Google Predicting the Future?

Geeks among us will recognize the term “chaos theory”. It is a highly philisophical, and yet scientifically unproven, theory of physics that says, among other things, that there is a natural order to the universe that cannot be observed directly, but can be seen in patterns. Popularly known as the Butterfly Effect, it theorizes that though there appears a dissonance and disorder in nature, nature actually behaves in an orderly and predictable way. Examples of chaos can be seen in weather, the flow of currents and even the natural cycle of economic conditions. Though no two iterations of an event happen exactly as they happened before, there is a pattern that is distinguishable if charted or mapped.

Ike Pigott requested my input on a theory he floated last night on his blog. The theory is that Google, in their attempt to meet their stated mission of “organizing the world’s information”, is attempting to predict the future. He framed his argument around the dissolution of many Google services over the past week, in an effort to economically streamline their business and Steve Rubel’s prediction that their Google Reader product is next on the chopping block.

Ike’s argument was that, through Google’s monitoring and recording of key behavioral patterns – such as reading and sharing of stories, commenting, time of engagement, and subscriber base numbers – that Google is able to create a massive database over time that “learns” the patterns of human information engagement. With these patterns (and a nod to Chaos Theory), Google can accurately predict a large number of events, or cultural shifts before they come to be. Additionally, as the only owner of multiple copies of the internet in their massive server farms, Google positions itself to be the one and only benefactor of such information. It could be argued that “the Machine is among us” (in another nod to common science fiction themes),

It has long been my assertation that the tendency of the internet world to easily trust and adopt to Google efforts is a dangerous precedent to set. Increasingly, people rely on Google for mail, calendaring and even productivity. New bloggers tend to setup blogs on Google-owned Blogger and the saturation of video content is due, in no small part, to Youtube. Why? Because Google makes products that are easy and ease of use is more important than virtually any other factor that consumers might think of.

Without raising the alarm bells, folks should be cognizant about entrusting Google with all of their data. Personally, I use Gmail, FeedBurner, YouTube and other services, but the data is yours and should be diversified as much as possible.

Question of the Day: Is this theory of future prediction fact or fiction, good will or conspiracy? Isaac Asimov outlined the rules for robots in his book I, Robot:

  1. A robot may not injure a human being or, through inaction, allow a human being to come to harm.
  2. A robot must obey orders given to it by human beings, except where such orders would conflict with the First Law.
  3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Law.

Food for thought.

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Tech Predictions for 2009

As we gear up for 2009, there remains many questions about the economy and the growth curve of the technology industry. As a team, we have come up with predictions for 2009. Ray Capece, Venture Files editor for Technosailor.com and I make our predictions.

As always, these are predictions. Last year, we were dangerously accurate with our predictions and would like to think that we have a good understanding of the business and technology marketplace in 2009.

Ray’s Predictions

  1. By now, all VC firms have had the ‘triage’ partners meeting — where they decide, whether existing portfolio companies will 1) receive additional funding, because they’re generating revenue and have the prospect of getting cash-flow positive; 2) be shut down (and recapture any remaining cash); and 3) receive no additional funding, but be left to their own devices (to get funding however they might on their own). In 2000, there were a good many in category #2, since dot.com rounds were in the $10s of millions; now, with social-networking investments averaging around $1M, there will be little cash if any to recover. But I predict there will be many in category #3 (also known as ‘the walking dead,’ since they’re burning their cash, no matter how slowly, till it’s gone.)
  2. Online advertising revenues in 2009 will continue to fall, as inventory outpaces demand. I *don’t* see the $$ flowing from other media to online offsetting this downward trend.
  3. Consumers have discretionary (albeit small) $$$ to spend. In times of bleak economy, they seek distractions (gaming and feel-good entertainment), and will happily pay $0.99 for iFart. The hope for developers in the social networking space will potentially lie with commerce in real and virtual goods. Facebook and the others need to make this extremely easy for third parties, and it will most certainly happen in 2009. (Yes, despite what others are saying about FB’s party line.)
  4. Consolidation always picks up in down times . . . good, small apps facing a difficult fund-raising environment reset their valuations lower, and robust companies with solid funding swoop in to pick up the team and technology on the cheap. It began in the fourth quarter with Pownce and others, will continue throughout 2009.
  5. As an extension to this prediction — we’ll see more Intellectual Property for sale on eBay.
  6. Apple will continue to grow its mobile share as others fumble about. Watch for new BlackBerry Curve to become the defacto standard for ‘button lovers.’

Aaron’s Take: While I agree with most of Ray’s predictions, I’m more bullish on early round VC. Even though we won’t see as much investment as we have, I believe it will still happen and companies that have already been funded will probably continue to receive investment funds, even if on down valuations, as long as they are somewhat viable. The reason is that most funds are long-haul investments of about 10 years.

Aaron’s Predictions

  1. Consolidations will occur en masse this year. Small companies with angel funding or Series A funding will be lumped into bigger conglomerates as the acquisition threshold is low.
  2. Brightkite will be acquired by Facebook, as poignantly pointed out by a commenter over at Read Write Web.
  3. The second Google Android-powered G2 phone will be released to T-Mobile in Q1. As the first one was a proof of concept that had little impact, the second iteration will be an essential release to prove the Android platform. No other carriers will take the platform until the concept is proven, but T-Mobile is already there and will be the victim for the second release.
  4. Twitter will *not* be acquired, but an advertising/partnership business model will emerge in Q2.
  5. Apple will release 3 new products this year. That is it. Their growth will continue upward but will see a decline over growth patterns of previous years.
  6. Net Neutrality will take a massive hit in 2009 with governments and companies looking to defend themselves in a down economy. The result will be regulations that will allow the big telecoms survive. Too big to Fail. Unless it’s the general public.
  7. No clear winner in the “single identity” space. OpenID fades, fbConnect gets fleshed out and adopted by many while Google Friend Connect makes significant inroads with others. An emerging war akin to Bluray vs. HD-DVD emerges between Facebook and Google with the internet world divided evenly among the two. Blogs and social networks will tend toward Facebook while bigger sites and services, possibly including newspaper walled gardens, trending toward Google.

Ray’s Take: Aaron’s crystal ball looks pretty good to me . . . except that, like Jonah in the whale’s belly, Twitter will be devoured.

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Obama Names Googler and Launchbox Digital Cofounder to Transition Team

In a move that demonstrates a commitment to web technology, President-elect Barack Obama has named a Google executive and a Launchbox Digital cofounder to his transition team.

julius-genachowskiJulius Genachowski, from Launchbox Digital a DC-based web incubator investment company in the order of YCombinator and Techstars, IAC and Rock Creek Ventures comes to the team with a tremendous amount of value and knowledge. And he’s one of our own.

Sonal Shah comes from the Google.org Philanthropy branch of the internet search giant and is also a former executive for Goldman Sachs.

sonal-shahI guess the takeaway here is that grassroots is power (Launchbox Digital) and that an Obama administration believes in “Don’t be Evil.”

One of our key cornerstones for an Obama endorsement was his commitment to advancing the technology and science sectors here in the United States. This is a great start in the right direction.

[Source: CNET]

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