Harry Chen Thinks Aloud

April 1st is the one day in the whole year that you can make jokes, sometimes cruel jokes, and can still be forgiven by your co-workers, friends and families.

April Fools’ Day:

The day is marked by the commission of hoaxes and other practical jokes of varying sophistication on friends, enemies and neighbors, or sending them on fools’ errands, the aim of which is to embarrass the gullible.

Given that many of us practically live on the Web, April Fools’ Day has gradually become a special occasion for people to spread fake advertisements to attract Web readers and communicate fake personal stories to trick friends and families.

I Got Fooled.

This morning I got fooled by GMail’s announcement of a new feature called “Custom Time“. Supposedly this feature allows users to custom the time when they want their email to be sent. Without noticing this is a hoax, I was looking for a clickable link to “Custom Time” in my GMail account. After 5 minutes, still unable to find the link, I realized that it was an April Fools’ joke.

April Fools’ on Facebook.

A friend of mine and his girlfriend announced that they are engaged and the girlfriend is pregnant. They changed their Facebook profile information and status the night before. Also, they published few photos of an engagement ring etc. Not too surprised. Friends on the network called them and inquired whether the news is for real.

Wii Got Fooled.

My wife called me this morning and told me that she saw Best Buy selling Wii Fit, and asked whether she should go wait in line for a Wii Fit. Without a second thought, I say “Yes! Go Now”. Moments later, I discovered that she had tricked me. I should have remembered that Wii Fit is not available until later this year. I got fooled again!

More April Fools’ Hoaxes.

• USB Pregnancy Test
• Wii Pii Pii Brothers
• Google buys the US Government for $2 billion

Mozilla Foundation announced its 2006 revenue: $66,840,8550. This result represents a 26 percent increase from its 2005 revenue. The financial state of the Foundation looks bright in the short-term. However, some analysts have concerns about it’s long-term outlook.

Here is the problem. In 2005, about 85% of the organization’s revenue comes from Google, which pays royalty fees to have Google search services integrated in the open source Firefox browser. Google’s contract with the Mozilla Foundation is to expire in November 2008. So far, no words from Google whether it wants to renew the contract. Analysts worried that Google may abundant the relationship and go on to implement its own browser strategies independent from Firefox. As a result, Mozilla could face a big drop in its revenue after 2008.

I think Mozilla can live well beyond 2008. First, if Google decides to end its contract in Nov. 2008, there is simply other potential clients to replace Google, e.g., Yahoo! and Ask. Second, Firefox can offer other kinds of royalty licensing to web business, such as EBay, Netflix, and Amazon. The Web is an important computing platform. It’s definitely worth paying to have your business displayed in the default page of the worlds’ second most popular web browser. Third, if Mozilla Foundation does run out of cash to operate, I’m sure some Silicon Valley VC will be happy to take over the organization and run it, perhaps, under a different business model.

Mozilla is here to stay, either with or without Google.

Both Google and Yahoo! went through the millennium bubble burst. However, years after, the business of those companies seem to have gone into two different directions. Google’s stock price has risen more than 500%, and the price of Yahoo!’s stocks is nearly unchanged.

So what business discussions have contributed to the success of Google and the failure of Yahoo!? Conrad de Aenlle in this IHT article explains…

The strength of Google has been to take complicated technology - a superb Internet search engine - and build an uncomplicated business around it: selling advertising aimed at consumers based on Google’s understanding of their needs and wants, gleaned from their search patterns.

Yahoo is a jack of all trades - a communication medium, aggregator and distributor of news and entertainment - and it has not mastered many of them, Weiner said. “Yahoo is attempting to become a broadcasting platform, creating original content, cutting deals with film studios and TV networks,” he said. “None of that has really panned out.

A simple answer to the question is this…

It takes more than great technology to make a great technology company.

When it comes to building a successful technology company, while technology and innovations are important, but the company’s operation and execution are even more important.

Source: Why Yahoo! came up short

Mozilla Foundation is a non-profit organization. It depends on people donations and contracts to operate it’s daily business — pay for developers, marketings etc. Since 2004, with the success of its Firefox browser, Mozilla has grown into a very successful open source organization, and a very profitable one.

The revenue of Mozilla Foundation increased from $6 million in 2004 to $52 million in 2005. A large portion of this increase is due to a special agreement with Google. The company pays Mozilla more than $100 million to have Firefox’s default page to display the Google search page.

In 2005, a new for-profit Mozilla organization is created, which is called Mozilla Corp. A key task of the new organization is to manage tax and other issues related to the Google contract.

Here are couple interesting questions to think about:

1. When the survival of an open source organization (e.g., Mozilla) is depended on special arrangements and agreements with a for-profit company (e.g., Google), can it continue to function independently without being influenced by any business objectives of the for-profit company?
2. Should Mozilla share wealth with thousands of people who have contributed to its open source projects? If so, how?

Source: Firefox faces the costs of success

In April 2007, Google employees will be permitted to auction their stock options to preapproved financial institutions, according to a CNet News report. This is a completely unorthodox. According to Google executives, this new plan is aimed to bring fairness to employees who have higher strike price.

Traditionally, employees have two ways to deal with stock options: exercise (take ownership) of them once they have “vested” and sell them at the current trading price, and pay back the company for their so-called strike price (that’s typically the trading price the day the options were granted), or hold on to them after exercising them.

For employees who have arrived at Google long after its stock price started to climb, the auction potentially presents a more profitable alternative to trading on the public markets. It would work like this: once an employee’s options are vested, he or she can look for bidders in the private auction. A financial institution may offer the employee, for example, $150 per option. If the employee’s strike price was $400 and the stock was trading at $500, the employee would have made $50 more per option going the auction route rather than selling them on the public market. Employees can also set a minimum price at which to sell.

I think this is an innovative approach to maintain employee loyalty. Not only this will give comfort to current employees, but also will attract new talents who see Google as a true innovative company.

As we enter a new era of information technology, politicians have learned to exploit search engines to better their political campaigns. According to the New York Times,

Fifty or so other Republican candidates have also been made targets in a sophisticated “Google bombing” campaign intended to game the search engine’s ranking algorithms. By flooding the Web with references to the candidates and repeatedly cross-linking to specific articles and sites on the Web, it is possible to take advantage of Google’s formula and force those articles to the top of the list of search results.

Put aside the real political value of those candidates. I’m impressed with their ability to exploit cutting-edge technology. However, I think those smart ideas probably came from their respective marketing and campaign organizations. Nevertheless, I think the world is changed forever because the Internet and its tight integration with our everyday life.

In the future as a new generation of politicians come into power, and they also happen to be the ones who live and breath with MySpace and YouTube, they will bring political warfares into a whole new next level. I wonder if we will soon see SMS spams, splogs (spam blogs), or YouTube videos for political campaigns?

Everyone acknowledges that Google is an innovative company, but not everyone agrees that its innovative research culture makes sense from a business point of view. A recent BusinessWeek article “So Much Fanfar, So Few Hits” presents Google as a company that is extremely good at creating new web applications for different markets, but at the same time it’s unable to compete in markets other than “search”.

Consider just a few examples: Google Talk, an instant-messaging service launched last August, now ranks No. 10, garnering just 2% of the number of users for market leader MSN Messenger, according to comScore Media Metrix. Three-month-old Google Finance, heralded as a competitor to market leader Yahoo! Finance, has settled in as the 40th-most-visited finance site, according to data from Hitwise, a competitive intelligence firm. Gmail, the e-mail service that was lauded at its 2004 launch for offering 500 times as much storage space as some rivals (they quickly closed the gap), today is the system of choice for only about one-quarter the number of people who use MSN and Yahoo e-mail.

Does this mean Google’s innovative culture is bad for business? I don’t’ think so. The truth is that innovation is not a silver bullet that always guarantee successful business. There are too many stories about past companies with amazing innovations, and none of their business really succeed.

Sound business management is not substitutable, at least not by innovation alone. In order for Google to succeed, its innovation must be combined with great management leadership and a sound business model. Though I don’t know much about Google’s managements, but it seems like they are doing a good job. At least they got some approval from Bill Gates.

MarketWatch reports that Google is to be added to S&P 500 Index, replacing Burlington Resource Inc. This is a good news to those who want to invest in Google but doesn’t want to buy Google stocks directly.

Since GOOG will be part of S&P 500 Index, investors can own shares of GOOG by investing in index funds that tracks S&P 500 index (e.g., Vanguard 500 Index Fund).

I think in the near future, investors should see a minor increase in the stock price of GOOG since all mutual funds that track S&P 500 index are forced to re-balance their portfolios to include GOOG.