Google eyes Salesforce.com

BRW. online only By Foad Fadaghi

Speculation is growing that a deal is brewing between Google and Salesforce.com.
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SaaS gets attention of apps giants - Australian IT - May 29 2007

AS the software-as-a-service market continues to pick up steam, analysts say established enterprise software providers cannot ignore the trend.

One researcher even predicts the emergence of surprising new participants.

"For large, established IT solution providers the SaaS market so far has not appeared to have enough incremental growth potential to meaningfully contribute to revenue growth," Gartner analyst Ben Pring says.

However, "incumbent IT solution providers are slowly waking up to this and are entering the market to leverage SaaS market interest".

That analysis is backed up by another researcher, IDC, where senior research vice-president Frank Gens says SaaS "sleeping giant" IBM will awaken, and shake up the SaaS space with its WebSphere range of products.

Microsoft and SAP will increase their commitment with newer products aimed at smaller markets. In a seemingly off-the-wall prediction, Gens says SaaS market leader Salesforce.com is ripe for takeover but he does not think IBM, Oracle or SAP will be the acquirer.

Gens says it will be either Google or Yahoo, allowing them to move deeper into the enterprise market from their consumer roots.

The worldwide SaaS market reached $US6.3 billion ($7.7 billion) in 2006 and is forecast to grow to $19.3 billion by the end of 2011, according to Gartner.

Gartner defines SaaS as hosted software based on a single set of common code and data definitions that are consumed in a one-to-many model by all contracted customers, at any time, on a pay-for-use basis, or as a subscription based on usage.

The report emphasises that SaaS adoption is broadening out from areas such as customer relationship management and human resources into new areas such as procurement and compliance management.

The scale of change involved in moving to a SaaS approach is proving hard for many to manage.

"Hosted services have come a long way from the lunatic fringe to emerge as an accepted norm," Pring says. "Other than IBM and more recently Google, large players have given the technology a wide berth, in part because of its lack of perceived growth potential."

Driven by debate over the technology, the concept of core competence and the economics of capital allocation, SaaS sees the pendulum swinging away from today's accepted norms and towards a business model that predates it.

After a period of supply-side stagnation (2000-04) new players such as Salesforce.com, Case Central, Axentis, Rearden Commerce, NetSuite and Invoice Insight have emerged.

By 2011 Gartner expects that about a quarter of all applications being used by companies will delivered SaaS-style, Pring says.


What hooked Google's 12th recruit

WHEN Omid Kordestani first met Larry Page and Sergey Brin, he was a successful business development executive at Netscape Communications, the browser company that opened the world's eyes to the power of the internet, and they were 25-year-old dropouts from Stanford University in the US.

Albeit dropouts with a promising search engine called Google.

At the time, in early 1999, Google employed four or five engineers in a garage in California's Palo Alto and had no clear idea how it was going to make money.

Kordestani was introduced to them because he thought Netscape might be able to make some use of search, but it didn't turn out quite as he expected.

Sitting at a pingpong table, he was soon embroiled in a six-hour interview with the inexperienced Brin, who called in his engineers to help in the cross-examination.

At the end, Kordestani took them all out and bought them dinner at a Chinese restaurant.

"The sparkle in their eyes, this real idealistic view that they could change the world, was clear from day one," Kordestani said earlier this month.

"That simplicity was really what attracted me - that innovation was so clear. I was convinced that even if they decided to build furniture it was going to be the most innovative furniture you'd ever seen."

So, two months before the birth of his second child, Kordestani took the "very risky and scary move" of becoming Google's 12th employee.

As the world knows, it turned out well for Google and for Kordestani. The Google advertising business Kordestani built is today worth almost $US150 billion ($182 billion), and he has an estimated fortune of $US2 billion.

Kordestani was given the task of globalising the newly profitable Google when Eric Schmidt, a Silicon Valley veteran, took over from Page as chief executive in mid-2001.

"Eric told me to get on a plane and not come back until we had international revenues reflecting our international usage," Kordestani said.

When he arrived in Britain, Kordestani had to hold meetings in hotel lobbies.

Google was already Britain's most popular search engine, but it didn't have offices here.

Google now employs more than 12,000 people, although it continues to take painstaking care over new recruits.

Page personally signs off on all new hirings every Wednesday.

Britain has been a big part of Google's success.

With strong growth in Germany, France and Spain, the company has just promoted its London-based head of European operations, Nikesh Arora, to the new role of president for Europe, the Middle East and Africa.

"Nikesh is doing a tremendous job," says Kordestani, who is global sales and business development senior vice-president.

Google had always seen itself as a global phenomenon, not just a US business, he says.
From having only 400 staff when Arora was recruited from the board of T-Mobile in November 2004, Google Europe now has 2000. Its European partners include the BBC and German publishing group Axel Springer.

Like Brin, Kordestani is an immigrant to the US, having been born and raised in Iran, where he attended an Italian Catholic school in Tehran that emphasised education and language skills. As a boy, he spent a lot of time in London with his parents, but the death of his father prompted his family to move to California in 1978 when he was 14.

Along with Schmidt, Kordestani was to be back in Britain yesterday to attend Zeitgeist, the company's annual gathering to discuss technology trends with industry leaders.

This year's participants include WPP's Sir Martin Sorrell, BSkyB's James Murdoch, the BBC's Mark Thompson and Sanjiv Ahuja of Orange. When Kordestani joined Google, the fledgling firm was still experimenting with ideas for generating revenue, including licensing its search engine to other websites and large companies.

Contrary to the suggestion in John Battelle's book The Search on the company, Kordestani says Google's founders were never opposed to advertising per se, only to intrusive banner ads that detracted from the all-important user experience.

"Our founders were very savvy," he says.

Despite the dotcom euphoria, Page and Brin were keenly aware that Google could not become successful without customers, and that revenue "is not a bad word".

Kordestani says it was interesting that everything Google tried had made money.

"Our enterprise business has grown into a very successful business by itself," he says.

Google Apps, as it is called, charges companies a fee for a suite of Google's software, including email, instant messaging, word-processing and spreadsheets.

However, this business is dwarfed by the colossal success of search-based advertising, which generated the bulk of Google's $US10.6 billion revenue last year.

The great advantage of keyword advertising is that advertisers can quickly see what works and what does not.

Kordestani says this is only the start, and the company plans to apply the same data-driven approach to other forms of advertising: television, print, radio and emerging formats such as mobile phones.

"Our vision is very simple," he says. "The effectiveness and accountability of search can extend to all these new areas.

"There's not only a lot of spending in other segments, but there is a great desire among customers to have the same view of the performance of this advertising, and be able to understand how best to allocate budgets between the different formats.

"It's about efficiency and accountability. The ultimate vision is to create a dashboard that helps chief marketing officers to have real visibility of how best to spend money and allocate their budgets. There's a lot of power in that."

Google's broadening ambitions recently prompted it to spend $US3 billion to acquire Double Click, a firm that serves as an intermediary between web publishers and online advertisers.
Last week, the growing potential of digital advertising prompted Microsoft to spend $US6 billion on Aquantive, the owner of the leading agency, Razorfish.

WPP, one of the world's biggest marketing groups, bought 24/7 Real Media of New York for $US649 million.

Every Monday, Kordestani reviews Google's most important partnerships, with input from Schmidt, Page and Brin.

The involvement of the founders is one indication of their determination to remain much more than figureheads.

The power balance within the triumvirate is a source of considerable fascination in Silicon Valley.

It is widely assumed that Brin and Page, who are still large shareholders, ultimately call the shots, irrespective of Schmidt's position as chief executive.

"They have their own areas of passion where they spend their time," Kordestani says.
"Eric and Larry spend a lot of time with our engineering teams, reviewing the priorities and doing rapid reviews of the products.

"Given the phenomenon and given how fast Google has grown and how ambitious our vision is, it's great to have three great brains at the top of the company sharing that responsibility."


$12bn 'land grab' reshapes world of online advertising

Michael Sainsbury
May 24, 2007

FIRST it was the second wave of the internet, widely known as web2.0, powered by broadband speeds, armed with interactive technology and enhanced video capabilities. Now it's (dotcom) boom 2.0.

As the internet has finally started to deliver on its promise as the global (and Australian) media platform of the 21st century, extraordinary deals worth $12 billion have been sealed in the past six weeks.

This time the targets are not the online e-tailers - most of which collapsed through lack of interest - but the digital advertising software platforms, agencies and website networks that power the revenues of the web.

"It's a land grab," Shane Murray, chief executive of Australian digital advertising group Viva9.com, said.

And these deals have the potential to shape the Australian and global online media industry.

"In the the first dotcom boom, technology companies were separate from the media companies," Mr Murray said.

"Now that there is vertical integration, it's about adding value and providing the best value for advertisers."

What the big internet players are trying to do is create integrated businesses comprising buyers, sellers and the software platforms and behaviour measurement technologies that sit between them.

And many believe that much of the present deal frenzy has been driven by the fear of a company that emerged only towards the end of the first, truncated dotcom boom, Google.

"The prevailing dynamic is of fear created by the Google-DoubleClick deal," Ian Lowe, chief executive of listed local digital advertising group Facilitate Digital, said.

"This has seen the land grab reach nonsensical proportions as media players are buying technology, media buyers are buying technology and media buyers are buying media players."

Google muscled into the market in April with the $US3.1billion purchase of DoubleClick, only to be outspent last weekend by arch-rival Microsoft, which splurged $6 billion on aQuantive, a group with similar assets.

In between, advertising group WPP spent $649 million buying 24/7 Real Media and Yahoo paid $680 million for Right Media. And then there's the $1.2 billion that another advertising conglomerate - Publicis - paid forDigitas.

Google's Australian spokesman Rob Shilkin was reticent to make any comments on the group's strategy beyond a short statement. "For users it the acquisition of DoubleClick will mean more relevant, targeted and useful advertising," he said. "And for customers the acquisition of DoubleClick will deliver the integration of all types of online campaigns more effectively, combined with faster product innovation.

"We believe recently announced acquisitions are evidence of the rapid pace of change and healthy competition in the advertising industry."

The recently acquired companies hold an almost bewildering array of assets.
Most run the sophisticated internet software platforms known as ad servers. These straddle the online advertising equation as they are the conduit between the advertisers needing to put their ad on the internet site and the publishers who need the ads displayed.

The aQuantive purchase sparked a share price run on Facilitate - up 12 per cent in one day on Monday - as Facilitate also owns ad serving software.

Lowe is coy about any approaches the company may have had and Viva9 is still considering whether it will make its own public offering.

It's not just the software and advertising parts of web 2.0 that are booming: so are the broader internet marketing groups.

Also this week, local digital services and marketing conglomerate BlueFreeway, which only listed late last year, upgraded its profit forecasts.

Revenues will increase from $17.1million to $19.4 million for the 2007 second-half period. The company said the earnings upgrade has been driven by organic growth in the initial 10 companies that made up BlueFreeway at the time of the initial public offering in December 2006, reinforcing the many benefits of themodel.

"BlueFreeway has been born at a time of an unprecedented shift away from traditional media, and as such has realised growth via its one-stop-shop offering through its corporate sales team," the group's chief executive Richard Webb said.
"While the company has made, and will continue to make, accretive acquisitions, this result demonstrates that our foundation companies continue to grow and become more efficient, and are well-placed to benefit from unprecedented growth in online marketing and advertising spending."

There is more basis for confidence in the internet now than there was back in the halcyon dotcom days. Locally, online advertising topped $1billion last year and its growth is outstripping ad growth in traditional media by a factor of four or five. There certainly appears to be something of a bubble at play.

"aQuantive is a very serious business as its recent revenue growth and profitability show," said David Bradshaw, principal analyst at technology research specialist Ovum.

"But still, an 80 per cent premium on the share price and almost 14 times last year's revenue: how can it be worth this much to Microsoft?

"The answer is only if Microsoft can use this purchase to drastically improve its share of the online advertising market, which some estimates put as high as $40 billion in the last year."

And increasingly revenue is not just about eyeballs and website traffic but about how you target website users. In Australia, the big media sites such as Ninemsn, Yahoo7, eBay and the more traditional media groups account for up to 90 per cent of traffic.

Better software, and an advertising industry that now understands the medium better, is starting to deliver on the targeted advertising that the world wide web promised for smaller publishers.

"There are two main factors that drive success in the online advertising business, the strength of your web presence and how effectively you monetise that web presence," Ovum's Mr Bradshaw said.

Viva9.com business development chief Peter Bojanac agrees.
"It's all about how much money have you made me? Show me the money," he says. "We provide free ad serving, we think it's a commodity. We are winning clients left, right and centre. It's not so much about the technology, but performance.

"We have multiple network partners worldwide. Publishers pay us only only for the lead we generate for them. At the end of the day, the client doesn't have any risk."

That sounds like the future the internet has long promised. The question is, when the music stops at the end of the latest acquisition round, who will deliver it?


Salesforce lifts on Google talk - Australian IT - May 22

MAY 22, 2007

SALESFORCE.COM's stock price climbed by more than 4 per cent Monday in response to a report that the online software pioneer is poised to team up with internet search leader Google in a double-barrelled attack on Microsoft. Although details are still being negotiated, the alliance would most likely involve blending Google mass-market applications like instant messaging, word processing and spreadsheets with Salesforce.com's business programs for managing customer relationships, according to The Wall Street Journal.
Microsoft, the world's largest software maker, competes in all those fields, making it logical for Mountain View-based Google and San Francisco-based Salesforce.com to draw upon their respective strengths to thwart a common rival.
A partnership makes so much sense that "it's not out of the realm of possibility that Google ends up buying Salesforce.com," CIBC World Markets analyst Brad Reback said.Investors seemed tantalized by that prospect as Salesforce.com shares rose $US1.96 ($2.38), or 4.3 per cent, to $US47.76 Monday. Google shares gained $US0.28 cents to finish at $US470.60.Google is still trying to close its planned $US3.1 billion acquisition of online DoubleClick in what would be its largest deal in its 9-history.
Buying Salesforce.com would cost even more, given the company's $US5.5 billion market value.
In a Monday interview, Salesforce.com Chairman Marc Benioff reiterated his long-standing admiration of Google but declined to comment on any possible talks. "The enemy of the enemy is my friend," he said. "That makes Google my best friend."A Google spokesman declined to comment Monday.
A formal announcement between the two companies is expected in early June.Mr Benioff, an outspoken advocate of distributing software applications over the Internet, has repeatedly depicted Microsoft as a lumbering dinosaur that he hopes to drive into extinction.
The topic surfaced during Salesforce.com's quarterly earnings conference call last week when Benioff told analysts his company already has been promoting Google's free alternatives to Microsoft's widely used suite of office applications."We're accelerating Google against Microsoft because we show customers that they can use Google apps, like Google spreadsheet and Google word processor instead of buying Microsoft Office," Mr Benioff told analysts. "Microsoft doesn't like that.
"Google has been promoting its applications more aggressively this year as it tries to give Web surfers more reasons to visit its site, where it makes most of its money from online ads. The company also is trying to create a new source of revenue by licensing an expanded suite of applications to corporate customers.
To underscore its ambitions, Google earlier this month embraced "Search, Ads and Apps" as its new theme.Meanwhile, Salesforce.com has overcome initial scepticism to prove companies are willing to lease some applications over the Internet instead of going through the more cumbersome - and often more expensive - process of installing the programs directly on computer hard drives.Founded near the height of the dot-com boom in 1999, Salesforce.com now boasts 32,300 customers and is expected to generate than $US700 million in revenue this year. Mr Benioff expects Salesforce.com's revenue to top $US1 billion next year.
Salesforce.com's success has helped the company's stock price more than quadruple from its initial public offering price of $US11 nearly three years ago.

The Associated Press

Google, Salesforce Said To Be Talking, Targeting Microsoft - Investors.com - May 21

Monday May 21, 7:00 pm ET
J. Bonasia

Reports surfaced Monday that Salesforce.com (NYSE:CRM - News) and Google (NasdaqGS:GOOG - News) are in talks about an alliance aimed at mutual rival Microsoft (NasdaqGS:MSFT - News). The reports sent Salesforce shares up 9% before the stock closed up 4.3% at 47.76, a three-month high. The reports also sparked some favorable reaction from analysts.

"Such a partnership would be extremely reasonable and viable," said Brad Reback of CIBC World Markets.

Salesforce and Microsoft are increasingly facing each other in markets for enterprise software, especially for midsize and small businesses. Google and Microsoft most notably face off in online search, but Google has come out with some software products that also compete with Microsoft, the world's biggest software company.
The Wall Street Journal, citing unnamed sources, reported that Salesforce and Google are in talks to strike some sort of a partnership soon. Salesforce and Google declined to comment.
Analysts say Google and Salesforce could combine their online software into a more complete package for business users. They would take on Microsoft's Office, Dynamics and Live brands.
Broad Offerings

Google could offer users its desktop collaboration software for e-mail, chat, spreadsheets, word processing and calendars. Salesforce could provide online services to help companies build and track customer relationships.

Salesforce does not want to build the word-processing, spreadsheet and other desktop software products that Google has been rolling out in recent months, says Brent Thill, an analyst with Citi Investment Research. Google lacks Salesforce's business applications. Citi rates Salesforce, Google and Microsoft stocks all buys.

"Salesforce wants to continue to focus on what they do well," Thill said. "Most of their success has come with midsize businesses."

Some analysts also expect that Apex, a software language developed by Salesforce.com, could be combined with other software from Google to create more business applications for AppExchange, an online marketplace for software programs that is hosted by Salesforce.com.
"With Google's existing success in consumer applications, an alliance with Salesforce would give them more presence in the enterprise space," said Trip Chowdry, an analyst with Global Equities Research.

Salesforce remains ahead of rivals in developing online applications for businesses, Chowdry says. Salesforce is a pioneer in on-demand software, or software as a service. Users don't license or buy packaged software for installation on their networks. Instead, they use it as needed, downloading it from Salesforce's network.

The on-demand style is counter to how Microsoft built its huge business, but Chowdry points out that Microsoft has come from behind many times. "Microsoft realizes they have to play catch-up," he said. "Don't rule them out yet."

New Area For Google

Google would likely benefit more than Salesforce from a partnership, says Peter Goldmacher, a Cowen & Co. analyst. Google lacks a strong foothold with enterprise customers, he says. He rates Salesforce stock neutral. Cowen & Co. has buy ratings on Google and Microsoft.
"Such a partnership would help to get Google's productivity applications into the customer base of Salesforce.com," Goldmacher said.

Both Google and Salesforce have built Web-based software businesses that pose a challenge to Microsoft's dominance, says Reback, who has neutral ratings on Salesforce and Google shares.
"With a partnership, Google would gain an entree into more enterprise customers, and Salesforce would get greater distribution among small and midsize businesses," he said.

A partnership would reinforce a widely held view that Google plans to battle more intensely with Microsoft, Goldmacher says.

"There are a lot of things to think about," he said. "One thing that's clear is that all three of these companies are moving much faster than their customers right now."

The partnership would likely improve integration between Google's e-mail applications and Salesforce's suite of customer relationship management programs, says Daniel Cummins, an analyst with Bank of America Equity Research.

"It could bring Salesforce into the spotlight at many organizations that Google targets," he wrote in a research note. Bank of America rates Salesforce a buy.

Google, Salesforce.com discuss alliance - Business Week - May 21


Salesforce.com Inc.'s stock price climbed by more than 4 percent Monday in response to a report that the online software pioneer is poised to team up with Internet search leader Google Inc. in a double-barreled attack on Microsoft Corp.

Although details are still being negotiated, the alliance would most likely involve blending Google mass-market applications like instant messaging, word processing and spreadsheets with Salesforce.com's business programs for managing customer relationships, according to The Wall Street Journal.

Microsoft, the world's largest software maker, competes in all those fields, making it logical for Mountain View-based Google and San Francisco-based Salesforce.com to draw upon their respective strengths to thwart a common rival.

A partnership makes so much sense that "it's not out of the realm of possibility that Google ends up buying Salesforce.com," said CIBC World Markets analyst Brad Reback.

Investors seemed tantalized by that prospect as Salesforce.com shares rose $1.96, or 4.3 percent, to $47.76 Monday. Google shares gained 28 cents to finish at $470.60.

Google is still trying to close its planned $3.1 billion acquisition of online ad service DoubleClick Inc. in what would be its largest deal in its 9-history. Buying Salesforce.com would cost even more, given the company's $5.5 billion market value.

In a Monday interview, Salesforce.com Chairman Marc Benioff reiterated his long-standing admiration of Google but declined to comment on any possible talks. "The enemy of the enemy is my friend," he said. "That makes Google my best friend."

A Google spokesman declined to comment Monday.

A formal announcement between the two companies is expected in early June.
Benioff, an outspoken advocate of distributing software applications over the Internet, has repeatedly depicted Microsoft as a lumbering dinosaur that he hopes to drive into extinction.

The topic surfaced during Salesforce.com's quarterly earnings conference call last week when Benioff told analysts his company already has been promoting Google's free alternatives to Microsoft's widely used suite of office applications.

"We're accelerating Google against Microsoft because we show customers that they can use Google apps, like Google spreadsheet and Google word processor instead of buying Microsoft Office," Benioff told analysts. "Microsoft doesn't like that."

Google has been promoting its applications more aggressively this year as it tries to give Web surfers more reasons to visit its site, where it makes most of its money from online ads. The company also is trying to create a new source of revenue by licensing an expanded suite of applications to corporate customers.
To underscore its ambitions, Google earlier this month embraced "Search, Ads and Apps" as its new theme.

Meanwhile, Salesforce.com has overcome initial skepticism to prove companies are willing to lease some applications over the Internet instead of going through the more cumbersome -- and often more expensive -- process of installing the programs directly on computer hard drives.

Founded near the height of the dot-com boom in 1999, Salesforce.com now boasts 32,300 customers and is expected to generate than $700 million in revenue this year. Benioff expects Salesforce.com's revenue to top $1 billion next year.

Salesforce.com's success has helped the company's stock price more than quadruple from its initial public offering price of $11 nearly three years ago.


Fairfax and Google forge ad deal - SMH - May 18

Stephen Hutcheon
May 18, 2007 - 12:52PM

Fairfax Digital has strengthened its ties with Google, announcing an expanded relationship that will include a rollout of Google's AdWords text advertisements across the media company's network of websites.

The agreement will also pave the way for an increased amount of Fairfax's video content being made available through Google Video and a greater use of Google's mapping service throughout the Fairfax Digital network.

The partners also indicated that down the track, they would pursue additional commercial opportunities in Australia and New Zealand.

"We see this as a great partnership going forward and one that will allow us to do some interesting things, as yet unspecified," said Fairfax Digital CEO Jack Matthews.

"We believe there will be significant benefits to Fairfax and to ourselves from this partnership ... through increased monetisation ... and secondly, we believe our international reach is very important," Google's regional managing director Richard Kimber said.

The agreement will see revenue generated from the AdWords advertisements shared between the partners.

Fairfax Digital's existing graphical ads are served through DoubleClick, a company Google recently purchased for $3.75 billion.

"In today's complex world there is a reality you have to deal with ... and we see many more upsides to this relationship than threats," said Mr Matthews, responding to questions about dealing with a company that was once viewed as a competitor.

Fairfax Digital is the online arm of Fairfax Media, publisher of a raft of newspapers and websites including The Sydney Morning Herald and smh.com.au.

Fairfax Media last week completed a $7.5 billion merger with Rural Press that saw it significantly expand its presence in print, radio and magazines across a much wider geographical footprint.

The deal does not include Fairfax's stable of New Zealand websites, nor the Fairfax Business Media online network.


New Study Renews Click Fraud Debate - SMH - May 18

May 18, 2007 - 1:05PM

Deceptive clicks on Internet advertising links distributed by Google Inc., Yahoo Inc. and other online marketing vehicles are probably occurring far more frequently than the network operators acknowledge, according to a study by fraud detection specialist Fair Isaac Corp.

The chicanery involves automated computer programs or scam artists who repeatedly click on ad links with no intention of buying anything. The short ad links, which appear alongside search results and other content at thousands of Web sites, typically trigger a commission with each click _ a financial formula ripe for mischief, Minneapolis-based Fair Isaac found.

The study's preliminary conclusions, scheduled to be discussed Friday during a Fair Isaac conference in San Francisco, threaten to revive suspicions among advertisers that they have been overcharged as part of a ruse known as "click fraud."

After reviewing a handful of Web sites since last August, Fair Isaac believes 10 to 15 percent of the advertising traffic is "pathological," indicating a likelihood of click fraud, said Joseph Milana, the company's chief scientist of research and development.

"It's still an early result," Milana said. "The question remains about how broad the problem is in the entire marketplace."

The culprits behind click fraud typically are either trying to make more money from the ads appearing on their own Web sites or maliciously trying to drain the marketing budgets of a competitor.

Google, which runs the Internet's largest ad network, maintains its engineers and filters identify all but 0.02 percent of the click fraud on its network. The Mountain View-based company says it doesn't bill advertisers for any of the flagged click fraud.

Yahoo, which runs the second-largest ad network, also maintains its preventive measures weed out all but a small portion of click fraud.

Fair Isaac's initial estimates fall in the same range as those made by Click Forensics, a San Antonio-based consulting service that compiles a quarterly index tracking click fraud rates.

Other studies have estimated click fraud rates as high as 30 percent, a figure implying advertisers have paid billions of US dollars for bogus sales referrals during the past few years.

Google and Yahoo have consistently ridiculed double-digit click fraud estimates as the handiwork of search engine consultants trying to drum up more demand for their services by alarming advertisers.

On the flip side, Google and Yahoo have a powerful incentive to debunk the click fraud claims to preserve confidence in a system that generates most of their profits. Last year alone, Google and Yahoo sold a combined $16 billion in Internet ads.

Fair Isaac enters the debate with a track record for ferreting out fraudulent conduct in other industries.

Best known for a scoring system that rates the creditworthiness of consumers, Fair Isaac also has helped banks fight credit card fraud for 15 years. More recently, the company has sold anti-fraud tools to health care providers and telecommunications companies.

Now, Fair Isaac is trying to determine whether click fraud is a big enough problem to justify the company developing a potential solution that could help boost its own profits. "This is a problem that fits well in our sweet spot," Milana said.

Click fraud doesn't appear to be a major problem when the ads appear on Google's and Yahoo's respective Web sites, Milana said.

The trouble starts cropping up once Google and Yahoo deliver the ads to other Web sites that are part of their vast marketing networks.

"They just don't know what happens beyond their own firewalls," Milana said of Google and Yahoo.

Ads on other Web sites accounted for $4.16 billion, or 39 percent, of Google's revenue last year. Google shared $3.31 billion of that revenue with its advertising partners. Yahoo doesn't break out how much of its revenue comes from ads on other Web sites.

Aberdeen Report: Creating A Customer Centric Marketing Organization

Marketing executives face a constant stream of pressures—pressure to accommodate customers, business pressure from executives to meet corporate goals, and pressure for virtuosity in performing key marketing functions. In addition, there is increasing uncertainty stemming from converging sales, marketing, and distribution channels. These pressures to find the smoothest path to the bottom line, and utilize the technologies that best integrate all the customer data collected at each point and channel of customer interaction, are omnipresent for organizations of all sizes, revenues and industries.


In a recent study published by Aberdeen Group, findings revealed that creating a customer-centric marketing organization provides significantly higher return on marketing investment (ROMI) and has become a driving imperative for chief marketing officers. Five hundred companies were surveyed to gain insight into how organizations enhance customer relationships and grow revenues through marketing initiatives.

The research revealed that best-in-class marketers consistently demonstrate higher performance across KEY business and marketing metrics, they also measure specific metrics that directly link marketing efforts and overall business goals.

Sample of the findings:

Fifty-percent of small and mid-market enterprises lead in capturing 70% of current customer profiles

50% have centralized customer knowledge and data management processes in place

Customer data is utilized to perform customer profitability modeling at rates significantly above average – 41% versus 33%

According to Aberdeen, technologies that will yield best-in-class results must enable integration of data and enhance sophistication of marketing processes in order to add value.

Download the FREE Aberdeen Study Creating a Customer-Centric Marketing Organization.


CRM Magazine: Is Salesforce.com Changing Direction?

by Marshall Lager Tuesday, May 01, 2007

When Salesforce.com announced its 25,000-seat customer win with Merrill Lynch on February 27, it also showcased Salesforce Wealth Management Edition, the vendor's first release targeting a vertical market. The deal size is significant--even its pilot program was larger than most Salesforce.com implementations--but the real surprise is the vertical product itself.

Salesforce.com, and its chairman and CEO Marc Benioff, formerly took an antivertical stance, stating that Salesforce.com is easily customizable and expandable to any need, and insinuating that vertical solutions don't truly address the needs of individual businesses. Siebel was often targeted because of its vertical focus, but now it appears the taunts were a smokescreen.

"If it's disingenuous, it's not the first time a person or business has changed their approach," Jeff Kaplan, managing director of THINKstrategies, says of the switch in attitude toward verticals.
"If it's Machiavellian--distracting the industry while preparing to do verticals their own way--that wouldn't be surprising either."

Many analysts believe the maneuver is smart both for the company and for the industry. "It shows how the SaaS model continues to evolve; even horizontal applications like CRM and SFA can be configured to meet specific industry needs," Kaplan says. "From Salesforce.com's perspective it's good, because it broadens the market opportunity without stretching them too far. It's not too different from what they've done in the past, and they can achieve it through third parties. It's a perfect example of how to leverage AppExchange."

Martin Schneider, an enterprise software analyst with The 451 Group, says that the vertical turn isn't something Salesforce.com would do rashly. "Salesforce.com isn't just saying 'We're going vertical like everybody else'; they're seeing where the need is greatest, and where they can do well with a vertical product. They picked somewhere that they could undersell the incumbents and still perform well."

Salesforce.com's vertical editions aren't even big news. "There isn't much vertical customization in the CRM itself; it's what AppExchange and the open platform can offer," Schneider says. Kaplan agrees: "This is part of the natural evolution of the market. As Salesforce.com gets bigger, it becomes a bigger target for criticism." Strategies that would once have caused unbridled excitement are viewed with skepticism now that the company is an industry leader.

Whether the new vertical focus is good or bad for Salesforce.com, the company will have to walk a fine line when it comes to rolling out new functionality. Much of that functionality is not native to Salesforce.com, but supplied by partners and other vendors via AppExchange. "Salesforce.com does have a tendency to step on its partners' toes when it comes to announcing enhanced functionality," Kaplan says. Schneider echoes the metaphor: "It's going to be tough not to step on the partners' toes. This announcement goes against past statements, including some very recent pro-partner announcements."

The challenge isn't for Salesforce.com to provide good vertical applications--it's to keep the balance between promoting its own capabilities and keeping its partnerships intact. "Partners want to be added-value vendors, not an extended sales team for Salesforce.com," Schneider says. "Making the simultaneous VAR and on-demand model work is hard. Salesforce.com will have as much trouble as anybody else." --Marshall Lager

Two Questions for Marc Benioff, chairman and CEO of Salesforce.com

CRM magazine: You have previously denounced the need for vertical applications. Why did you recently announce the first vertical offering, Salesforce Wealth Management Edition?

Benioff: Since our inception I've never been a fan of verticals. Really what happened were two things: We started aggregating customers by a number of key verticals. When we got into financial services they started to ask us to customize our product with a number of things. We [later discovered] our product really was satisfying a lot of them, and not just small and medium ones--where we have a lot of presence--but really the biggest in the world, including Merrill Lynch and Deutsche Bank and others. That's why we need to focus on the financial services industry, because, first and foremost, our largest customer is now in financial services. Second, we ended up having a lot of demand-specific expertise.

CRM magazine: Which vertical will you target next?

Benioff: We see expansion into the media as well as into the nonprofit sector, where we also have a strong presence, as well as in the high-tech and manufacturing areas. David Myron

Web ads work, even if you don't see them - iTnews.com.au - May 15 2007

By Robert Jaques, 15 May 2007 11:45 AEST
Even incidental exposure to advertising on commercial websites may have a significant impact on consumers, new research has revealed.
A study by US academics due to be published in the June issue of the Journal of Consumer Research found that website banner ads influence surfers even if they are not aware of having seen them.
"Regardless of measured click-through rates, banner ads may still create a favourable attitude towards the ad due to repeated exposure," wtote Xiang Fang (Oklahoma State University), Surendra Singh (University of Kansas) and Rohini Ahluwalia (University of Minnesota).

"Effects of mere exposure are expected to grow in a marketplace where consumer attention is often focused elsewhere."
The researchers investigated whether "mere exposure effect", a condition in which people develop a positive perception of stimuli not presented to them on a noticeable level, was also applicable to incidental advertising.
In a series of experiments, they discovered that even if people could not recall the content of the ad, repeated exposure led to familiarity, which then led to positive feelings.
"Our research could have important theoretical and practical implications. Theoretically, it enhances our understanding of the process underlying the mere exposure effect," said the researchers."
Practically, it provides some useful guidelines for advertisers to develop more accurate measures of banner ad effectiveness."
Participants had more positive evaluations towards the target banner ad as exposure frequency increased. Surprisingly, participants also showed high levels of tolerance for banner ads on which they were not directly focused.
According to the researchers, common wear-out effects were not apparent even after 20 exposures.
"Our results suggest that the fluency resulting from frequent passive exposure, and the consequent spontaneous affective reaction, provide a crucial link between exposure and positive impressions," wrote the authors.
"Such spontaneous affects influenced evaluative judgments through a more complex process, likely by colouring the interpretation of the fluency experience and the nature of resulting meta-cognitions relating fluency with liking."


It's web take 2.0 - SMH - May 15, 2007

Australian companies are starting to twig that Web 2.0 isn't just the latest trend for designing web pages - it can be a vital business tool. Brad Howarth reports.

MAKING a name for your business in a national market is never easy. It's even harder when you're a small start-up company based at Ballarat in regional Victoria.

Sometimes a lateral approach to the market can help - such as providing a free service to get your name out there and get potential paying customers hooked.
That small start-up, Imaging Associates, decided that a web 2.0 tool could help give them that edge. Imaging Associates provides a specialist service and software to help professional digital photographers calibrate their computer systems.

The company chose to use a swicki - a combination of search and wiki software - to build a community of interest (and potential customers) around its company website. The swicki software, developed by the New Zealand company Eurekster, enables web searching that produces only the targeted search results wanted by that specialist community.

The swicki search engine learns from the popularity of the links clicked by the software developers, multimedia designers, digital photographers and graphic artists who use them.

The swicki went live in September last year, and immediately doubled IA's site traffic. Since February, traffic to the IA site has increased by 10 per cent each month.

"It was a very good way that we could gain publicity for our site," says Imaging Associates' webmaster, Simon Reid. "We can provide a service by putting in some of our time to moderate the search engines that we've created, and in return it's gaining publicity for our site.

"We've definitely found a very positive response, in terms of learning about what people are looking for, and people discovering Imaging Associates."
The company has since built swickis for even more specific topics. Each requires maintenance of about one hour a week. The swickis are free for Imaging Associates to create, with Eurekster deriving revenue from ads on the swicki sites.

Swickis are among a clutch of technologies described under the collective tag of web 2.0. The term has many definitions, but is generally applied to web pages or applications that can be easily altered by users, rather than just being passively read.

The technology has also come to represent a spirit of free and open communication between or among companies and the users of their products and services. Hence, some web 2.0 technologies are also called social media technologies.

Blogs and wikis are the most common examples of web 2.0 technologies, but the label has been applied to many others, such as mash-ups, tagging, and virtual worlds.

The main focus of web 2.0 developers has been applications for consumers, such as the online task management service called Remember the Milk, or the parenting information service Minti. Some have been adopted by small businesses such as Imaging Associates, but to date few larger Australian businesses have plunged into the social media pool.

One exception is the not-for-profit World Wildlife Fund (WWF). Its former manager of online communications, Grant Young, says the WWF is becoming a convert to web 2.0 technologies, having recently created its first organisational blog focused on what people can do to reduce their environmental footprint, using software from US company WordPress.

The WWF has also set up a travel diary blog for a staff member travelling to Macquarie Island, using software from another US supplier, Blogger, which is owned by Google. The WWF communications team is using an internal wiki for sharing information within its marketing team, and is looking to expand that across the organisation.

Mr Young, who is now working at digital media consultancy Digital Eskimo, says there is much interest in the use of these social media technologies throughout the WWF globally. "We definitely see it as an opportunity to meet people where they are at, rather than constantly trying to drag people to where we are," Mr Young says. "Our website is for anybody to find, but quite often they may not think of WWF as an organisation that is working in a particular area. So we go to where they would be looking. And everything from search engine optimisation to web 2.0 tools are methods of doing that."

WWF is also a heavy user of email and manages this using the Campaign Monitor online service from Australian developer FreshView. As a small software developer, FreshView is a heavy user of web 2.0 technology, with an active corporate blog.

Mr Young says he has appreciated having close access to the product's developers through the blog, as they have been highly responsive to support requests. Several of Mr Young's suggestions have since been incorporated into FreshView products.

"Their blog has been fantastic - particularly for us when we were redeveloping our newsletter," Mr Young says. "The blog has a gallery that promotes their customers' emails, and it was a really rich way for us to get an idea about what other people were doing and how they were doing it."

Adopting the web 2.0 ethos has paid benefits for FreshView, a company that employs only five people and spends next to nothing on marketing. Co-founder David Greiner says the company has created a very active community, allowing it to sign up 25,000 registered customers including Apple and eBay.

"We relied on word of mouth and blogs and message boards and online communities to get the word out," Mr Greiner says.

Whether companies such as Imaging Associates and WWF will prove to be early adopters of a mainstream trend is still unknown.

According to social technologies researcher Ross Dawson, some information-intensive organisations, including law firms and banks, are the most active in investigating the benefits of web 2.0 technology, as an extension of ongoing knowledge management developments.

"Web 2.0 in the enterprise is about enabling people to better find information and work with it," Mr Dawson says. "There are some sweet spots, which are very natural applications for blogs and wikis where it makes a lot of sense. And these are projects, competitive intelligence, and many other things where you are trying to get broad information and input on a specific topic."

In the case of competitive intelligence, for instance, a wiki can be set up to allow employees to input information they may have learnt about their organisation's competitors, and rely on their colleagues to collaborate or correct their entries. The same can be true of corporate blogs.

"There's a lot of cynicism around whether it is worth doing or not, but done well, in the right sort of organisation, it is a way to get greater visibility and awareness of capabilities across the organisation."

Mr Dawson also believes that blogs and wikis can become an alternative to email.

"Email as a communication platform is experiencing breakdown because people have too many emails. If you can start to shift activity outside of email, that's enormously valuable and more effective and more productive."

According to Martin Wells, the chief executive officer of the Australian web 2.0 software developer Tangler, many large corporations are limiting their use of web 2.0 tools to just another tool for marketing, as they are struggling with losing control of their communications.

"They don't see this as really opening a channel of conversation for users, or tapping in to the creativity and passions of users and how loyal they are," Mr Wells says. "They just see this as another medium. Some 2.0 technologies will get into enterprises this year, but I don't think the actual 2.0 spirit that's behind it. It will take a number of years before that is taken advantage of by the enterprise."

Tangler's product, which is still in testing, is a web-based service for enabling website visitors to to communicate with each other. Hence, a company can quickly create a community from its users and learn from their discussions.

However, according to Tangler's marketing director Mick Liubinskas, these benefits can be swamped by concerns over the increasing level of regulation under which companies find themselves working, and the risk-averse legal perspective this engenders. Hence, they stick with traditional methods of reaching consumers, even though consumer audiences are fragmenting, thanks in part to blogs and podcasts.

"So they keep chasing the users wherever they go, and the users are running away because they are sick of the corporates yelling at them," Mr Liubinskas says. "So from a marketing perspective there is going to be a continued mess for a while."

Consumer goods manufacturer Kimberly-Clark is another to test some of the concepts around web 2.0. The company has made extensive use of its website to solicit feedback relating to its Huggies disposable nappies. The company has used online forums since 2002, which now include 19,000 members in Australia and New Zealand.

According to Lisa Liaros, senior brand manager for Huggies, , the forum was established to give parents a form of communication and support with each other that was available at any time.

"It is a safe space where any question can be asked and answered by other parents and carers," Ms Liaros says. "We often ask mums their thoughts on new products and ideas and have recruited mums to test and trial products as needed.

Ms Liaros says that the parenting forums have become an integral part of Huggies' marketing mix, with more than 600,000 posts since it was launched, and the company's experts are now receiving more than 100 questions a month.
"Through the forum, Huggies is able to build a strong relationship with parents that hopefully builds loyalty to Huggies products. "The options for communication and interaction that web 2.0 technologies present are widening rapidly. The concept of virtual worlds, in particular, shot to prominence in the past six months. Australian companies such as Telstra, the ABC and web technology company Hyro have opened sites within the Second Life virtual environment, providing a new avenue for interacting with users, business partners or even potential recruits, although most of these efforts are experimental, rather than commercial.

Sydney-based Yoick is currently testing its virtual world technology, dubbed Outback Online, which allows an organisation to create its own virtual environment, or outback. These outbacks utilise peer-to-peer technology developed by the IT research organisation NICTA to overcome problems experienced in Second Life in terms of the number of users it can support in one place at one time.

According to Yoick's chief executive officer, Randal Leeb-du Toit, there is strong demand from companies to showcase or test goods or services in a virtual environment.

"(Outback Online) came out of extensive discussions with industry, so we knew what they didn't want, and as a result could work out what they would want," Mr Leeb-du Toit says.

Similarly, Australian start-up VastPark is developing a three-dimensional content portal and toolset. The company is aiming to become an online portal for members of the 3-D industry to promote its work, but in the longer term will offer a platform for creating 3-D showrooms or classrooms. A multi-user version of VastPark will be released soon.

VastPark's chief executive officer Bruce Joy says the goal is to create an environment where someone can undertake a very small development and build it into a larger community.

� Blog - an easy-to-use web publishing tool - e.g. TypePad, Blogger.com
� Mash-up - where different technologies are blended to manipulate and display information - e.g. Google Maps
� Social network - tools for managing communications between people of related interests - e.g. LinkedIn
� Swicki - a search engine tailored to a community of interest -e.g. Eurekster
� Tagging - where users help to organise sets of information -e.g. Del.icio.us
� Wiki - a site that can be edited by visitors - e.g. Wikipedia
� Virtual world - an online three-dimensional virtual environment - e.g. Second Life.

ONE OF the problems with social media technologies is that companies need new systems to handle and benefit from the increased level of communication.
Local start-up MyCyberTwin is developing a web-based technology platform that can respond on behalf of a person or an organisation even if they are not actually online at the time. Known as a CyberTwin, the user trains the software with basic question-and-answer routines.

MyCyberTwin's chief executive officer, Liesl Capper, says many websites are very one-dimensional "brochure-ware", and force users to navigate large amounts of information.

As a consumer product, CyberTwin gives users a personality online at any hour of the day. But the CyberTwin can also be trained to respond on behalf of a company, handling routine queries and forming a new channel for communication with customers.

"You can't do this with staff - there are just not enough. From a brick-and-mortar perspective it can serve as a representative of your company that chats and finds out about people," Ms Capper says.

Ms Capper says normally a company will train representatives to ask or answer questions such as how the consumer found out about the company, or what products they are interested in. This function can easily be taken over by the trained software agent.

Ms Capper says she consulted extensively with businesses, including major media companies, while developing MyCyberTwin, and is already working with the owner of a popular web dating site to give its members more options for handling inquiries.

Asia-Pacific execs bare priorities for 2007 (May/08/2007)

By Jose Allan Tan

It's May and we are approaching the middle of the year. Business is booming right across Asia-Pacific. The world economies are in constant movement, with consolidation and expansion rampant across much of Asia. Nearly every industry is moving forward despite rumors of a potential slowdown in the world's largest economy -- the US. The world doesn't appear too concerned. Instead business managers are busy scheming to expand territories and searching for partners.

Enterprise Innovation surveyed its readers in March 2007 to identify what the business and technology concerns are for the year. Some of the responses took us by surprise. Others affirmed our long-held belief that we are in the right course -- IT has one overarching goal (and it is not to support business). Technology is finally catching up with business and the IT organization finally realizing its real purpose is not to serve the business, but to lead with it.

Business challenges and priorities Best remembered as the father of modern management, Peter Drucker wrote that "there is only one valid definition of a business purpose: to create a customer. He went on to say "Businesses are not paid to reform customers, they are paid to satisfy customers."

Asia-Pacific is gearing up for competition in an increasingly global economy. And regardless what business you are in, all 618 respondents to Enterprise Innovation's survey agree that the customer remains the focus of attention with over 49 percent of responses believing that improving customer service delivery is of the highest priority (refer to Table 1).

"The degree of product differentiation is thinning these days and brand loyalty is harder to achieve with influx of numerous brands. Service is what differentiates leaders from laggards," says Lynette Low, Manager for Customer Delight Management, Canon Singapore. "People remember an experience and this is largely created when they interact with the people behind the brand. No matter how much one is impressed by an advertisement, it the final experience is bad, all good impressions generated from advertisements and public relations efforts are lost."

In this case the 'customer' is not just existing customers but the competition's customers as well. Business executives are diligently looking for every possible opportunity to turn a competitor's customer over to them even as they look for ways to protect their own customer base (and milk them for new opportunities -- also called cross-selling).

"Companies are all pretty familiar with the tiered approach for winning and keeping customers by moving them up the value chain, incrementally, through value added services. True service personalization comes when companies are able to rapidly configure and deliver hundreds of these smaller services -- at which point the value add becomes the service," says Gareth Senior, CEO and CTO for Axiom Systems.

To achieve both goals require companies to implement changes in the way they do business (42.0 percent). To achieve its top three priorities, management is under extreme pressure to come up with innovative new products and services (33.6 percent) and improve workforce productivity (28.1 percent).

While profitability remains a priority for many businesses, cost cutting plays a low 27.9 percent to businesses priorities -- sixth in importance among business and technology objectives. This lends credence to management understanding that cost is no longer a competitive advantage and must play a secondary role to generating new business.

Business continuity is still important (27.9 percent) for many businesses particularly those open in disaster prone markets such as Taiwan, Japan, and Indonesia. This also applies to markets like Thailand and the Philippines where disruption to business may come in the form of political or economic uncertainties. And as the cable disruption disaster that occurred in Taiwan in December 2006 shows, disruption in one market will impact those operating in other geographies.

Workforce collaboration is deemed less important than cost cutting and minimizing business disruption. This reflects market observation that many companies are unfamiliar with collaborative tools (more so than their Western counterparts). Asian businesses are inclined to invest in technology or processes that are new and unproven. Asia's business managers often take a wait-and-see approach in introducing solutions that may are seen as untested (particularly among their local peers).

IT management priorities are shifting

This is a recurring priority among senior IT executives that trickles down throughout the organization. CIOs are pressed to improve the performance and capabilities of the entire team (66.6 percent). Refer to Table 2.

"High-touch businesses have to adopt a number of technologies, and in some instances change the way they do things, to be able to respond faster to market. This may involve re-architecting the company's infrastructure so that customer service response is the same regardless of where the transaction takes place," says PK Lim, Managing Director, ASEAN / ANZ, Blue Coat Systems.

The CIO and his direct reports are also driven to meet the overall imperative of aligning IT with business objectives. The good news is that successful IT teams have shown this is possible. The bad news is that it requires a change in mindset as well as willingness to learn, adapt and be humble enough to accept other people's opinions.

Ann Livermore, executive vice president for the Technology Solutions Group at HP notes that "IT as we know it is over. The new reality is that technology doesn't just support the business -- technology powers the business and helps drive growth. The shift to business technology enables CIOs to weigh and measure their investments in terms of business outcomes -- whether it's managing risk, accelerating growth or lowering costs."

Companies are also more inclined to spend on technology and implement operational change (35 percent) if it means becoming more agile (nimble) and responsive to changes in the business environment.

Faced with the difficulty of identifying, hiring and retaining qualified staff, IT managers are more than happy to outsource non-strategic elements or work that can easily be outsourced without comprise to security and in-line with keeping costs down.

Technologies on high priority

Over 55 percent of survey respondents say that security (and continuity) remains the number one concern within the IT organization. (Refer to Table 3). Security-related spending is a mainstay of annual IT budgets with some companies now outsourcing their IT security needs to specialists.

As businesses adopt mobile technology to get closer to their customers, this exposes the inadequacies of present-day security policies and strategies to hostile elements. Ken Low, Security Marketing Director at TippingPoint observes that even as companies (of all sizes) grow in reliance on their networks, many aren't proactively doing something to improve their network security.
"In a Gartner survey 60 percent of companies admit they don't have adequate security in their wireless environment. Add to this the widespread adoption of wireless connectivity options offered by a multitude of mobile devices, and the biggest threat might very well be your own employee, or even employees working in companies around you. This is just one tiny aspect of network security. If you consider the sophistication and velocity of malware and security threats out there that haven't been properly provisioned against, you will begin to realize how dire the situation can get, whether you're a large enterprise or an SMB," Low adds.
Greatest contributors to business
Present day business environments call for IT to get off its cost-center mentality and lead the way in identifying new opportunities. Among the best run organizations, IT staff are required to relocate to specific business units they are assigned to. In so doing, they become part of the business unit, and part of the team that draws and execute new products and services.

"Technology is an important differentiator in today's competitive business environment. New technologies enable businesses to stay competitive and venture into new markets while enabling innovation and resulting in improved productivity," says Kishore Kapoor, CEO, i-flex Solutions in Singapore.

Over 40 percent of respondents believe that business process management (BPM) is a strategic initiative in 2007 (see Table 4). Gartner points to the CIO as the person to take charge and be accountable for BPM related exercises.

According to Janelle Hill, research vice-president at Gartner "BPM wins the 'triple crown' of saving money, saving time and adding value. BPM is delivering both short-term ROI and long-term value. One example is an insurance company that was able to reduce its claims processing cost by more than 20 percent. We are currently seeing uptake in BPMS use and benefits in government, banking, healthcare, transportation and travel industries."

One man's security is another man's opportunity. Companies are not just investing in security they are telling customers that their security is very important. Customers are more inclined to do business with companies that take security very seriously.

According to Nick Small, Regional Director, Unisys Public Sector, Asia South: "Information security has over the past years transformed from being an internal issue, primarily localized to the IT Department, to a business priority and an opportunity for differentiation. In many industries sound information security has become a key marketing tool -- demonstrating to customers a commitment to securing their information and assets. But as information security improves, so do the capabilities of those that seek to overcome it. It is essential that information security solutions are continuously refreshed to address emerging threats and vulnerabilities -- thereby demonstrating to customers that they are protected."

A company's intellectual capital is still the least utilized asset within a company. Tapping this knowledge pool continues to be the subject of heated discussion as to industry best practices. Over 39% of senior executives participating in this survey understand the power that knowledge brings to the business and have prioritized it as such. Investments in business intelligence (BI) and data mining remain a continuing priority.

"Operational systems (such as ERP software) allow you to do things faster, while the BI solutions help you to think faster. Combining the two allows users to do, think and consequently act faster," said Chart Chai Chayavirabood, Director of Information Management at Avanade Asia.

Drucker warns that many organizations will continue to fail in this arena so long as the responsibility for how BI tools usage remain in the hands of the IT organization. "Most CEOs still believe that it is the job of the CIO to identify what information the CEO requires. This is a fallacy. The CIO is a tool maker. The CEO is the tool user," argues Drucker.
The survey shows that different companies have different priorities reflecting the varied interests in the types of technologies being considered, invested in, and deployed. What is clear is that technology is an integral element of the business operation and that IT is expected to not only solve crucial business problems but help identify and deliver innovative products and services. The company's survival depends on the successful integration and alignment of IT into the business.

Editor's note: For a complete list of the survey results, send your request to editor@enterpriseinnovation.net with the subject "2007 User Wants and Needs Survey".

Calif. Web Site Outsources Reporting - SMH - May 11 2007

The job posting was a head-scratcher: "We seek a newspaper journalist based in India to report on the city government and political scene of Pasadena, California, USA."

A reporter half a world away covering local street-light contracts and sewer repairs? A reporter who has never gotten closer to Pasadena than the telecast of the Rose Bowl parade?

Outsourcing first claimed manufacturing jobs, then hit services such as technical support, airline reservations and tax preparation. Now comes the next frontier: local journalism.

James Macpherson, editor and publisher of the two-year-old website pasadenanow.com, acknowledged it sounds strange to have journalists in India cover news in this wealthy city just outside Los Angeles.

But he said it can be done from afar now that weekly Pasadena City Council meetings can be watched over the Internet. And he said the idea makes business sense because of India's lower labour costs.

"I think it could be a significant way to increase the quality of journalism on the local level without the expense that is a major problem for local publications," said the 51-year-old Pasadena native. "Whether you're at a desk in Pasadena or a desk in Mumbai, you're still just a phone call or e-mail away from the interview."

The first articles, some of which will carry bylines, are slated to appear Friday.
The plan has its doubters.

"Nobody in their right mind would trust the reporting of people who not only don't know the institutions but aren't even there to witness the events and nuances," said Bryce Nelson, a University of Southern California journalism professor and Pasadena resident. "This is a truly sad picture of what American journalism could become."

It is a shaky business proposition as well, said Uday Karmarkar, a UCLA professor of technology and strategy who outsources copy editing and graphics work to Indian businesses. If the goal is sophisticated reporting, he said, Macpherson could end up spending more time editing than the labour savings are worth.

This is not the first time media jobs have been shipped to India.
The British news agency Reuters runs an operation in the technology capital of Bangalore that churns out Wall Street stories based on news releases.

Macpherson appears to be the first to outsource community journalism _ work that by definition has been done by reporters who walk the streets they cover.
Macphersons said his website, which he runs out of his house, gets about 45,000 unique readers per month but is not yet profitable. Up until now, his main help has consisted of his wife and an intern.

Macpherson posted the help-wanted ad Monday on the Indian edition of craigslist.org. Within days, he said, he had hired two Indian reporters, one a graduate of the journalism school at the University of California at Berkeley.

He wants them to broaden pasadenanow.com's content from news releases and event listings to analyses of issues before the council, and perhaps eventually to investigative reports.

Projected annual cost: $20,800 for the pair. Not bad wages for an Indian journalist and cheap by U.S. standards, especially if each one produces the expected 15 weekly articles.

Pasadena city spokeswoman Ann Erdman said coverage from afar shouldn't pose problems if the articles are well-edited. In any case, she said, "Local government is certainly not in the practice of dictating to local business who they can hire and where those employees should live."

Google has big plans for corporate services, expert says - ZDNet Aust. - May 14 2007

Google may be known as the Web search advertising company but it has big plans for offering services to corporations, says Stephen Arnold, author of The Google Legacy and a Google patent scrutiniser.

Arnold figures out possible tech company strategies by analysing their patents. He's come across several patent applications from Google that he says indicate that they plan to use the Google Search Appliance as much more than just a device that lets employees search for data within the internal network.

The Google Search Appliance is a "Trojan Horse" that will soon be able to do much more than just search, he said. He cites two patents, "Determination of a Desired Repositor" and "Programmable Search Engine," that he said make it possible to connect a Google Appliance into Google's datacentres, almost like a node on the network.

"This connection makes it possible for a licensee (Appliance user) to tap into the computational power and the applications running on Google's servers," he said in a statement expected to be released today in the US.

"Even more interesting is that a Google Appliance can send data to Google's servers for inclusion in new information products and charge users a fee for the access to this data." For example, a merchant could push its entire catalogue of products directly to Google through its Appliance, or a company could get video or other content directly from Google the same way. Multiple Appliance users could also exchange data with each other.

"Search is today's offering. Tomorrow it will be e-mail, enterprise applications, and a wide range of innovative partnerships to help Appliance licensees leverage information more effectively," he said."

Just as the Google Search Appliance is a form of outsourced corporate search, Google can position the Appliance as the IT department's helper, handling the research, word processing and other applications a company doesn't want to deal with in-house, he said.

The more applications that a corporation can have Google serve and manage through the "data cloud" -- as Google puts it -- the more money and resources a company can save. This seems to fit nicely with Google's own vision of its future as a Web-based apps provider. During Google's shareholder meeting on Thursday, Chief Executive Eric Schmidt said the company is expanding beyond search and advertising.

"We're going to start using the phrase 'search, ads and apps' to define what we're trying to do," he told reporters before the meeting. "There is a big opportunity before us, which is to move to a new architectural platform ... based on the data in the cloud."

A Google spokesman provided this statement in response to Arnold's theory: "Protecting the privacy of information is paramount to Google. This is true of the Google Search Appliance and Google Mini. We have specifically not added features that might be misconstrued as communicating with Google.com, such as auto-update functionality or diagnostic reporting.
The Google Search Appliance and the Google Mini do not now, nor have they ever, connected to Google.com. We have no plans for these appliances to connect to Google's datacentres and any communication technology on the appliances is not intended for this purpose."


Google plans to profit by getting personal - SMH

May 14, 2007

Guardian News & Media

THE internet giant Google has plans to compile psychological profiles of millions of web users by covertly monitoring the way they play online games.

The company thinks it can glean information about an individual's preferences and personality type by tracking his or her online behaviour, which could then be sold to advertisers.
Details such as whether a person is more likely to be aggressive, hostile or dishonest could be stored for future use, it says.

The move is intended to customise advertisements shown to players of online video games by tailoring them to specific tastes and interests. But it has worried privacy campaigners who say the implications of compiling and storing such detailed information are alarming.

The plans are detailed in a patent filed by Google in Europe and the US last month. It says people playing online role-playing games such as Second Life and World of Warcraft would be good to target, because they interact with other players and make decisions that probably reflect their behaviour in real life.

The information could be used to make advertisements that appear inside the game more "relevant to the user", Google says.

Players who spend a lot of time exploring "may be interested in vacations, so the system may show ads for vacations". And those who spend more time talking to other characters will see advertisement for mobile phones.

The patent says Google could also monitor people playing on any game console that hooks up to the internet, including the Sony PlayStation, Nintendo Wii and Microsoft's Xbox. It says information could be retrieved from previous game details saved on memory cards.
Sue Charman, of the online campaign Open Rights Group, said: "I can understand why they are interested in this, but I would be deeply disturbed by a company holding a psychological profile."

"Whenever you have large amounts of information it becomes attractive to people - we've already seen the American Federal Government going to court over data from companies including Google."

Google said it did not have any plans to roll out the technology in the near future, and that it was just one of a large number of patents that it had filed in recent months.