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Google Bets the House on Banner Ads

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_____About Filter_____
Filter looks at the day's top technology news through snapshots and analysis of what the world's media outlets are covering. Washingtonpost.com's new Mon.-Fri. feature is penned by technology reporter Cynthia L. Webb. If a technology story breaks, a company falters or triumphs, or there's a new trend in technology, Filter wants you to know about it.

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Outsourcing: Come Sail Away With IT (washingtonpost.com, May 17, 2004)
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Xbox Masters the Electronic Arts (washingtonpost.com, May 11, 2004)
Going Public: Everybody's Doing It (washingtonpost.com, May 10, 2004)
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By Robert MacMillan
washingtonpost.com Staff Writer
Thursday, May 13, 2004; 9:33 AM

One gets the impression that nobody's getting a lot of sleep these days at Google HQ in Silicon Valley.

The company remains as mum as possible on how much it'll be worth once it goes public, it's getting ready to launch one of the biggest and most controversial Internet e-mail services ever envisioned -- and oh yeah, it's breaking with its past advertising policy of just serving up little text links. Just another day in the life of America's most dynamic tech success story.

Today's fresh helping of Googlemania: The company plans to sell ads with images on other companies' Web sites. CNET's News.com jumped all over this one, calling it a "surprise reversal for a company that has won regard for its pioneering use of text-only marketing pitches."
CNET's News.com: Google to Sell Banner Ads

That's fine, but before getting into the ins and outs of this advertising model versus another, let's look at something a little more incendiary: Gmail. New York Times personal tech guru David Pogue served up what is probably the most articulate defense of the much-maligned e-mail service that Google is now testing. Most of you already know that the Gmail concept is pretty sweet -- offer tons of e-mail storage space for free, live with the fact that Google seeds messages with ads based on the keywords in the message text.

Pretty scary stuff? Not according to Pogue, who said that the zealots at the Electronic Privacy Information Center and their friends are overreacting: "In fact, no human ever looks at the Gmail e-mail. Computers do the scanning -- dumbly, robotically and with no understanding the words -- just the way your current e-mail provider scans your messages for spam and viruses."

Better still, Pogue says: "Besides, if you're that kind of private, Gmail is the least of your worries. You'd better make sure that the people at credit-card companies, mail-order outfits and phone companies aren't sitting in back rooms giggling at your monthly statements. Heck, how do you know that your current e-mail providers -- or the administrators of the Internet computers that pass mail along -- aren't taking an occasional peek? Still, you feel what you feel. If Gmail creeps you out, just don't sign up."

Pogue describes a bunch of the wonderful things that Gmail does, but gets down to the heart of the matter when he says that Yahoo and Microsoft's Hotmail service won't know what hit them. "[You] wouldn't even peg Gmail as being from the same planet as Yahoo and Hotmail. The most important difference is the amount of storage: one gigabyte. That's 250 times the amount you get on a free Yahoo account, 500 times the amount on Hotmail. One gigabyte changes everything. You no longer live in terror that somebody will send you a photo, thereby exceeding your two-megabyte limit and making all subsequent messages bounce back to their senders. You're no longer neurotic about checking your mail twice a day just to keep the in-box cleaned out. You can let years' worth of e-mail pile up, complete with file attachments (maximum size: 10 megabytes each)."
The New York Times: Google Mail: Virtue Lies in the In-Box (Registration required)

Washington Post columnist Leslie Walker, meanwhile, says she hopes that Gmail won't vanish under the privacy outcry. Walker makes a number of similar points as Pogue, but gives this nice elucidation here: "The reality seems to be that targeted advertising is well on its way to becoming an important part of the Internet economy, helping defray the cost of online content and services. Anyone who thinks they aren't already being shown ads targeted to their electronic histories must be unaware that large networks like Yahoo routinely profile their registered users and track what they view online. Yahoo then uses the information it gathers to show ads customized to people's surfing histories on Yahoo -- including targeted ads alongside messages on its Web-mail pages."
The Washington Post: Gmail Leads Way in Making Ads Relevant (Registration required)

Walker and Pogue are on the opposite side of the fence from Walt Mossberg, the Wall Street Journal's personal tech writer. Last week, Mossberg wrote that "Google is risking its reputation for honesty, and for putting the user first, with" Gmail. He argued that Google should "preserve its sterling reputation for honesty and customer focus by offering an alternative form of the new Gmail service. The company should offer Gmail accounts without the ads, and without the scanning, for a modest annual fee. That would put the choice where Google has always placed it: in the hands of its users."

AdSense and Sensibility

Now, what was that about advertising? Oh yes -- so Google is going for the visual all of a sudden, prompting a ton of press and ruminations about more tectonic shifts in the online zeitgeist, etc,. etc. But zeitgeist be damned! This is about money, as some other press reports make clear.

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