The Facebook blog announcing “Welcome to Facebook, everyone, Now you can all connect”:
My friend must be a Bird- Because it flies! Mortal, my friend must be, Because it dies! Barbs has it, like a Bee! Ah, curious friend! Thou puzzlest me!, -Emily Dickinson
Emily Dickinson’s take on friendship: kind of obscure to me. Facebook’s definition: less so. I just wanted to open with a poem.
Inspired by Facebook, I open with William Shakespeare, Macbeth, as I ponder Google CEO Eric Schmidt’s partnership “strategy”:
To-morrow, and to-morrow, and to-morrow, Creeps in this petty pace from day to day To the last syllable of recorded time, And all our yesterdays have lighted fools The way to dusty death. Out, out, brief candle! Life's but a walking shadow, a poor player That struts and frets his hour upon the stage And then is heard no more: it is a tale Told by an idiot, full of sound and fury, Signifying nothing.
The leader of the $139 billion market cap Google is not an “idiot,” but the company he leads is doing a lot of “strutting” and “fretting” in the partnership arena.
Schmidt reaffirmed the importance of partnerships to the Google growth strategy during the company’s Q3 earnings conference call yesterday:
Partnerships, something we talked about last quarter. Each one defining a new and important market for us; it started, of course, with the Dell deal in Q2, where we got better access for end users to Google, followed by the Adobe deal, better integration of high-quality graphics in Google. Followed then by eBay, integration with Skype and bringing international advertisers into the fold. Intuit, advertising services to medium and small businesses that we couldn't otherwise reach or could not serve as well. MTV Networks, video distribution and video ad targeting and syndication, bringing in a whole new way in which we can make money for content video publishers. Fox MySpace, a search and advertising partner with us for the fastest-growing social network. And of course, culminating last week with the YouTube acquisition, sort of the ultimate partnership, if you will, recognizing the fundamental importance of video of all types.
Schmidt’s commentary, and lack thereof, during yesterday’s Q3 earnings conference call suggests that Schmidt’s partnership announcements may often be just that, announcements “full of sound and fury, Signifying nothing.”
Omid Kordestani, Senior Vice President of Global Sales and Business
we are doing partnerships like the MySpace partnership with Fox and News Corp., where significant amounts of inventory and growth opportunity represent ways for us to try new ad formats.
Bill Morrison, JMP Securities
On MySpace, I was curious, you have obviously announced the deal and talked a lot about it. Curious if you have actually signed the deal, and their response to your planned acquisition of YouTube?
With respect to your question on MySpace, we signed a binding letter of agreement which we are operating under. We will come to final contract terms, I think, very quickly on that.
Schmidt concluded the conference call waxing poetic about Google partnerships.
Marianne Wolk, Susquehanna
You signed a lot of distribution deals with Adobe, Dell and others. Can you let us know whether that has become a significant contributor to Google.com revenue yet? Would you say that's 5% of the Google.com revenue? 2%? Is there any way to characterize that? And thus far, can you talk about the monetization trends from that source? How do they compare with what you generate from traditional search portals?
Each of the deals that I highlighted is at the beginning stages. Each of them amplifies the revenue production, if you will, of our advertising network. They deepen it, they bring in more advertisers, increase the coverage. So the economics compound quarter-over-quarter as they begin to flow. The Dell deal, for example, is already shipping and doing well for us, et cetera.
So it is hard to characterize a particular percentage, but understand that the partnerships are much more than just revenue partnerships. They really are a way of doing business for us going forward. For example, there are a lot of folks on the call asked questions about legal concerns over video. But the strategy with video was to partner, not to focus on the legal aspects, but to focus on the business partnership aspects. Because the folks who, we certainly want to respect everybody's copyrights, and they need us, we need them. The combination should produce some very interesting new partnerships, which we are hopefully going to work on, especially after the integration with YouTube is complete.
Perhaps Schmidt should focus on executing the News Corporation contract first!