How serious is Google about India?

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Quartz carried an article about the number of Indians going online will outnumber Americans by 2015. Google’s India representative estimated  500 Millions Indians will be on internet in just four years from now.  Smartphones are being purchased at a feverish pace. McKinsey  has reported that in India "Mobile Internet usage is growing at the rate of nearly 85 percent per annum"

 Image courtesy World Bank 

The Quartz article also pointed out that tech companies like Facebook are only earning just 0.23% of its revenue from the 7% of its users who are in India.

Google is also not immune to this large-user-base-but-low-revenue situation. It is a common knowledge that the average Cost-Per-Click in India is often way below that in the US  (or in other developed countries). Even in US, Google is grappling with the low CPC mostly from the mobile users.

Just Adding Numbers is not enough

The issue is while the online traffic is exploding in India, internet enterprises generally expect the same business model to hold and revenues to scale.  However, transplanting a business model rarely works.

A better approach lies in aligning with the local user behavior and, in India's case, devise a way to work with the long tail.  This would require thinking away from a website centric approach to internet (text based searching maybe?)

Some Tech companies have begun experimenting with different models that would be better suited for India.

For example, Google’s strategy for reaching out to this rapidly growing number of internet users revolves around pushing more of low cost Android smartphones into the internet hungry population- the Andriod One.

But does that meet the demand directly?

McKinsey has found (in the same report referenced above) "...that 75 percent of non-voice usage being devoted to entertainment, where video and music streaming are major growth activities." 
Indian online users are big on media consumption, online research and, of course, spending time on Facebook.   Another report has come up with the following

Image courtesy Yourstory

While an Android platform will give Google leverage in the long run, but it will not necessarily  address the current user demand for entertainment and social networking.

Social over Mobile

Facebook appears to have taken a different approach that is resonating better with the customers.  Mobile carriers in India are selling cell phone plans that tout Days of Free Facebook time on the smart phone data plan.  The social networking giant has rolled out a service that does not require the users to purchase a data plan to spend time on Facebook.

A country where a significant share of rural population is still semi literate, a plan that is user friendly and talks in terms of Facebook and YouTube access would have an immediate attraction. I have heard youngsters in small towns ask for a Free Facebook plan while purchasing prepaid services.

Facebook has also reportedly optimized its ad services to run on relatively slower internet connection.

In contrast there are no plans from Google that people know about.  The search giant could easily offer free YouTube access on mobile phones to capitalize on the huge demand for “entertainment." 

Typically users in small town with no/sketchy internet buy 4-5 minutesof  music video clips or movie clips on SD cards for INR 20 ($0.34) to watch on their mobile phones. This market is ripe for Google to offer YouTube services at a low data cost. It is only recently Tata Docomo has launched a low cost YouTube access.

Or take for example Google’s GTalk. People love to chat and Indians are no exception (early adopters of WhatsApp) 

Users can immediately relate to and engage with plans that are centered around such services. Simplicity is the key when  trying to woo the large user base in India.

In India the long tail will be getting even longer as National Optical Fiber Network  kicks off in few years. 

Maximizing Owners or Optimizing Stakeholders?

Boston Globe carried an interesting article  by Leon Neyfakh exploring the idea whether enterprises exist solely to maximize wealth of their owners (shareholders), or should they look at the interest of other “stakeholders” as well.

This debate was once again triggered by the events at Market Basket after the board fired their CEO, who was well loved by the employees and customers.

The notion that enterprises are standalone entities where management works to further the interest of the owners only, gained ground when Milton Friedman advanced the argument that the businesses should not get into the realm of “social responsibility.”  To that extent Friedman has an undisputable argument.  However, the assumption that a business operates with just one single objective is pushing some businesses in an absurd direction.

The following two recent examples show the distortions being created for customers and employees, the two main pillars that keep a business enterprise going.

Credit Card frauds: High cost to customers

Take for example the credit cards frauds that have broken out like an epidemic in the last few years.  Credit card companies and issuing banks have been resisting the upgrade to the new Chip-‘n-Pin technology since the last decade. They cite high cost of transition (translated to mean reduced profits) as the main impediment. Meanwhile customers pay the price, not only as victims of such scams but also in shelling out higher interest rates (as explained by Experian) as issuing banks resort to costly insurance to contain their risk. Clearly no entity in the chain – stores, banks and credit card companies are quite sensitive to the customer’s interest, apart from the obligatory (and mostly empty) words- we take your security seriously! Seriously?

 In fact in several cases companies did not reveal the scam and theft of customer information in time! Probably they were scared of their stock prices taking a beating on the Wall Street.

A rep from a major credit card company went to a ridiculous length to justify this resistance to change “It is comparable to declaring that US drivers will now drive on the left-hand side of the road and changing all the road signs and highway entrance and exit ramps and reprogramming all the GPS systems.” 

Is this a subtext message that the businesses would be OK if some “accidents” continue to create havoc? US is the only developed country that has yet to embrace this technology (hopefully now in late 2015)!

Another disturbing (for customers) fallout of this inertia is that the field continues to be unprotected for fraudsters to keep on pillaging the merchants and customers.

Ironically the conversion cost has been estimated to be in the range of $8B. For  comparison, eMarketers has reported that the total retail sale in US was $4.5 TRILLION in 2013! 

 Collecting Subsidy from Taxpayers

The next example is about employees of some giant companies earning billions in profits. Yet some of their workers have to depend on food stamps and public assistance at taxpayer’s dime. Forbes reported that Walmart workers took  $6B in public assistance last year while the company garnered a profit of $17B during the same period. A similar story goes for Fast Food Industry whose 3.65 million employees were supported by $7B from public assisted programs. 

American Banks are the most powerful and wealthy.  Washington Post reported that the while banks reaped a profit of $141B in 2013, tax payers had to support half a million of the bank tellers with $900M in subsidies like Food Stamp, EIC, Medicaid and Children’s health insurance. 

Is a business entity justified in maximizing their profits at the expense of its own workers, and depend on taxpayers to ensure the survival of their employees in order to keep the business humming? Are American taxpayers subsidizing these businesses indirectly in exchange for lower prices they pay at the counter?

Optimized we stand?

Back in 2004, after the Enron Scandal, we briefly looked at the competing and often conflicting forces a business enterprise has to balance everyday (unpublished manuscript Sarbanes Oxley Act: Defining the New Rules of Corporate Engagement).  We likened a business entity to an engine producing wealth for the society and for its shareholders.  The environmental forces constantly pull the engine’s speed lever in different directions. Investors would generally like to rev up the engine to extract the maximum gain in the shortest time. The management’s job is to keep the engine running in good shape and to leave its competition behind.  Employees seek security and gains over their working lifespan. Customers want to get their demand filled in the most efficient manner. Regulators have a mandate to ensure that there is no conflict with everyone else (public policy).   

Clearly Milton Freidman did not account for these distortions causing reverse flow of subsidy to shareholders when he made the case that maximizing profit is the only goal of a business enterprise in a truly free market economy.

It is difficult to assume that businesses would be able to operate sustainably by serving the interest of its owners only. As developments show, companies can ignore everyone else at their own peril.

Should Information Have Expiration Date?

 This blog post was originally published on Linkedin.com

It will be an understatement to say that the decision from EU’s Court of Justice, virtually enshrining Right to be Forgotten, and its compliance by Google, has kicked off a firestorm, on both sides of Atlantic.

Americans have a trepidation about this newly minted "right” colliding heads-on with their First Amendment Rights, guaranteeing the Freedom of Speech. They are also apprehensive that this development will potentially impede free flow of information, the life blood of internet. The issue of online privacy is also held in a similar light. Not long ago Eric Schmidt reportedly remarked that online users would have to fight for privacy or they may loose it.

Europeans, on the other hand, have a deeper affinity to the idea of privacy, data or otherwise, and seek to restrict public availability of information about individuals. This right has its historical roots in French Law covering Right of Oblivion.

A professor at Yale summarized these differences as originating from differing perception of Dignity vs. Liberty

Google’s (somewhat hurried) implementation of EU's Court order sparked more reactions. Last week EU gave an extended questionnaire with 26 questions to Google, Microsoft and Yahoo, in order to delve deeper into the matter.

Balancing Public Interest vs. Privacy

Immediately after the Take-down Request form went live, thousands of requests poured in. A review of of these request showed that half of these stem from criminal conviction or past sins. This raises a question about how would Google strike a fair balance between the privacy and public right to know? How long the information about a person should be easily accessible?

Court Records are archived (after a mandated period). Newspapers have their own archives for the business or social needs, that can be accessed with some effort.

Search Engines have not defined any set period for accessing the information once it get into their indexes. The keyword based “relevancy” of their algorithm ensures retrieval of all information held in the repository, regardless of its recency or public needs. The indexed information does not have any attributes to cover “privacy” or “public interest.” The later is usually handled via ad-hoc requests from governments or courts.

Courts are competent to balance individual’s privacy rights against broader public interest. Search Engines should not be expected to walk that thin, fuzzy line.

A case for specifying a shelf life

This raises a question should some types of information have expiration dates to preclude those from appearing in search results?

Note that the EU Court while considering the case deemed that the act of 1990 was old and “no longer relevant.” [emphasis is mine]

Attaching an expiration date will give search algorithms an objective criteria for excluding the information from its results. The information would still be in the index, just not accessible through a casual search.

Search Engines cannot (and should not) adjudicate what that period should be. In the case of a conviction that determination should rest solely with the courts. For example courts could specify an expiration date, before which the information would be freely available (or searchable) in order to serve the public and social interests adequately.

Once that date is over the individual's right of privacy will gain primacy. Courts could do this as part of their sentencing guidelines or through judicial discretion. This will, of course, require amendment of the statues currently on the books.

…and signaling with META DATA

Once a period is set by the decision of a competent court, it should not be too difficult to attach a META DATA carrying that date to that piece of information. Search engine’s information retrieving algorithm could be tasked to read this META DATA, and to leave the information out from search results if it has gone over its expiration date.

Such a step should ease the technology related burden in removing numerous links and also address the issue of removed links in one domain still accessible in other domains.

Above all, it will free the search engines from the herculean task of dealing with “removal requests” from individuals.


Obviously such a step will not be a silver bullet for all types of “takedown requests” where other information about a user has been proliferated by others on internet. However, once a META DATA on Expiry Date has been created, the original owner of the content would have gained more control on the data. This will make it easy for media sites/SEs to ignore the time-expired result in casual search sessions.

Such a step will serve to ameliorate the Type 1 and Type 3 issues referred to by Peter Fleischer, Google’s Chief Privacy Counsel. The existing laws should be able to adequately handle type 2 problems.

Image courtesy of usamedeniz / FreeDigitalPhotos.net

Changing not just the aging Business Model!

Innovation, technology and extreme social connectivity are testing and pushing the bounds of public policy and law. First these “disruptions” exerted pressure on the traditional business models, forcing businesses to pause, and take stock of the changing user role and behavior. Some businesses reinvented themselves and changed the course. Those with more inertia just folded up.

But these changes still operated within the limits defined by the existing legal and policy frameworks.  But now those structures has started showing signs of strain under the onslaught.

Take for example, a situation where an innocent teenager, venting his frustration on Facebook, faces serious charges of “thinking” of committing mass homicide, and faces possible conviction. In the pre-Facebook era the youngster harmlessly airing of his annoyance would not have travelled beyond his friends with hardly any consequences.  But now a complete stranger “friend” can notice his remarks on the social network and trigger serious consequences for the boy! Paranoia amplified X times over social networks?  Now your careless rant in 140 characters can lead to loss of job, or, make you a defendant in defamation suits.

We are still figuring out how to deal with the ever-shrinking degrees of separation in social interactions! As separation vanishes so does the notion of privacy.

Building pressure for policy changes

The explosive growth of “Sharing economy” has cities scratching their heads as they see threat to the hospitality industry, auto rental and taxi services. Not only the cities are facing impact of lowering tax revenue, they are not sure how to balance the interest of all sides concerned. Airbnb massive popularity has polarized landlords, tenants, hotels owners and worker’s unions in cities like New York and San Francisco.

City of San Antonio is wresting with the issue whether Lyft is a taxi service or "a transportation network service powered by cell phones matching people with empty seats?”

Aereo is another interesting case where the highest court of the land is considering whether housing an antenna and a DVR in a remote location and accessing recorded broadcast TV content over internet, constitutes “public performance” violating the Copyright Act? At the heart of the matter is the practice of “channel bundling” that is getting increasingly unpopular.  Cable companies argue that viewers would not be able to discover the lesser known channels unless these were bundled with more expensive ESPN! Seriously? 

 And before you dive deep into legal definitions consider the survey from Nielson that shows  the trend in cable content consumption. It is anybody's guess if this trend is  responsible for giving rise to the practice of cable cutting.

                                                   More channels are not able to move the needle

 

Is providing internet services is akin to a utility? FCC is grappling with this question and its collateral fallout of the issue of net neutrality.  The rising demand of  videos hogging bandwidth is forcing a second look at how internet is “interconnected.”  Tech companies and VCs strongly believe that creating a paid for fast lane would kill innovation.

The idea of “digital ownership” is mired in confusion when you try to explore the limits of what an owner can do. Do you have a right to sell a used eBook? There is no line separating “new” and “used” digital property. You can’t hold a garage sale of your digital assets.

Or how about the question of searching a mobile phone, of a person arrested, without a warrant? Again Supreme Court is grappling with the issue of what is “private” in the era of Facebook and Twitter? Can the arresting office scan the Facebook entries on the phone without a warrant but not the private information held in the address book or the emails?

One interesting offshoot is the case of Outbox, a startup that was striving to clean up your mailbox by digitizing and providing a soft copy of your postal mail.  They met stiff resistance from USPS management because USPS felt that this step would go against the interest of those who flood junk mails in your boxes. As this report says, these junk mailers are the “real” customers for the Agency.

Change is constant: Its velocity is not!

 

Clearly we are in the midst of major transitions fuelled by a strange mixture of innovation and resistance to change.  Granted that the laws and policies take time to evolve, given the vested incumbency and the need to balance the coin on its edge. Taking the foot off the pedal is not an option.

Such disruptions define progress, and have been happening throughout the history.  Science drove groundbreaking changes to our understanding in the last two centuries.  Now innovation has taken the baton. 

What is amazing is that we have a perfect ringside seat to a multitude of fundamental “disruptions” compressed in a short period of time.

OK Glass! Where is my iPad?

Apple’s Q2 earning threw a curved ball at the market. Yes, the iPhone sales boomed, thanks to the deal with China Mobile. The revenues at $45.6B never looked better! The report exposed the wrinkle in the declining iPad sales, the product that has grown to 200M in the shortest time in the company’s history.  That decline sent a jitter in the market. While attempts were made to explain this decline away as temporary phenomena (not a Christmas Quarter or an inventory goof up…), but as this excellent analysis from Benedict Evans shows, iPad has a use perception problem.

Yes you do not replace a tablet as frequently as you do your smartphone (more often facilitated by your mobile carrier). The core issue is the belief that tablets are replacement for bulky laptops/PCs. This has not happened as anticipated. 

To be fair the PCs/laptops shipment has been declining steadily, and to be equally fair this handy device  is not a direct replacement and for a good reasons. You can accomplish a lot with a tablet besides watching Netflix or YouTube videos, but your iPad is not exactly as hardworking a workhorse for your work or profession. It remain to be seen if availability of Microsoft Office on  iPads will push this device a bit more into the realm of replacement for future laptops. 

On a side note, Benedict Evan also concluded that we (the makers, users and investors) should think of comparing “smartphones” with “tablets and laptops” and stop clubbing tablets and smartphones together. He argues that smartphones, with their vast numbers and ubiquitous presence, is  “transformative.”  Following his reasoning one cannot escape the conclusion that it will take some more time before “tablets” will emerge as a game changer in the laptop/desktop use segment.

Awsome yet with the same issue!

Google Glass is a very different device. However, it is facing a similar perception problem while attempting to move its users beyond being labeled as “Glassholes.”  You could be active and light in exploring your world…. but where do you go from there with a device that costs more than most laptops?

Clearly both devices are not general purpose computing gadgets. Both would be excellent devices for special purpose or specialized use!

Tim Cook alluded to this when he  pointed out that  95 percent share of America's education tablet market, is held by tablet  (emphasis is mine).  I know of one startup that is using tablets extensively for teaching kids that need special education. 

Tablets are being used as check out devices in retail stores, and for browsing menus in restaurants; doctors are using iPads for remote diagnosis. There is a potentially huge but little explored territory where we need information and some interaction, but not require a whole lot of computing. Tablets fit right in.

Google Glass is probably moving in that direction. It’s use in helping firefighters, doctors and surgeons is being explored. NYPD is testing Glass's efficacy for the New York’s finest. Air Force is checking if it can be a useful visual accessory for its air traffic controllers. 

An intrepid legal firm is testing if Glass can provide relevant information faster, to help its personal injury clients. A breastfeeding support website in Australia is advocating the use of Glass to help new mothers in breastfeeding. 

Both the devices have pushed the bounds of technology and have put a lot of access  literally in our palms. 

User will put these to innovative uses, in time,  pushing the envelopes in human-machine interaction and accessing knowledge.  It is in the hands of users, not investors.

Tech companies will in the meanwhile, continue to play the cat-and-mouse with Wall Street!

Google Paid Search: Searching for growth

Google's announcement of its Q1, 2014 earning report caught the Wall Street by surprise.  The search behemoth missed the analyst estimates, something that has been unexpected from this company so far.

Google scooped up $15.42B in revenue, representing a 19% increase. But what triggered the anxiety was its key revenue metrics – Cost per Click (CPC- or the amount a user pays to Google when the person clicks on the URL in the paid search) dropped by 9%. 

While the overall click volume went up by 26% (more users clicking more), the combined effect was a net revenue increase of 19% only.  In itself, this drop in CPC would not be giving the company (and the investors) sleepless nights, what got this exacerbated is the fact that CPC has been dropping now straight for 8 quarters!

The general take of the market has been that clicks are rising on smartphones (thanks to their explosive growth- Benedict Evans

 Developing and emerging markets are driving the smartphone growth.

However, advertisers are not as convinced about advertising on your mobile phones. The level of competition has dropped therefore, depressing average prices.  Google took some steps to address this issue three-four quarters ago (remember Enhanced Campaigns). Apparently those have not been enough to shore up flagging prices.

World Going Online

One other fact, that has not caught much attention, is that the share of International Revenue has been rising steadily in Google’s total revenue. It crossed 57% in this latest report.  Google revealed its income from UK, which has been at 10%.

The Internet Trend Report 2013 from KPCB illustrates the larger share of global visitors to the Top Internet properties

These observations  lead to the following two inferences:

1.     The rise in click volume is mostly coming from regions outside US (and developed world) driven by mobile traffic.  Generally the CPC rates have been lower in developing and emerging countries than in US/UK/EU (ask any SEM vendor or a webmasters running Google Adsense program worldwide)

2.     Paid Search click volumes in the developed markets are probably reaching saturation levels, and advertisers are searching for alternate channels like Facebook or Twitter or...

Interestingly Adobe released its Q1 Social Intelligence Report and found that the CPC on Facebook has gone down 11% quarter-over-quarter while its impression and click volumes have grown! 

These are early indications that the days of windfall revenue growth from paid search are numbered, whether from desktop or mobile visitors. 

And it is the time to kick off the search for the next Holy Grail in digital marketing!

“Your privacy is very important to us….”

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This is a common refrain you hear from any company that is facing a data breach or violation of your data, whether involuntary or otherwise.  We have come to take that statement as more of a marketing speak or damage control PR, than anything substantive. The phrase signals defensive stand of the speaker.

Very recently we heard this from Microsoft. The Hotmail service provider, allegedly, read the emails of one of its ex-employees suspected of unauthorized sharing of company’s sensitive code with outsiders, using Microsoft’s own email and other data storage services! (WTF?)

Hurricane in a teacup

It was interesting to hear the commotion from EEF,  and a raging online  discussions about Microsoft’s “frisking” of user’s emails.  Some people likened access of email by Microsoft to breaking a trust that has been taken for granted.   Perhaps, in all this hue and cry, we may have forgotton that it is we, the users, who have given our consent to the tech companies (via ToS fine print) to peek into our inboxes or sniff at our outgoing emails if they so wish.

In fact Microsoft wanted to drive home this point home when its Deputy General Counsel stated (in the blog post referred above) that “Courts do not, however, issue orders authorizing someone to search themselves” (emphasis is mine). Clearly the company asserts its ownership of your emails and related data as “their” property! The software giant believes it is not just a carrier of your messages as you always believed, but owns it as well. 

Consider that USPS, by law, needs a warrant to read your mails. Private companies, however do not. They get this authority from the contract you agreed to while signing up for their services.  All for the convenience of a free email services and gigabytes of free storage. In return we do not seem to mind if our messages are read or acted upon.

 We accepted this slowly. First it was algorithms pioneered by Google that read our emails in exchange for serving more tailored ads. We tacitly agreed to the artificial distinction between a person reading our email against an algorithm designed by a person to read our emails. 

Back to the basics

Why not go for a paid email service (think Centmail-now defunct) where you pay for every email you send and forbid service provider to read your email without a warrant? No I am not talking about paid secure email services using state-of-the-art encryption to protect your mail from snooping or hacking.  Rather an email service where the sender pays to send a message in exchange for the protection of law. Granted you will be deprived of the filtered ads for your perfect vacation at unbelievable prices. But the search engines would do that gladly and there are apps for that.

Such a service would greatly reduce (if not eliminate) the massive scourge of SPAM choking our networks and inboxes, and generating all the headaches that come with it- SPAM firewalls, SPAM detection and filtering, whitelist & blacklist, domain & IP blocking.  It will also give a better control over malware spreading recklessly through emails.  

Paying for sending billions of emails would take a good amount of air out of SPAM and Malware economy. It would also make it easier to track the sources of malicious attacks that started from emails.

Looking beyond Emails

This kind of an approach would re-trigger the old protest, echoing phrases like “stifling innovation.”  Such protests presupposes that innovation does not have a leg to stand on unless it makes its services free. The reality is we are too hooked to things that come with the label “FREE.”

Interestingly the Gen X and the Millennium crowd do not treat email the same way as boomers do. Email for the digital generation is not a primary vehicle of connecting with each other.  For them mobile messaging  and social media is the current gold (ask WhatsApp and a bunch of VCs investing heavily into messaging apps).

Email has attained maturity and has become a de-facto formal means of communication like its predecessor, the postal mail. There is no reason to barter away your fundamental rights of protection against search and seizure, for a free service and suffer abuses or breaches of privacy in return ... or to act outraged if the “free” service provider goes beyond your presumptions.

Why is Search Engine Optimization not going strategic?

Search Engine Optimization professionals are facing a conundrum today.  While most practioners consider this field as a purely tactical, the search engines, notably Google and Bing,  are attempting to shift the focus.

The problem arises because the practice of search engine optimization or SEO, is trying to serve two masters at the same time – 

1. The search engines, and 
2. The website visitors. 

 

Unfortunately, and probably due to the historic reasons, we end up serving the two in that order!

Now search engines are striving to flip the priority.

But the nomenclature does not help. The name itself suggests that webmasters should make their website optimal for search engines.  The deck should be cleared for the bots to crawl and other artifacts (like links) added to boost the search ranking.

In short executing a set of tasks targeted toward meeting search engine requirements.  

Note that the phrase does not mention the searcher! 

Matt Cutts (+MattCutts) , Head of Google’s Webspam team, has been advising website owners to focus more on creating better user experience for their primary audience i.e. human visitors. He has been cautioning them not to stray into the gray practice of gaming the algorithm.  Search Giant’s consistent message has been – you focus on creating superior value for your users, we will take care of rankings.

But it also gives the following advice to webmasters that is at the nuts and bolts level.

Bing is not behind in belaboring this point. In a recent blog post Serve the searcher, not the engine their senior Product Manager implores that we should focus on the users.

Given such repeated advice by Search Engines for creating higher user experience, you wonder why they have not taken major steps in shifting the focus away from tactical matters. They can begin by changing the nomenclature that is not focused on users in order to turn the spotlight on to the users. 

Superior User Experience

Rechristening also makes sense in taking the practice to a more  strategic level. 

The current execution is mostly tactical. It is centered on tasks like “keyword density”, “link building”,  “indexing” and “crawling.”  Such preoccupation leads to cutting corners to stuff keywords or bait links however you can or to create different experiences for humans and robots. Wider consequences and fallout are rarely on the radar.

Businesses, both small and large, give in to the temptation of gaming the system. In the last two months we have seen some instances where Rap Genius, resurrected a practice banned more than five years ago to boost search ranking.  Just last month, Expedia saw its organic traffic plummet when Google handed it a penalty.  The SEO community believes that low quality paid guest blogging was the culprit.

It is time to go strategic and to focus more on what maters to your users. Technology is sufficiently advanced to take care of locating the content so you do not have to bother about robots. Algorithms are getting smarter in catching the correct signals (Big data) and separating the noise.  Once the focus is on users who drive the business, this practice will move out of the cubicle and climb up in the value chain.

But in order for that to happen, the focus of the practice needs to change first. Search Engines may take a lead in shedding the term SEO and replace it with something more representative, like Superior User Experience or SUE.

Sharing is…a Good Business

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A nascent form of sharing economy is taking shape. Airbnb, when it began was an experiment in renting out that extra bedroom or a less often used guest room, to a needy traveller looking for a short stay. The room is offered sans any frills of a hotel room or services, but is inexpensive and with much less hassles.  The experiment caught fire, and, in a very short order Airbnb expanded to over 34,000 major cities across the globe.

Sharing a ride was the next natural target. Startups like Lyft, Sidecar and UberX  explored the possibility of car owners to give passenger a ride for a fee has become immensely successful. 

Renting your car or vehicle was the obvious extension. Seeing the writing on the wall Avis decided to merge with ZipCar, a car sharing service, last year to break away from the traditional car rental model.

These experiments did not stop at renting a room or sharing a car, but extended to bike sharing or dog walking and to potentially several other fields.

Picking up the slack

Putting underutilized assets (or capital) to work makes good economic sense. There is demand, and if supply has the capacity and can come in at an affordable price, there should be no stopping. Sharing economy is cracking the door open to the pent up demand and bringing in the  suppliers aka the people.

This growth in “informal renting of assets” has caused established businesses to start worrying. They claim that the playing field is tilted against them. While they (the businesses) are bound by regulations, the agents of the shared economy are not constrained in any manner. Cities are worried that they will loose out on the tax revenue.

So the pressure is being felt!.

Barter Kings...The Next Step?

The “barter system" of exchanging goods and services with no payment involved appears to be ripe for a makeover.  This age-old practice has literally died long time ago. With the advent of internet and a dramatic rise in connectivity, the task of finding, matching and mediation in a bartering process has become much easier.

While businesses have been trying their hands with “Barter Exchanges”, like Barter Business Unlimited, it is the individual side of exchanging goods and services that could experience the next wave of change. 

When services like u-exchange are linked with the power and reach of social media, this bartering economy will have the potential to grow by leaps and bound. It will be interesting to see the economic impact of people flocking in numbers to clean out their closet (or fill up their  downtime) for getting something they have been looking for in return.

Regulation trying to catch up?

Of courses, taxes and regulations will take time to catch up to the new emerging reality. Regulations strive to bring order into chaos and taxes protect the equity. Laws, typically, have more inertia, and rightly so since these needs to see a better part of the iceberg before charting the right course. 

However, displaying amazing speed,  California Public Utilities Commission created a new class – Transportation Network Companies to provide legal cover for car sharing model in September 2013.

Challenge and be relevant! 

Some of these changes can appear like flash-in-a-pan and may disappear. eBay tried to entice its users to auction out their unused stuff.  But the “thrill of winning an auction” overtook the “need.” 

However these changes are indicators of the transformative power of connectivity and mobility.  Some of these changes may not pan out, but not before challenging us to rethink the established traditional business models built on old premises.

It was just seven years ago when Netflix was laughed out of Blockbuster’s HQ about its offer of partnership on video streaming business. It was even fewer years ago when Border realized too late that the readers would prefer to buy books online and that too electronically.