Bill Zhang

Friday, April 28, 2006

Google Maps Europe

The search engine introduces a test version of its map product in four Eurozone countries.

Every war plan begins with the unfurling of a map. Google’s designs on Europe are a little clearer now that the search engine has released test versions of Google Maps for France, Germany, Italy, and Spain.

The map products of Google and its rivals, Yahoo and Microsoft, are an important part of the burgeoning local search business, which the search engines regard as one of the last untapped reservoirs of ad revenue.

The Kelsey Group predicts that the U.S. local advertising market will hit $124.8 billion in 2010. In 2005, it grossed $96.8 billion. U.S. local search and classifieds revenue is seen jumping 25 percent to $9.9 billion in 2010 from $3.3 billion in 2005.

Matt Booth, an analyst with the Kelsey Group, says that maps are the shock troops in a campaign to win advertising dollars from the local market.

“Mapping is the forefront of a local strategy,” he said.

‘The real revenue opportunity comes when there is rich content underneath all of the pins on the map.’

Google’s improving of its map product in Europe, announced late Wednesday, follows Yahoo’s debut of satellite images on its beta map site on April 11. In October, Google announced the launch of Google Local, which blended mapping data with local information such as restaurant reviews, addresses, and movie times.

The move also came one day after French President Jacques Chirac said his country would spend $2.5 billion on six technology projects including a search engine designed to compete with Google (see France’s $2.5B Tech Foray).

Like Google Maps and Yahoo Maps, the beta version of Google Maps in the four European countries comes with an API (application programming interface) that allows programmers to incorporate Google Maps into web pages not connected with Google.

While Google doesn’t allow developers to profit from using its map API, the API has generated a cottage industry of mashups that combine Google Maps with content that ranges from real estate to fast food finders.

Mr. Booth said that the power of maps and local advertising has not been fully exploited.

“The real revenue opportunity comes when there is rich content underneath all of the pins on the map,” he said

France’s $2.5B Tech Foray

France plans six tech projects, including one aimed at Google; observers raise doubts.

Venture capitalists in Europe said Wednesday they are skeptical about French President Jacques Chirac’s plan to spend $2.5 billion on six technology projects, including a search engine to rival Google.

Mr. Chirac said technology and innovation are key to the future of France. In his announcement Tuesday, the president noted there is only one French company among the 30 global firms that spend the most on research. The United States and Japan dominate in new technologies, and Europe needs to forge ahead, he said.

The huge growth of the search engine sector, for example, makes it imperative that France, along with European partners, develop a global product to rival Google and Yahoo, the French president said.

The programs that will receive funding through the French Agency for Industrial Innovation include Quaero, a multimedia search engine that would be used both on computers and mobile phones. Quaero, which is Latin for “I search,” is being spearheaded by French multimedia company Thomson, France Telecom, French search engine developer Exalead, and French universities.

‘We are at war economically with the U.S., India, and China—and Europe is today the big loser.’

France had hoped the German government would also contribute economically to Quaero, but no announcement has been forthcoming. However, German companies, research centers, and universities are involved.

They include media company Bertelsmann’s Arvatis unit, Siemens, MediaSec Technologies, Deutsche Telecom, Thomson-Brandt, Lycos Europe, Grass Valley Germany, the German Research Center for Artificial Intelligence, the Fraunhofer Gesellschaft, and the Universities of Karlsruhe and Aachen.

The other five projects being funded by France include:

• an effort led by Alcatel and French research labs INRIA, CNRS, and CEA, to develop a European standard for delivering television over mobile phones;

• the development of a hybrid diesel car led by French companies Michelin, Valeo, and PSA Peugeot-Citroen;

• a project called Homes, proposed by Schneider Electric and Somfy, which aims to use a new system of heating and lighting to reduce energy consumption within buildings by up to 20 percent;

• an automated subway system called NeoVal, proposed by Siemens and Lohr; and

• a plan to develop plastics from cereals proposed by Roquette and Metabolic Explorer.

Thirty other projects will be considered by year’s end, Mr. Chirac said. He said the French agency for Industrial Innovation should serve as the foundation for a new European industrial policy.

Most European venture capitalists believe that a top-down approach to innovation doesn’t work. Instead of funding giant projects, most venture capitalists argue European governments should instead change employment laws and tax and stock option rules to make it easier for entrepreneurs to set up and run companies.

Still, “being totally sarcastic about it is easy,” said Geneva-based venture capitalist Sven Lingjaerde, founder and president of the European Tech Tour, which promotes investment in European technology startups. “The good thing is that it is a wake-up call; politicians are recognizing we are hitting a wall. We are at war economically with the U.S., India, and China—and Europe is today the big loser.”

Despite many attempts by various governments, Europe still “has no Silicon Valley,” said Mr. Lingjaerde. So, “rather than taking the typical French attitude of ‘we will conquer the world’ the French should concentrate on one project and try to take it to a pan-European level and then, if that works, move on to another area, always concentrating on areas where Europe has competence.”

European Competition

Mr. Lingjaerde argued that one of Europe’s biggest weaknesses is that European countries compete with each other, each funding national projects. A better approach would be for different countries and regions to choose a particular area of competence and the others agree to cede that area and instead concentrate on something else, he said.

And in areas like alternative energy and materials sciences, a unified European approach with government funding could be helpful in setting standards and boosting certain technologies, said Mr. Lingjaerde.

Eric Archambeau, a French venture capitalist working for Munich-based Wellington Partners, believes the top-down approach does work when the project involves local infrastructure projects, such as France’s high-speed trains.

“But when you want to create a market standard, it is very difficult to do it through government,” he said.

Mr. Chirac though, seems convinced the government is taking the right direction.

“At a time when [some] question the dynamism of Europe and of France, and where in the minds of certain people [France’s] future is as a museum country, France is resolutely making the choice of science, innovation, and industry,” Mr. Chirac said in his speech. “It is essential to conserving the ranking of our country in the world and for collectively rediscovering a taste for risk-taking and the pride of innovating.”