spread reduction in force may be coming to Microsoft. Alone with the news yesterday that Microsoft is moving a bunch of existing execs around and the writing on the wall is clear – some major changes are going to be taking place at Microsoft in the short term. Whether those changes revive the company or are the beginning of a slow decline into a maintenance mode company remains to be seen.
–jeremy
Microsoft, MSFT, Google
As a just announced in the forums, LQ recently turned six. The site continues to grow at an astounding rate. It's not just the 2,311,325 posts and 254,019 registered members either. LQ ISO is just about to hit 2,000,000 downloads and we have almost 3,000 articles in the LQ Wiki. That not what's remarkable to me though. What is remarkable, is that despite our long term rapid growth, we've managed to stay both true to our roots and extremely friendly to the Linux Newbie. True, your post may scroll off the main forum page quicker that it used to, but the site still has much of the feel it did five years ago. That is something I'm truly proud of.
–jeremy
Linux, Open Source, LQ, LinuxQuestions.org
After being successfully prosecuted by the DOJ, but escaping any serious punishment by a new incoming administration, it looks like the EU may actually follow through with some bite to its bark. With the $2M Euro per day fine (about $2.5M USD) potentially being back dated to December 2005, the amount could be substantial. One item I've seen incorrectly reported in multiple venues is that the EU is forcing Microsoft to open the code for Windows. This is categorically not the case. They are asking for open and usable documentation on API's and interfaces that are not license encumbered along with the unbundleing of media player. In fact, Microsoft offered the code under an NDA and that was turned down as an unacceptable resolution. After the DOJ case, it appeared that once a company reached a certain size, even the US Government couldn't do much to monitor and govern its actions. It's good to see the EU at least taking a stand. One comical sentiment I continue to see in comments are things like “Microsoft should just pull out of the EU”. That is so astoundingly short sighted and ethnocentric that I find it hard to even rebuke. It should be obvious that pulling out of a market that is so huge would immediately spawn the adoption of alternative operating systems and applications that it's asinine to even consider as an option. The day they pulled out would be the day every hardware manufacturer announced preload support for Linux and the day nearly every software maker would announce their port. There's no way Microsoft is prepared to let that happen.
Another article has the following:
Commenting on the report, the Americans for Technology Leadership, a consumer group of 40,000 members, said that “All American companies doing business in Europe should be concerned. This development makes clear that successful American companies will face a higher regulatory standard in Europe and that their entire global business strategy may be hostage to the whims of a few European regulators.”
The “hostage to the whims of a few European regulators” is a bit dramatic, but if you are an American company who chooses to compete in the EU, why would you not expect to have to comply with the regulatory standard in the EU. You think the EU is bad, wait until you see what it takes to get into China.
–jeremy
Microsoft, MSFT, Open Source, EU
Looks like Intel has divested its “communications and application processor units” to Marvell Technology for $600 million. Intel had invested significant amounts of cash into some of these units and the PXA Xscale-based line was particularly popular in Linux-based products. They also powered the latest Treo and Blackberry. The processors failed to generate the market share Intel had hoped for though. With nearly a billion cellphone due to ship next year and countless billions in investments already sunk into the projects, Intel finally decided to pull out of the market (which TI dominates with 69% of the market). I guess Apple isn't going to get that one stop shop I had speculated about a while back. What may be worse for Intel though, is that their little foray into this market may have taken their eye off the ball just long enough for AMD to gain the ground they have been vying for in Intel's core market for ages. Luckily for Intel, they have a cash cow to fall back on.
–jeremy
Intel, INTC, Marvell, Linux, Xscale, PXA, AMD
Continuing the recent rash of high level departures, Jack Messman has been ousted by the Novell board. Taking his place is long time IBM'er Ron Hovsepian. The market reacted well to the news, with NOVL up over 10% on the press release (although still down sharply for the year). I think it's clear that Messman just wasn't the right guy to turn Novell around. He didn't seem to understand their Linux/OSS strategy very well and the company was subject to a fair amount of internal strife (with multiple high profile departures, including the Suse founder) and a lack of overall vision and direction. The prospects seem to be better for Hovsepian from what I've read, which should be encouraging for Novell. He had the following to say:
“Going forward, we will maintain a sharp focus on meeting customer demand and delivering value through Linux-based, enterprise-wide solutions and identity and resource management products. We have innovative technology, a strong roster of customers and business partners and an extremely talented group of employees. I look forward to continuing to work closely with our business partners and customers.”
They have some nice products, but have failed to gain real traction compared to Red Hat. They seem to want to focus more on the Linux desktop, while Red Hat has all but abandoned that in favor of the enterprise server market. Which will work out better in the long term is unclear at this point. The Linux market, however, is eager to have two solid performers to avoid the pitfalls that became clear with the Microsoft monopoly. How much time remains for Novell before someone else steps up as the clear number two remains to be seen.
–jeremy
Novell, NOVL, Messman, Hovsepian, Linux,Open Source, Red Hat
On a topic I've covered multiple times recently, more execs are stepping down from Microsoft. Both Martin Taylor and Ted Hase are already gone, in fact. From the respective articles:
Microsoft did not give details on why Martin Taylor left the world's biggest software maker after the 13-year company veteran was appointed in March to lead marketing efforts for Windows Live.
“After 16 exciting, interesting years in one place challenging conventional thinking, introducing fresh approaches, creating new businesses opportunities, and managing, leading and being influenced by some of the brightest minds in the industry I've decided that it's time for a change,” Hase said.
As you can see, both have been with the company well over a decade. Both of them seem to have come to recent hasty decisions or were pushed out. Cringely has some interesting ideas on what we'll see in the coming months. I agree with a lot of what he says, and I came to the same conclusion – Ballmer has to go. He takes that assessment further though and says “several dozen of his (Gates) closest and oldest associates” must also leave for this to be done correctly. The “Microsoft Way” must fundamentally shift in a major way, which in essence means a regime change at this point. Shift away from what you ask? I think this recent comment from Bill is telling:
When they invented radial tires, they should have shot the guy,” he said. “The whole industry went through a crisis, because it took nine years to squeeze out the extra factory capacity, because the tires lasted longer.”
That's what Microsoft has thought of innovation recently. Anything that cuts into sales, even if it saves lives is bad. I hope you're no longer wondering why Microsoft doesn't innovate. Whether they can pull a fundamental paradigm change off in a company the size of Microsoft remains to be seen, but a lot of longtime Microsofties will have to go in the process for them to have any change at all. This one could get ugly.
–jeremy
Microsoft, MSFT, Cringely, Gates
In an interview with InternetNews Wim Coekaerts, who is the Director of Linux Engineering at Oracle, goes into some details on how Oracle is utilizing Linux. It's fantastic to see that “almost half of Oracle Application Server 10g Release 3 shipments were on Linux in the first three months of 2006″. I knew that Oracle penetration on Linux was really gaining traction, but almost half is extremely impressive. When the topic of the OSDL came up, Wim has this to say:
Let's just say that one part of the OSDL is trying to represent businesses to the Linux community. I know that a number of the members aren't heavily involved in Linux but still are members.
We basically know where to go. We have a good relationship directly with people in the Linux community. We have all our partners. So there is no immediate advantage to being a member for us. Not to sound arrogant, but we know how to deal with the Linux community.
The thing that was really kind of revolting is that OSDL goes out and basically says that they represent the Linux community while there is no direct feedback line back to the community.
Now, it's true that a number of the members aren't heavily directly involved in Linux but still are members. Beyond that though you have to remember that for Oracle, Open Source is not core. One of the main points of OSDL is to share R&D costs and Oracle certainly doesn't want to do that. I'd have thought “Why isn't MySQL AB not in OSDL” would come up before Oracle. His last comment, however, is the one I felt was poignant here. The OSDL really seems to be taking a beating on this point lately. I've not seen a ton actually change though. Greg KH seems hopeful now that some of the things that were proposed will be adopted, which is encouraging. I had offered (both personally and on behalf of LQ) to help the OSDL with their community efforts not too long ago. While some people from within OSDL did contact me and some useful discussion took place, nothing ever came of it. The offer, of course, still stands…but I still don't have a clear picture of exactly what we could do.
–jeremy
OSDL, Linux, Oracle, Open+Source
Craig Mundie, who was recently made chief research and strategy officer at Microsoft, was interviewed by eWeek and commented on the GPL. His response to the question about interoperability with Open Source (and specifically the GPL):
I have been one of the principle people architecting the way we are going to step up to this bigger question around interoperability, and that will certainly be a focus of mine going forward, along with Bob Muglia.
Let's not forget though, Mundie in the not too distant past was the Microsoft “anti-open-source poster child“. In fact, the Perens open letter that was signed by everyone from Stallman to O'Reilly, was addressed to Mundie. Has he done a mental 360 or is this just lip service? As I've mentioned in the past, words mean very little at this point and we need to see some action, and some significant action at that. Complying with the EU anti-trust case would be a start, but you don't get many points for simply following the stipulations of a lawsuit. With the history that Microsoft has, the olive branch they need to extend has to be almost tree-sized at this point. Let's stop the words and get to the actions, we're all waiting to see what happens.
–jeremy
Microsoft, MSFT, Open Source, GPL, Linux, Mundie
It seems that Business 2.0 thinks so. From the article:
Since Gates stepped down as CEO in 2000 in favor of Ballmer, the company has floundered technically and strategically. As the company's chairman, chief software architect and supposed visionary, Gates deserves blame for missing the wave of Web-based software that has propelled Google and Yahoo.
But Ballmer has made gaffes of his own in his longtime role as head of the company's business side. They include an undistinguished push into business applications to compete with Oracle, financial maneuvers that have failed to stir the stock – which has slumped 16 percent so far this year – and continuing antitrust problems in the United States and Europe.
Not a very flattering summation. I asked if Bill and Steve were holding the company back about 18 months ago. So what do I think now? With Bill phasing himself out, the company is at a crossroads. I don't think they can turn the corner with the current CEO in place. He has the old Microsoft too ingrained in him and I don't think he'll allow the company to grow in the directions it needs to in order to turn itself around. I think it's clear at this point that he probably should step down in the next two years, but somehow I don't think the hubris will let him. I'd guess he sincerely thinks he can turn things around. Whether that will change as the two years wear on remains to be seen.
The question that arises from there is, if he does step down who will take his place. The odds are on one of the two Kevin's. Kevin Turner, the COO, seems like the most favored at this point. The fact that an ex Walmart exec may become the CEO of Microsoft is absolutely stunning to me. From the reports I've read of the moves he's made since coming aboard, this one seems like a bad choice to me. They already have morale problems and he just seem to be exacerbating them. I don't know enough about the situation to know why he's the favorite, but on the surface it doesn't make sense on a couple levels. Kevin Johnson, co-president of Microsoft's Platform and Services division, is a long time Microsoftie (which at this point I don't know if that's for or against him) and seems like a better fit. With Ozzie and Mundie filling Bill's shoes, the short list seems to end there. Dare they go outside the company for a replacement? I doubt it, but then again I guess it depends on just how long Ballmer stays.
–jeremy
Microsoft, MSFT, Steve Ballmer
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