Source: John Koetsier

The actual, real, live fire pole.

Like a full regulation fire pole that people can actually use to drop down a floor. Or an officially certified slide to get down to the lobby after a long day. Perhaps a cushioned and enclosed chill room.

Or even, believe it or not, a cattle walkway.

On a recent trip through Ontario, I toured Google’s first office in Canada — and talked to the engineer who leads Google Canada, a former startup guy in Silicon Valley and native Canuck, Steve Woods. If you use mobile Gmail, a Chromebook, Google Maps, Google Calendar, or Google Fiber, there’s a good chance you’ve touched something built at Google’s offices in Waterloo, Ontario.

And if you ever get the opportunity, those offices are definitely something to touch as well.

“Startups are great, because you start from scratch,” Woods says. “Startups are awful, because you start from scratch. At Google, you can literally launch a project that affects a billion people.”

That’s one reason he decided to accept Google’s offer to leave the Valley, return home, and “figure out what we should do in Canada and do it.”

In 2008, when Google opened the office, Waterloo and London were the company’s two centers of mobile excellence — likely due to Waterloo’s proximity to then-leading smartphone manufacturer BlackBerry. So Waterloo and London pioneered the mobile version of virtually every service Google offers: Maps, Gmail, Calendar, mobile search, and more. Waterloo, which now boasts about 200 engineers, also hosts the team that built Google Fiber’s user interface and critical software for the Chrome Pixel, Google’s answer to Apple’s retina display, with full touch integration.

The office is located in a formerly industrial building that once housed a tannery, believe it or not (hence the cattle walkway). Google shares it with a number of accelerators, startups, and coworking spaces that together make up Communitech, a startup mecca with strong connections to Waterloo University, angel investors, and venture capitalists.

Source: John Koetsier

The Googlers who work here. After a year, their drawing gets colored in.

Woods, whose recruiting strategy is to get ex-patriate Canadians to move back as well as to draw new talent from the nearby Waterloo University, says that it’s an attractive place for Googlers for a variety of reasons — not just the fire pole or massage room.

“There’s fewer bosses here, or at least they can’t find you,” he jokes. “At least a third of the people here have moved back from California.”

Source: John Koetsier

The actual cattle walkway

Woods says that Google’s most internally unpopular and controversial product ever was built in Waterloo as well: Conversion Optimizer. That’s a piece of software for advertising buyers that Google calls the “just trust us and push the button button,” which essentially hands your advertising campaign over to Google to optimize for the cheapest and most effective ads.

“It was extremely unpopular in Google,” Woods told me. “People were wondering: How much money will we lose? They were worried that advertisers would optimize their ad spend early in the month, hit their caps, and stop buying.”

Google’s known for taking risks, however, and the company ultimately decided to go ahead despite the chance it might actually lose money. Now, the product is one of Google’s most popular for advertisers, and it manages “many, many billions of dollars.”

“It took a Nobel prize-winning economist to prove that was untrue,” Woods said. “It’s great for Google, great for advertisers, and great for surfers.”

And another product Waterloo build that Woods is particularly proud of is what he calls “the largest project Google has ever done.”

It’s the first mobile search transcoder, which was an infrastructure that rendered web pages on Google’s own internal servers, decided which bits were most important for mobile phone web users, and sent only those bits. It sounds like something for the presmartphone days of historical antiquity, but not so.

“It’s still a very fast-growing project,” Woods told me. “The volume is staggering … billions of pages per day in countries in the third world, and even in the U.S., it’s still growing.”

So … why in Waterloo, Ontario?

Source: John Koetsier

Communitech, the community in the building that includes Google.

“Something interesting is happening here,” Woods says. “The university produces an amazing kind of talent … and people that come into Google from the University of Waterloo do disproportionately well.”

Worldwide, he says, Waterloo has been one of Google’ top three or four recruiting centers for some years now. And, he adds, not everyone who wants to work for Google wants to live in California.

“This area has a very high proportion of startups to population,” he adds. “Google loves startups, and we love to hire entrepreneurial people.”

Oh, and the slide?

The office has a plastic red slide down from the second-floor Google reception area to the first-floor entrance. It has a prominent sign, “For Googlers Only,” which a PR rep told me was placed there because Ontario’s provincial slide inspector (yes, they have one, apparently) raised some concerns about safety.

I was bad, however, as I frequently am, and went down the slide anyways. The PR rep forgave me, as you can see in the video below:

Image credits: John Koetsier

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Big Data and Predictive/Real-time Analytics startups: Are you looking to jumpstart development & accelerate market traction? Sign up for the SAP Startup Focus program to receive technology, support, resources and community to help you develop new applications on SAP HANA, a cutting edge database platform. Get started here, and enter promo code “VB2013″ on the form.

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July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Google had its first $50 billion year in 2012. But with its massive investments in mobile, someday it might make that much just on the little plastic and metal devices we carry in our pockets.

In fact, digital ad company WordStream has counted no fewer than 21 ways that Google is monetizing mobile, from good-old-fashioned Google AdWords to Groupon-light Offers to augmented reality assistant Google Goggles and, someday, Google Glass.

Google even wants to replace your dead-cow wallet with a shiny digital one. But if you won’t buy what you want with Google Wallet, it hopes to at least guide you to your next purchase with Google Shopper.

Here’s the full list, in visual form, along with WordStream’s perception of how well Google is using its mobile tools to generate mobile money:

photo credit: Louish Pixel via photopin cc

The new offers capability has been in limited release for some time. With it, advertisers can add a coupon-like discount offer to their AdWords ads, either for immediate redemption online or for printing and in-store use, and it’s now on track to roll out to all advertisers, according to Larry Kim, the CEO of search marketing company WordStream.

Source: WordStream

Example: the Google Offers Extension ad product

He’s excited about the new opportunity for advertisers.

“It’s a way better deal than Groupon, who requires 50-90 percent discounted pricing, then takes 50 percent of that for themselves,” he wrote me in an email. “Also, advertisers can track this. Local businesses can connect the dots between online marketing and in-store purchases … not possible before!”

One thing that’s not so certain but would be absolutely huge: integration with Google Maps, which would enable Google to deliver incredibly targeted, relevant, and immediately actionable advertising right to your mobile device.

“Local Deals + Google Maps = perfect match!” Kim said.

As Kim writes in a blog post on the subject, Google famously attempted to buy Groupon for $6 billion a few years ago, when Groupon was still in its ascendancy and could, seemingly, do no wrong. Now, of course, the company is not quite as hot, sporting a market value of just $3.8 billion.

Offer Extensions, well integrated into Google’s vast array of mapping, email, web search, and other properties, cannot be a good thing for the Chicago deals company. But they will be a good thing for advertisers, says Kim:

“Coupons mean more eyeballs and attention for advertisers. Even if users see your deal, save it for later, and forget about it, they’ve still interacted with your business and brand more than they might have if you didn’t put out an ad offer.”

I asked Google for a comment, and a representative said essentially that the company has been testing Offer Extensions, among other AdWords extensions, since 2010, and that advertisers using enhanced campaigns (AdWords campaigns that include information like maps, phone numbers, or more product info) now also have access to offers.

photo credit: mark knol via photopin cc

The only problem?

You wasted a good chunk of that $50 billion on advertising that didn’t convert, didn’t show ROI, and wasn’t intelligently conceived. Ideagility founder and CMO Rahm McDaniel wants to change that.

“Our typical customer sees their overall spend decrease by double digits,” he told me. “And their conversion rates increase by double digits.”

Source: Ideagility

Conversion rates

The big boys, companies like WalMart and PC Mall and Amazon, spend millions of dollars on Google AdWords. So they have whole teams of brainiac advertisers constantly tweaking campaigns, editing ads, A/B testings copy, and generally doing everything you don’t have time to do. Which is why pay-per-click management software like Ideagility’s AgileBid makes sense: it makes the software do the work for you.

“Big companies tend to view little companies as small, stupid versions of themselves,” Ideagility’s CEO Ron McDaniel says. “Google has built this amazing advertising platform … but the learning curve of Adwords is too high for most business that do $1000/month on Adwords to be worth their time.”

Managing a PPC campaign is labor-intensive. You set up multiple ads, choose keywords that you’re targeting, and then iterate daily via multivariate testing to optimize three key metrics: click-through rate, conversion rate, and return on investment. Some keywords are worth more, because they convert at a higher rate and convert into higher-paying customers. Some keywords stimulate huge click-through, but poor conversion. Failing to optimize means failing to win: paying Google too much for advertising that does not efficiently accomplish your objectives.

So McDaniel, who built the software for AgileBid for his own use initially, created software to optimize AdWords spending regularly, repeatedly … forever.

“If you can make a 10 percent improvement on your bid process every day — which is what humans don’t do well — then that’s where the largest returns come from,” he told me.

Here’s how it works.

After initial set-up, AgileBid is constantly active moving dollars out of areas of negative returns, into areas of positive returns. Most of the keywords that you’re able to think of when setting up a campaign are the exact same keywords your competitors thought of, so they’re expensive, may not convert well, and don’t have great ROI. AgileBid is constantly looking for new, related keywords, and unexplored opportunities.

AgileBid spends about 20 percent of your budget on that testing. The hidden gold it uncovers in out-of-the-way keywords and ads is what drops your spend and boosts your conversion rates by double digits. That means if you’re spending $1000/month, you could reduce your ad budgets to $800 and still get better results.

Source: Ideagility

Ideagility dashboard

AgileBid isn’t for everyone, McDaniel is quick to clarify. Other PPC automation tools such as WordStream, Kenshoo, Marin, and Acquisio offer more features and more customizability. But that’s just the opposite of what AgileBid was intended to do.

“We’re like a 4-hour work week tool,” McDaniel says. “The problem isn’t that people don’t have enough features … what our customers have told us they don’t have time to mess with that stuff. So we give our clients a look at what’s happening, but not a lot of knobs and dials to turn.”

The results are impressive.

McDaniel says that the big AdWords spenders like Amazon, PC Mall, Overstock.com, Costco, and Macy’s average about 2 to 3.5 percent conversion rates. (That’s pretty good — I’ve personally managed PPC campaigns, and a single percent is generally considered par for the course.) AgileBid’s customers — typically small businesses without huge, well-known brands — convert at an astonishing 3.37 percent.

In other words, better than NeimanMarcus, Overstock.com, PC Mall, and Costco, and almost as good as Amazon.com and Macys.

In other words, impressive.

photo credit: faith goble via photopin cc

An angel may not get its wings, but somewhere, a click sells a product, downloads a white paper, or takes some personal information. In short, some exchange of value takes place — at huge, mind-boggling scale.

Larry Kim of the web marketing firm WordStream analyzed a huge divot of Google data — which I published in infographic form earlier today. WordStream offers a free Adwords Performance Grader, which gave it access, Kim told me, to about 1 percent of Google’s revenue over the past quarter.

And the data that comes out is fascinating.

Source: WordStream

The shopping industry does a lot of ad shopping

For instance, the finance industry places 617 million ads on Google.com and 5.32 billion ads on Google’s ad network each and every day, generating 28 million clicks at the highest average cost per click of any industry: over $3 on google.com, and over $1 for ads in the network. Top five advertisers in finance include names like State Farm, Geico, and Quicken Loans.

The second most prolific industry buying Google ads is travel, where brands like Expedia, Hotels.com, and Kayak place 2.5 billion ads a day to generate over 20 million clicks at an average price of just under $0.30, and complete 360,000 sales a day.

“Different advertisers define conversions differently,” Kim told me today, so those sales include not just actual flight, rental car, and hotel bookings but also any leads generated via an ad.

But the highest conversion rates belong to the education industry, which enjoys almost three times the conversion rate of travel companies. Education advertisers such as the University of Phoenix, DeVry, and Kaplan University convert at a red-hot 6.27 percent.

30 billion ads served … a day

All those millions of click and hundreds of thousands of conversions come out of probably the biggest advertising engine in the history of the world. Between ads on its own site and ads on its network, Google delivers an astounding 29.8 billion ad impressions every single day. That’s mind-boggling.

The good news for advertisers is that Kim’s data shows that average cost-per-click has come down significantly, which is part of the reason why Google lost almost $20 billion in market value in a single morning last week. Advertisers are now paying between 16 percent and 18 percent less for clicks than they did just four months ago.

Source: WordStream

The finance industry spends a lot of green with Google

“I think that’s fantastic news,” Kim says.” “It’s not only cost-per-click going down, but also that the inventory of ad impressions is going up substantialy … it means you can get more customers for less money.”

That sounds bad for Google. But not really, he told me.

“It’s actually really good news for Google, too … even though Wall Street cheers when the cost-per-click goes up and Google gets more money from advertisers … that’s not sustainable. By increasing the available impressions and clicks and lowering the costs, more advertisers will see more value from online advertising and that will be beneficial for Google in the long run.”

One caveat: While Kim is pretty confident in the data, saying that by analyzing 1 percent of Google’s revenue he’s checking a far higher percentage than Gallup, for instance, would poll for an election preview, it’s not Google data.

So it’s possible that WordStream’s data is off. With such a large sample, however — over a billion dollars in annualized revenue — it’s not likely that it is very far wrong.

photo credit: captcreate via photopin cc

Now a new report from an independent source, internet marketing software company Wordstream, is giving us more information on how, exactly, that happened.

Essentially, even though total revenue rose to hit $14.1 billion, including $10.8 billion in advertising revenue, the amount advertisers pay for each click decreased significantly. Advertisers paid 16.5 percent less per click on Google search results compared to the previous quarter, and a whopping 18.2 percent less on Google’s display network (sites around the Internet that carry Google’s ads).

Looking for more data? 30 billion times a day, Google runs an ad (13 million times, it works)

In addition, click-through rates on Google search result pages dipped 12.4 percent on Google’s high-value search pages.

The upshot is that while strong growth in the number of ad impressions and clicks — 21.6 percent on Google search, and 29.1 percent on the network — drove top-line revenue, profitability as a percentage of sales was impacted. And that’s what caused such panicky GOOG stock selling that Google asked NASDAQ to halt its stock trading temporarily.

The data comes from a study that analyzed 2,600 AdWords accounts with a quarter of a billion dollars in annualized spend, including both small and large advertisers.

So how does Google make over $100 million a day?

Here’s how:

But the company gave VentureBeat a sneak peek today.

The single most popular tool? Überpopular file-sharing, storage, and back-up service DropBox. Evernote, the electronic memory app, comes in at No. 4.

The number of times Google shows up on the list is simply shocking, although I supposed it shouldn’t be. Google make no less than seven appearances in to the top 25, including Gmail, Google Docs, Google Voice, Google Calendar, Google Alerts, Google AdWords, and Google Analytics.

(Add Google Search to the list of freelancer tools and I’m guessing seven would magically transform to eight.)

One fly in this survey’s ointment? The company only surveyed about 100 entrepreneurs. If I remember anything at all from my university statistics course, that might give it a reliability factor of don’t-have-a-freaking-clue.

In any case, here’s the infographic.

Little contest: as you check it out … count how many services you use or have used, and put your number in the comments. Will your score beat mine? My number is 17.

Photo credit: female freelancer/ShutterStock

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Big Data and Predictive/Real-time Analytics startups: Are you looking to jumpstart development & accelerate market traction? Sign up for the SAP Startup Focus program to receive technology, support, resources and community to help you develop new applications on SAP HANA, a cutting edge database platform. Get started here, and enter promo code “VB2013″ on the form.

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Google may be a worth upwards of $200 billion by itself, but the company is also helping to generate some serious revenue for everyone else.

So says the company’s latest Economic Impact Report, which estimates that Google’s search and advertising tools helped generate $80 billion for American businesses in 2011.

Google draws its revenue figures by combining AdWords revenue, payout to AdSense partners, and donations made to non-profit organizations through Google Grants.

The numbers are based on two assumptions: Google assumes that, for every two dollars a business spends on AdWords, one dollar is made back. The company also assumes that businesses net five times as many clicks on their search results as they get on advertisements

Google illustrated these numbers via its Economic Impact tool, which lists how much cash the company helped generate for each state. The biggest winner is California, which generated $20 billion through Google. That the state came out on top is no big surprise, as it’s where Google is based. New York came in second with $11 billion.

Google’s numbers have been increasing at a fairly regular clip since the company began releasing the data two years ago: The company says it helped generate $54 billion in 2009 and $64 billion in 2010.

Even Google was slightly taken aback by the news. “What’s really surprising here is that, even in a bad economy, businesses are still growing,” Google Policy spokesperson Jenna Wandres told VentureBeat.

And if you think the numbers sound a bit low, Google’s right with you. Not only did the company err on the conservative side with its estimates, but it also didn’t include results from products like YouTube and Google Maps. The numbers also don’t reflect the money-saving benefits of search results for consumers or how much Google’s own hiring helps the economy (Google employs over 14,000 Californians, for example).

The company does aim to include all of these details in future reports, though, so we can expect some further increases next year.

That growth will also come as more businesses flock to the Internet, Wandres said. ”It’s really significant that fifty eight percent of American businesses aren’t online, so I think that as these numbers continue to grow, more and more businesses will see the economic value of going online,” she said.

Google has rolled out a version of its its successful keyword search advertising service AdWords for Video, the company announced on the YouTube blog yesterday.

AdWords for Video is essentially Google’s attempt to take on the video advertising world by taking advantage of the 800 million monthly visitors to YouTube. The company claims that YouTube video ads can drive a 20 percent increase in traffic to an advertisers website and a five percent increase in searches. And with Google’s $100 million commitment to transform YouTube into a place for premium, long-form video content, the new service could really take off.

As for the service itself, it’s similar to the search ads, where you pay for clicks and set budgets with bids, but advertisers only pay for video ads when users choose to watch it. Campaigns will be accessible through the same panel used for search and display ad campaigns, which is nice for both ROI and promotion coordination purposes.

To help get the new service off to a good start, Google is offering $50 million in free advertising, or a $75 video ad campaign credit for about 500,000 businesses.

The company has released a demo video of the new AdWords for Video service below. If you’ve used the new service, let us know about your experience in the comment section.

Image via Google

Google got a dose of bad news today, as a court revived a longstanding trademark infringement case against it.

The U.S. Court of Appeals for the 4th Circuit has decided to address whether Google is in violation of trademark infringement for selling other companies the rights to use a copyright-protected brand name as an advertising search term.

Right now, clients of Google’s AdWords service can buy any number of specific search terms — terms people would type into a Google search bar — in an effort to drive traffic or attention to their website. The paid links are displayed somewhere near the regular search results. You don’t need to own a trademark in order to buy advertising for the term. In other words, if I wanted to buy advertisements that popped up whenever people searched for “Coke” or “Pepsi,” I could do that, even though the companies that own those trademarks might not be happy about it.

Rosetta Stone Inc., the company best known for producing language learning software, first filed the trademark lawsuit against Google in 2009, claiming that selling brand names as search terms would confuse consumers. It was dismissed a year later by a Virginia district court.

Today, the appeals court overturned the earlier decisions, thus reviving claims that Google could have directly infringed on Rosetta Store and diluted its brand.

“A reasonable trier of fact could find that Google intended to cause confusion in that it acted with the knowledge that confusion was very likely to result from its use of the marks,” wrote Chief Judge William Traxler in the decisions for the court panel. Basically, that means Rosetta Stone has to prove that Google purposefully sold the search term “Rosetta Stone” to a competing software company that resulted in confusion to people wishing to buy language education software.

“We’re very pleased with the opinion, and we think it is an important precedent,” said Rosetta Stone’s lawyer Cliff Sloan.

This is a pretty important case because if Google is found guilty, it could drastically change the way things are marketed online. You’d not be able to buy search terms for any number of brands without running into legal trouble. It’s for that reason alone that I expect freedom of speech advocates to come out of the woodwork if the case advances further.

Via Reuters

Create an Internet business in four days; that’s the goal of the Wharton School of University of Pennsylvania’s workshop that finished yesterday. Students spent four days turning ideas into business prototypes and competing against each other in the course’s Innovation Tournament.

In four days, Jan 2 – 5, MBA students learned how to pitch, create and launch a new web-based business. Each student entered the class with an idea and through a process of elimination, seven business ideas and teams emerged. Students learned the basics of creating an online business; from identifying target audiences and pitching an idea, to search engine optimization and online traffic reporting.

At the end of the workshop, the organizers announced the winners of the Innovation Tournament. Each team won on a specific metric, such as most pageviews for the business website or best real world application. While the “everyone wins” spirit is helpful in a classroom setting, in the real business world there are often clear winners and losers — something the workshop didn’t dive into. In addition, due to the short time span, the workshop didn’t discuss how to identify and deal with competitive businesses. New businesses launch all the time and many companies are competing for the same customers. Being able to set your business apart from all of the others, can mean the difference between success and failure.

The team that won based on pageviews and marketing created Chow4You, a service that helps you find meals based on nutritional value and dietary needs. Rohan Mirchandani, the acting CEO of Chow4You, said, “The workshop was focused on learning the steps to take to make a business viable, especially focusing on user experience, which I found to be the most important topic”. The program is just a prototype now, but based on his experience in the course, Mirchandani said he felt confident that he could launch Chow4You as a real business.

The Innovation Tournament is in its fourth year and has launched about one successful business from each workshop. Karl Ulrich, the Vice Dean of Innovation at Wharton, teaches the four day workshop at the beginning of January at Wharton West, the San Francisco campus for the Wharton School.

The ads made it easy for US residents to order controlled and non-controlled prescription drugs from Canada, which is illegal. The $500 million fine takes into account the gross revenue Google received through running ads from Canadian pharmacies, as well as the gross revenue made by those pharmacies from sales to the US.

As I wrote back in May, when inklings of the settlement were first reported, the half a billion dollar fine would be among the largest paid to the government to settle investigations. It’s a sign that Google is willing to pay whatever it takes to make this investigation go away. And it’s a wakeup call to the company, which generated nearly $30 billion in ad revenue last year, that it needs to be particularly careful with the ads it accepts.

The DOJ notes that Google was aware since 2003 that it was illegal for pharmacies to ship prescription drugs into the country. Even more damning, Google offered customer service to the pharmacies between 2003 and 2009 to make their ads more effective.

Once the company was aware of the investigation, led by the U.S. Attorney’s Office in Rhode Island and the FDA, it took steps to prevent prescription drug sales via its ads. The company began requiring pharmacy advertisers to be certified by the National Association of Boards of Pharmacy’s Verified Internet Pharmacy Practices Sites program, which the DOJ says has strict standards against selling drugs via online consultations, but which doesn’t certify Canadian online pharmacies.

In a statement to the New York Times today, Google said, “We banned the advertising of prescription drugs in the U.S. by Canadian pharmacies some time ago. However, it’s obvious with hindsight that we shouldn’t have allowed these ads on Google in the first place. Given the extensive coverage this settlement has already received, we won’t be commenting further.”

The DOJ also revealed that its investigation into Google started from an unlikely source: “[It] had its origins in a separate, multimillion dollar financial fraud investigation unrelated to Google, the main target of which fled to Mexico,” the agency wrote in today’s announcement. “While a fugitive, he began to advertise the unlawful sale of drugs through Google’s AdWords program. After being apprehended in Mexico and returned to the United States by the U.S. Secret Service, he began cooperating with law enforcement and provided information about his use of the AdWords program.”

AdWords is a huge, lucrative system, said AdGrok co-founder Antonio Garcia-Martinez, but it can be hard to tell exactly how an ad campaign is performing — especially if you’re a small business that doesn’t understand search engine marketing. Garcia-Martinez said he wants to be the “TurboTax of search advertising”, namely the service that simplifies a complicated process for a wide variety of customers.

The San Francisco company first announced its service last summer, but today it’s coming out of beta testing and announcing its pricing model.

The most attention-grabbing feature is probably the “GrokBar”, which lets customers look at any page on their website and see data about all the AdWords campaigns pointing to that page. (Garcia-Martinez said one of the rookie mistakes in search advertising is to direct all your ads towards your home page, rather than the specific page where a shopper can buy a product or register for your site or whatever.) Customers can see exactly how much they’re paying for each campaign and how well it’s performing. Then they can kill ads that aren’t working and create new ones. Garcia-Martinez said that if AdGrok is successful, customers will never have to interact with AdWords directly.

Another cool feature involves integration with Shopify, a service that powers online stores. Sites that use Shopify can upload all of their inventory into AdGrok, create ad campaigns around each product, and then immediately end the campaign once they’ve sold out of a specific item.

Again, Garcia-Martinez said he hopes to serve the full spectrum of search engine marketing customers. If you’re an agency running a mind-boggling number of campaigns, you might use a search marketing tool like Marin Software to manage all of them but still sign-up for AdGrok to get a quick, high-level view of how those campaigns are doing. On the other hand, if you’re a small business that feels overwhelemed by AdWords, AdGrok can make the process manageable, and you can even hire the company to run your campaigns for you.

AdGrok offers free and paid services — the “standard” package is $20 per month.

The company was incubated at Y Combinator and has raised $470,000 from Chris Sacca, Russ Siegelman, Ben Narasin, and TriplePoint Capital. Customers include Eventbrite and Kiva.

Houston said the results were “horrific”.

Before launching, the company already made a splash with a demo video that became insanely popular on social news aggregator Digg, and it also found early users through Y Combinator (where Dropbox was incubated) and by launching at the TechCrunch50 conference. However, when the company tried to continue that growth through traditional methods, it found that it was paying something like $400 to acquire each new user, which was far more than customers paid for the service.

What went wrong? Houston said the problem, particularly with search advertising, was that no one was actually searching for a document syncing product. That’s the danger with trying to solve a problem that may be real, but that people don’t realize they have yet.

“All the AdWords in the world are not going to save you if no one’s looking for what you’re making,” Houston said. Instead, what worked for Dropbox was “making our users really really happy, and then giving them good tools to spread the word.”

(It seems worth mentioning that a startup called Zuberance offers tools for convincing customers to tell their online friends about products and brands they like, and it just announced new funding yesterday.)

Dropbox is backed by Accel Partners and Sequoia Capital — Houston was speaking at the Stanford Accel Symposium today.

[image via Maitri's Vatulblog>]

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Google CEO Eric Schmidt said that the future of search was blazing-fast, “autonomous” searching that constantly provides users with results. He made the comments at a keynote speech at the German IFA home electronics event in Berlin Tuesday.

But autonomous search isn’t really search as we think of it — a user querying a massive database to get a result. Schmidt likened it to telling a user what he or she didn’t know, but was probably interested in seeing. Google already sees more than a billion searches cross their servers daily, and providing an automated process that is constantly providing search data can only boost those numbers.

That means more potential ad revenue from Google’s advertisements running with searches. Advertising made up about 96 percent of Google’s revenue in the first six months of 2010, according to company financials. Try as it might to diversify away from that revenue stream, for now, search-linked advertising is Google’s highly lucrative trick.

The company brought in $6.8 billion for the quarter ending June 30. Improving that by even a small percentage could bring a huge payout for Google.

For now, old-fashioned search is growing quickly on mobile. Google said about 33 percent of mobile searches related to users’ location, and mobile search grew by 50 percent, and searches on Google’s Android mobile operating system tripled, in the first half of 2010. But tech pundits theorize that users will increasingly use task-specific apps to find what they need rather than perform general searches.

The autonomous approach faces risks, from provoking a privacy backlash to draining users’ batteries through constant queries. But the biggest risk is that mobile users will drift away from Google, which has become all but synonymous with search on computers.

[Photo: dannysullivan]

The product will let businesses create ads and target users across multiple platforms with a simple interface. According to company CEO David Kidder, people don’t have the time to learn a new ad-placement system, which leads them to put all their resources into Google campaigns using the familiar AdWords interface. Kidder thinks the Master Campaign will change that.

“We’re bringing Apple-like simplicity to the marketplace,” Kidder said.

Clickable’s tool is focused on professional services like doctors, dentists, and lawyers. Someone mentioning that they just got divorced, for instance, would be served an ad for a divorce attorney, while someone mentioning credit-card debt might be served an ad for cheap bankruptcy advice. Kidder said the data Clickable has collected on these types of ads allows them to detect users’ intent on social sites like Facebook in ways that might not be obvious to people used to the simple keyword matching used in search ads.

“You can’t do this for all advertisers only for verticals which you have data for,” Kidder mentioned. “The question is not whether I can translate my keyword success on to my keyword success in Facebook. It’s not a lateral thing.”

Clickable is planning on bringing its platform to Twitter in the near future, Kidder told VentureBeat: “I think we’ll be the first one to do it.”

Kidder attributes Clickable’s success to taking the hassle out of advertising.

“Real businesses are painkillers, not vitamins,” Kidder said. “We are the most important painkiller in online advertising because we’re taking away the time and complexity.”

Clickable was founded in 2006 and has received funding from Union Square Ventures, Founders Fund, and Firstmark Capital. The company is actively hiring, Kidder said.