Brad Burnham asks "What's Next?"

Brad writes a great post on the Union Square Ventures blog asking "What's next?". In it he explains that innovation moves up the stack and that we are now at the 'data' layer.

"In the early days, the central value proposition in the computer business was hardware. Later, it shifted to systems software, then applications software, and then networks. As more software functionality was delivered to a browser over the Internet, the basis of competition shifted from features to service level metrics like reliability, accessibility and security. I believe that today, at least in the area of consumer web services, we have already moved on to a new focus of competitive differentiation based on data."

I am glad VCs are starting to ask these questions. It shows they are thinking beyond 'me too' services.

He goes on to write:

"One way to look at that question is to argue that we have arrived at the end of history. The progression to date has been up the stack in a classic architecture diagram, data is on top of that stack, and nothing sits on top of the data. I disagree."

I disagree too Brad. Here are a few more layers to think about.

Once data is structured and syndicated, the next job is to:

1. Aggregate - And I don't mean like a feed reader. I mean like Edgeio and Vast
   
   
2. Personalize - Using Attention Data
   
   
3. Visualize - Using all sorts of techniques. With Touchstone we are using escalating alerts. The more personally relevant the content (from step 2) the bigger the alert.

Since when does 'Search' translate to 'Hosting Video'

Google's original mission was to help the world find information. So why, in recent developments (yes including the Google/YouTube buyout) are they so intent on hosting all that information as well.

"They need to diversify to stay competitive"

Diversity is one thing. Straying so far from your original business and philosophy so that the brand is diluted and your partners are alienated is another.

Search is not the end of line for information discovery and management. The fact that Touchstone, Attensa, Digg, BuzzLogic and Techmeme exist is testament to that. They are all products and services that aim to help organize the world's information so that users can find the signal from the noise. With so much diversity in approaches and usage models, it is obvious that there is plenty of room to innovate and monetize products inside the original problem domain.

What's more, these forays into various other product categories are alienating the partners who use their ad network. Instead of keeping their ‘do no evil’ image and remaining the benign partner of choice they are becoming just as 'evil' as Microsoft trying to own and run everything (note: I don’t actually think Microsoft is bad, but it is a common perception).

They are making mistake after mistake by going after 'wow look at me' projects instead of focusing on what they do best.

So why isn't Google doing its job? They have lost focus, lost good will and are now finding themselves competing against Microsoft in areas they have no expertise.

Microsoft still can’t compete with search.

It is obvious they can’t do smart information management systems. Products, hosted apps and distribution they can do. But they can’t do maths. Google should be taking advantage of that fact by building better algorithms and visualizations that make information accessible. Not hosting video. They could have achieved the same revenue result simply by cutting a deal to run YouTube’s ads. They don’t need the headache of running the whole company.