The Real Story Behind Google’s Street View Program

This morning Google signed a consent decree with the US Federal Trade Commission to avoid a lawsuit over privacy concerns caused by Google’s Street View program, which covertly collected electronic data including the location of unsecured WiFi access points and the contents of users’ web access logs. As part of the settlement, the FTC released a huge collection of sworn depositions that were taken from Google employees during its investigation. I’ve been wading through the depositions, and they give tantalizing hints of a deeper data collection plan by Google. Here’s what I found...

–We shouldn’t be surprised that there was an Android angle to the data collection. Most smartphones contain motion sensors, which when tuned to eliminate background noise can detect the pulse of the user. That was being combined with the phone's location and time data, and automatically reported to a centralized Google server.

Using this data, Google could map the excitement of crowds of people at any place and time. This was intended for use in an automated competitor to Yelp. By measuring biometric arousal of people at various locations, Google could automatically identify the most interesting restaurants, movies, and sporting events worldwide. The system was put into secret testing in Kansas City, but problems arose when it had trouble differentiating between the causes of arousal in crowds. This resulted in several unfortunate incidents in which the Google system routed adventurous diners into 24-hour fitness gyms and knife fights at biker bars. According to the papers I saw, Google is now planning to kill the project, a process that will involve announcing it worldwide with a big wave of publicity and then terminating it nine months later.

–Tech Crunch reported about six months ago that Google was renting time on NASA’s network of earth-observation satellites. This was assumed to be a way to increase the accuracy of Google Maps. What wasn’t reported at the time was that Google was also renting time on the National Security Agency’s high resolution photography satellites, the ones that can read a newspaper from low Earth orbit. Apparently the NSA needed money from Google to overcome the federal sequester, and Google wanted a boost for Google+ in its endless battle with Facebook.

Google’s apparent plan was to automate the drudgery of creating status posts for Google+ users. Instead of using your cameraphone to photograph your lunch or something cute you saw on the street, Google would track your smartphone’s location and use the spy satellites to automatically capture and post photographs of any plate-shaped object in front of you, and any dog, cat, or squirrel that passed within ten feet of you. An additional feature would enable your friends to automatically reply “looks yummy” or “awww so cute.” (An advanced option would also insert random comments about Taylor Swift.) Google estimated that automating these functions would add an extra hour and 23 minutes to the average user’s work day, increasing world GDP by three points if everyone switched from Facebook to Google+.

–The other big news to me was the project’s tie-in to Google Glass, the company’s intelligent glasses. Glass doesn’t just monitor everything the user looks at and says; a sensor in Glass also measures pupil dilation, which can be correlated to determine the user’s emotional response to everything around them. This has obvious value to advertisers, who can automatically track brand affinity and reactions to advertisements. What isn’t widely known is that Glass can also feed ideas and emotions into the user’s brain. By carefully modulating the signals from Glass’s wireless transceiver, Google can directly stimulate targeted parts of the brainstem. This can be used to, for example, make you feel a wave of love when you see a Buick, or to feel a wave of nausea when you look at the wrong brand of beer.

This can sometimes cause cognitive problems. For example, during early tests Google found that force-fitting the concepts of “love” and “Buick” caused potentially fatal neurological damage to people under age 40. The papers said Google was working on age filters to overcome this problem.

Although today’s Glass products can only crudely affect emotions, the depositions gave vague hints that Google plans to upgrade the interface to enable full two-way communication with the minds of Glass users. (This explains Google's acquisition of the startup Spitr in 2010, which had been puzzling me.) The Glass-based thought transfer system could enable people to telepathically control Google’s planned fleet of moon-exploring robots. It may also be used to incorporate Glass users into the Singularity overmind when it emerges from Google’s server farms, which is apparently scheduled for sometime in March of 2017.

Posted April 1, 2013

The ghosts of April Firsts past: 
2012: Twitter at Gettysburg
2011:  The microwave hairdryer, and four other colossal tech failures you've never heard of
2010:  The Yahoo-New York Times merger
2009:  The US government's tech industry bailout
2008:  Survey: 27% of early iPhone adopters wear it attached to a body piercing
2007:  Twitter + telepathy = Spitr, the ultimate social network
2006:  Google buys Sprint

Why it’s Hard to Set a Standard and Maximize Short-Term Profit

After my post yesterday on Kevin Lynch’s move to Apple (link), Infinity Softworks CEO Elia Freedman sent me a followup question:

“This line is interesting: ‘You can’t set a standard in tech and maximize short-term profit at the same time.’ Talk more about this?”

He’s right, I did assert that without explaining it. So here goes:

There are a couple of different tech industry things that we call standards. The first type of standard is a product that almost everyone uses because it has critical mass: Microsoft Word, Internet Explorer, etc. The second type of standard is a technology or tech specification that almost everyone builds on or incorporates into relevant products: HTML, JPEG, etc.

Once in a while you can establish a standard without limiting your short-term revenue (Adobe Photoshop is probably an example; it's carried a premium price ever since it was introduced in 1990). But in most cases, to establish a tech standard you have to limit your near-term profitability. Sometimes that means lowering your margins for quarters or years until the standard is established. In other cases it means permanently giving up some revenue streams in order to create a position of power.

A few examples:

—Adobe gradually gave away PDF in order to solidify it as a standard for document interchange. At first Adobe made the PDF reader free of charge, and eventually it gave away the PDF standard itself, enabling other companies to create PDF readers and creators that competed with Adobe. This move enabled PDF to become one of the most resilient standards in computing. Think about it – despite the hostility of much of the Internet community, and full-bore attacks from Microsoft and others, PDF continues to be a standard today.

When Adobe gave up control over PDF, it reduced the near-term revenue it could have earned through selling PDF readers and creator apps. This undoubtedly lowered Adobe’s quarterly revenue for a while, but it enabled PDF to survive as a standard when many other Adobe standards have withered away. Plus Adobe managed to keep a nice business selling PDF management software to large companies.

—Amazon has been selling e-reader devices at cost for several years in order to jumpstart the market for ebooks. I doubt Amazon will ever make much money from its hardware, but it’s willing to make that sacrifice in order to control the ebook transition and establish itself as the standard electronic bookstore.

—Google doesn’t charge license fees to use Android in a smartphone. This played a huge role in the early adoption of Android by phone makers; I think there’s a good chance the OS would never have taken off if Google had tried to charge for it. Google obviously hopes to make the money back through bundled services, but it’s not clear how successful that will be, and in the meantime Android is a huge cost sink for Google.

—Many open source companies operate by giving away their software and then charging for services or other ancillary products related to them. This approach defers revenue until the software becomes established as a widely-adopted standard.

As I explain in Map the Future, strategies like this are very problematic for an analytical company that focuses on logical cost-benefit planning. The benefits of establishing a standard are usually nebulous and risky, while the costs are immediate and painful. Faced with that kind of choice, most analytical companies will focus on tangible near-term opportunities. Thus Adobe made the prudent and logical decision to make money from Flash Lite when it had the chance, rather than sacrificing revenue to possibly make it a standard in the future.

You made your choice, now you have to live with it.

In the tech industry, the road to hell is often paved with prudent business decisions.

Kevin Lynch and Adobe: Shooting the Messenger

There’s been some nasty commentary about Apple’s decision to hire Kevin Lynch from Adobe. John Gruber at Daring Fireball has been especially acerbic, and there certainly are some things Lynch has said that look dumb when you read them today. But while I usually agree with the Fireball, in this case I think you need to look beyond Lynch’s statements and understand the situation he was in at Adobe.

Let me start with a little history. Adobe is a software powerhouse, with a long and very successful history in publishing and multimedia. But despite all its successes, I think it deserves to go down in history as the company that choked when it had the opportunity to rule the world, not once but twice.

In the formative years of the Internet, Adobe could have set the standard for formatting web pages. Adobe PostScript was far more sophisticated and capable than HTML, which became core standard for displaying web pages. HTML is basically a text formatting specification. You give it a bunch of text tagged with suggestions for things like “this should be bold” or “underline this” or “this is a link,” and then the browser does its best to interpret the tags. HTML was derived from a formatting standard used in academia and government publishing, and it’s great for long text-only reports. But it was not designed to mix text and graphics. That’s why we still struggle to fully integrate great graphics with the web even today.

In contrast, PostScript is a programming language designed to mix text and graphics effortlessly. You can use it to control exactly where every pixel and image goes on the screen, and exactly how it looks. It was so powerful and so far ahead of its time that Steve Jobs’ NeXT chose it as the graphics language for its workstations. Using PostScript, you could easily draw things twenty years ago that we still can’t do on web pages today. The nagging incompatibilities and formatting weirdnesses we have to cope with from HTML, the fragile hacks and workarounds that web page designers live with every day...none of that had to happen.

Unfortunately, Adobe was so obsessed with making money selling PostScript interpreters that it was unwilling to make PostScript an open standard when it could have made a difference.  And so Adobe missed the chance to set the graphics standard for the web.

Fast forward a few years, and Adobe again fumbled the chance for greatness, this time with Flash. This wasn’t just Adobe’s fault; it was a joint project with Macromedia, which Adobe bought in 2005. Flash became the dominant animation and video playback standard for the web because, unlike the situation with PostScript, the player was free. There was no cost for users or tech companies to adopt the standard, and so it spread wildly, boosted by a bundling deal with Microsoft (link). There was a time in the early 2000s, prior to the iPhone and Android, when the mobile phone world was ripe for a takeover by software that would let you produce great visuals on a smartphone. Palm OS was too weak for the task, Windows CE was a mess, and Symbian was, well, Symbian. Macromedia, and later Adobe, could have set the standard for mobile phone graphics if they had given away the Flash player for mobile phones. But Macromedia had lucked into a licensing deal under which Japan’s NTT DoCoMo paid to put Flash on millions of mobile phones (link). Macromedia and Adobe fell in love with that revenue stream and decided they could extract money from every other mobile phone company in the world by charging for the player.

I’d call that move arrogant, but it was more than that – it was stupid. You can’t set a standard in tech and maximize short-term profit at the same time. For a few years of profit, Adobe sacrificed the opportunity to dominate the mobile phone market for a generation, and in the process fatally weakened Flash on the PC as well.

I could go on and on about the opportunities Adobe squandered: AIR, e-books...it’s a depressing list that reminds me of the stories people tell about Xerox PARC. If I thought Kevin Lynch was the executive responsible for those moves, I’d be shocked that Apple hired him. But as far as I can tell, they were made by other people, and he was stuck playing out the hand he was dealt. I’ve been there, I’ve done that. If you’re part of a team you do the best you can and trust that the folks around you will do theirs. If you want to fault Kevin for something, fault him for staying so long at a company that was putting quarterly profits ahead of long-term investment.

So my reaction to the Lynch hiring depends on what Apple’s going to ask him to do, and we don’t know that yet. If Apple wants him to run business strategy I’ll be worried, because I don’t think he had great role models at Adobe. If Apple wants him to run marketing I’ll be alarmed. But I think Apple has hired him as a technologist. In that role he’s extremely smart and easy to work with, and Apple fans, I think he can be an asset to the company.

Disclosure: I did a little bit of consulting for Adobe in the past, and have met Kevin Lynch. This article doesn’t include any confidential or inside information.

Coming Soon: My Book on Business Strategy

I’m getting ready to publish my book on business strategy, Map the Future. It’s all about how a business should plan for the future, and how to manage the functions that help you make those plans: competitive analysis, market research, and advanced technology. It’s not a case study book; it’s more like a business cookbook, with detailed how-to instructions on everything from segmenting the market for a new product to influencing people who don't want to listen.

I’ll post more about the book when it ships, but in the meantime I wanted to offer a review copy to any journalists or bloggers who want to look at it. If you’re interested, please write to me at the address here. Be sure to include the URL of your publication or blog.

Now that the book’s finally done, I can get back to blogging. There’s a lot of interesting stuff going on, and I’ve been dying to dig into it.

The Windows 8 Muddle

This isn't shaping up to be the transcendent week that Microsoft wanted it to be.  The Windows 8 announcement isn't a failure by any means, but the coverage is a lot more mixed and confused than I'm sure Microsoft would have liked.  That's partly due to some clever marketing by Microsoft's competitors, and partly due to some mistakes made by Microsoft itself.

The situation all came together for me this morning when I did a brief appearance on Bloomberg TV, a cable business channel in the US.  The segment was supposed to cover the new iPad Mini and Windows 8, with equal time given to each one.  The Bloomberg folks spent time with me yesterday prepping the questions on each subject.

The equal billing of iPad Mini with Windows 8 is itself bad news for Microsoft.  Windows 8 represents the reinvention of Microsoft, one of the biggest changes the company has ever made.  The iPad Mini is a follow-on product in the iPad line.  It's a very nice follow-on, and probably one that will sell very well, but it's not at the same level of importance as Windows 8.  However, hardware gets more attention in the tech press than software.  It's more tangible, and people react to it emotionally. So the Mini jumped right into the mix.

Apple very cleverly timed the Mini announcement a couple of days before the formal Windows 8 rollout, distracting the press from Microsoft's story.  It reminds me a bit of the way the iPhone rumors undercut the Microsoft Zune launch in late 2006.


Leaking Flagship

Even with the competitive game-playing, Microsoft's announcement should have been OK.  But then Microsoft failed to ship the Intel-compatible "Pro" version of its new Surface tablet on time.  Instead, the only Surface device being reviewed right now is the Windows RT version, which can't run existing Windows software.  Since Surface is the Windows 8 flagship, and hardware gets more coverage than software anyway, the concerns about Windows compatibility in Surface RT are dominating a lot of Windows 8 press coverage.

One of the most biting Surface reviews was David Pogue's in the New York Times, who compared Surface to owning "a new Ferrari...that has to be refueled every three miles."  (link).  PC Magazine called it "a disaster" (link).  You can see more reviews summarized here.

There's an answer to the concerns about Surface RT: wait and buy the pro version.  But the last thing a vendor wants to do right before the December buying season is tell customers not to buy.  You'll hurt sales of not just Surface RT, but all other Windows 8 products as well.  So Microsoft can't push that message aggressively.  (Hey, Microsoft -- you say you want to be a device company?  Lesson No. 1 is that you have to ship your high-end flagship product before Christmas, not right after it.)

The Windows 8 muddle was in full play for the Bloomberg segment, which started with video of Bloomberg's Sara Silverstein and Gizmodo's Sam Biddle trying to use Excel on Surface.  Sara tries and fails to copy a formula using the touchscreen.  Sam tells her Microsoft claims you can use all of Excel in the touch version.  Sara replies sarcastically, "I believe that you would...if you're making a spreadsheet about, you know, lemonade stands" (link).

Then the segment jumps to the iPad Mini, with a discussion of how it stacks up against Amazon's subsidized tablet hardware.  That's a great topic, and deserves a lot of thought.  In fact, it goes on so long that Bloomberg runs out of time and never comes back to Windows 8 (link).  So Apple and Amazon steal most of the oxygen, and the only impression you get about Windows 8 is that it's not ready for serious business use.

Not all the Windows 8 coverage is negative.  For example, Walt Mossberg did a nicely balanced piece on All Things D (link), and Wired was pretty positive about Surface (link).  But the story of Windows 8 is complicated.  In a world of quick sound bites, it's very easy for the press to caricature Windows 8 as "that touch screen thing that doesn't run your stuff properly."  Clever marketing by Apple is giving Microsoft less time in the press to explain the nuances of Windows 8, and the failure to ship Surface Pro on time makes Microsoft's job even tougher.  Microsoft has enough money to wait out the bad coverage, but I think it's less and less likely that Windows 8 will deliver the massive initial sales that Microsoft promised for it.