Following years of second-class citizen status, Flash content is now being welcomed into Google’s index.  A post on the Official Google Blog introduced the algorithm update (the wording indicates that it is currently live) and a second post on the Google Webmater Central blog presented list of anticipated questions and answers.

From the announcement post:

Now that we’ve launched our Flash indexing algorithm, web designers can expect improved visibility of their published Flash content, and you can expect to see better search results and snippets.

This is undoubtedly a step in the right direction, but there’s still a good deal of ground to cover.  While .SWF files will be indexed, it will only be for text content contained within the .SWF file.  Content that is pulled in by a .SWF for presentation as opposed to be included in the .SWF will be indexed separately.

As it is described in the Q&A post, the code which parses Flash files will essentially be acting like a user.

We’ve developed an algorithm that explores Flash files in the same way that a person would, by clicking buttons, entering input, and so on. Our algorithm remembers all of the text that it encounters along the way, and that content is then available to be indexed.

There are obvious limitations to overcome, in my mind specifically with the inability to index dynamic content (content pulled in from a database or external XML file), but this is a big move in the right direction, and its been a long time coming.

Thanks to Chris ‘Ubergeek’ Hill for emerging from vacation long enough to pass this info along.

The board of ICANN unanimously approved sweeping changes to the rules governing domain extensions today. The broad based changes allow top-level domains (.com, .org, .edu, etc.) to be created without restrictions previously in place.

The new posture opens the door for almost any domain suffix imaginable, likely with .sex and .xxx leading the way. With most memorable names consumed under “.com,” that this ruling will pave the way for more descriptive suffixes, such as “.resort” or “.books”.

The AP reports that new TLDs won’t surface for several months. Regulation? Domains will need to be proposed to ICANN at which time they will go through a review phase allowing anyone to raise an objection.

Welcome to the next domain rush. Or maybe not. Citing ICANN, Ars Technica reports that “if approved, registering the TLD will cost anywhere from $100,000 to $500,000.” Maybe it’ll be the domain rush for everyone but the little guy.

A quote from Karen Donovan’s Wired article on Jerry Yang and his participation in a plot to undermine a successful Microsoft purchase of Yahoo (emphasis mine):

…Yang was engineering a plan for a “massive employee walkout” in the aftermath of a Microsoft takeover by offering all of Yahoo’s 14,000 employees the right to quit his or her job and pocket 100 percent acceleration of their equity rights, if there was “substantial adverse alteration” of their jobs.

Yahoo’s compensation consultant calculated that the proposal would cost $1.5 billion, or 3.2 percent of the transaction price. “That’s nuts,” he concluded in an e-mail.

For more background, and where the documentation came from to substantiate the claims being made, read the full article over on Wired’s site

Microsoft Live cashback

Microsoft recently announced Live cashback, a program that rewards those who search on their Live search engine and consequently buy a product from one of several hundred merchants affiliated with the program. It’s fairly straightforward. Merchants are in essence placing cost-per-action (aka pay-per-action) advertisements for which they only pay Microsoft if there is a sale. They do not pay for a visitor clicking or merely viewing their advertisement. Of that pay-per-action fee, Microsoft is only retaining a small amount, instead passing the bulk of the money collected back to the consumer.

Microsoft’s Desperate Position

My initial response was that this was a desperation move on the heels of a thwarted acquisition attempt of Google. Most of the negative commentary on Live search is based on the premise that because Microsoft lost out on its Yahoo acquisition attempt that they are now relegated to having to pay customers to use their Live search engine. And, to be clear, there is something desperate about Microsoft’s situation in search. They’ve been at this for quite some time now and their progress has been underwhelming. As it currently stands, here’s the lay of the land:

Search Market Share - April, 2008 - ComScore
1. Google: 61.6%
2. Yahoo: 20.4%
3. Microsoft: 9.1%
4. AOL: 4.6%
5. ASK: 4.3%

But, insofar as Live cashback itself, it may be a response to a desperate situation, but the program shouldn’t be cast in a negative light solely because it is a response to a difficult challenge for Microsoft.

Live Cashback and consumers

If the average Joe can get a few percent of what they spend back when making a purchase (assuming they know Live cashback exists), I’d argue they’d at the very least consider it. Will they actually do it? That I cannot predict. If users do make that switch over to Live, even if only when in a purchasing mindset, the needle moves in Microsoft’s favor on the back of a clear value proposition.

Live Cashback and advertisers

The other side of the coin is the advertisers. Over on Google, merchants place AdWords ads for which they pay when the ad is merely clicked upon. With Microsoft’s cashback program, the advertiser is getting a guaranteed ROI. They are only paying when a sale is made. The advertising investment has no risk.

A few participating merchants and their that caught my eye include Zappos.com (9% Cashback), Barnes & Noble (6% Live Cashback), and Footlocker (15% Live Cashback).

Will Cashback ultimately work?

For the program to ultimately work, consumers have to find value when they try the service. That requires having as many merchants as possible participating, and preferably those who are already top shopping destinations online. For merchants to want to participate, they’ll want to see search volume, which is what Microsoft doesn’t have an impressive inventory of.

Who knows. Microsoft Live Cashback could be dead-on and drive a self-perpetuating cycle of increased search traffic enticing merchants which in-turn drives more search traffic. If everything is spot on, that cycle will still move slowly. One thing that Google has online that Microsoft does not is incredible brand affinity. And, even if there is a perfect storm for Microsoft, thinking that Google will stand by and watch it all happen without doing something to slow or reverse such a cycle down is naive.

Could Cashback just fail? Absolutely.

For Microsoft, having a larger search inventory would be a great place to start. Yahoo anyone?

Over the weekend Microsoft officially retracted its bid for Yahoo.

I, for one, would have liked to have seen this go through. I give Microsoft a pat on the back for coming to the table with the buy. It makes it pretty transparent that Microsoft has had significant challenges in the search arena, and realizes that incremental change isn’t going to cut it at this point.

Yahoo? I don’t know what they’re thinking. There aren’t many suitors out there who can make a reasonable offer for Yahoo and then follow through with a provoking, competitive solution. Unless Jerry Yang has some magic market share dust up his sleeve, Yahoo will continue to languish in its role of nonthreatening counterweight that prevents Google from being considered a monopoly.

Here’s what others are saying about Microsoft walking away from its Yahoo! bid:

• Breaking: Microsoft Withdraws Yahoo Bid; Walks Away From Deal (Updated) - TechCrunch
• Yahoo Responds: “The distraction of Microsoft’s unsolicited proposal now behind us” - TechCrunch
• After Deal Dies, Yahoo Weighs Its Next Move - New York Times
• Microsoft: Decidedly not R.I.P. - Fortune