The Pebble and the Avalanche

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Current Revolutions in Business and Technology

by Dr. Moshe Yudkowsky,

author of The Pebble and The Avalanche: How Taking Things Apart Creates Revolutions


Mon, 2007-Jul-16, 05:09

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Hertz Still Hurts

Last week I wrote about Hertz rental cars, and their backwards rental web site. I've now had the "pleasure" of trying their used-car sales site, and it's even worse. My favorite part is the opening screen, in which I'm informed that "the browser you are using is not yet compatible with our newly redesigned site," which is of course nonsense. Then I'm told to "click here" to access the old site, which leads me immediately to "Bad Request (Invalid Hostname)" as the only words on the page. I can still access the site by ignoring Hertz's instructions and simply following the links, but it's no treat to shop online with Hertz.

So are the managers clueless? Is it the public relations department? Have they outsourced their work to someone's brother-in-law? Somehow I can't see the front-line IT department putting together web sites as bad as these; it strikes me as the kind of disaster I've seen consultants offer, or the ones that clueless managers push as "good enough."

Wed, 2007-Jul-11, 10:18

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How Long as Number One? Hertz, Treasure Hunts, and Mystery Car Rentals

I've just rented a car from Hertz, but I'm wondering if it's the last time I'll bother. Hertz is a wonderful company in some ways, especially since I'm a "#1 Gold Club" member, but Hertz hasn't bothered to update their business practices to keep up with modern times. I think they're in danger of being knocked off their perch by a more clever, more customer-centric competitor.

Back in the days when everything was done by print or through travel agents, every travel arrangement was a treasure hunt. You had to read the newspaper to catch word of sales, you had to make note of each possible way to save money, and you had to hope that your travel agent knew his or her business. In some sense, this was an unavoidable complication of paper-based information.

The web changed all that. Now I expect that all the information I need will be at my fingertips, and if a company really wants my business they will keep me fully informed of all discounts and related information. That's what happened when I recently rented a car online with Budget: they applied discounts to my rental, automatically, without me having to lift a finger (other than to click on "purchase"). It was a pleasure to use.

But at Hertz, I had quite the treasure hunt. Hertz gives out 10%-off "memberships" to any number of organizations, such as credit card companies that give a membership to each of their millions of customers. In other words, these "memberships" constitute a discount known to some members of the public and not others — irritating, to say the least. Why does Hertz bother?

The other information hidden on the Hertz web site was a series of special offers. These offer aren't integrated into my reservation process — I have to read each and every one separately, not all the details are disclosed up front, and the only way to find out if a deal works is to enter all travel information and see what price comes up — over and over and over again. I had trouble understanding why one offer simply wasn't available, and after speaking to three separate agents we finally understood that the deal just (mysteriously) wasn't available, period, for that car in that city at that time — despite what the web site said the offer actually was.

The right way to do this, obviously, is to let me enter the dates and times of travel once, and then either offer me a series of choices or apply all the mysterious "rate quotes," "CDP numbers," "coupon codes," and other arcane information automatically. That's how the modern web works. The modern web does not require me to cut and past "RQ" codes from one part of the web site to another; the modern web makes reservations transparent, easy, simple, and inexpensive... but not at Hertz.

Tue, 2007-Mar-13, 08:03

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Google Problems? Stop Whining and Call Jason

My friend Jason Dowdell runs MarketingShift, a search engine optimization web site. He's an expert at making certain that your web site can be found, searched, and highly ranked by search engines such as Google.

I'm bringing this up because yet another article has appeared about companies that simply don't understand the role of Google in Internet-based commerce. Google is in the business of tweaking its search engines to return the very best results from the consumer's point of view. They aren't in the business of keeping your company's web site on the front page of their results, they don't guarantee to search your web site the very first day it goes online, and they can change your company's ranking at any time as they optimize their search algorithms. Google does not own the Internet; they are a company just like yours.

If you don't like your search ranking, stop whining to Google about it. Call Jason; he's been working in this field for over a decade, he can fix your problems, and making your web site rank highly is his business — not Google's.

Fri, 2006-Oct-20, 05:08

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Investor's Business Daily Newspaper Subscription List Stolen

Investor's Business Daily, the second-largest print and online newspaper devoted to financial news and information in the United States, has had at least a portion of its subscriber list stolen. As a result, subscribers receive unsolicited email marked "" and "" that offer tips about penny stocks; as you might imagine, I would rather heap my money up in a pile and set it on fire than purchase stocks based on these tips. These email messages have been arriving for about a week and show no sign of stopping anytime soon.

This email problem may also be related to phishing attacks against Investor's Business Daily customers, who receive email that purports to be from the newspaper but is actually sent by criminals. Investor's Business Daily placed a notice on their home page to warn their subscribers about the phishing attacks, but I see nothing on their web site about loss of subscriber information.

The evidence for the theft of Investor's Business Daily's email information is straightforward. As I've noted here and elsewhere, when a company asks me for an email address I create one for the exclusive use of that company. If the company misbehaves I can turn off that email address; and I can also determine how that email address is used. The recent spam messages touting penny stocks came from various fake addresses, but they were all addressed to an email address that was assigned for the exclusive use of Investor's Business Daily.

Security expert Bruce Schneier recently noted an important article about "targeted" viruses, i.e., a deliberate attempt by a virus writer to selectively attack a lucrative target, which yields important information but avoids the attention that accompanies a large-scale attack against the entire Internet. I certainly don't know how Investor's Business Daily lost control of their subscription list, but I do know that if I were investigating this problem, a targeted attack is the first thing I'd check.

Mon, 2006-Sep-25, 07:55

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Making Podcasts Useful

Podcasts provide information, but only if you're willing to listen to the podcast. Like many other people, I'm not willing to listen to a 15-minute podcast just to find out if it has information I need. I want the podcast to be searchable, just like a web page; if the phrase I'm looking for is in the podcast I will take the time to listen to the relevant section, and then perhaps the entire podcast — just like I do now with a web page.

And the search engine has to be very good. A web page takes only moments to skim after it loads into my browser, but audio is linear; I cannot listen to a few words here and there or skip to a summary paragraph at the end. Podcasts must overcome a huge burden if they are to become archival sources of web-based information.

Several companies offer search engines for podcasts using speech recognition technology. A new offering by Pluggd introduces a couple of new twists. First, Pluggd offers search suggestions based on your original search, and indicates where all these search terms appear in the file. These results provide context to the audio file and should help you determine whether the file you've found has the information you'll need.

Pluggd also says they'll disaggregate any user-created information from the audio file:

Users can click to listen to the file at that point, or select another option to tag, describe and share a particular section of the file. Castro says the company aims to set that data free, not keep it trapped in Pluggd.
This proposal takes Pluggd one step along the path to disaggregating information from audio, but as far as I can tell that's one step further than anyone else has taken.

Wed, 2006-Sep-20, 19:01

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Top Web 2.0 Sites

Wired has a list of the top winners and losers for Web 2.0 sites.

Tue, 2006-Aug-29, 06:15

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Yahoo Tries for Web 2.0 Real Estate Listings, But Only Gets to 1.5 at Best

To date, real estate agents have managed to avoid the fate of travel agents. Prior to the Internet, travel agents made a goodly portion of their living from access to restricted information: schedules and prices for airlines, hotels, and the like. Once that information came online, once the rigid links between agency and information came undone, travel agencies underwent a decline. It's a pity, actually; after my last trip and all the time I spent wading through web sites that only pretended to provide travel information, I often wished for a competent travel agent. The only bright spot was Kayak, which has a superb interface.

But the web is not a perfect substitute for the travel agent. Even with the best web interfaces, if your flight is delayed and all you have is a cell phone, you're essentially out of luck; re-jiggering your arrangements often requires human intervention. Travel agents do have a niche, just like any expert, but I haven't seen many that have managed to extract their core expertise (familiarity with the travel business) out of the all the other trappings of the industry to create a new model for the travel agent business.

Which brings us to the real estate market. Yahoo just announced an expanded online real estate listings. Real estate agents need not worry: I've tried the service and it's fairly worthless. It has some of the trappings of a Web 2.0 site, but it feels more like Web 1.5, or perhaps even Web 0.5.

A quick search near my home produces over three hundred listings, which is pointless unless I can sort them in some acceptable fashion. But Yahoo ignores the three most important things in real estate: Location, Location, Location. The finest-grain location search criteria Yahoo provides is the zip code, which is a very crude tool indeed when related to my own criteria, namely proximity to a particular location such as an intersection, street address, or neighborhood. The search page is odd-looking and cluttered, and produces tiny maps by default. I'm limited to displaying ten items per page, not much use when the search returns three hundred listings. I can think of a half-dozen improvements to the interface without too much trouble, and I have to wonder what they were thinking when they created it.

In other words, Yahoo has eliminated crucial information instead of disaggregating it to make it more useful. They do allow you to limit a search to a particular price range or the number of bedrooms in the house; but that's not as important as location. And they limit searches by "kind" of listing, e.g., you can find items that are listed because of foreclosure (and receive highly limited and inaccurate information about those listings) but only on a separate search. Why they impose this restriction is beyond me; I suspect it's business related because of data partner relationships, but they've let the seams between the businesses show, which is rarely a good idea.

I expect other companies to step into the business to provide the disaggregation and interfaces that Yahoo has failed to supply. Despite the hype about dominating the Web, better customer service and a smarter business model can let even the smallest company challenge the giants.

Thu, 2006-Jul-20, 11:02

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Next-Generation Search Engines

When Google returns several hundred thousand answers that's almost worse than no answers at all; wading through page after page of results isn't very productive. While I continue to use Google, I've kept on the lookout for next-generation search engines — search engines that are smarter than Google, or that provide useful strategies to improve search results. Here's an article that summarizes how several next-generation search engines help you find the answers you're looking for. It's fascinating to see how the various different "components" of search — the basic index, the interfaces, the search strategies, ideas from elsewhere such as "tagging" and "social networking," and still other innovations — combine in different ways to provide very different search services.

Wed, 2006-Jul-19, 16:05

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Google the Utility

Designed for kids but useful for adults, a web site that's devoted to education has put together a list of different search engines and what they're good for.

One lesson from this educational web site: Google isn't everything, but it is most things. Many search sites use Google as a base and add additional features. But the list also shows that there's a "Deep Web" that isn't indexed by Google, information that the web site owners restrict to their own site. The existence of the "Deep Web" implies that new business models will be needed to take that information out of the confines of the restricted web sites, and I wonder what those business models might be — because someone will become rich by discovering them.

Mon, 2006-Jul-17, 06:11

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Labitat Answers the Question: Billions for Search, But How Many Cents for Optimization?

Labitat announced a new product today that solves a dilemma faced by small and medium enterprises. Companies now spend billions of dollars at Google, Yahoo, and other search-engine companies to purchase advertising; the question becomes is that money being spent wisely? Certainly it's easy enough to purchase advertising via Google — fill out a one-page form and you can spend as much as your budget allows. But is your marketing campaign effective? Are you wasting money on inappropriate search terms? Are the "clicks" legitimate or fraudulent? Businesses spend bilions for "clicks" and it's crucial to put some cents (and sense) to make certain the billions are wisely spent.

Some advertising firms have a "chief digital officer" who monitors their web strategy. Large companies with in-house marketing teams can devote staff positions to search-engine marketing. And the complexity of search-engine marketing demands expertise, as noted in this recent Wall Street Journal article:

But because consumer search patterns change and competing businesses can jump in and out of the search ad market at any minute, advertisers say they have to stay on top of it to get the most for their money. Changes to the search companies' ad systems make it even more dynamic. Google and others sometimes add new variables or weight existing ones differently when determining which ads are displayed most prominently or what the advertiser pays per click. They also regularly roll out new features, such as letting advertisers restrict display of their ads to specific times of the day or only to people in specific geographic locations.
Many small and medium firms can afford to spend a few hundred dollars per month on search-engine marketing, but can't afford the time and don't have the expertise to determine if their marketing efforts are wisely spent.

Until now, that is. Labitat, the same folks who brought us the excellent Marketing Shift blog on search-engine marketing, now offers "PPC Audit" (i.e., pay-per-click audit). For a reasonable fee — "less than most SEM [search engine marketing] companies charge for a setup fee" — Labitat will audit a marketing campaign and provide expert advice.

The evolution of search-engine marketing continues. In very short order, the business has disaggregated into many different specialties, with more to come — for example, I haven't yet come across search-engine wholesalers who purchase "clicks" at bulk disount and re-market them, the same way telecommunications companies purchase long-distance minutes in bulk and re-market them, but I predict it will happen some day soon if it hasn't happened already. For the forseeable future, services from Labitat and similar companies will become more and more important as the search-engine marketing business continues to grow and evolve.