Google to allow bidding on Brands in UK

Google announced today that, as of May 5 2008, it will allow open keyword bidding on all terms in the UK and Ireland, bringing these territories in line with the US and Canada.

Simply put, this means that the search giant has abolished its previous system in which a registered trademark could not be bid on by competitors.

Open keyword bidding was rolled out across the US and Canada in 2004 and means that competitors can now bid on a registered trademark, although they will not be able to use trademarked terms in their anchor text or text snippets.

For many, this is unlikely to be welcome news, although some major price comparison sites could see advantages. Until now, clients in the UK and Ireland have benefited from a large amount of relatively cheap traffic from searches on their brand name. The new move is likely to mean trademark holders and competitors will need to significantly increase their bids for the top spots on crucial brand keywords.

The roll out looks on the face of it a very clear revenue boosting idea by Google and no apparent benefit to the leading brands, users or ISPs with all the revenue flowing to Google. The biggest impact is likely to be in developing keyword navigation from the browser address bar which has traditionally been a source of significant revenue for both MSN via Internet Explore and Google via both Internet Explorer and more explicitly via Firefox.

This technique of Direct Navigation was first pioneered by RealNames between 1999 and 2002 before they closed at the behest of MSN. Simply typing a keyword such as “Amazon” into the browser address bar would take you directly to the Amazon site applicable to the territory setting in your browser. After the demise of RealNames, MSN has taken this traffic to MSN search and benefitted from the sponsored listings in a relative benign way although generating millions of dollars in PPC revenue. Google were quick to spot the opportunity and have similarly “hijacked” this traffic from the address bar to their search results. They took this a further step forward when they signed an exclusive deal with Firefox to send all keyword traffic to either search results or on “exact match” to the site in question. Now they are introducing bidding on these terms where will the “exact match” branded keyword go now.

You may feel that this is an excellent use of the web and Google are performing a fair service. However, the browser address bar is not owned by Google or MSN and any interference of outgoing traffic is the same as ease dropping on a phone call being dialled and redirecting the requested call to an alternative location of their choosing. Typing a keyword into a browser address bar is a “DNS error”. Under law you can only redirect it after a NXD or Non-existent domain error has been generated by the Authoritative Name Servers (ANS). So why has MSN and Google got away with this abuse? Well MSN won the right to be able to do this activity in the US and indeed all such search requests are indeed redirected to their servers in Redmond cost the ISPs significant transit costs. Google on the other hand have no such “get out of jail free card”, but have continued to redirect keyword traffic straight from the browser bar. This is not a cost free service since the ISPs naturally end up picking up the transit costs. Now Google wants a larger slice of the cake by forcing Brand names to bid up their own trademarks.

Two bodies who could deal with this issue, ICANN and the ITU, seem strangely silent on this activity and seem content to let Google and MSN to make unreasonable profits paid for by the ISPs.

When will Next Generation Broadband start to deliver for the UK?

If we are to enjoy the plethora of digital services such as IPTV in a quality comparable to HD delivered via the internet we will need the bandwidth that only the Next Generation Broadband known as Fibre to the home (FTTH) can offer. FTTH projects are being rolled out around the world it seems the UK is lagging far behind our developed world competitors. Except for a small trail announced by BT Openreach in Kent which will target up to 9,500 new homes and offices in an area of 1,000 acres. This at a time in Japan where FTTH installations are poised to pass a now declining ADSL userbase. FTTH is a form of fibre-optic communication delivery in which an optical fibre is run directly onto the customers' premises. Traditionally only the network to the local exchange was fibre and methods such as copper wires or coaxial cable for "last mile" delivery.

The advantages of FTTH are huge.

For customers, it offers virtually unlimited bandwidth capacity and truly integrated voice, data, and video.

For providers, the ability to offer integrated services could mean higher profits and no electronics in the field means less maintenance. In addition, the costs of implementing technology are dropping and are similar to costs of deploying copper, but the payoff is much larger.

So how does FTTH work?

The Internet "backbone" is made up of fibre optic cables (very thin glass filaments) that have enormous bandwidth and use light pulses to carry information. Most customers, however, connect to the backbone through copper-based technologies like twisted pair and DSL or Hybrid Fibre Coax cable, which have limited bandwidth and limited capacity to carry integrated voice, video, and data services. This creates a speed and service bottleneck in the "last mile," the distance between the fibre optic backbone and customers.

Providers primarily offer FTTH through two types of architectures, point-to-point and passive optical network (PON). Point-to-point requires providers to install an optical transceiver in the provider's central office for each customer. PON uses a single transceiver with a splitter to serve up to 32 businesses and residential customers who share the bandwidth. The splitter is located up to 9km from the exchange, and a single strand of fibre can carry the signal another 1km to the customer. Once the fibre reaches the customer's home or business, an optical electrical converter (OEC) on the side of the building converts the optical signal to an electrical signal that can interface with existing copper wiring.

Some providers are also using Gigabit Ethernet over fibre to provide customers with broadband access.

Fibre optic cables can currently carry information at speeds greater than 2.5 gigabits per second. Residential/business FTTH typically offers speeds from 10 mbps to over 100 mbps, which is a hundred times faster than most cable or DSL service and over twice as fast as a T3 connection.

What is happening elsewhere?

In Europe, the majority of live fibre customers are in Italy, Sweden and Denmark. While a number of incumbents have announced plans fibre deployments, these have generally been for their backbone infrastructure rather than direct to the consumer - e.g. Deutsche Telekom's (DT) rollout of a €3.3bn fibre/VDSL network offers uses fibre for the back end and VDSL for the final connection to the home. DT expects the service to be live in 50 cities by year-end 2007. Many fibre rollouts in Europe are also still only in Greenfield and pilot stages like BT. Moreover, the majority of projects involving fibre are developed by utility and municipal organisations rather than the incumbents themselves.

Comparing Europe with the Japan shows how pathetic our efforts in the UK really are. By the middle of 2008, Japan’s MultiMedia Research Institute forecasts that FTTH installations are forecasted to surpass traditional ADSL reaching 19 million lines by 2009 out of a total instaled broadband base of 35 million. This suggests that by 2009, that the majority of the Japanese population will be accessing the new range of high definition IPTV, real-time video phone and a huge range of fast integrated services making the UK look like we are still using Prestel for our on-line service!

So What?

Ten years ago I wrote my Masters’ dissertation on the need to create a national fibre infrastructure taking fibre to the doorstep of every home and business in the UK. At the time I estimated the cost to be in the region of £24bn and that given the local loop or last mile to be considered a natural monopoly we should seek to establish a common business, such as BT Openreach is today, to set-up and run the infrastructure allowing for commercial organisations to deliver the range of new and exciting services. This network would form the basis of a new “Information Society”. Looking back at my cost estimate, this now seems to pale into insignificance given the money that government seems prepared to waste on supporting inefficient banks such as Northern Rock.

We never seem to have the will to take the risk of investing in infrastructure that are key to our economic wellbeing until we get to the point that we face the collapse of key services. Just look at our railways, The London Underground, even our airports and compare them to what you find in Europe and the Far East. The UK seems content to operate on a piecemeal second rate basis.

If the UK is to prosper in the 21^st Century, we will need to start to work in a strategic manner and not rely on the occasional prestige project such as the Channel Tunnel Rail Link to demonstrate our commitment to the future delivered ten years late and for twice the original projected cost.

UK ISP Numbers

As with the US ISP market previously, I have just finished an analysis of the DSL and Cable Access market in the UK. I worked with the ITU published data for Broadband usage numbers and Neilson Ratings to get an accurate picture as well all the reports and disclosures for each of the ISPs shown below. I believe these figures represent a reasonably accurate representation of the genuine adoption of broadband either via DSL or Cable. Broadband connections included in this data cover download speeds equal to or faster than 256kbit/s. Dial-up is collapsing very fast and very few of the ISPs offer any user numbers.

ISP		Total	% of UK Accts
BT		4,074,000	27.56%
Virgin Media		3,590,000	24.28%
CPW (inc AOL)		2,500,000	16.91%
Tiscali UK		2,000,000	13.53%
Orange		1,142,000	7.72%
Sky		1,000,000	6.76%
Kingston		140,851	0.95%
Thus		132,000	0.89%
Entanet		80,000	0.54%
Clara.net UK		72,000	0.49%
Breathe		20,000	0.14%
Supanet		8,000	0.05%
Others		26,000	0.18%
Total		14,784,851	100%

There has been considerable consolidation of the UK market over the past year. Most recently we have seen the acquisition by Tiscali of Homechoice and Pipex's user base, Sky's acquisition of Easynet and CPW acquiring the AOL userbase. With the entry last month of O2 into the fixed Broadband market with a very competitive offering and Vodafone flexing its muscles acquiring Tele 2's operations in Spain and Italy, the race to mop up the remaining minnows is likely to continue into 2008. In particular the continued independence of Thus and Kingston in this market must be considered to be in question. Maybe C&W with their improved fiscal results would see the Telecoms operations of Thus and Kingston a good fit, allowing for the broadband base to be sold to the aggressive Sky! Certainly 2008 is likely to be as exciting as the last 18 months and we may see the top six consolidate further with Sky possibly making a play for Tiscali and achieve their stated aim of 3 million users by the end of 2008.

US ISP and Cable Subscriber Numbers

I have recently been evaluating the US ISP market and trying to get accurate figures for Internet access for DSL, Cable Access and Dial-up. I worked with OECD published data for Broadband adoption and I have gone through all the reports and disclosures for each of the ISPs shown below. I believe these figures represent a reasonably accurate representation of the genuine adoption of broadband either via DSL or Cable. Broadband connections included in this data cover download speeds equal to or faster than 256kbit/s.

Table 1 US ISP & Cable Operators
Name	ADSL	Cable	Dial	Total
AOL			5,100,000	5,100,000
United Online	2,300,000			2,300,000
Road Runner		6,900,000		6,900,000
Earthlink	575,000		1,725,000	2,300,000
Embarq	1,100,000			1,100,000
Cox		3,500,000		3,500,000
Comcast		11,500,000		11,500,000
Charter	2,400,000			2,400,000
Cablevision		2,000,000		2,000,000
Suddenlink Comm		1,400,000		1,400,000
Bright House Networks		2,200,000		2,200,000
AT&T World net/BellSouth/SBC	10,500,000	6,500,000	3,000,000	20,000,000
Insight Communications		600,000		600,000
Verizon	7,000,000			7,000,000
Qwest	2,100,000			2,100,000
Media com		580,000		580,000
Cincinnati Bell	400,000			400,000
Local Net		260,000		260,000
Wind stream		400,000		400,000
Others			30,000,000	30,000,000
Totals	26,375,000	35,840,000	39,825,000	102,040,000
	Broadband Total	62,215,000

I believe that this table has the most accurate figures as regards DSL and Cable Access for each of the ISP or Cable Companies detailed in the Table at this point in time. I have not been able to ascertain any accurate data as regards dial-up access which remains surprisingly strong in the US. However, should anyone have any additional data or up to date, please let me know. I will add additional data for the UK and Europe as I can locate them out from published and unpublished sources.

The figure of 62,215,000 Broadband access either via DSL or Cable indicates around 8.7% growth over the figures published by the OECD in December 2006 which seems to be a reasonable assumption. I have included other forms of access either via Satellite or FTTH (Fibre-to-the-home) or FTTB (Fibre-to-the-building). I expect FTTH and FTTB to have grown significantly during 2007, but I haven't any specific data as such.

Direct Internet Navigation and Error Correction

Direct Navigation and error correction are becoming significant areas of web development, enhancing the Internet surfing experience for users, enabling ISPs to monetise hitherto error traffic, helping brands to grow traffic through keywords and building advertising revenues for PPC and CPA players through the delivery of qualified direct navigation traffic. Today the PPC sponsored click through or the pay for transaction approach is the fiscal model behind all of the current error and keyword redirection companies such as Golog, Barefruit and Paxfire.

Originally pioneered by RealNames in 1998, the user entered a keyword and was taken directly via a paid-for route to a specific web page. Hence ‘jobs’ would be bought by Jobs.com for $1m. Each time the word ‘jobs’ was typed in the browser address bar of IE4, the user was taken to jobs.com website via an interstitial advising the user that they were navigating by a RealNames keyword. RealNames had a database of over 1.5m keywords, all of which were paid for. They were both brand names and a limited number of paid-for generic terms. The user of generics was restricted by MSN to use by them to navigate to MSN results pages. Other examples of direct navigation technology existed including the AOL keywords and Common Names.

The raison d’être of direct navigation was that a study by MIT in 2000 revealed that each time a user was forced to click to the next page to uncover a particular location, 50% of the audience was lost. Hence if a deep site location was 5 clicks away for every 1000 users searching for the initial site only 31 users would follow through. A subsequent study by the University of Boston proved that direct navigation improved eCommerce conversion by between 65% and 300% depending on category .

RealNames was forced into Chapter 7 by MSN because they viewed the rapid growth of keyword use as damaging their search business. Between October 2001 and May 2002 RealNames PPVs rose from 2m per month to 30m per month. The growth was 75% per month.

The direct navigation approach used by RealNames was successful because it had near 100% of user coverage through the embedding with Microsoft IE3 and IE4. This was also its main Achilles heel; since MSN were able to terminate this exclusive contract.

Since 2002 there have been a number of direct navigation solutions based on keywords that have been deployed. Most notably AOL continues with AOL keywords (although their use is restricted AOL subscribers). Yahoo! has deployed their own version on Yahoo! enabled browsers, as have Firefox and Opera.

Two years ago Google moved to introduce a ‘paid-for’ keyword direct navigation system based on the RealNames approach with the so-called “Browse by Name” approach, as well as a browser based spelling correction service using stored URL data. Google offered both Brands and Generics with direct navigation. Since it used the Google enable browser they have dispensed with any interstitial page. Type “Ford Explorer” in Google Browser and it will navigate directly to the deep site Ford Explorer page. Similarly type “Mortgages” it will directly navigate to “UK Mortgages Online”. All these solutions are browser-based. Google moved away from monetising error traffic but maintained its direct navigation approach with it's Google Toolbar and through a commercial relationship with Mozilla to apply direct navigation to results and brand sites to browser bar search on Firefox. The only other major keyword driven system was deployed by J-Word in Japan, which is based on 3721 company's downloadable system. 3721, a Chinese company, was acquired by Yahoo! in 2003 for $120m.

Error correction as a result of mis-spelt domain names and broken links in search results, resulting from 400 and 500 class errors are relatively new phenomena. Initial approaches that have been adopted were limited to the analysis of non existent domains (NXDomain). The first to be introduced was SiteFinder from Verisign using “wild card” technology provided by Paxfire in the US. This technology identified when a non-existent domain was being sought and offered the user the opportunity to buy the erroneous input. However, the service responded to both the “A” record domain name request to the authoritative name servers and “Mx” record which is associated with email. Providing a positive answer to a incorrect email address resulted in opening ISPs SMTP mail systems to virus attack. The service was quickly abandoned after a formal request by ICANN , the Internet’s governing body. This experience has made ISPs very suspicious of any DNS “modifications”. However, the level of NXDomain traffic has been identified as being a significant source of error traffic. Total network error traffic is estimated by Verisign to account for approximately 15% of total network traffic of which NXDomain traffic makes up about 20%. A recent study by Google recently indicated that 404 HTTP errors alone account for 6.96% of published pages on average of the 11.5 billion web pages currently published on the web or some 800 million error pages!

A more sophisticated approach is being rolled out by a British company called Barefruit. Barefruit is aiming to provide a relevant result for nearly 100% of network error traffic by not only dealing with the mis-spelt URL error resulting in an NXDomain response, but also covering the 400 and 500 class errors.

The Barefruit Service
Barefruit has a service which is based on the evaluation of broken links in search results and the identification of DNS errors. It can resolve 400 and 500 errors in particular the eponymous 404 Error as well as isolate NXDomain errors. It does this by utilising a proxy server to store a temporary cache of the page prior to the display of the error page. It then detects the error response and then analyses the broken link data and provides a further set of links rather than an error page. Barefruit estimate that a typical broadband user will generate fifty errors every month.

Barefruit patented solution covers the broadest range of error traffic.

1 Mis-spelled urls (NXDomain)
2 Keywords
3 400 Errors
4 500 Errors

The addition, of direct navigation methodology is relatively simple to achieve by combining the NXDomain redirection patches currently in the public domain with an extended taxonomy.

It differs from the previous direct navigation approaches in that it works at the ISP level and not the browser level, although a browser download is available, only deploying when an NXDomain event occurs in the browser or when a 400 or 500 error occurs in a link.

The Barefruit solution provides the ISP with an opportunity to take back a degree of control over “their” user traffic rather than losing it to third parties and also creates a revenue stream from users clicking through on sponsored links. One significant fillup for Barefruit is the rapid adoption of DPI - Deep Packet Inspection, which allows broadband and cable operators to monitor their web traffic and so identify http errors relatively easily and allow Barefruit to analyse and identify user preferences and hence present highly relevant results instead of errors.

Other Developments

Other developments in ‘Direct Navigation and Error correction’ are being pursued by a number of players although none currently offer a solution as comprehensive as Barefruit.

Google has launched its own keyword system in ‘Beta’ which is a direct click through system running from the address bar of Google enabled browsers. They are also introducing spelling correction at the browser bar level for mis-spelled URLs of the URL data stored in their database. This operates in a predictive mode similar to the methodology used in mobile phone text services. It does not eliminate mis-spellings but does reduce MURL events. The approach is not DNS based but its deployment in Europe is limited by the need to comply with EU Directive EU 2002/53. It also tends to offer the ISP with limited income opportunities.

Yahoo! is also developing a direct navigation service similar to Google’s ‘I feel lucky’ approach, taking users directly to the sponsored website. This is likely to be deployed through Yahoo! enabled browsers and their ISP partners such as BT Yahoo! in the UK. BT Yahoo! enable browsers already use keyword navigation utilising direct navigation. Yahoo! will use a variation in their T&Cs to overcome the issues associated with the EU Directive.

Both Yahoo! and Google suffer from lack of independence in respect of ISPs given Overture’s ownership by Yahoo! and relationship with BT Yahoo! and Google’s recent link up with AOL.

Paxfire, a US based company, has been promoting its mis-spelled URL service to ISPs. The service is based on a proxy server solution and relies on a data update solution similar to the ‘black listing’ of sites deployed by website filtering solutions. It was this service which was the basis of the Verisign SiteFinder service and has been demonstrated to be difficult to configure successfully to avoid key issues. Paxfire's Look-Up Service allows ISPs to capture search terms and misspelled URLs entered into any Internet web browser address bar and deliver relevant content and advertising. Paxfire's technology works at the network level and provides a plug and play platform that requires installation of the Paxfire Look-Up Engine (PLE) in front of a DNS server in the ISP’s network.

Golog is limited to NXDomain events and the current business model in Europe and appears to rely on a “forced redirection” after 4 to 7 seconds. Golog installs a software patch into an ISPs DNS infrastructure which redirects the NXDomain to a Golog analysis server which identifies a key term which is then looked-up against a Golog database and where appropriate Golog monetises its mis-spelled URLs through partnership with Miva (formerly eSpotting)or a PPA partner such as Zanox. The Golog solution does not cache the request and cannot deal with any 400 or 500 error traffic. There are some risks associated with the “forced rediection” approach as it can result in the user feeling that they have received an unrelated result which is a poor user experience and can result in the advertiser being charged for a click that a user hasn’t selected.

Conclusion

The development and interest in direct navigation and error correction is growing at a significant rate. In the competitive on-line advertising market, its user ability and untapped potential, it has the potential to supersede the current listings and search approach as users become more familiar with the ability to use the address bar as a direct navigation tool combined with auto error correction both at the browser and in the search listings. One key aspect of any solution that an ISP may apply lies in offering its customers a route to "opt-out" of any error redirection.

To date only Barefruit has developed a combination of direct navigation and error correction which covers nearly 100% of error traffic and it also enables the ISPs to be offered a very powerful revenue generating service from what had previously been regarded as rubbish traffic.

Spam Phone Calls

As a marketeer I have always consider legitimate direct mail and phone canvassing as reasonable sales channels. However, I have now become so totally enraged with the endless number of spam telephone calls that I receive. The worst offenders appear to be Telephone companies who use Indian call centres to call me up to encourgage my adoption of say Toucan Telecom! They invariably introduce themselves as "Richard" or "Dave" when they are clearly Deepak or Sanjit and go on to tell me how much I could save if I change from BT to Toucan. The only problem is that their records are vastly out of date as I have been a customer of Sky for over a year.

The telephone sale is the scourge of modern life. I typically receive four calls each evening from Telcos sales, New Kitchens and Competitions for Timeshares. I have a similar number of "dead ender" calls which have nobody on the end of the call generator. I seldom let these callers get beyond their intro nowadays although my Partner is much more inclined to listen to them as she has no wish to be rude by slamming down the phone and feels sorry for the operators. Whilst I have some sympathy for the operators I have finally found a method which I hope will solve the problem. I have registered my telephone number with TPS (Telephone Preference Service) www.tpsonline.org.uk which aims to stop telephone marketing operations from abusing my telephone service.

I hope that this will help reduce the level of abuse. It will not stop those that come from the so called "competition operations". These I will report to OFCOM in the hope that they will take action, however, since I was the victim of BT's fraudulent downloading dialer scheme I doubt they will do anything! That is a story for another occassion! So if you are hacked off by repetitive marketing calls, start the fight back and use TPS!

You can also sign up to the Mail Preference Service on the TPS site and save a few trees from getting the chop!

Deep Packet Inspection - Is Big Brother here to help?

Deep packet inspection (DPI) is a form of computer network packet filtering that examines the data part of a through-passing packet, searching for non-protocol compliance or predefined criteria to decide if the packet can pass. This is in contrast to shallow packet inspection, which is usually called just packet inspection, just checks the header portion of a packet. This form of filtering is enormously powerful and will enable a huge range of new value added services such as the Barefruit http error solution I mentioned in a previous articles and will enable significant new revenue streams.

From a technical perspective, DPI devices have the ability to look at Layer 2 through Layer 7 of the OSI model. This includes headers and data protocol structures. The DPI will identify and classify the traffic based on a signature database and will allow the user to perform many things.

A classified packet can be redirected, marked/tagged, blocked, rate limited, and of course, reported to a reporting agent in the network. In this way, HTTP errors of different classifications may be identified and forwarded to Barefruit for analysis. Many DPI devices also perform the ability to identify flows rather than a packet by packet analysis.

DPI allows ISPs and cable companies to "readily know the packets of information you are receiving online ranging from e-mail, to websites, to sharing of music, video and software downloads" in the same way as a network analysis tool. This is the approach that Cable Operators and ISPs use to dynamically allocate bandwidth according to traffic that is passing through their networks. Thus a higher priority can be allocated to a VoIP call versus web browsing.

DPI is also increasingly being used in security devices to analyze flows, compare them against policy, and then treat the traffic appropriately (i.e., block, allow, rate limit, tag for priority, mirror to another device for more analysis or reporting). Since the DPI device looks at each individual packed, it can be used by ISPs to provide or block services on a user by user basis.

The continued growth in peer-to-peer (P2P) traffic presents increasing problems for broadband service providers. Internet service providers (ISPs) do not generate any revenue from delivering P2P traffic to their subscribers, and smaller ISPs face considerable peering costs when P2P traffic goes off-net. Even for ISPs large enough to cover these costs, P2P drives increasing traffic loads, requiring additional capex for no additional revenue. Moreover, a minority of users generating large quantities of P2P traffic can degrade performance for the majority of broadband subscribers using less-intensive applications such as email or Web browsing. Poor network performance increases customer churn, leading to a decline in service revenues.

Deep packet inspection (DPI) technology has emerged from the enterprise world into service provider networks to help mitigate the impact of P2P. According to most vendors, initial uptake of DPI was fastest in Asia, where problems with P2P traffic and high off-net traffic had been most severe. European broadband providers were also early adopters of DPI, but for another reason: Due to high levels of competition from digital subscriber line (DSL) broadband operators in many countries, service providers used DPI as a means to implement tiered service plans, to differentiate them from standard “all-you-can-eat" or "one-size-fits-all” data services.

In the U.S. market, multiple system operators (MSOs) such as Cable Operators were early adopters of the technology. This is because Cable Operators faced greater challenges than DSL providers in the last mile. For a Cable Operator, the last-mile bandwidth is shared among users, whereas in a DSL network a dedicated link is established for each subscriber. Smaller DSL operators were generally early adopters of DPI, as they suffered most from P2P-generated off-net traffic and peering costs. Recently, vendors note an increase in the level of request for proposal activity from large wireline and wireless operators in the U.S. It appears that several operators are looking to deploy DPI alongside their IPTV deployments in 2007.

Worldwide, network operators spent US$96.8 million (£48.4 million) on DPI in 2005, but the DPI sector grew by more than 75% in 2006, to about $170 million (£85 million) , and is forecast to exceed $586 million (£293 million) in 2010.

This may be one case where "Big Brother" really is here to help!

Babble - Creating a new future for VOIP

On Monday, Babble plc (babble.net) is launched on to the Ofex (ofex.com), the UK's independent market focussed on small and medium enterprises from around the world. Babble is a UK based VOIP company with over 100,000 registered users. It joins companies such as Skype and Vonage in taking aim at the traditional POTs (Plain old telephone services) like BT, France Telecom and their like.

Why is the launch of Babble important? You may have thought that Skype had already captured this market. However, you would be quite wrong. Although Skype is probably the largest voice service on the Internet, it has been created on a proprietory basis which means its technology is unable to simply link with the standards based systems around the world run by the traditional telephone companies and mobile operators or connect with any other standards based service.

Babble is SIP based and offers true VoIP services and take the idea of phone calls over the Internet forward another step. Because Babble use an Internet standard protocol, SIP, to make the call, the system is a lot more flexible. You can use Babble's client software available for PCs and Macs which pulls together a computers microphone, soundcard and internet connection to simulate a telephone. It isn't only based on your PC either. Babble allows you to add a telephone adaptor that will let you connect an ordinary telephone directly to your network, or an IP phone. Babble's service allows you to call people for free on the net, on a land line and on also to mobiles. There calling plans allow you to take control and to cut the cost of calls dramatically. It doesn't end there. Babble can also enable you to send SMS messages to any mobile worldwide as well set-up a "real" telephone number which can be set to reach you where ever you are and call answering service to ensure you never moss another call.

VOIP is undoubtedly coming of age and mobile VOIP is now very near which will lead massive changes for the mobile operators who have operated on a super profitable basis at our expense.
So join the revolution and log-on to Babble and become part of the future.

For further detail go to www.babble.co.uk

Disruptive Technologies - A funding opportunity or a waste of money?

I was recently asked to look at what are the next investment opportunities in the Internet space and consider whether there were are obvious disruptive technological aspects which could provide superior returns.
Well in my experience investment in technology and more specifically that related to the Internet is a gamble at the best of times and almost certainly depends on luck as much as the naturew of the invention.
A disruptive technology is a new technological innovation, product, or service that eventually overturns the existing dominant technology in the market, despite the fact that the disruptive technology is both radically different from the leading technology and that it often initially performs worse than the leading technology according to existing measures of performance. A disruptive technology comes to dominate an existing market by either filling a role in a new market that the older technology could not fill such as more expensive, lower capacity but smaller-sized hard disks did for newly developed notebook computers in the 1980s or by successively moving up-market through performance improvements until finally displacing the market incumbents as in the case of digital photography which has begun to replace film photography.

Some examples of disruptive technologies include:-

• Music downloads and file sharing vs. compact discs
• eBooks vs. paper books
• e-commerce vs. physical shops
• Open-source software vs. proprietary software (for example Linux versus Microsoft Windows, although Linux has already largely displaced proprietary Unix)
• Internet Video on Demand and IPTV vs. Advertising supported broadcast and cable television
• VoIP over vs. traditional telephone and mobile phone service.
• portable mp3-players vs. the portable cassette players
• DVD vs VHS tape (VHS has already undergone a great decline, particularly in the market for pre-recorded tapes, although the price of DVD recorders remains high enough for VHS home-recording to hang on for the present)

The Internet is considered by many to be the ultimate disruptive technology, changing the ways businesses operate, creating new channels, destroying bastions of value, and establishing entirely new revenue sources. The Internet may be regarded as a super group of a whole range of disrupting process including impact on Banking, Telecoms, Media, Manufacturing and Design. Frequently areas combine to yield the most unexpected results and more importantly extraordinary profitability.The key to the identification of disruptive opportunities is in the selection and potential more critically the timing.

Recently, I have identified three opportunities which represent investment opportunities in areas which will critically impact the development of the Internet in key sectors.

Web Repurposing for the Mobile Market

This business provides a means for client browsers on mobiles to access web sites that directly are too complex for them. The company uses proxy technology to takes away site complexity before delivering simple pages rendered 'fit for purpose'. This enables standard web sites to be viewed on any mobile device and more importantly allows all the ecommerce interactivity to also be completed. The technology can be used on a wide range of mobile devices as well as VOIP display phones. The company has already run successful trials with a number of major mobile operators and provides a service to a specialist device operator.

Development of frictionless financial transaction services.

This company is the only one that allows top-up services accessed directly from bank accounts for mobile pre-paid, Internet web-cash, pre-paid transport, WIFI and e-money stored value providers; roaming recharge services; transactional marketing services including pre-paid loyalty and bonus management, and business process outsourcing for the customer not present, prepaid, low-value and mobile initiated payment market. This form of money transfer is going to change the way we move money around the world and will disrupt the banking system by bypassing the traditional transfer costs between currencies. The company is an experienced business process outsourcer in the rapidly growing 'direct' mobile prepaid top-up channel, e-money stored value, transport and WIFI markets and it is already working internationally with mobile operators and e-money providers and is delivering on its promises in groundbreaking market sectors.

Monetisation of Internet Errors

This company has developed patented technology, which can monetise the errors resulting user mis-types, broken web links, crashed sites etc. The technology identifies the error and then analysis the web error data to establish where the user was attempting to access. This technology and its exploitation through PPC and CPA partners provides ISPs and users alike a method for both improving the surfing experience and also enabling ISPs to take back control of their users traffic and generating significant additional revenues.

All of these examples are disruptive technologies in the various field of activity in the mobile, banking and Internet fields. In all cases, the businesses have successful grown beyond the “new born” stage to the point where major businesses are beginning to trial their solutions. They are at the “realisation” or second stage of development and will need funding to realise a significant future.

Could they succeed without help? Almost certainly yes, but they will not have the opportunity to achieve their real potential. Are they a waste of money? Absolutely not! Having been involved in a number of ventures, some of which have had stellar growth funded by VC money and which in some cases made spectacular money and in others disappeared as quickly as they had appeared, the investments have grown the "body of knowledge" which has frequently led to further developments. Investment in the "bleeding edge" is seldom comfortable, but it is always rewarding for those lucky enough to have been involved.

Interactive, Networked and err….404 File not found!

It was reported recently that Britain had overtaken France as the largest user of broadband lines in Europe, according to the internet consultancy Point Topic. Today it is estimated that the UK has 9.8m broadband lines, France has 9.7m and Germany is in third place. During the same period we have seen massive growth in the online advertising market with the UK accounted for the largest share of European online ad-spend, at 39% of the total (€3.101 billion).

Typically broadband is 40 times faster than ordinary dial-up and the speed of broadband tends to be addictive, so it is doubly frustrating when you come to a screeching halt due to a browsing error. If you're running any of the popular internet browsers such as Microsoft’s Internet Explorer or Mozilla’s Firefox, you are most likely to get "The page cannot be displayed" followed by largely worthless advice that's incomprehensible to the average surfer, which concludes with "Cannot find server or DNS Error." or reference to some numbered code such “error 404” . Network Solutions Inc (NSI), the domain name registry for .com, .net and .org estimate that up to 15% of all network traffic is this sort of error traffic. Also a recent study by Google recently indicated that 404 HTTP errors alone account for 6.96% of published pages on average of the 11.5 billion web pages currently published on the web or some 800 million error pages! These huge volumes of errors and the demand for more advertising inventory has stimulated significant interest in monetising this massive untapped market characterised by one senior Ad Executive as “the last white space”.

In the past the main beneficiary of much of this traffic has been Microsoft and their MSN Search Engine. The error codes are identified by the Internet Explorer browser and the user is delivered to an MSN Search result. Consequently this error traffic has managed to boost MSN Search into second place behind Google in the Global Search Engine stakes.

Search Engines have long been aware of the value of this traffic and it will come as little surprise that the behemoth Google has had a product called “AdSense for Errors”. Google extracted contextually related keywords and advertisements from the DNS error pages by using Google's semantic technology to "understand" the meaning of each error. It tended to focus on a class of error known as an NXD or Non eXistent Domain, the error generated when a mis-spelt or unregistered domain name is typed into the browser address bar. This has evolved into Adsense for Domains focusing on the domain name business. However, Google hasn’t left the error space entirely to Microsoft, in recent years it has rolled out the Google Toolbar to “hi-jack” error traffic such as search from the browser address bar directly to Google search results in the guise of did you mean. In case you thought couldn’t possibly be any money in errors, Google has reportedly paid Mozilla millions of dollars to ensure that address bar search defaults to Google results rather than go to a DNS error page!

Verisign, the owner of NSI, got into a spat with ICANN (www.ICANN.org), the Internet’s Governing body, when it started responding to these NXD mis-spellings with a so-called “wild card response”, offering users the opportunity to buy the mis-spelt domain. Unfortunately, the service known as “SiteFinder” was poorly configured and resulted in opening many ISP and Enterprise email servers to spam attacks.

Now a British company called Barefruit (www.barefruit.co.uk) has emerged to become the Global leader in this developing error space. Barefruit resolves all the most commonly occurring errors, handling 98% of the error traffic including NXDomains, 400 Website errors including the aforementioned 404 File not found error and 500 Server errors. The company has successfully patented a technique of caching the user’s desired link and if an error occurs, analysing both the domain name information and any associated description and directing the user to either an exact match for a mis-typed brand or trade mark or providing a contextual search result to allow the user to make an informed choice. Through relationships with a broad range of databases and search partners, Barefruit delivers both organic and sponsored listings and claims to offer a near 100% relevancy of the user’s desired destination.

The Barefruit solution is available in a variety of formats which are simple to install either at the user level, via a plug-in, or in partnership with an Internet Service Provider (ISP) through modified DNS software or through the installation of a proxy server. The service also works with every browser type. The benefit of the Barefruit service is not only limited to the resolution of the error, but also provides the user the ability to navigate the Internet by the use of Keywords enabling every ISP with a “direct navigation” capability similar to AOL Keywords or Google’s “Browse by Name”.

With Barefruit, there is also a financial benefit to the ISP as they share the revenue generated by their users clicking on sponsored links. So what had been considered to be rubbish in the past and an annoyance in Internet navigation may now be turned to the benefit of users and ISPs alike. This has led to an increasing number of Tier 1 ISPs, in the UK, Europe and in the US market to adopt Barefruit’s solution. to enhance the Internet surfing experience of millions of users, monetise hitherto error traffic. This new source of traffic is also keenly wanted by advertisers since with Barefruit’s ability to extract the desired requirements of the user is helping brands to grow traffic and continue to build advertising revenues for online advertised through the delivery of qualified traffic.

2007 has seen massive growth in the development of the error correction market and it is set to become the most significant area of development of the so-called Web 2.0. A number of new players have tried to enter the market to monetise this traffic, but only Barefruit has such a broad range of patented error solutions. Barefruit’s growing reputation for extracting relevance and literally “bearing fruit” in millions of pounds of additional revenue to ISPs and online advertisers alike whilst improving the Internet users surfing experience.