Google’s numbers for the quarter were very good, beating estimates and highlighting its mobile ad performance, but the company was short on details of how the earnings were derived. My personal view is that Google is doing well with search and still working things out elsewhere. Sure mobile is doing well, but it’s likely that the primary driver is mobile search. Display, the good old secondary, is also likely expanding. YouTube, Android? Not much contribution in my view.
There’s a Street rumor circulating that Google may have an interest in CDN giant/pioneer Akamai. I’m not sure how I feel about that one, presuming that it’s true (Google says it is not). I can see some symbiosis there because Google already deploys server/cache technology inside some carrier networks to make YouTube work better, but the CDN business per se is definitely sinking and operators are likely to sink it faster as they deploy their own planned content monetization strategies, all of which include CDNs. It’s not that CDNs are bad (which is why I used the “per se” qualifier just now) but that traditional content-provider driven, Internet-transit-avoiding, CDNs are bad in most developed markets. There are other far more important missions for CDNs, and that’s why I believe that the term “CDN” here may be getting loaded with too much legacy baggage. What we’re really talking about these days is “CMNs”; Content Monetization Networks. They’re CDNs with about seven functional elements added to address TV Everywhere, QoE management, stream-switching, personalization, and the like.
Speaking of content, AT&T and Verizon have beaten the cable companies in customer satisfaction according to the latest JD Powers survey. Some consumers who look at this may wonder what universe JD is in; I get plenty of complaints about both these players. I think the reality here is that the telcos are first of all more tolerant of low ROI and thus have invested a bit more in both the experience and customer care, and second that the cable companies have had such a historically terrible reputation for field service that people are complaining more about the legacy than the current reality.
Another factor that may be settling in here is that back-office OSS/BSS stuff is much more mature at the carrier level than at the cableco level, and without long-standing operations practices you tend to lose both quality of response and consistency. Ironically, the cable guys should have been able to do this better, having a fresh start and a modern perspective. Apparently, not yet.
Telefonica isn’t resting on legacy for sure. At a recent conference the company talked about the very kind of network-data-mining initiatives that I’ve been talking about in my “the Network Knows” presentation. I’m seeing more vendor attention to the notion that knowledge in the network can become the framework for value-added services, especially in the mobile area, but at least some operators are tired of waiting for vendors to do something and ready to strike out on their own. With Telefonica Digital, it’s clear that there’s a sense of urgency in addressing new services, because the OTT wars are almost certain to move the ball quickly.