Google Games?

Someone sent me this job listing. 

Product Management Leader, Games

I was the guy who led the team that launched and built Yahoo! Games into the number one online gaming site. It's not my focus these days, but it is what a lot of valley people remember me for. I have some experience integrating gaming into existing online services.

The way this job is outlined seems to reveal a certain strategic direction and plan. I infer from the language that Google wishes to internally create hit games. This is not the strategy I think Google will find successful. The games business is funny. The popularity of games, even hit games, is ephemeral. Most games are not hits.  

The reason Y! Games succeeded is because we combined Y!'s brand recognition and distribution with the brands of established games (blackjack, backgammon, poker, chess, spades and so on). I was able to add community around those games (ladders and tournaments and the like), back in the baby days of social media. Once we had built this audience, we were able to start creating new games. Popular games are a hit or miss business, and we missed as much as we hit. Building a brand for a new game is expensive and difficult. Even if you're wildly successful, the game will have a brief shelf life.

I would recommend Google do something similar, but take it a step further (what I would have done if I had stayed at Yahoo! longer). I'd love to see them acquire one (or several) gaming engines and basically open source them (Yahoo! acquired a one person game company called classicgames.com which provided the basis of our efforts). Create a core set of Google branded games with these tools, but internally only spend resources building a suite of games that come with built-in audiences and brands. Just this will create a significant gaming audience. Do these essentially as reference designs. Make sure your reference designs show off the platform capabilities. Give away a powerful gaming development platform, and then let developers create terrific games. 

I wouldn't take development and brand building risk of new games myself; I would allow third parties to do that. Give away an awesome tool set. Own the enabling technology. Own the distribution channel. Own the platform. Own the transaction services (both in-game and out). Own the monetization channels. Own the metrics. When something starts to get traction, promote the hell out of it. Allow advertisers to skin games easily. Allow the developers to share in monetization using one of Google's most significant strengths -- advertising driven by user data.

Users think of Farmville and Mafia Wars as Facebook games, not Zynga games (greatly to Zynga's dismay). Zynga may have a terrific valuation, but I bet Facebook makes more money from Zynga games than Zynga does. How many of Zynga's broad catalog of games provide anything more than de minimis revenue?

Google should not be aiming to get into the game business.  They should get into the gaming platform business.

GO is my favorite board game. Pure strategy built from nothing. A great game for any founder.

Sell Search Now

I tend to not blog much here recently about the larger technology industry but the recent developments at Yahoo! compel me to write.

YHOO gave its investors a tremendous return (and if you bought YHOO on the day of the IPO you're still looking at a nearly 10X return, in fact if you bought $1000 worth of YHOO on the day it went public and $1000 worth of GOOG on the day they went public, your YHOO shares are still worth a lot more than your GOOG shares).

There was a time in the late 1990s when Yahoo! was the most respected brand on the internet. It built tremendous products. Its communications products, its finance products, its news products, its entertainment products (which I had something to do with) were industry leaders (many of them still are).

The one thing that YHOO never did well in house was search.

Search was outsourced to Alta Vista (~1997)

Search was outsourced to Inktomi (~1998-9)

Search was outsourced to Google. (~2001)

Search was not a core competence of YHOO. They were NEVER going to beat Google at search.

Earlier this year Microsoft tried to buy YHOO. That fell apart. Then Microsoft tried to buy YHOO's search business. That fell apart.

YHOO tried to fight back, but frankly Jerry is too nice (I knew Jerry quite well 10 years ago, he is very nice). YHOO has a ton of dead wood and Jer doesn't want to be the guy to fire folks, but that's what Y! needed.

Now MSFT has expressed interest in buying the search business again. Please, for the love of everything purple; please SELL SEARCH!. Let Google kick MSFT's ass in search not yours. Focus on verticals. Focus on mobile. Pocket MSFT's money for the search business and watch them fail.

Fight the battles you can win, not the battles you will lose.

My New Start Page

My Yahoo! has been my browser start page since the summer of 1996.

As of this morning, My Y! no longer my start page. This morning I switched to the customized iGoogle start page.

The overwhelming reason is speed. The new, improved, version of My Y! is just plain slow. They've redesigned stuff to add more graphics and to look all "Web 2.0", but in the process they've killed the usability. My Y! was a great start page because it had everything I wanted and it was wicked fast. Perhaps My Y! just became a mismanaged anachronism of the pre-RSS revolution.

iGoogle on the other hand just rocks. It's really fast, there are lots of modules, and the design is clean. Most importantly, it's open, if I need a module that doesn't exist, I can just write it myself.

There's a lesson to be learned here for all startups (including Foneshow) about user centered design and targeting your platform.

I've Been Tagged

I've never really been into the whole meme thing but Ann at WhyGoSolo tagged me, so here goes...

1) I have sailed across the Pacific Ocean 4 times, 3 of those times were solo. The 2002 Singlehanded Transpacific race, 2004 Singlehanded Transpacific race. The return voyage back to California in 2004 I also did solo.

2) I like to be alone (see above). I drive cross country by myself too. Until you spend time really alone, you don't know yourself.

3) Entrepreneurship brings out the manic/depressive in me. The highs are really high, the lows are crushing. My stubbornness gets me through the lows.

4) In a performance review at Yahoo! I was told I had an "east coast management style". I am guilty as charged. I am sarcastic, I tend not to sugar coat criticism (but don't take it personally), and I really don't suffer fools well. (Frankly Y! would be well served these days by more "east coast management style").

5) You can network to anyone. Now it's easier than ever. Blogs have totally changed the way business development works for online companies. Blogs are rapidly changing the way the VC world works too. It never hurts to ask, the worst they can say is "no".

6) I believe in love at first sight.

7) The summer before I turn 50 (I'm 42 now) I'm going to hike the entire Appalachian Trail.

8) Someday I'm going to do the Vendee Globe race. That's solo, around the world, no stops, no outside assistance. I have some technological ideas about how to handle the ice in the southern ocean that should allow me to get scary far south (the high 50s to the low 60s).

Technically I supposed to tag others at this point... That will take more thought.

Jerry is Back

Jerry Yang is back in charge of Yahoo!. I've seen a ton of blog commentary in the last few days, some of it good, some of it incredibly misinformed. The best comment I've seen is from Jason Calacanis

Jerry should rebuild the management team to focus on product and forget about hitting numbers for a year or two. The focus has to be on making better products than Google--not an easy task.

Jason is totally correct. When I started at Yahoo! everything was about the product. Get it out, iterate it, and integrate it with the rest of the network. That was the mantra. Somewhere in late '98 or early '99 it stopped being all about the product. We had beaten Excite, Lycos and Infoseek and Y! was in cruise control. The focus turned inward. Y! built a campus. Office politics became rampant. They opened a Santa Monica campus. The focus was off product. People got scared to take product risks. Lots of new hires were in "vesting-in-peace" mode from day one.

And along came Google and they kicked Yahoo!'s ass. They did it by building a better product in an area that Y! had long been neglecting; search.

Now Jerry is back and his mandate is clear, take on Google.

I don't think taking Google on in search will be successful even if Yahoo! does search better than Google does, there's just too much momentum. Incremental improvements are not enough, you'd need an order of magnitude improvement. That won't happen unless Google eases up on search technology and rests on their laurels (unlikely in my view, there are lots of ex Y!'s at GOOG who know first hand what happens when you do that).

But Google is vulnerable in other areas. Mobile is one of them.

Right now mobile is where the web was in 1995. It's wide open with a huge market just opening up. Yahoo! can win in mobile using the same techniques they used to win online in '96-'98.

Yahoo! won online by addressing the big audience. Yahoo worked the same on every OS and every browser, no plug in needed. The pages were lightweight and loaded fast. They need to do the same in mobile. They need to be carrier and handset agnostic. They need to build apps that don't require 3G. It's not about distribution deals. You need to end-run the mobile carriers. Y! did countless distribution deals (MCI, HP and countless others long forgotten), I don't think combined they amounted to a hill of beans. Distribution is not their problem, good product is. If you build a good product that works consistently across all platforms you will win.

I'm pulling for you Jerry.

Some Monday Links

David Beisel on the "Concurrent Startup Idea Generation and the Pervasive Copycat Fallacy". Someone else is working on your idea and you're far better served by talking and networking than being quiet.

Scott Converse from ClickCaster on starting a company: You're over 40 and you want to start your first company. Now what?. Starts off as a riff on Fred's post about founders over 40, but Scott expands and most of his best points are not about age.

Brad Feld sums up why iPods are a bad platform for podcasting.

Carnival of the Mobilists 72 is up.

Yahoo paid $52 million for Bix? I'm not getting something here, I don't think Bix had an audience yet and the technology is merely OK. I had put this one at ~$10-20 million.

NYT on cell phone video.

Speaking of the New York Times... How cool is this picture?

Finally, I've been a San Jose Sharks fan since the came into existence. I was a season ticket holder from 1991 until I left the bay area in 2004.

Ron Wilson needs to be fired. He actually needed to be fired after the Edmonton series last year, but better late than never.

Office Space

I used to have an investment strategy centered on using the construction of an office campus as a contra-indicator for near term success. When tech companies start to build buildings everyone gets distracted. Employees moving offices is distracting. Divvying up the new shiny space churns up office politics. Senior level management spends time reviewing renderings and looking at swatches. Focus is lost. Apple nearly died after building Infinite Loop. I think the excite@home temple is still empty. SGI went splat after building their campus (although Google is doing well in the old SGI space). Yahoo!'s glory days were when they were on Central Expressway, not in their new digs in Sunnyvale (not to mention the Santa Monica debacle).

Foneshow is currently virtual and we intend to stay as virtual as we can for as long as we can (although it does look like we'll be subletting some space in the Old Port neighborhood of Portland in the near future). VC Confidential has a great post of the perils of start ups dabbling in real estate. There are a lot of great lessons in there.

Entertainment needs to be Entertaining

(rant on) Yahoo! Entertainment is reinventing itself again. You can read about it here, here, here and here. In my opinion, this effort will be a disappointment.

Way back at the dawn of time when I ran Yahoo Entertainment I had a mantra. Online entertainment has to be entertaining. Online entertainment has to engage you emotionally. Online entertainment has to be fun.

Do you know what is far and away the most successful Y! Entertainment property?

Yahoo! Games.

Do you know why?

Y! Games is entertaining. Y! Games is fun. Y! Games engages you emotionally.

Yahoo! Movies is not an entertainment site, it is a news and information service about movies. The movies are the entertainment. Yahoo! TV is not an entertainment site, it is news and information service about TV (it's barely that since the "improved" version was released).

Now Yahoo! is launching little branded worlds around popular culture icons. That is not entertainment. That is news, information and community wrapped around existing entertainment distribution channels. The Nintendo Wii is a device that delivers entertainment. The Yahoo! Wii site is a page about a device that delivers entertainment. These sites will do OK, but they won't be the home run entertainment product that Y! has been searching for. It's news, not entertainment.

ET is entertainment news.

The Office is entertainment

The key is emotional engagement.
(end rant)

Googleplex

I had some meetings in Mountain View today, after I finished up I had lunch with an old friend at the Googleplex. He's been there for about seven months. In those seven months Google has essentially doubled in head count. It boggled my mind. They are handling their growth so much better than Yahoo! did. They are keeping their hiring standards WAY up, something that Y! did well for a while, but really slipped on in the late '98-99 time frame. No one is hiring people just so they don't "lose the headcount". The place is just so much better run than Y! was. The energy is amazing.

Of course, the food at Google is head and shoulders above the old Yahoo! meal plan in 3400...

Friction

What is friction? Friction is "user hassle".

When I first came up with the concept for Yahoo! Games back in 1997, the guiding principle of the product was that it required the user to install no software. Lack of friction in user adoption drove everything about the product, from the selection of classicgames.com to the games we chose to implement. It was this lack of friction that allowed us to go from launch to number one gaming site (where it's been ever since) in less than four months.

There is a very real danger that friction will kill podcasting. There's no question that it is greatly slowing growth. Where is the friction? RSS subscription is not as straightforward to the naive (mainstream) user as it should be. Sharing and forwarding podcasts is a big hassle (there goes viral growth). The iPod is only a connected device via a wire. Getting feedback to the author is a hassle. Keeping a portable device filled with timely content is a hassle. Notifying a listener of new content requires work on the listener's part. It's even worse on the phone -- add software handset installs and data plans into the mix, and growth is totally mired.

At Foneshow we've worked hard to eliminate these friction points. I think we've succeeded.

A Random Thought on GooTube

Was Google's acquisition of YouTube a defensive move to take out a competitor? Will Google care if they kill YouTube?

There's been much sturm und drang about the Y! peanut butter memo this weekend. One of the main points of the memo is that YHOO has similar products in the same space that compete against each other. Commentators have mentioned that one of GOOG's strengths is that they don't have multiple products in the same space.

A little bell went off in my head. When the YouTube acquisition was announced GOOG CEO Eric Schmidt went out of his way to say that Google Video "is not going away."

A few points:

-The bump in GOOG stock due to the YT acquisition means that YT was essentially free.

-There's no way in hell Google Video was beating YouTube in the marketplace.

-GOOG would be hurt if YouTube were owned by MSFT or YHOO

-Google is a company that thrives on technology solutions. YouTube has no proprietary technology (the interesting tech is Adobe's).

-There's a snakepit of trouble with YouTube vis a vis copyright issues (especially once people realize that Progressive Download!=Streaming).

-An unfavorable legal judgement against YouTube would hurt all online video efforts (see A&M RECORDS V NAPSTER).

I'm not suggesting Google is going to try to kill YouTube. I just suspect that if it doesn't work out, Google won't shed too many tears.