Future Trends

VentureBlog has a post by Naval Ravikant on the past and future trends in technology.

Geometric growth in CPU power and disk space drove the PC revolution. Big winners -- Intel, Seagate, Microsoft, others...

Geometric growth in modem speeds, LAN networking, and optics drove the Internet revolution. Big winners -- Yahoo! Ebay, Google, others...

In the last three-five years, yet more steadily advancing technical trends have come into play:

. Internet traffic continues to double every year for the forseeable future
. CMOS image sensors are doubling in density every 18 months
. Liquid Crystal Displays and Liquid Crystal on Silicon are increasing panel size and density, roughly doubling every two to three years
. Solid-state non-volatile memory is doubling in capacity every 18 months
. Improved power management and new batteries are increasing effective battery life by about 20-30% every year
. Wireless networks are doubling in capacity every 18 months

Who will be tomorrow's winners?

Barry Diller's Internet Ambitions

News.com writes about the emergence of Barry Diller as the "Net's new poster boy" following his recent acquisition of LendingTree.

While many other CEOs have been complaining about the burst of the bubble, Diller, chief executive of USA Interactive, has been methodically picking up the pieces from the rubble.

He now controls Hotels.com, Match.com, and Expedia--which are all in the middle of the hottest growing areas of the Net.

Quote from an interview in the WSJ with Diller: "Firstly, we like fragmented businesses, and financial services is the essence of fragmentation. Second is businesses that are essentially offline moving online, that have characteristics that are advantaged in being in an online versus offline universe. Things like personals, dating, travel, information about cities, etc. Finally, we like businesses where the scale and leverage effect is easy to discern, where you can see that once you have sufficient level of activity, the scale affects are mighty. Those are the only lessons we intend to give anyone else."

Social Software and Blogs

The Guardian discusses whether social software's (re-)emergence is being driven by weblogs.

There is a web-based platform emerging, based on weblogs, Wikis (web pages that any user can edit), and RSS feeds (either Rich Site Summary, or Really Simple Syndication - a way of sending messages when a site's contents are updated). Another is ease of use: "ridiculously easy group-forming is really new," says Shirky. A third is ubiquity. In some cases, he argues, all the people in a group will have web access, so they can take its use for granted.

If there is a new type of social software emerging, it is clearly emerging from the blogging world. Weblogs that started as simple collections of links rapidly developed into diary-like personal platforms, and many have already turned into group discussions, as members of a clique list one another on their blogrolls and leave comments on one another's blogs. Links, RSS feeds and new protocols such as Trackback are increasing the number of connections between groups of people and their blogs, creating a parallel universe that is already known as the blogosphere.

Forbes on Google

Forbes traces Google's history, discusses its AdWords program and says that Microsoft wants in on the search business.

In Adwords, businesses use an auction system on the Google site to bid for the most popularly searched words and phrases. Google gets paid every time someone clicks on the ad itself. Bids start at 5 cents per click but can go to $15 or more for high-end products like helicopter parts. Critically, Google demotes a sponsor to a lower rung on its page if its response rate is too low, elevating a rival's ad for getting more clicks. This imposes a built-in pressure on businesses. They're even asked to revamp wording if less than 0.5% of viewers click on their ads. By contrast, many traditional banner ads get click rates of just 0.3%.

This could transform the $193 billion business of direct marketing. Junk mailers constantly work on narrowing the recipient list to the people most likely to respond and on jazzing up the envelopes to trick them into looking inside. Google ends the guesswork. People directly declare what interests them, and Google feeds them an appropriate ad. The ad's few pitch words are critical. For big corporate accounts like Dow Chemical, Google account executives continually recraft the message, like a haiku of commerce, aiming to maximize the click-through.

As everyone waits anxiously for Google's IPO, its revenues have risen from USD 20 million in 2000 to a projected USD 700 million this year. I came across this post on VentureBlog which quotes David Drummond, Google's General Counsel, on the four key reasons for Google's success:

1. Technology. Along with its innovative approach to page ranking, Google is a purpose-built hardware company, building all its own servers from components it buys directly for their manufacturers. Google now operates the world's largest distributed computer system.

2. Business Model Innovation. By perfecting the nature of targeted ads, Google not only has created a highly effective revenue generator, it has produced what it hopes to be a better experience for its users. It is Google's goal to make their targeted ads at least as relevant and useful to users as the search results themselves.

3. Brand. A European study recently determined Google to be the number one most recognized worldwide brand. Indeed, Google has become a verb ("I can't wait to get home and Google him") which poses real challenges to a company seeking to protect the strength of its mark.

4. Focus On The User Experience. Product decisions at Google are driven by optimizing for the user experience first and for revenue second. The folks at Google firmly believe that the better the user experience, the more easily money will follow.

A related story in Forbes looks at the different approaches being taken by the different search companies:

[Overture's] Flake plans to add machine learning, which improves each search by drawing on past efforts. Data from human editors who currently review key words for their relevancy to Web pages will be keyed into the machine learning process.

Ask Jeeves makes semantic distinctions, so that "curry," the spice, will be distinct from "curry," the horse care. Like Google, it judges a page's utility in part by how many other people have linked to it. Yahoo wants a guided search, leading users through a series of steps to find the perfect page. Microsoft wants search that remembers everything you have seen, letting you call it back up by date, topic or what you were doing when you saw it--surfing, reading e-mail, etc.

Google does not want human entanglements. Norvig plans to solve the curry problem with software tricks. "Search should be like HAL in 2001," he says. "It should understand what people say--hopefully without killing anybody."

Google is likely to introduce blog search soon.

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