GOOG grows up

[rffrydr]

YouTube and new GOOGE: The first time a Googe embrace has been met with Jitters:

http://www.forbes.com/entrepreneurs/feeds/ap/2006/10/11/ap3084503.html


Microsoft is supposed to play the heavy. More importantly, first departure from the math-loving self confidence promoting internal growth, small company aquisition for all cash. Now playing the investment bankers, and more shockingly, IT'S OWN STOCK AS CURRENCY.

All lights are green for now.

[rffrydr]

Anybody notice 500? 25% in 2 months working wonders for the indices. Round numbers again providing the resistence.

[HenryTo]

The real Google killer?

Peter Thiel is one of the founders of Paypal and is currently running a hedge/VC fund. He is also featured on "Inside the House of Money." I remember trying out "Ask Jeeves" back in the late 1990s. I really gave it a chance but ultimately, I decided that the results that I was getting weren't too different to the ones I was getting on Yahoo or Lycos, for example.
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The search engine that would outdo Google
Commentary: Powerset shows off its freedom from the ills of 'keywordese'
By Bambi Francisco, MarketWatch
Last Update: 12:23 AM ET Nov 7, 2006

SAN FRANCISCO (MarketWatch) -- Three guys are aiming to be game-changers in the search-engine industry and essentially take on Google, its $100 billion gorilla.

So they must be crazy, have a high threshold for pain, or are certain to deliver a brilliant product, right? It could be all of the above. That's not to say the founders of Powerset -- Barney Pell, Lorenzo Thione, and Steve Newcomb are all hype and little substance.

In 2005, 47 search startups -- a record for one year -- received more than $260 million in venture funding, according to Dow Jones Venture Wire. The total sum of that backing was the high-water mark since 2000, when nearly $280 million was invested into 18 search startups.

Now I'm not one to get overexcited about a new technology, especially when a company keeps it mysteriously in stealth mode. But in the case of Powerset -- which received loads of blogger attention about its existence without any coverage about the actual product -- there actually is a lot of substance behind the intrigue.

I was fortunate enough to be the first journalist to get an in-depth demonstration of Powerset, which is a natural-language search engine. Simply put, the technology analyzes the meaning and relationships of words in context so that it can accommodate questions asked in natural language, such as "How're the Giants doing," rather than questions asked in sketchy "keywordese" inputs, like "scores, Giants."

After sitting down with the three founders over a few hours to test their search engine and compare it to the industry's big guns, I think Powerset has a great shot at improving the overall search experience.

Liberating

Indeed, searching with Powerset was a far richer and more liberating experience than what you get with the rivals. It felt constrained and limiting when I went back to the likes of Google, Microsoft's Live, Yahoo and Ask, which is owned by InterActiveCorp.

Powerset won't be made available for the public to evaluate it until next spring, but it's clear I'm not alone in seeing the potential of this search engine.

So far, the group says it has raised $12.5 million in venture-capital financing and has a valuation of roughly $40 million.

The founders of Powerset relinquished control of about 25% of their company -- not the one-third that some writers have suggested. Pell, the company's CEO, is a former NASA researcher, and Lorenzo, the chief technology architect, worked on computational linguistics and search at CommerceNet and Fuji-Xerox.

Charles Moldow of Foundation Capital and Peter Thiel, an initial investor in Facebook, are joining Powerset's board. Powerset's early backers include Esther Dyson, the technology guru.

Powerset represents a combination of "long-term vision and game-changing opportunity," said Thiel.

Comparing to the rivals

So let's look at what sets this search engine apart. Since Powerset indexes a fraction of a fraction of what Google currently handles, we confined our test of Powerset to searching the The New York Times and Wikipedia sites and then checked how Google stacked up when doing the same.

Sample input: "What does News Corp. own?" In Powerset, the top 3 results were very relevant -- and specific. They included a link to a document about Fox TV studios owned by News Corp; another was a link to Balkan News, owned by News Corp. Yet another was about Foxtel being owned by News Corp. The same search on Google generated relatively relevant results, such as a link to the about News Corp. page on Wikipedia. But one result was a link to a Netscape "news" story about President Bush and how the U.S. "does" not torture prisoners.

In capturing the Netscape page, Google implied that its technology found relevancy because the words "news" and "does" were in close proximity. But the result had nothing to do with the company News Corp. In the query, "news" was referring to a company name and "does" referred to an action by that company.

That's the problem with existing search engines, Powerset's founders say. Conventional search indexes words based on the occurrence they're mentioned and their proximity are to one another. Where they fall short is they don't index the relationships between words or the meanings of the words themselves.

In another example, we typed in "acquisitions in 1996." The preposition "in" says a lot about a searcher's intent, said Thione. But in a Google search, the word "in" is ignored, he said. So the top result on Google was about acquisitions by Texas Instruments since 1996 -- even though that company wasn't part of our input. The Google result displayed the results with the words "1996" and "acquisitions." But Google didn't take into account that the searcher wanted to know about acquisitions "in" that year.

Additionally, Powerset's engine understands that "in" may also mean "during" or "within" because it indexes the meaning and relationships of the words. So a search for "acquisitions during 1996" and the results would be the same.

To this end, the index that Powerset puts together for one document is far more in-depth than what other search engines, like Google, index, according to the founders. Given the successful demo, I can believe it.

Powerset short cuts

Powerset also improves upon the shortcuts or instant answers that all the search engines provide for common queries, such as weather, movies, sports scores, or mathematical equations. A shortcut is an answer that the search engine compiles and offers up as the best answer. For instance, if a person wants to find out about the scores for the Giants, on Live, you can type in "scores Giants," and receive a very simple and accurate answer. You can't get the same succinct answer if you type in "scores Giants" into Google or Ask, however. And, how could you, really? Who would know how to use that syntax when inquiring about the Giant's score in the first place? It's not natural. But try typing in, "How did the Giants score in a recent game?" into the search engines, and the results are even worse. On Live, the top result was a link to a news report that was more than two weeks old.

"With existing engines, you'd have to magically know the secret syntax," said Newcomb, Powerset's chief operating officer. Indeed, searching would be easier for me if I knew all the shortcuts. But who has the time?
Powerset is trying to simplify the instant answers by allowing people to ask, "How are the Giants doing?" as opposed to "Scores Giants."
"We already know how to speak," Pell said. "Why work differently to make sense to computers?"

The skeptics

Powerset's founders will have their work cut out for them as they try to evangelize people on the merits of their engine and natural-language searching.

If you're a skeptic, you're saying that natural-language search is a bunch of hoopla. After all, Google doesn't use it, and it's the No. 1 search engine. Or, you may think of Ask.com, the group that started as Ask Jeeves and billed itself as the search engine that uses natural-language search -- only it later dropped that kind of branding.

These are reasonable points. But more skepticism -- or complacency with the current system -- is always good for the underdog, which in this case is Powerset.

Here's why a search engine with a new paradigm can work today: In the years since Google was born, technology costs have dropped sharply, making the indexing for natural language search far more cost effective.

Indexing in natural language requires about 100 times more computational power than indexing keywords, which is what the popular search engines do today. The cost of central-processing unit cycles was eight times more expensive six years ago (in other words, three iterations of Moore's Law).
Powerset is using EC2 Web services provided by Amazon.com Inc.. Without the platform, Powerset might have to burn a lot of its venture funding just on the cost of refreshing Web pages monthly. With Amazon's Web services, those costs drop dramatically.

What's more, Powerset's technology is different from prior attempts in this vein. Ask Jeeves, founded in 1998, wasn't really a natural-language search company, despite its branding as one, said Danny Sullivan, a search guru who writes a blog at SearchEngineWatch. Ask employed more than 100 editors and encouraged searchers to use natural language. Sullivan is a bit negative on Powerset, but that's only because he hasn't seen the product, I believe. Nonetheless, in a self-described "rant" against Powerset, Sullivan makes great points about the search industry and Powerset's chances.

Final notes

If Powerset is successful in getting machines to understand our language, I shudder to think about the consequences of such technological advances. A decade or two from now, will machines correct people when they're wrong or illogical? And what's next -- machines that understand our emotions?

I'm excited about the advances in technology, but I'm not sure I want to be around when machines know humanity that well.

[mcstylin]

It could be trouble for Google if they mess with what's made YouTube such a success. Alot of video content won't be available now...Even so the diverse range of products and services Google offers continues to expand..and the advertising seems to keep growing. I guess I'm high on this stock.

MC
_________________
Make sense of your dollars..

Financial Frenzy!

Insure Yourself!

[rffrydr]

At $500 it's high on us too.

[rffrydr]

Looks like 500dollar GOOG was a good indicator of (over) bullishness.

[HenryTo]

Bloomberg on Peter Thiel - a must-read. Note that he is also featured in the book "Inside the House of Money."

He still sees a deflationary recession/depression, a rise in the U.S. dollar, and the concept of Peak Oil:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPlSRwPxtTKA

[rffrydr]

Google has revamped it's finance page.
_________________
Today is the Tomorrow you worried about Yesterday!

[HenryTo]

rffrydr,

Thanks for the heads-up. Here is a story on it from Red Herring:

http://redherring.com/article.aspx?a=20192

Best,

Henry

[rffrydr]

Now off over 10% from its highs--no worries.
_________________
Today is the Tomorrow you worried about Yesterday!

[rffrydr]

GOOG is 0.824% of SPX and 4.415% of NDX
_________________
Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Failing to hold 500 on another blowout earnings release:

http://www.internetnews.com/bus-news/article.php/3657251
_________________
Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Old vs. New playing out in the GOOG's electronic library--to save the book we had to kill the book (author). How far will the law bend to the digital age?

http://www.newyorker.com/fact/content/articles/070205fa_fact_toobin

I often use Google Books/Scholar--we are no longer at the mercy of a bad index, and can get quite detailed, nor by the size of the library. Cannot come soon enough for me. I consider this one of the great corporate philanthopic projects--but will no doubt lead to transformations I can't forsee.
_________________
Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Great for me as well. All my research is done on the internet and in the bookstore nowadays (or I would purchase the title from Amazon). That being said, many of the older financial books (especially biographies) do have some factual problems with them. Now if they could post on the internet the original manuscripts of the Rothschilds and Morgans, etc...

[rffrydr]

Death by....exhaustion?

http://www.thestreet.com/_googlen/newsanalysis/technet/10336784.html?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA
_________________
Today is the Tomorrow you worried about Yesterday!