Technology Futures

Google has announced a new "search within a search" option that has online retailers worried that the search behemoth will steal customers. The new option lets you use Google to search only pages that are part of a single site. So if you want to buy a digital camera and go to Google to start the search, you get the usual search results page. If you click on a Best Buy site, as an example, Google will now do an extended search only on the Best Buy site.

Sounds handy, right? Except that the search results are likely to include ads from Best Buy competitors. So the pages that Google returns from the customized search may be larded with ads from Circuit City.

For Google, this is a good thing, as it will likely increase ad revenue from click-throughs. And you could argue it is good for the person trying to buy something, as Google gives you more information about prices and competition.

But there is a certain "goose and the golden egg" situation here. While in my example it appears that Circuit City may be the winner, it could just as easily go the other way on the next search, where Circuit City came up first, and subsequent search results are plastered with Best Buy ads. Circuit City and Best Buy both end up paying Google while Google tries to push potential customers somewhere else. This is also known as "wanting your cake and trying to eat it too."

At some point, some big Google advertisers are going to say, "Enough is enough," and take their ad dollars elsewhere.

According to a New York Times article, Europe is pulling far ahead of the United States in high performance broadband deployment. European countries, led by Sweden, Denmark, Holland, and Finland, are adding 50,000 broadband lines a day.

In Europe, most countries have required the incumbent telecom firms to allow other broadband firms to lease their infrastructure, which has led to heavy competition and lower prices. While many of the new connections are still copper-based DSL, many places have gone to citywide fiber deployments. In Paris and Vienna, 100 megabit fiber connections are widely available.

There was widespread speculation last week, including a cover page article in USA Today, that the March Madness basketball tournament would create widespread Internet slowdowns. The NCAA decided to make all 65 games available on the Internet, leading to predictions of clogged networks and low productivity at work while employees sat at their desk and watched "TV" on their computers.

The IP TV basketball games are yet one more strong signal that there is a sea change underway as more and more people are tuning in to watch video via the Internet, rather than on "television."

With the announcement of the iPhone Software Development Kit (SDK) which allows software developers to write native applications for the iPhone, Apple has also changed another set of rules for the game.

Apple is creating a special area in the iTunes Store for iPhone software applications. Software developers pay a small one time fee to have their software placed in the Apple store, and Apple takes on the responsibility for distributing, downloading, and installing the software, including certifying it is virus-free. Apple also takes on the responsibility for collecting the money for the software, processing credit card charges, bad debts, and all the associated headaches associated with running an online storefront.

In return for all that Apple support, the developer agrees to share revenue with Apple, on a 70/30 basis, with the developer getting 70% of the sales price.

This will unleash tremendous innovation and there will be, in the coming months and years, a flood of new software and services available for the iPhone because Apple has designed not just a piece of hardware, but an entire shared system that makes market entry for small, innovative businesses very low cost--Apple only gets paid once there is revenue flowing. Apple's approach makes it easy to try out new applications and services at low risk. It is identical to the open, multi-service networks being built in places like Danville, Virginia. In both cases, a shared system lowers the cost of offering products and services.