The Google-Groupon acquisition rumors are coming in hot and heavy now. The day began with a rumored price of $2.5 billion, which was way too low. Now it ends with a more likely price somewhere between $5 billion or $6 billion. Whatever the price, it will likely be Google’s largest acquisition ever if it goes through (beating out DoubleClick’s $3.1 billion, and certainly YouTube’s $1.65 billion price tags).

But why is Google even interested in Groupon? It is essentially an e-commerce site, bringing consumers daily deals from local and national merchants. Google doesn’t do e-commerce very well (although it is trying through sexier product search). Buying Groupon would be a very risky $5 billion bet for Google in an unproven area outside its sweet spot of search I won’t even get into valuation, which at $5 billion would be somewhere in the neighborhood of ten times whispered revenue run-rate of $500 million. But Groupon is the clear market leader in the fastest growing new category on the Internet, and Google seems willing to pay whatever it takes to buy market leadership. As one CEO in the local commerce industry put it to me on Monday, “I think the way Google will evolve is they will want to control everything significant on the Internet.”

Local commerce is one of those opportunities where Google is putting a lot of wood behind the arrow. Google Places is increasingly front and center on the main search results page for local searches, and VP Marissa Mayer recently switched from Search to now running Location and Local Services. She is known to be a big fan of Groupon, and now it will likely become a business under her direction.

But if there is one thing that explains Google’s affinity for Groupon is its pay-for-performance model. Groupon doesn’t get paid by merchants unless it delivers customers to their doors in the same way that Google does not get paid by search advertisers unless it delvers clicks to their websites. Through its online-to-offline coupons, Groupon has figured out how to track that last mile in local online commerce between the ad and customers showing up at a store.

Google could start showing Groupon deals as tags on local searches or within Google Maps. The ability to add deals to their Places pages could make Places more appealing to local businesses as well. The biggest challenge for Google will be scaling the business from one which deals with a few hundred businesses per day to tens or hundreds of thousands. Groupon still requires a large local sales force to manage these deals, and an army of copy writers to make the deals appealing. The larger Groupon gets, the harder that becomes. And those reputed 50 percent margins are begging to collapse. With a $5 billion price tag, there will be no margin of error for Google on this deal.

Source: TechCrunch

There’s a lot of hoopla right now that Google’s Chrome OS has been delayed and will miss the stated release date of “this year”. Much of this is based off of the comment that Google CEO Eric Schmidt made last week at Web 2.0 Summit, in which he said that Chrome OS would be available sometime in “the next few months”. So I asked Google today if they were still sticking with the “later this year” availability of Chrome OS — the answer I got? An enthusiastic “yep!”

But just in case, I decided to follow up and ask if that meant an actual shipping product was coming or some test version of the OS? The answer there was much more murky. “We’re not going into details at this point,” is what I was told.

Looking over the code issues in the Chromium OS forums, it looks as if work is still progressing to knock out a lot of late-stage bugs before the OS can be released. Many of these bugs are UI-related, but several seem much more serious, as well. That said, there are a few indications that a “beta” release of the OS may be drawing near. As you can see here, there are only six bugs labeled as “ReleaseBlock-Beta”. And almost all of them are related to the UI of buying a 3G plan from a Chrome OS-powered netbook. There’s also a “ReleaseBlock-Nominate” list, which features 38 bugs.

There are other indications that Google is removing certain features that contain “show-stopping bugs” in order to get a beta out there.

So, if I had to guess, I would bet that we’ll see some sort of Chrome OS beta launch in December. But that will disappoint many people, as we were originally told that ChromeBooks (Chrome OS-powered netbooks) would be here in time for the holidays. Unless some vendors are willing to ship a very beta product, that’s probably not going to happen.

But maybe there is hope. All About Microsoft’s Mary-Jo Foley says she talked to Google recently about the OS:

I had a chance to ask the Googlers about Chrome OS  recently, and was told that a preview version of Google OS is still going to hit this year and be available in test form on several new form factors.

Of course, she also notes that “Google, like Microsoft, is not going to have a viable iPad competitor available in time for holiday 2010.” But Google is already distancing itself from the talk that Chrome OS is meant for tablets. At the same Web 2.0 Summit talk which featured Schmidt’s comments above, he also said that Chrome OS was meant for keyboards, while Android was meant for touch.

That said, there’s no denying that ChromeBooks and iPads are very likely to eventually go head to head in the market simply because both will likely cost around the same amount of money. And despite Schmidt’s comments, Google has been thinking about Chrome OS in the tablet space as well.

Source: TechCrunch

Back in February we wrote about Facebook’s secret Project Titan — a web-based email client that we hear is unofficially referred to internally as its “Gmail killer”. Now we’ve heard from sources that this is indeed what’s coming on Monday during Facebook’s special event, alongside personal @facebook.com email addresses for users.

This isn’t a big surprise — the event invites Facebook sent out hinted strongly that the news would have something to do with its Inbox, sparking plenty of speculation that the event could be related to Titan. Our understanding is that this is more than just a UI refresh for Facebook’s existing messaging service with POP access tacked on. Rather, Facebook is building a full-fledged webmail client, and while it may only be in early stages come its launch Monday, there’s a huge amount of potential here.

Facebook has the world’s most popular photos product, the most popular events product, and soon will have a very popular local deals product as well.  It can tweak the design of its webmail client to display content from each of these in a seamless fashion (and don’t forget messages from games, or payments via Facebook Credits). And there’s also the social element: Facebook knows who your friends are and how closely you’re connected to them; it can probably do a pretty good job figuring out which personal emails you want to read most and prioritize them accordingly.

Oh, and assuming our sources prove accurate, this explains the timing of the Google/Facebook slap fight over contact information.

Source: TechCrunch

Google has given all of its employees $1,000 cash “holiday bonuses” and 2011 salary increases of at least 10%, a loyal reader tells us.

The 10% company-wide raise will take effect on January 1, 2011.

In addition, Google will also give each employee an additional raise equivalent to 1X the employee’s target bonus for the year.  And employees will be eligible for additional “merit increases” based on their individual performance.

In another nice gesture, Google will pay the taxes on the $1,000 holiday cash bonuses, thus allowing employees to keep the whole thing.

(You can sniff that $1,000 isn’t much, but it’s a lot more than nothing, and spread across 20,000 employees, it’s costing the company $20 million. A 10+% raise on a total cost base of $20 billion, meanwhile, will probably cost the company $1 billion a year, assuming a third of those costs are compensation. Judging from an internal memo, the new salary costs will be somewhat offset by reduced bonuses and stock option grants.)

This surprise news, Google CEO Eric Schmidt explained in an internal email (see below), comes in response to feedback that Googlers most value the salary part of their compensation far more highly than bonuses or stock compensation.

And what does it suggest about the company?

Well, first it suggests that Google is still an awesome place to work. Given that employee retention has been a problem, it also suggests that Google is now going the extra mile to keep its employees happy.  Lastly, it suggests that the company’s financial performance continues to be very strong.

We attempted to confirm this info with Google. The company did not immediately respond to a request for comment.

Here’s what our reader says is the internal email from Eric Schmidt:

CONFIDENTIAL: INTERNAL ONLY
GOOGLERS ONLY (FULL TIME AND PART TIME EMPLOYEES)

I’m pleased to share some very, very good news with Googlers worldwide. But first let me say, on behalf of everyone on the management team, that we believe we have the best employees in the world. Period. The brightest, most capable group of this size ever assembled. It’s why I’m excited to come to work every day–and I’m sure you feel the same way. We want to make sure that you feel rewarded for your hard work, and we want to continue to attract the best people to Google.

So that is why we’ve decided…to give all of you a 10% raise, effective January 1st. This salary increase is global and across the board–everyone gets a raise, no matter their level, to recognize the contribution that each and every one of you makes to Google.

There’s more. We’ve heard from your feedback on Googlegeist and other surveys that salary is more important to you than any other component of pay (i.e., bonus and equity). To address that, we’re moving a portion of your bonus into your base salary, so now it’s income you can count on, every time you get your paycheck. That’s also effective January 1st. You’ll be receiving an email shortly with further details about these changes to your compensation. And one last thing…today we’re announcing that everyone will get a holiday cash bonus, too.

Googlers, you are what makes this company great, and our goal here is to recognize you for your contribution, in a way that’s meaningful to you. Thank you for all that you do, and for making Google a place where magic happens.

Eric

Yesterday Facebook released a clever way to continue to download Google user data, despite Google banning Facebook from using their APIs. It looks to me like they aren’t going to try to stop Facebook from using this more manual approach. Instead, for now, it’s being escalated only via words:

We’re disappointed that Facebook didn’t invest their time in making it possible for their users to get their contacts out of Facebook. As passionate believers that people should be able to control the data they create, we will continue to allow our users to export their Google contacts.

That’s a nice swipe there in the beginning, about how they wish Facebook had spent time giving people a way to liberate their own Facebook data rather than building tools to end around Google. That last bit though, about “people should be able to control the data they create” doesn’t quite hit the mark though in my opinion.

We’re talking about your Facebook friends list and their email addresses. You create your list of friends, of course, but you generally aren’t uploading email addresses to Facebook, your friends do. Still, I think there are excellent logic arguments for allowing users to download friends’ email addresses, too. More on that later.

Source: TechCrunch

The phrase “Google it” is getting a whole new meaning today; the search giant has just released its goo.gl URL shortener to the public and created a standalone website so that anyone can use Google to shorten and track the URLs they share via social media sites and e-mail.

Goo.gl initially debuted last December as a feature integrated into other Google (Google) products. Google’s newly public URL shortener competes with a myriad of other popular services, Bit.ly (bit.ly) being the most notable of the bunch.

The company claims that its shortener boasts stability, security and speed. The former two are especially important as several other services have been plagued by both downtime and malicious parties masking deceptive links. Goo.gl features automatic spam detection, and “near 100% uptime since our initial launch,” according to the company’s announcement.

The product also comes with expected URL-tracking features. As a goo.gl user, you can log in to your Google account to view URL history, traffic sources, referrers and visitor profiles for countries, browsers and platforms.

Google is known to hide bonus easter egg features in its products, and goo.gl is no different. Earlier today, Google engineer Matt Cutts tweeted one such easter egg — add .qr to a shortened goo.gl URL and you’ll create a QR code that, when scanned, will redirect to the original URL. It’s a quirky additive that makes goo.gl all the more friendly for brands and marketers experimenting with QR codes. A Twitter (Twitter) tipster also informed us that you can add .info to the goo.gl URL to check out analytics.

As for why Google is going public with goo.gl, it’s anybody’s guess. Initially, goo.gl was designed because the company didn’t want to rely on other URL shorteners for the same purpose. Our guess is that it’s another small part to the much speculated about social strategy. After all, Google is the business of URLs, and URLs are the fabric of the social web. What’s your take? Share your thoughts in the comments.

Source: Mashable

Last year, Google bought an old paper mill in Finland. Now the company is in process of converting that paper mill into a major data center. Construction is already well underway, and the data center is expected to go live next spring. It will be Google’s first dedicated data center in the Nordic countries, with several interesting innovations, for example being cooled entirely by sea water.

Swedish magazine Computer Sweden was recently on location in Finland and has published an article (in Swedish) with new information and pictures from the build. We’ve summarized the important parts of that article and also what other information we could find around the Web, mostly from Finnish newspaper articles.

Facts about Google’s data center in Finland

We’ll go a bit more into detail about the choice of location later in this article, but here are a some quick facts about Google’s new data center in Finland.

• - Will be a €200-million data center. Google bought the paper mill in Q1 2009 for €40 million (just under $52 million). Once the rebuild is complete, Google will have spent €200 million ($260 million), and that amount doesn’t include the thousands of servers the place will house.
• - Legacy of more than half a century. The old paper mill had been operational for 53 years when it was closed in January 2008.
• - Two server halls are planned. The first one will be 8,000 square meters (86,110 square foot).
• - Construction crew of up to 300 people. Currently, 180 people are working on the rebuild, but that will increase to 300 as the build enters its most intense phase in a couple of months.
• - Cooled entirely by sea water. The data center will be cooled using water from the Baltic Sea. It’s pulled in from the ocean floor, where temperature is more even, using pipes that are up to two meters in diameter. Twenty-year-old, renovated pumps from the old paper mill are used to circulate the water. This will be Google’s first data center to be chilled entirely using sea water, and to their knowledge, it’s also the first ever data center to do so.
• - A water silo in case of fires. One of the old silos of the paper mill will be used to house water, not for cooling purposes, but in case Google needs to fight a fire. (We’re assuming this is not intended for fires inside the actual server halls.)
• - It will use wind power. At least some of the power will come from a newly constructed 12 MW wind park nearby. Some of the land for the wind park was donated by Google. The wind park (owned by the local power company and constructed by WinWinD) currently has four 3 MW wind turbines with rotors 100 meters (328 foot) in diameter.
• - Will go live in spring 2011. It is, however, expected to be operational for testing this winter.
• - Staff. Google plans to employ 50-60 people to run the data center. So far they have found four, so they have some head hunting to do.
• - Googlers will be Googlers. Once Google has hired the entire staff, they will be given free hands to decorate the interior of the place to their liking and make it look like a proper Google site. But seen from the outside, it will remain a paper mill.
• - Security will be tight. Access from land or sea will be monitored by cameras and motion detectors, and the server halls will only be accessible after passing biometric authentication using iris recognition scanners.

Although Google started with an existing structure, they’ve had their work cut out for them. To get an idea of how much “cleanup” they’ve had to do, have a look at the video in this article from Finnish newspaper Helsingin Sanomat (the actual video is in English).

Why this location?

The Summa paper mill is located in Hamina, a small town on the south coast of Finland near the Russian border. It’s not a big place. Hamina has a population of 21,493, the main town housing about 5,000.

Why this location, you ask?

• - Proximity to Russia may be a factor. Hamina is near the border to Russia and the area has excellent Internet connectivity that reaches into Russia and St. Petersburg as well as to the west (Sweden, etc). For example TeliaSonera has an international connection that runs right through the area. There have been reports that Google has had trouble establishing itself in Russia, and this may be a way to get around that (being close to but not inside Russia).
• - The climate. Finland has a relatively cold climate and on the coast there is also plenty of access to cold sea water from the Baltic Sea for cooling. Cooling costs are otherwise a major power expense for data centers.
• - Simple geographic diversity. Google is a global operation and has dozens of data centers around the world. Perhaps it was simply time to add a big one to this part of the world.

Regardless of why Google is doing this, we think it’s great. Not just because we love seeing these kinds of initiatives so close to home (we’re Swedes), but because repurposing old industrial structures like this paper mill gives the place a lot of personality and is just plain cool. Then on top of that, smart details like sea water cooling add even more to that coolness (no pun intended…).

Sourcs: pingdom

Facebook and Microsoft are discussing an agreement that would significantly expand the search relationship the pair have shared for many years, said several people with knowledge of the situation.

According to those sources, that includes the possibility for the software giant’s Bing search service to mine anonimized data from consumer usage of the social networking site’s recently introduced Like buttons.

The Like button, which Facebook has been trying to proliferate around the Web, allows users to indicate an interest in a page with one click that then tells their Facebook friends.

While the deal is not closed and talks could end without result, such information might yield a treasure trove of insight for both search users and advertisers.

That’s because it represents search based on what people are actually interested in rather than just crunching massive amounts of information and muscling it into something useful.

And it would also presumably give Bing a little leg up on Google (GOOG), since data will be available on it that is not available on the search giant, made more important as Facebook’s information-generating audience grows ever larger.

But because of Facebook’s many privacy snafus, sources said that any expansion of the search relationship will never involve providing any information except that which users have agreed to make public.

Facebook and Microsoft (MSFT) already struck a nonexclusive agreement almost a year ago to integrate Facebook’s real-time feeds of public status updates into Bing.

It’s part of a longtime search–as well as investment–relationship between Microsoft and Facebook that stretches back for years.

Currently, Bing provides global Web search to Facebook, yielding branded results whenever someone searches within the service.

Microsoft also invested $240 million in Facebook in late 2007 and has since had a mostly cooperative relationship with the fast-growing Silicon Valley company.

It also has provided a hedge against Google for Facebook, as that pair’s relations has worsened over the years due to intensified competition.

Source: allthingsd

Google has agreed to pay $8.5 million to settle a class action lawsuit claiming it violated the privacy of Gmail users when it released Google Buzz, a Gmail bolt-on that turned the email service into a Tweetbookish social networking tool.

The suit in question consolidates several civil cases filed against the company over Google Buzz, which was rolled out to all Gmail users in February – before it had been publicly tested. By default, Buzz automatically exposed users’ most frequent Gmail contacts to the public internet. You did have the option of hiding the list from the public view, but many complained that the checkbox that let you do so was less than prominently displayed.

Within days, Google agreed to move the checkbox to a more prominent position, and it rejiggered the way it handles user contacts. But this didn’t prevent a spate of lawsuits.

In settling the consolidated case, Google will create an $8.5 million fund that will be used to distribute awards to organizations focused on internet privacy or privacy education. It will also be used to pay the lawyers and class representatives – i.e. the people who sued.

Clearly, Google is desperate to challenge the Facebooks of the world with a widely used social networking service of its own, which would expand its its efforts to collect data on users that can then be used to target ads. But like Orkut before it, Buzz hasn’t exactly achieved that goal – just judging from anecdotal evidence. Google has not said, however, how many people actually use the service.

Source: TheRegister