Sooner than later Google will acquire a weather company

By Yaron Reich (founder and CEO Nooly Technologies Ltd,)

Nov. 2009

Location Base Navigation proved to be a mobile phone killer application that is why nobody was surprised when Google enter this market. The Google Maps Navigation will change the way the location-based services industry does business. How it will change the industry remains to be seen, but a major player such as Google that aims to integrate the entire web has to offer as a location base service and for free most definitely will impact a market where consumers are used to and willing to pay.

According to Google, the Mountain View giant will make its money by providing location-based ads that will be sold in conjunction with the navigation solution.

Mobile advertising are green fields for Google where it expect to base its future growth. For this reason Google acquired for $750 million AdMob, a mobile advertising pioneer and market leader.

The Turn-by-Turn voice activated feature of Google navigation make the Garmin / TomTom navigation systems (that cost around $150 per unit) to look like a Stone Age tool. Nevertheless, with more than $10 billion Garmin made since 2005 and from a market leader position, Garmin will have no problem to close this gap and to fight back defending its market share by joining forces with Google competitors (Yahoo, Microsoft, AOL, etc.) and by showing off its strength.

One of the first key differentiators Garmin will present is the Garmin location-based weather from its subsidiary Digital Cyclone Inc. ("DCI"). Garmin bought DCI in 2007 for $45 million in cash so it would be able to integrate weather data as an information layer on top of their navigation system. TomTom also offers weather conditions as a layer along the expected driving route.

In another angle of the same issue, going full steam on the mobile market and mobile advertising, Google find itself faced with another mobile killer application - short-range and location-based weather. According to Weather Channel’s Cameron Clayton vice president of mobile and international, with more than 10 millions mobile viewers (and more than 40 million Web unique’s), Weather.com is the fourth most popular mobile destination in the U.S., only behind Facebook, Google and Yahoo.

According to unofficial data, The Weather Channel (TWC) is also one of the most profitable among the four, mainly due to the subscription fee people pay for high level personalized weather services and for the high value that advertisers received while advertising in conjunction with weather information, additionally, the demographic that is commonly tag as weather consumers are traditionally among those of the highest Purchasing Power. These people are the one who buy new homes, take expensive vacation, upgrade their car to the latest model are among the main reasons of this success.

One notable ingredient of Weather.com’s success is its robust ad sales. It refused to deal with ad networks like Google’s. It has its own sales people, something Cameron says has become a “religion” within the company. This religion (according to VentureBeat editor and CEO Matt Marshall) portrays Google as an infidel.

Here is where Google biggest dilemma starts. In order to match TomTom and Garmin weather-based navigation features, Google will need to have an extensive weather database and accurate forecasts. While Google can get some basic weather forecast from the national weather service, it will also require some additional expertise, capabilities and access to some of the relevant patents in the area. In other words, Google will not be able to just integrate the national weather service data. It will need to work closely with one of the leading weather providers or better yet, will need to have some control on some of the most elementary weather-related technologies and patents such as LBS Nowcasting, weather pending navigation, one of the weather pending advertising platforms, etc.

Following the recent AdMob acquisition, Google will find itself in another dilemma. Unlike the Yahoo mobile ads network, the Microsoft (FaceBoock) mobile ads network of Weather.Com is not a competitor to Google but rather a partner. When a Google user search for weather in a certain location, the first result will most often be that of the Weather.Com site. At least 10% of Weather.Com web application users originate from Google searches. This figure is dramatically higher in the mobile arena. Moreover, at least 22% of Google mobile users use the search engine to look for weather at a specific time or place. In other words, Google is fuelling up Weather.Com success with millions of its users.

Now, when AdMob is part of the Google family and their effort to dominate the mobile advertisement market, Weather.Com, being the fourth largest US mobile site and one of the largest mobile ad networks, is categorized as serious competitor to Google and its newly bought (AdMob) mobile ad network.

An elegant solution for the predicament, where Google literally promotes one of its mobile ad competitors (TWC), is to form close collaboration ties between Google and TWC. Under such a scenario Google will deal with Weather.Com advertising (mobile and web) while TWC will provide the relevant weather information to Google for its mobile navigation app.

At the beginning of 2009, NBC Universal together with Blackstone Group LP and Bain Capital LLC acquired TWC for $3.5 billion in cash, from which $1.7 billion came as debt financing from various financial institutions. In order to improve its financial performance, TWC named Michael Kelly, former president of AOL's Media Networks, as President and CEO of The Weather Channel Companies. Under Kelly’s leadership it is hard to see how Weather.Com will forsake its religion and join forces with the “infidels”.

A more likely solution for Google is to acquire a bit smaller weather provider for a much lower price than what was paid for TWC ($3.5 billion). Among the companies that are available to Google are AccuWeather, WeatherBug and Weather Underground.
Which weather company the Mountain View giant will prefer to buy is yet to be seen. Google will need to consider an array of weather technologies, patents, and developments, and to see how each one of them can enhance Google's various services and application, when the mobile advertising and mobile navigation app are just few of them.

The weather decision Google takes will have a profound impact on Google’s bottom-line. A smart and brave decision could mean a serious growth engine for the giant search engine, which will extend its search capabilities into our daily lives and will increase our dependency in the Mountain View guys.

There are some disruptive new weather technologies out there, such as the Nooly LBS Nowcasting. The way these new technologies will be implemented and their availability to the various players, will determine how this market will behave in the next few years.

How David Beats Goliath

When underdogs break the rules.

David’s victory over Goliath, in the Biblical account, is held to be an anomaly. It was not. Davids win all the time. The political scientist Ivan Arreguín-Toft recently looked at every war fought in the past two hundred years between strong and weak combatants. The Goliaths, he found, won in 71.5 per cent of the cases. That is a remarkable fact. Arreguín-Toft was analyzing conflicts in which one side was at least ten times as powerful—in terms of armed might and population—as its opponent, and even in those lopsided contests the underdog won almost a third of the time.

In the Biblical story of David and Goliath, David initially put on a coat of mail and a brass helmet and girded himself with a sword: he prepared to wage a conventional battle of swords against Goliath. But then he stopped. “I cannot walk in these, for I am unused to it,” he said (in Robert Alter’s translation), and picked up those five smooth stones. What happened, Arreguín-Toft wondered, when the underdogs likewise acknowledged their weakness and chose an unconventional strategy? He went back and re-analyzed his data.

In those cases, David’s winning percentage went from 28.5 to 63.6. When underdogs choose not to play by Goliath’s rules, they win, Arreguín-Toft concluded, “even when everything we think we know about power says they shouldn’t.”
Read the full article

Good Friday Tornado

This is a sad blog entry, whenever I read about fatalities or lost of life / massive property that I personally could prevent I feel troubled.
I am referring to the “Good Friday” Tornado. Good Friday refers to the crucifixion of Jesus when, in a later stage, he went up to heaven … well this more or less what had happen to John Bryant (on April 10th – the Good Friday) or in his own words:

"It sounded like a train coming."
"I knew in my gut that something was wrong."
"I was going up, up, up ... and I flew."
"It broke my heart."

The last time John Bryant saw his 9-week-old daughter, Olivia and wife Kori, 30, "he was being sucked through the roof" of his home.
He "was looking down at Olivia as she was looking up at him ... His exact words were, 'I was going up, up, up ... and I flew.'"

Few days later, volunteers found Olivia under debris about 20 feet from what was once her home. The baby was found, still strapped in her car seat that her parents thought would give her extra protection.
Yet another 20 feet away, under a tree, volunteers found Olivia mom Kori Bryant's.

On top of the two deaths — Kori and Olivia Bryant (names that I will need to remember), there were 42 injuries and more than 900 homes and businesses that were damaged by the tornado.

Emergency Management Agency figures showed the destruction amounted to almost $42 million to businesses and 845 homes. About 117 homes were demolished, 298 sustained major damage and 175 sustained minor damage. An additional 255 homes were affected. More than 8,000 tons of debris, tree and brush were collected.

The Good Friday Tornado was kind and less deadly compares to his predecessors which rage at the same route during 1949 killing 55 people in its path, and another twister which killed 7 people in 1975.



I hope that by the next tornado season we will have a Nooly system up and running in the South East.
I would feel much better knowing that our minute – by – minute Location base Nowcasting system help to save some lives with accurate early warnings and alerts.


The following video is a great example for the Nooly power solution; when we see the killer tornado is building itself and making a touchdown while the NWS weather report give a general tornado warning.



With the Nooly system the Tornado warnings are much more focus (both in time and location) and they are specific for each tornado or a possible tornado with contrasted with the common general tornado warning as we have today.

To show how serious the situation was and how people were not prepared to this; here is a news flash tracking the 23 miles twister;



They went on air an about 12:35 (about 16 min after the Tornado made touchdown).
There was no any specific tornado warning only a general warning for the all region, and nothing to warn the people of deadly F4 tornado making his way to this schools and kindergartens’

Twister data from NOAA
Location / Time of event: Rutherford County, 04/10/09 12:19 PM
Beginning Point: Kelley Road and Hwy 41A - SW of Murfreesboro
Ending Point: Eight (8) Miles NE of Murfreesboro
Rating: EF4 - Maximum estimated wind speed around 170 MPH
Path Length: 23.25 Miles (~37.5 km.)
Maximum Width: Almost 1/2 Mile (800 m)
Fatalities: 2
Injuries: 42

For some personal stories from the Tornado I recommend reading “MRS. 007” blog

Handyman

Handyman,

Whenever people, that I am not that familiar with, ask me for my position in the startup I am working for I usually have this answer – I am the Handyman of our company.

Maybe it is the Chinese modesty which overwrite my Israeli nature to brag about my shiny title (Founder and CEO of a young innovative startup) or is it just my subconscious telling me that I am not yet a CEO. Saying that only when I will earn a CEO salary, have the right car and other status symbol that go with the title I might be eligible for the CEO title J, until then I am just the company handyman J

If you think of this, half of the people who ask me for my position in the company actually are more interested in; how much money I earn, or what is my eco status .. in other words they do care if I have or not all the goodies of a successful CEO..

So for now, all of us are good with the handyman definition because, at the end of the day, this is exactly what I am doing in the company.

Issues with the bank – I will be the first one to know about it.

Investor question / requirement – my phone will be the first one to ring.

Patent and IP issues … my full attention will be required both in the high level strategy and in most cases also in the actual wording.

Agreements ? … clients, investors, employees, partners etc… there is no question about it. On the right pile of my desk and as a blinking reminder on my to do list.

A laptop, server, mobile phone or other equipment is malfunctioning … I will be the second one to know (after the owner).

Clients, sales ? no problem, 32A (my favorite seat) in Y – Class and I am on my way to see the client packing all the problems that I will try to tackle on the 12 hours flight (hey, we are an early stage start up!).

These are all among the “clean” work and duties that a young, early stage start-up manager must deal with .. since it’s a white and clean blog I just use the nice jobs and left the ugly shores for your imagination ;-)

Nevertheless, at the end of the day, it is all about the rush !

The title is really not important, the salary is nice, but its main function (at this stage) is to pay the bills.

It is the rush of creation.

Changing the world.

Having a dream and taking it from endless mind games into a working service / product that your average Miss Adams will used on a daily base and that might save Mr. John’s lives in the event of a blizzard or a severe storm.

If in order to take this dream and turn it into reality I need to serve as the company “Handyman” for a while, so I will be the best handyman building the best product yet.

My first post

Hi,

Welcome to my new Blog.

It’s a new experience for me – blogging,,,

well I am ok in writing but the question is how long I can keep up with this..

My main idea is to share some thoughts I have about two main issues; China (and the Chinese market) the opportunities and challenges it present. so if you are reading this post and you have some comments about this please post them or mail me, if you have any interesting article please send it to me or refer the link to me.

Another thing I would like to share with you is a kind of first hand peek on the process of building a great LBS weather related startup, about some of the challenges one is going, the ups and downs. I would also try to share some “inside” info regarding our technology and the way it will shape all of our future.

Personally I don’t believe in “stealth” startups, I believe that if you are good, innovative, know your place and niche in the market, know your clients and their needs (some good patents coverage will not be bad idea) you will do ok. Or as a local “poet” once said: you need to start the best and fastest you can and then slowly slowly improve yourself get better and get faster ..

About competitors, well I believe in my company, in our exceptional team, in our innovation and our capabilities. together with our great patents and employees dedication I see no reason to worry from our competition (as long as our guys will do the best they can and just keep getting better and better). Today I am in a place when I look at today’s competitors as our tomorrow partners.

So if you are one of our “competitor” please feel free to join in to the open discussions, participate in the polls and share some insight with us.