Gary Robinson's Rants

Why $2.7B?

If I had seen more significant digits in the earlier news articles, I might have noticed:

The exact offering, $2,718,281,828, is the product of "e" and $1 billion, where "e" is the base of the natural logarithm--a logarithm especially useful in calculus--and equals 2.718281828.... [CNN]

I am geek enough to enjoy that. Hell, it's at least as logical as any other IPO valuation I've heard of in the Internet age. Actually it's deeply logical, in that it recognizes the fundamental irrationality of IPO prices. There's no pretense. And is it an accident that e is, technically, an irrational number? ;)

Frankly, the document they released today dubbed "An Owner's Manual' for Google's Shareholders" makes me feel more positively about Google's prospects than anything I have ever heard from or about them. It says things like:

"Many companies are under pressure to keep their earnings in line with analysts' forecasts. Therefore, they often accept smaller, but predictable, earnings rather than larger and more unpredictable returns. Sergey and I feel this is harmful, and we intend to steer in the opposite direction." [Another CNN article; definitely worth reading]

And, about their decision to have two voting classes:

"While this structure is unusual for technology companies, it is common in the media business and has had a profound importance there. The New York Times Company, the Washington Post Company and Dow Jones, the publisher of The Wall Street Journal, all have similar dual class ownership structures. Media observers frequently point out that dual class ownership has allowed these companies to concentrate on their core, long-term interest in serious news coverage, despite fluctuations in quarterly results." [Same CNN page]

I find this very interesting. They seem to be trying to engineer a solution to the corporate problems other companies have experienced, just as a good engineer addresses technical problems that earlier projects have experienced.

And the best engineers recognize that sometimes, they have to fly by the seat of their pants. And the very best engineers know when they have no choice but to do so; they don't pretend they know exactly what they are doing in such a case. They have integrity. They don't hide the facts. Is the choice of an irrational number for the IPO valuation a conscious wink to those who might care, saying this is one such case? Is it a statement: "We have the integrity to act according to our principles, even to the extent of making choices that are not what Wall St. would necessarily understand or approve of in the short-term"? I hope so.

Maybe this will turn out to be as interesting an experiment as it seems it has the potential to be. Cool!

Google files for IPO

At $2.7 billion, not the $25B people have been speculating it's worth. That makes more sense. Google does have a lot of eyeballs at this point, and there is a chance that it can convert many of those users into a situation where they are totally dependent on Google for their email or other services. Services like email are sticky in the sense that if a user has his entire email history ensconced in Google's servers, it will be hard for even Microsoft to get that user back as an email customer. If Google is successful in converting huge numbers of users into that kind of sticky situation, rather than the current situation where they'll defect as soon as a better or more convenient search engine comes along, then it could conceivably be worth $25B.

There's probably about a 10% chance of that happening, where the main risk is the fact that Microsoft is fully capable of creating a search engine of equal quality that is more conveniently accessible within the Windows GUI. And doing so before Google has converted many users.

Gmail has opened my eyes to the possibility that Google could be successful in "stickfying" large numbers of users; that's why I'd give it a 10% chance rather than a 1% chance. I didn't think their blogging software was enough, or their social software (Orkut). But Gmail has a chance.

So a 10% * $25B IPO doesn't sound absurd to me at this point. That's not far from $2.7B.

If a lot of suckers pay enough on IPO day to bring the first-day valuation to much more than that, some smarter people are going to make a lot of money by selling on the second day, I believe. ;)

A great math joke

A great math joke from Joi Ito via Liudvikas Bukys via Ole Eichhorn:

Improved Chi

Handling Redundancy in Email Token Probabilities is a new article by yours truly about the chi-square-based technique for spam detection. (That's the PDF, here's the Postscript version.) The abstract:

One of the many techniques which has recently been employed for filtering spam is one describedin the Linux Journal article A Statistical Approach to the Spam Problem. This technique incorporates ideas from the seminal article A Plan For Spam as well as R.A.Fisher's technique for combining p-values by means of the chi-square distribution. The technique presented in here takes the chi-square-based approach a step further by taking into account two facts: a) there is redundancy in the token probabilities, and b) spam andham emails have different amounts of such redundancy. Fivefold cross-validation was carried out on the new technique and is described here testing whether these factors actually lead to better performance. The results were positive and statistically significant.

Note: the link to the article above is to version .94; earlier versions are still available still here , here, here, and here, but they have some typos, and the original has an error in Eq. 3. Many thanks to Greg Louis and David Relson and others for pointing them out. Also, Laird Breyer has pointed to areas where I could have done a better job of explaining things, so that has also led to improvements in the new drafts and is appreciated. You should definitely use version .94.

Cleaning up Python __init__() methods

The ASPN site yesterday presented a technique to eliminate a lot of verbosity in Python __init__() methods where a bunch of arguments to __init__() are assigned to instance attributes. Such assignments are a frequent source of error due to forgetting one or more assignments and/or making spelling errors for the names.

They presented a function for doing the assignments automatically, but required that the __init__() that uses it has no logic with temporary variables -- an unworkable restriction IMHO.

So I added a comment with a version that works even when there is other logic with temporary variables. If you're a Python coder you might want to check it out.

Lots of movie downloading

Ipsos-Insight's quarterly digital-music study Tempo reveals that 21 percent of American downloaders aged 12 and over have downloaded a full-length motion picture.

The research reveals 37 percent of 18- to 24-year-olds have downloaded a full-length motion picture from the Internet. Men are more than twice as likely than women to acquire a digital motion picture online. [PCWorld]

A full-length movie is a big download. 21% is impressive.

OpenOffice.org success

The OpenOffice.org suite now claims a 7 percent share of the midsize business market, according to Jupiter Research, the research division of Jupitermedia Corp., in Darien, Conn. [eWeek]

Wow, I'm impressed. That's much more than I would have guessed at this early stage. And I'm one of those who take it as a given that the percentage is likely to continually grow.

music.download.com

Online technology company CNET Networks Inc. (NasdaqNM:CNET - News) on Monday launched a free digital music service, allowing users to search and download what it said were thousands of songs contributed by independent and unsigned artists. ... The music download service will be separate from the MP3.com Web site, which CNET has said it will relaunch soon as a music information site. ... The former MP3.com, which CNET acquired late last year, offered similar functions to those in the new music download platform. Many artists and fans of the site complained when CNET closed it down, fearing that hundreds of thousands of songs would be lost permanently. ... CNET said it plans to add new technology and community features to its download service, which it intends to be the largest free music download platform. over the course of the year. [Reuters]

Why condemn Rantisi killing? I don't get it. Honestly.

U.N. Secretary-General Kofi Annan said the killing of Rantisi was a breach of international law and called on Israel to end its assassinations.

"The only way to halt an escalation of violence is for Israelis and Palestinians to work towards a viable negotiating process aimed at a just, lasting and comprehensive settlement," Annan said. [CNN]

I find this impossible to understand. The guy was head of an organization that sent suicide bombers into Israel to murder Israelis. The guy must have personally ordered such attacks or at least given the go-ahead.

Why should Israel not go after someone who is doing such things? He was escalating the violence by ordering or approving the murder of innocent civilians because he thought their deaths was helpful. Why should be be allowed to continue doing as many as he wants of such acts?

It just makes no sense to me. If you have a way of making sense of it, please let me know.

Manipulating a certain resource in a good cause

Copying taint.org's manipulation for a good cause: jew. (To understand what the good cause is, see what the dominant search engine's first hit in response to that word, and where my own link goes. And consider doing the same thing on your blog.)

I'm not a jew, but my wife and kids are, and I've read enough about World War II to understand what a bad place the world can be for good people.

Rob Glaser makes RealNetworks - Apple alliance appeal

RealNetworks made a direct appeal last week to Apple Computer, its Internet music rival, suggesting that the two companies form a common front against Microsoft in the digital music business.   The offer to create a "tactical alliance" was made on April 9 by Rob Glaser, chief executive of RealNetworks, the Seattle-based Internet music and video service, in an e-mail message to Steve Jobs, Apple's chairman.   But if an alliance with Apple could not be struck, Glaser strongly hinted in the e-mail message that he might be forced to form a partnership with Microsoft to pursue "very interesting opportunities" because support for Microsoft's media-playing software seems to be growing. [NY Times via MacInTouch]

Amazon's A9 search engine

John Battelle has posted a discussion and review of Amazon's new search engine: a9.com. From the article:"What makes this particularly noteworthy is that A9 is built quite literally on top of Google. In short, Amazon has taken the best of Google, and made it, to my mind, a lot better. Sound familiar? Yup, it's what Google did to Yahoo, Yahoo to Netscape...you get the picture." [Slashdot]

iTunes Music Store profitable

This is news:

The iTunes Music Store generated a "small profit" for the quarter, according to Apple. [MacInTouch]

The general impression has been that the store was losing money and making up for it with iPod sales.

My latest Iraq rant

...may be found in by clicking the "comment" link on this blog post, preferably after reading the post. ;)

Scientists Create "Water" That Isn't Wet

This is pretty amazing. A clear fluid that you can submerge a powered-on laptop in without damaging it; a book also comes out just fine. It's to be used to put out fires. Don't miss the slideshow (thanks Slashdot).

Microsoft settles patent lawsuit for $440MM

"In the latest in a series of moves to clear up legal issues, Microsoft Corp. (MSFT, news) has agreed to pay $440 million to InterTrust Technologies Corp. (ITRU, news) to settle a broad patent suit that had cast a cloud over Microsoft's plans in digital media, Monday's Wall Street Journal reported.

The deal gives the software giant a license to InterTrust's large portfolio of patents in technology for protecting music, movies and other digital content against unauthorized copying." [Dow Jones thanks to Macintouch]

More Google vs. Microsoft

"An article at SearchEngineWatch states that Google and Yahoo have become as almost parts of the operating system, a 'layer' above Linux, Windows or Mac OS. Another article at Kottke.org says that Google is building a a huge computer with a custom operating system that everyone on earth can have an account on. Some people predicts that, after Gmail, Google could start a new instant message service or even its own electronic currency." [Slashdot]
If they get many millions of users using any one of them, they'll be in fine shape, and my naysaying will be proven wrong. Their lead in top-notch searching capabilities got them many millions of "eyeballs" (as they were called during the Internet boom) but search isn't enough to keep those eyeballs forever because there is nothing to stop people from using the first comparably good competitor that comes along. The other services described in the Slashdot entry quoted above are much more sticky. The question remains "Can they convert enough users to these other services before Microsoft chooses to make something at least as good and build it into Windows?" The "Google operating system" is an interesting idea. Again it's something Microsoft can do -- it already has the code needed for running Windows apps remotely. After working on scalability, which I'm sure they are working on already, it could sell access to a massive server network running that service.

It keeps coming back to the question of how Microsoft will choose to respond. Google needs to create these kinds of services, but that is not a sufficient condition for achieving their aims. They also need Microsoft to choose not to respond directly using capabilities that are well within Microsoft's reach.

However, Microsoft wants to stay as big as it is, and get bigger. Lower-priced competition from the likes of Google and Lindows will probably force the prices that can be charged for operating systems, whether the apps are run locally or remotely, waaay down, probably greatly decreasing Microsoft's income. Google may be able to end up with a fine business -- though much smaller than Microsoft's current business -- if they can convert users.

As a side note, Transpose is now making use of a virtual dedicated server at Hard Hat Hosting. For $10.49 per month, gives us our own virtual Linux box supplying email and other services. Especially when we consider the fact that maintenance is up to Hard Hat, it is very significantly cheaper than running a box in our offices for those services. We are very happy (so far) with our decision to use it.

If Google had offered a similarly-priced similar service, we probably would have gone with it rather than Hard Hat, just because we would assume that a company the size of Google would be a bit less likely to go out of business and leave its customer's hanging.

Tony Blair and George W. Bush

Andrew Sullivan's blog is a must-read today; it quotes extensively from Tony Blair's response to current events in Iraq. Blair is about 10 times more articulate than Bush. We can't we have a Blair running for the top office in this country? I feel like crying. The Blair quotes are an absolute must-read if you're at all willing to look at the "neocon" position on Iraq.

Sullivan also points to a piece which describes what would have happened if Bush had made the only response to the Presidential Daily Briefing memo, "Bin Laden determined to attack inside the U.S.," that would have had a decent chance of making a difference -- attacking Afghanistan to disrupt the Al Qaeda camps. Of course, Bush would have been impeached by those who are denouncing him now for inaction. And those who who have joined us in our post-9/11 military actions would have also condemned him. A perfect piece.

Google desktop

"Will Google's new, free e-mail system, Gmail, be just the first of many things we'll see in a new Google desktop? If so, Microsoft could have a lot more to worry about than just Web search," search engine pundit Danny Sullivan wrote in his Search Engine Watch newsletter this week. [News.com]

Desktop apps are inherently more responsible and usable than browser-based apps. Microsoft has every opportunity to mimic the good things offered by Google's systems, but on the desktop, in more-responsive software that comes with the computer. No one can say they don't have the resources or skill to do it. Or that they don't have the business smarts to turn on a dime to deal with a threat.

That doesn't mean they will do so in this case, of course.

More from the News.com story:

A Google executive downplayed the looming threat of search competition from Microsoft, saying his company doesn't expect to see a credible product from the software giant for years.

"Rather than worry about some big promise coming down five years from now, we need to focus on innovation now," Salar Kamangar, product development director at Google, said Wednesday on a panel at Stanford Business School's first annual technology conference.

If a major part of Google's strategy is to assume that Microsoft can't develop credible search in less than five years, that's nothing but dumb arrogance, and dumb arrogance is not a strategy that inspires confidence.

iTMS downloads costing more than the CD?

To see the future of online music prices, look no further than "Fly or Die," the new album by rock-meets-hip-hop trio N.E.R.D.   For months, digital-music services have been touting albums for $9.99 to entice more people to buy online. But Apple Computer Inc.'s iTunes Music Store has been charging $16.99 for "Fly or Die," while Roxio Inc.'s Napster service sells the 12-song collection for $13.99. Both prices are higher than the $13.49 that Amazon.com charges for the CD itself. The same pricing shifts are showing up on albums by a growing slate of artists, from Shakira to Bob Dylan. [Wall Street Journal, thanks to MacInTouch]

Memes in Iraq

I don't set myself up to be a political or war blogger since I am not involved in politics or the military and have no training in either. But I do end up commenting on those events here because I care, and because I am somewhat knowledgeable about the subject of memes, which I think are ultimately at least one root cause of this conflict (and most other international conflict).

So I'll briefly comment on this week's occurrences.

In most Iraq-related debates I've taken the neo-conservative position that Iraqis want freedom just like we do and will be glad if we help them achieve it. The liberal position has seemed to be that the Arab world won't be ready for political freedom and democracy for 500 years, and I have looked upon that position with disdain, not least because it leads liberals to take the side of tyrannical dictatorships while simultaneously considering themselves to be on the representatives of the interests of the common man.

However, it is a fact that many in the Arab world are currently hosts to the meme-complex known as fundamentalist Islam. Actually, some are now calling it "Islamo-fascism". Why? Because, like other forms of fascism, it is a matter of each individual choosing to subjugate one's own thoughts and will to thoughts and will of a dictator. What the dictator says is true, period; it doesn't matter if there's any independent evidence in favor of it or not.

In the 1930's in parts of Europe it was Hitler and Mussolini who filled that role. In today's Arab world, it's Sadr and others like him.

The main difference is that Islamo-fascism has deeper roots. It is supported by many centuries of refinements to its core meme-complex (its myths and beliefs); it rests on stronger psychological shoulders than, for example, Nazism did. Therefore, it may be considerably harder to eradicate psychologically.

Moreover, Islamo-fascism does not depent on a single "great leader". If Sadr is killed or taken prisoner, someone else while probably rise in his place. The meme-complex is structured so that that can easily happen. That is part of what enables Islamo-fascists to wage a war without a formal army and formal nation-state supporting it. Even if the groups are completely separate, their local leaders emerge, and they all have similar beliefs and hatred of unbelievers, so the net effect is almost as if they were all united in one army.

So, it is occurring to me now that the neocon side may have been wrong and the liberal side may have been more right in the Iraq war debates. The influence of Islamo-fascist memes may still be so great that it may not be possible, today, to create a democracy in Iraq they way we did in Germany and Japan after World War II.

Hopefully, for the benefit of everyone but Islamo-fascists, the neocons will be proven right in the end. But whether they will or not is unknowable at this point.

More reflecting on Gmail

In my previous post on Gmail, I said I bet against it doing Google much good. My bet was premature though, because the outcome depends completely on how Google's competitors choose to respond. I don't know what they'll do, so what's the point of placing bets? it's much more interesting and potentially educational just to reflect on the dynamics of the situation.

One of the things Steve Jobs points out as a reason for the iPod's success is that it frees you from having to make the effort to manage your digital music collection. It has so much space, it's probably enough for most people to load their entire music collection on it. You don't have to think about it or spend time on removing one album to make room for another. That's a Big Deal for true ease-of-use.

The idea of having a gigabyte for email, combined with great searching technology, is the same principle. You don't have to manage your email anymore. You can just keep all your non-spam email forever. When you want to find something, you can. And of course, if a gigabyte gets to be not enough, there is no reason the limit can't be further expanded.

But there is another factor at work in enabling Gmail users to avoid manual effort. That is the question of backups.

Most computers sold these days can absorb a gig of email stored in outlook with no problem. (Yes, Outlook has traditionally had stability problems when the database has approached that size, but that is fixable -- at least in principle. We'll leave it aside as an issue for now).

Nothing Gmail does on the Web is beyond what Outlook could do locally -- all the while being more responsive and easy-to-use because it's a local app rather than a Web-based one.

Except... what about backups? It's a pain to back up a gigabyte-sized database. And backups have to happen, because hard drives fail at some point. A CD isn't big enough to back up such a big database. A DVD is, but not everyone has a DVD writer, and who wants to make the effort and expense of backup up to removable media on a frequent basis? It takes a long time to write, during which time Outlook shouldn't be used so that the backed-up data remains internally consistent.

Backups really are a pain. Gmail eliminates that pain for emails.

Microsoft should respond to Gmail by continuing to give away Outlook Express as part of Windows (and Outlook as part of Office), but it should add a capability for server-based, invisible backup.

Users can access their Hotmail accounts through Outlook can't they? So, Microsoft should expand Hotmail to a gig of storage and take responsibility for the backups, and make it so that all emails the user receives and doesn't delete are backed up forever on Hotmail's servers.

Then they will have a local app, inherently more responsive than Gmail's browser-based app, that does everything of significance that Gmail does.

And it won't have to depend on custom advertising -- which many worry about as an invasion of privacy, and many others would like to avoid simply because they don't want ads in all their outgoing mail -- because people actually pay for Windows software. Either through the hardware manufacturer or directly. And MS is moving toward an annual-fee model for that software. So the cost of the service can be paid for out of that.

And while they are at it, they should add seamless server-based backup capabilities for other files on disk; why stop at email?

Such a service would be fundamentally superior to Gmail in a number of ways. Google would not really have much of an ability to compete effectively with it. It merely requires Microsoft to make the decision to do it.

But, Gmail is still a very smart move for Google. If they manage to get millions of Gmail users before Microsoft reacts effectively, those users will have two choices: a) stick with Gmail despite Microsoft's competition, or b) go through the hassle of changing their email again and deal with having their old emails in Gmail and their new ones in the Microsoft version.

In such a situation, and assuming Google continues to improve Gmail, many people will probably stick with Gmail. Google will have achieved the stickiness that their search service doesn't give them. People can painlessly switch search services, but switching an email service, particularly one geared toward eternally storing all one's emails, is harder. That's exactly the kind of thing Google needs to do to justify anything remotely like the valuation they want.

They're doing what they need to do because they have no choice. Only time will tell if Gmail helps them succeed at becoming a company that people won't forget about, as was the case with Alta Vista, the first time a better search engine comes along.

Update: There is now a utility to integrate Gmail into Outlook. That means that Gmail can be as convenient as Outlook. But then there is little reason not to just use Outlook and a plain POP3 account. Moreover Google will probably fight this kind of thing since it removes their source of revenues: inserting ads into emails.

Gmail getting copied

As I noted previously, the biggest threat to Google's hopes for world domination through gmail is that it can be copied. And today,

Spymac, a Web hosting company for Macintosh aficionados, is giving away e-mail accounts that come with 1 gigabyte of storage, mimicking a move search leader Google made last week. [News.com]

Is there anything about Google's service that is at all hard to copy? It's hard for me to see what it would be, unless they manage to get one of the PTO's overly-broad patents on some key ingredient. Gmail depends on search technology, but Microsoft will have their own good search technology soon enough; It's not beyond Yahoo either.

My bet is that Gmail isn't going to help Google much. It doesn't matter how good it is if it can be easily copied.

A fascinating blog post from Baghdad

Posted April 5 and updated later in the day:

A coup d'etat is taking place in Iraq a the moment. Al-Shu'la, Al-Hurria, Thawra (Sadr city), and Kadhimiya (all Shi'ite neighbourhoods in Baghdad) have been declared liberated from occupation.
...
News from other cities in the south indicate that Sadr followers (tens of thousands of them) have taken over IP stations and governorate buildings in Kufa, Nassiriya, Ammara, Kut, and Basrah.
...
No one knows what is happening in the capital right now. Power has been cut off in my neighbourhood since the afternoon, and I can only hear helicopters, massive explosions, and continuous shooting nearby.
...
If we need a person like Saddam to keep those rabid dogs at bay then be it. Put Saddam back in power and after he fills a couple hundred more mass graves with those criminals they can start wailing and crying again for liberation. What a laugh we will have then. Then they can shove their filthy Hawza and marji'iya up somewhere else. I am so dissapointed in Iraqis and I hate myself for thinking this way. We are not worth your trouble, take back your billions of dollars and give us Saddam again. We truly 'deserve' leaders like Saddam.
...
UPDATE: Sorry for the depressing note. It seems like everything is back under control, at least from what I can see in my neighbourhood. There is an eerie silence outside, only dogs barking. [Zeyad, the blog of an Iraqi dentist. Hat tip to Andrew Sullivan.]

Testing Gmail

...gmail is already so good that I've no qualms over using it for my regular general email straight away... I'll just say that unlike Segway it's nowhere near disappointing, and if folders and convenience issues make you as frustrated as they used to make me, you're going to love it. [miscoranda

]

Why does he love it? Info from Google's press release:

Today, a handful of users will begin testing the preview version of Gmail. Unlike other free webmail services, Gmail is built on the idea that users should never have to file or delete a message, or struggle to find an email they've sent or received. Key features of Gmail include:

• Search: Built on Google search technology, Gmail enables people to quickly search every email they've ever sent or received. Using keywords or advanced search features, Gmail users can find what they need, when they need it.

• Storage: Google believes people should be able to hold onto their mail forever. That's why Gmail comes with 1,000 megabytes (1 gigabyte) of free storage – more than 100 times what most other free webmail services offer.

• Speed: Gmail makes using email faster and more efficient by eliminating the need to file messages into folders, and by automatically organizing individual emails into meaningful "conversations" that show messages in the context of all the replies sent in response to them. And it turns annoying spam e-mail messages into the equivalent of canned meat.

This is really ambitious. To enable it to justify the kind of IPO they want, this will have to be as useful to most people as the reviewer quoted above currently feels it is for him, and they'll have to get a truly huge number of users before Microsoft and Yahoo copy it -- or there will have to be key aspects of it with strong patent protection behind them.

I find it hard to believe that I'd be willing to give up my local client and spam filter for a web-based email package, but if it's good enough to motivate me to do so, then I'll be very respectful of their accomplishment.

Oops pepsi-itunes still going...

[Jeffrey Stowell] It's 8:30 am, April 1, and I just entered two caps successfully.

["Joe"] The only reference on the entire [FAQ] page to 3/31/04 is if you want to write in and request a free game piece. In that case your letter needs to be postmarked by 3/31/04. (Hmmm...37 cents for stamp to get a 1-in-3 chance of winning a 99 cent prize...that's worse odds than the roulette table at Vegas!) [Macintouch]

Google launches their email service

Google's service, called "Gmail," will include a built-in search function that will let people search every e-mail they've ever sent or received.

According to company executives, users will be able to type in keywords to sort e-mails or find old missives. And it will come with 1 gigabyte of free storage - more than 100 times what some popular rivals offer and enough to hold 500,000 pages of e-mail. [CNN.com]

I discussed the reasons why Google must do this in January. I won't repeat that discussion here except to say that this is probably the best opportunity Google will ever have to try to justify the huge IPO they hope for.

The details of the system look very impressive relative to the competition. Of course, there is no reason that the competition can't copy every one of those details. It will be interesting to see what happens.