Google : The World's Largest Web Hosting Company?

Almost everyone has internet access these days. Probably well over 50% of households in the entire Western world are now plugged into the web.

But when it comes to having your own website, that's still a rarity. Probably less than one percent of people have their own website at this time.

This is about to change. It's likely that within five to ten years, most people with internet access will also have a website. The majority of these websites will be very small and brief, but people will have them, just as they now have their names listed in telephone directories.

This is because setting up a website (or blog) has become as simple as typing an email. And it's free. Google's free service, Blogger, now hosts several million blogs owned by well over one million blogger early adopters. Given the growth rates of the blogging phenomenon, the potential is certainly there for this to grow to several hundred million blogs over the next five to ten years.

And this is why I believe Google is quietly building their plan for a second giant revenue source (after online advertising) to come from the web hosting business.

There are rumors swirling around the net now that Google and Microsoft are in competition to acquire AOL. AOL has 27 million subscribers. Their subscribers are the least sophisticated internet users (representing the technologically challenged majority of people). Based on Google's recent RFP's, experts are predicting that Google wants to build a private internet network, maybe an entertainment behemoth like AOL and Time Warner first envisioned. But this doesn't sound like Google to me. Google isn't going to be entering the talent business of media and entertainment.

If Google does begin providing added-on services to the basic Blogger service, packages for domain names and web hosting, starting at $5 bucks a month, and enhanced services for more fees for people who want more, this could grow into a multi-billion dollar business very quickly. Do the math. If every tenth person decides they need their own website in the next five to ten years, this division of Google could soon be rivaling their advertising behemoth in revenue generation.

The web hosting business is a low margin, low-tech, customer support nightmare and a generally unsexy business. But it's also the future of online real estate. And with Google's clout, it could develop into something much bigger with add-on services we can't even imagine today.

That - with the middleman distribution system cut out and dangling - is the future of entertainment and media networks.




See also, The Future for Google's Blogger?


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Nimcat Networks acquired by Avaya for $46 million

Nimcat Networks was acquired by Avaya last week. Nimcat was founded just three years ago, in 2002. They had a staff of 35 in Ottawa, had received venture capital over the last two years totaling about $7 million and only launched their first product in the spring of 2005. Their revenues must have been very marginal still, possibly less than $1 million.

Avaya bought them for $46 million. And this was probably a steal.

Potential VoIP Investments: Part VI

This is a continuation of our look at potential companies for a VoIP shortlist. See the initial page here.

Nimcat Networks

Nimcat is based in Ottawa, Canada. They received $7.5 million (Canadian dollars) in venture capital financing about a year and a half ago. The provide embedded, peer-to-peer call processing software. Their PTX solution operates within standard wired and wireless VoIP telephones and eliminates the need for PBX equipment. They recently partnered on a big deal with Aastra. It's quite possible Aastra could be considering acquiring them. Last week they made it to the Pulver 100 list for 2005. They'll definitely be on our short list.

Update: Turns out Nimcat has been scooped up by Avaya on September 18th and is no longer an independent concern.

Pandora Networks

Pandora is a private company founded in 2001. They are based in Emeryville, California. Their R&D facilities are in India. In August they released their Worksmart IP communications solutions for SMB's. This company is worth watching.


Patton Electronics

Patton Electronics was founded by three brothers in 1984 and now employs 170 people. They develop network access and connectivity products including, VoIP, G.ShDSL ipDSLAMs, broadband transmission, dial-up and dedicated access servers, network transmission units, base-band and short-range modems, fiber-optic modems, interface converters and surge protectors. Their product line consists of over 300 items. In the past few years, the company has been investing heavily in the development of VoIP technologies. This investment has resulted in a new line of Voice and Data Gateways, servers, routers and integrated access solutions for TDM, packet, leased lines, multi-services and dial up.

They are headquartered in Gaithersburg, Maryland and have over 200 distributors worldwide. This company will go on our short list.

Is Asterisk the future of telephony?

One of the early indicators of a hot new technology could be advance book sales on the topic. When it comes to Asterisk for VoIP applications, the indicators look good.

Asterisk: The Future of Telephony is due to hit the stores sometime this month. It's ranking really well on Amazon.

If Asterisk is hot, we want to know what companies are most closely associated with the Asterisk open-source PBX?

Digium is the most obvious company that comes to mind. The founder of Digium is also the founder of the initial Asterisk open-source coding project. Digium is a private company based in Huntsville, Alabama. Apparently their revenues were about $10 million over the last year. They are a very popular company and have been listed on the Pulver 100 list of top private communications technology companies for the last two years. It wouldn't surprise me too much if they were talking to venture capitalists or IPO investment bankers right now. Some extra capital could probably help them grow much faster.

Digium's closest competitor is most likely Sangoma Technologies. This is a publicly traded company that's been around for twenty years. Their annual sales seem to have been stuck at about three million or less for a few years now and their market cap is still under ten million dollars. Sangoma started issuing Asterisk compatible PCI cards earlier this year.

There seems to be some serious rivalry between Digium and Sangoma. See comments by the founders here and here.

I have been buying up shares of Sangoma for a couple of years now, so I am rooting for them. But this market is more than big enough for both. Can anyone point to more companies which are set to directly benefit from the growing popularity of Asterisk?

Sandboxed Blogs get Seen with Google's Blog Search

Google launched their blog search earlier this week. This will have large repercussions on the entire internet search industry. I've commented on this earlier, but here lets look at some more interesting implications, including the new Google NavBar and the effect on sandboxed blogs.

Most people have heard of the Google Sandbox. Basically almost all new sites and blogs will not be found via Google search for several months. It's almost as if they don't exist as far as the Google search engine is concerned.

I started my first blog in December of 2004 and my second in February 2005. They are still not showing up on Google but they both show up for several keywords on the first pages of MSN and Yahoo Search. I've read that it takes anywhere from six to twelve months to escape the sandbox. I guess I will find out soon enough. My hunch is that Google's Blogger blogs may have to sit in the sandbox for longer than other types of blogs, because they are free and thus more likely to generate spam and scam contents. This would really be a shame if Google actually has a higher sandbox penalty on their own Blogger blogs. Does anyone else have any indications that this may be the case?

What is so exciting about Google's new Blog Search is that sandboxed blogs finally see some exposure. The sandbox effect does not seem to exist here. The Blog Search capability is limited of course, it only finds blog entries from the past few months and it only links to contents it finds in feeds. I would guess we will see a huge uptake in bloggers getting feeds in the next few weeks.

Most bloggers who already have feeds to their blogs have opted for the short summary form of feeds, and not for having their entire posts showing up in feeds. This is because we want people to come to our sites to read the full article and to look around some more. But the incentive structure for this kind of reasoning is changing now that we have Blog Search. Blog Search will only find the contents of your feeds, hence the service can only index the first few sentences of your posts, unless you've opted for the full feed. So, we can also expect to see a lot more people choosing the option of full feeds instead of short feeds in the next few weeks.

The Navigation Bar on Blogger blogs was also changed on the same day as the Blog Search debut. I've always resented the Blogger NavBar and wished I didn't have to have it on my blogs. But the recent changes make it much more appealing. For one thing, people can now search your blog, or all blogs and actually get some relevant search results from your blog, if your blog is in the sandbox. This option just didn't exist before. I had tried putting the Google Search box right into my blog, but that tool was useless with a sandboxed blog. The new NavBar changes everything. It should result in a lot more visitor traffic for people with blogs.

For these reasons, and the ones I mentioned yesterday, I'm getting increasingly enthused about the new Google Blog Search.

Google Blog Search: The Internet Search Industry Shake-Up

September 14th, 2005 is a momentous day. It signals one very large step toward democracy in media.

Today the internet search world was transformed with the debut announcement of the Google blog search engine. Google is the first major search engine to offer a blog search service. The others are expected to follow within months. As a small time blogger, this was exhilarating news to wake up to.

So much for all the speculation that Google will be buying one of the blog search leaders such as Technorati, PubSub or IceRocket. (See the previous note on IceRocket here). The future suddenly does not look so bright for the smaller independent blog search engines anymore. How will they possibly be able to differentiate themselves or compete with the resources of the three search giants (Google, Yahoo and Microsoft)? Of course, they will be acquired eventually. But now it's less likely they can command large premiums. Their main value may now reside in the accumulted skill base of their founders and employees.

On second thought, it's not just the big three search engines that would be interested in the assets of the little search engines. Maybe some of the world's largest newspaper companies or other media companies should show a lot of interest soon before it is too late for them? Maybe there is a big premium there after all...

For now, the Google Blog Search only searches blogs with feeds. It actually only searches feeds for now. Unless you submit the full content of your blog article to the feed, Google is only capable of searching the contents of the first few sentences or so of your blog entry; -– it is limited to the contents that show up in the short form of your feed. Additionally, the indexing only goes back a few months, so earlier articles on your blog will not show up in this search engine for now.

I see that the Blog Search box has also been added (very prominently) to the main page of the Blogger Dashboard. This has huge implications. There are at least 1.5 million people who blog with Blogger. (Does someone know the actual number?). Many of these people are not the least bit interested in official news sites, at least not on a daily basis. It's quite conceivable that this search box, found conveniently on their dashboard, will become their main and perhaps only source of search from here on in.

Overall, on initial testing, it looks like a fabulous blog search service. And if everyone is agreed on the demand for and relevancy of including the freshest news or gossip in search results how long can it be before Google adds the blog search capability to their main search page?

Go directly to Google Blog Search here.

See the initial reviews about this development here.

See more speculative notes on where Google is headed with Blogger here.

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Potential VoIP Investments: Part V

This is a continuation of our look at potential companies for a VoIP shortlist. See the initial page here.


LSI Logic

LSI Logic is a publicly traded company (NYSE: LSI) headquartered in Milpitas, California. LSI was incorporated in 1980. They are a big player in the semiconductor industry. Z.Voice is their line of VoIP solutions. See their press release about these products here. See also Rich Tehrani'’s interview with their VoIP product manager here.

Mediatrix Telecom

Mediatrix develops VoIP access devices, gateways, routers and related software. They were founded in 1997 and are based in Sherbrooke, Canada. They have about 100 employees. Mediatrix is wholly owned by Media5 Corporation, a high tech holding company.

Metreos

Metreos is a private, venture-capital backed company. They were founded in 2001 and are based in Austin, Texas. They received $3.8 million in venture financing late last year. They deliver a Communications Application Environment for leveraging voice and data networks.

NetFabric

NetFabric was founded in 2002 and has just received $11 million in venture capital financing to expand their VoIP services. They are preparing to launch a service package bundled with VoIP equipment and aimed at companies with less than eighty employees.

Netgear

Netgear was incorporated in 1996 as a subsidiary of Bay Networks. It is now a publicly traded company (Nasdaq: NTGR.) They are based in Santa Clara, California and they compete in the wireless networking products segment. Netgear has teamed up with Vonage, as announced last month, to provide a voice-enabled wireless router based on the 802.11g Wi-Fi standard. The router is to be available in October.

Potential VoIP Investments: Part IV

This is a continuation of our look at potential companies for a VoIP shortlist. See the initial page here.

Excel Switching

Excel Switching is a privately owned company. In mid 1999, at the height of the dotcom boom, Lucent bought Excel for about $1.7 billion in stock. Four years later, in 2003, they spun it out again as a private and independent company. Excel Switching develops signalling gateways and media servers for TDM and VoIP networks. In late August they announced their takeover of Brooktrout Inc or $173 million. Brooktrout was a NASDAQ listed company employing 290 people. Before this, Excel had about 175 employees.


Grandstream

Grandstream Networks is a private company founded in 2002. They are a designer and manufacturer of VoIP telephone terminal products and based out of Massachusetts.

InGate

Ingate is a private company founded in 2001 and based out of Stockholm in Sweden. They develop SIP-capable enterprise firewalls.

LignUp

LignUp is a private company founded in 2004 and based in Silicon Valley, California. They've developed a web services-based VoIP communications platform. They received six million dollars in venture capital financing in April 2005.

Linksys

Linksys is a division of Cisco and thus not of interest for this shortlist other than the fact that they may be acquiring some of the companies on this list soon.

Pingoat fights Blog Spam Single-Handedly

I was using Pingomatic to ping after every post until recently. About two weeks ago I discovered what seemed like a superior alternative. 'Pingoat' notifies over 50 services that keep track of blogs. After pinging with Pingoat, these services crawl and index your site.

Pingoat seemed a lot faster and cleaner than Pingomatic to me. Unlike Pingomatic it always worked - and worked quickly - when I used it. I couldn't believe only one person was behind Pingoat.

This site is so cool that I doubt Pingoat's founder will ever have time for college. His name is Kailash Nadh and he lives in India.

I was floored when I read that he just finished highschool this May! He's planning to take a year off before college. Well, he should probably forget about that idea. I've got little doubt that within a few months he will have landed himself a dream job as a very senior (self-taught) engineer at Google, Yahoo or MSN.

But the story gets even more interesting. Not only has he developed Pingoat, but now he is working on a spam filter for blogs. If his spam filter starts blacklisting most of the spam blogs out there from his Pingoat service --- can you imagine how incredibly big and influential and downright heroic Pingoat would be?

My 'blacklisted by the Pingoat' saga:

Unfortunately, as I went to ping on Pingoat today, I received a message saying my blog had been blacklisted. I was very hurt and shocked. Does this look like a spam blog to you? So I emailed Pingoat.

It turns out he has received hundreds of emails today from people who felt as equally wounded as me. He is asking for patience as he works out the bugs. Incidentally, he is asking for help too if anyone is so inclined and capable. I take it he is basing his spam filter on a paper he published on his website. It's entitled "Fighting Spam Blogs".

The incredible brain behind Pingoat is in the middle of trying to fight spam single-handedly. Any big guns reading this, please put some resources his way!




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