BEST OF THE WEB: Google’s search for a business model; Who is Xiaomi?
Wednesday, October 16, 2013/
These days, it is difficult to imagine Google as a tech start-up with a promising product but no workable business model.
Yet, as Will Oremus from Slate points out, that’s exactly the situation tech entrepreneurs Larry Page and Sergey Brin found themselves in when they first launched their then-revolutionary search engine back in 1998:
In September 1998, [Larry] Page and [Sergey] Brin founded Google based on an algorithm called PageRank that they had developed as Stanford Ph.D. students… PageRank dived much deeper [than its competitors], evaluating sites’ authority and influence based on the number of other authoritative and influential sites that linked to them. Suddenly a search for “Honda” turned up Honda.com instead of, say, a porn site that had copied the word “Honda” 50 times in invisible type at the bottom of the page.
Within a year, it was clear to many in Silicon Valley that Google’s algorithm was superior to those of more established search engines like AltaVista and Inktomi, whose software powered HotBot, Yahoo, and several other major Web portals.
However, despite the praise from the Silicon Valley community, it was still unclear whether Google would ever find a viable business model.
According to Oremus, the pair began looking at a now long-forgotten rival for inspiration:
That’s when Page and Brin started to take a closer look at GoTo.com, a rival search engine that was beginning to reap huge revenues with a novel advertising model. … Rather than build his own search engine from scratch, [GoTo founder Bill] Gross took Inktomi’s engine and introduced a twist: paid search. Like the way companies bought ads in the Yellow Pages, websites could pay for top placement on the GoTo.com results page for a given keyword.
How Bill Gross’ idea inspired Google’s paid search business model is an interesting and often piece of forgotten tech history.
It’s also a timely warning for anyone in the tech sector: While being first to market can be a big advantage, sometimes it’s more important to be the best.
Who is Xiaomi?
Tech start-up Xiaomi certainly raised a few eyebrows when it outsold Apple in the world’s largest smartphone market – China. The feat was made all the more impressive by the fact the company only launched in 2010 and didn’t begin shipping smartphones until 2011.
So just who is this company and how did they achieve such explosive growth? It’s a question investigated by Time Magazine’s Kevin Kelleher, who argues in his profile of the company that price and the nature of the Chinese market have played an important role:
Xiaomi designs its phones with high-end specs and sells them at midrange prices. Xiaomi phones can’t touch the [Apple] iPhone or the [Samsung] Galaxy in terms of quality (yet), but the company beats them handily on price, the paramount factor for many consumers in China… It helps that the company has a contract with China Mobile, the country’s state-owned telecom giant. China [Mobile] has 745 million customers (465 million smartphones and growing) [using] its 3G network.
Needless to say, the tech industry is beginning to take notice. Especially after the company poached one of Google’s most senior executives:
Outside of China, Xiaomi began to gain notice in July, when research firm Canalys said that the company’s market share in China surpassed Apple for the first time in the second quarter. Apple’s [market] share fell from 8% to 5% in a single quarter. Around that time, Xiaomi unveiled its Hongmi, or Red Rice, phone for around $130 and offered 100,000 handsets for sale online. It sold out in 90 seconds.
The company made even bigger waves in late August, when it hired Hugo Barra from Google. Barra, who was head of product development at Google’s Android unit, was impressed with how the company forked Android to its handsets.
However, despite its high profile recruits, whether the company’s success can be replicated outside China remains a major question:
It’s not clear whether it can maintain its intensive focus on customer experience as it moves into new markets, each with its own peculiar needs. Or whether it can grow quickly in them without the kind of support it receives from China Mobile. Or, most importantly, whether it can grow into new countries and new product categories with its small margins.
It’s a tale the tech sector – in particular, rivals such as Samsung and Apple – will be watching closely.
Like a diamond in the sky?
Just imagine for a moment a world where the rain falls as solid diamonds. It’s a lucrative thought, isn’t it?
Well, according to Tammy Plotner of the Universe Today, new scientific research shows such a planet could be closer to home than we imagine:
Recent data compiled by planetary scientists Mona L. Delitsky of California Specialty Engineering in Pasadena, California, and Kevin H. Baines of the University of Wisconsin-Madison, has been combined with newly published pressure temperature diagrams of Jupiter and Saturn. These diagrams, known as adiabats, allow researchers to decipher at what interior level that diamond would become stable.
Plotner notes that these diagrams reveal something rather fascinating. The pressure in Saturn and Jupiter’s atmosphere is so high, any carbon in the atmosphere would most (at least in theory) be transformed into diamonds:
According to Delitsky and Baines, carbon could be generated as soot or graphite from a lightning strike. Since lightning is normal during Saturn’s many huge electrical storms, it stands to reason this elemental carbon would descend to a lower atmospheric level to be compressed into solid diamonds. It would then further descend towards the planet’s core to be eventually “pressure cooked” into a liquid state.
In recent years, space flight a new commercial frontier in science and technology, with Elon Musk’s SpaceX and Richard Branson’s Virgin Galactic ushering in a new era of space travel.
The research by Delitsky and Baines suggests there might soon be a lucrative new reason for private space companies to explore our solar system:
Thanks to the latest data, researchers are confident that deep inside Saturn there may be diamonds so large that they could be referred to as “diamondbergs”!
Is this the kind of stuff we dream of one day mining? You bet.
The discovery certainly adds a new meaning to the phrase “a jewel in the night sky” – and space research might have a diamond-encrusted future ahead of it.