The Infamous Nike Ad

Embedded here for posterity

the secret powers of time

The Surprising truth about motivation

Really cool - the message and the presentation

The Return of the Tiger

This was written in April. A delayed upload. The message remains valid still

This weekend saw me being a part of the latest mania to hit television – The Return of the Tiger. Tiger Woods returned to Augusta Masters after 5 months off the field. Could he do it, couldn’t he? In the end it was a lot of the same. Tiger came and did what would have been expected of him 5 months back. He was in contention right till the last day only to have an average last round. 5 months back it would have been allright. What was special this time was the focus on Tiger. And it was here that it got really weird….

Ever since the Tiger Woods saga unravelled itself, Tiger has been expected to be apologetic about himself. Makes sense if its to his family (and probably even his mistresses) but on the field?? At the start of the tournament the chief organiser of the tournament had a swipe at Tiger with his reprimands for what essentially was Tiger’s private life. Now what has golf and Augusta masters have to do with it? Absolutely nothing.

Why are sportsmen expected to behave like entertainers. The core reason for a player to be on the field is his desire to win the game before everybody else and to do it in a sportsmanlike fashion. Tiger swears at the ball, does not smile at the patrons, throws his club around but so what… he is the best golfer of his generation because he wins games and tournaments and he does those at a rate that nobody thought was possible before. So why is Tiger now changing himself to be a “better person” muttering his thank yous and cap doffing when he should be zoning into his next target.

As spectators, we have come to a point where we want our heroes to be spotless in everything. We attach too much of importance to them, we want our children to be like them and when they start showing errant behaviour, we get angry at them and promptly and publicly chastise them.

Tiger Woods – No. 1 golfer in the world is a person, a package which includes personality traits and it is these traits that makes him successful. So I think its time to let him be and as the old Accenture line went – “Go on .. Be a Tiger”

Sansar se bhaage phirte ho.. A Gem

A gem from the past. Really good. Heard about it on Radio 4 again yesterday.

My favorite line - Ye paap hai kya, ye punya hai kya; reeton per dharm ki mohrein hain
Har yug mein badlte dharmon ko, kaise adarsh banoge

Sansaar se Bhaage Phirte…

Film: Chitralekha, Lyrics: Sahir Ludhianvi, Music: Roshan, Singer: Lata

The sitution is something like this: Meena Kumari is a dancer and the man she loves, rejects her and becomes a monk. This is the song where she tells the monk that living away from the world and trying to find God is not great, the important thing is be in this mess and find Him. Just the first line says it all: “Sansar se bhage phirte ho, bhagwan ko kya tum paoge”. And I love this line: “Apman racheta ka hoga, rachna ko agar thukraoge”…So true! Some say that she is justifying her way of living…maybe, but if you’ve to justify yourself – this is the way to do it. Hats off to Sahir Ludhianvi.

Sansar se bhage phirte ho, bhagwan ko tum kya paoge
Is lok ko bhi apna na sake, us lok mein bhi pachtaoge
Sansar se bhage…

Ye paap hai kya, ye punya hai kya; reeton per dharm ki mohrein hain
Har yug mein badlte dharmon ko, kaise adarsh banoge
Sansar se bhage ….

Ye bhog bhi ek tapsaya hai, tum tyag ke mare kya jano
Apman racheta ka hoga, rachna ko agar thukraoge
Sansar se bhage…

Hum kehte ye jag apna hai, tum kehte ho jhootha sapna hai
Hum janam bita kar jayegne, tum janam gawan kar jaoge
Sansar se bhage…

If

Thinking of Invictus led me to ‘If ‘, by Rudyard Kipling. To be read slowly. Any suggestions on other classics are welcome.

IF

IF you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired of waiting,
Or being lied about, don't deal in lies,
Or being hated, don't give way to hating,
And yet don't look too good, nor talk too wise:

If you can dream - and not make dreams your master;
If you can think - and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build 'em up with worn-out tools:

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: 'Hold on!'

If you can talk with crowds and keep your virtue,
' Or walk with Kings - nor lose the common touch,
if neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds' worth of distance run,
Yours is the Earth and everything that's in it,
And - which is more - you'll be a Man, my son!

Invictus

Saw’Invictus’ the movie yesterday. Got stuck on the poem. Decided to reproduce it for posterity. Some information about the poet here

INVICTUS

Out of the night that covers me,
Black as the pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.

In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed.

Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds and shall find me unafraid.

It matters not how strait the gate,
How charged with punishments the scroll,
I am the master of my fate:
I am the captain of my soul.

An idea for easing the traffic condition

Coming to work yesterday I had a flash, a brainwave. Much of our problems with traffic is due to the lack of information of whats happening ahead. Its specially true when one has options to make alternative route decisions. What I want is something like a friend in front of the traffic constantly telling me about the status of the traffic. So this is the idea.

We are increasingly having GPS systems installed in our mobiles & cars etc. There should be a system wherein information keeps being sent in from the traffic and fed into my GPS route map telling me the traffic condition on the route ahead. Traffic information from every road in the city might be picked up by special units set in taxis. These would relay information relating to location and traffic speed on a real time basis. My assumption is that at any point of time, there would be at least enough taxis stuck up in traffic to give me an accurate enough picture of the traffic conditions. The system can be jigged up to broadcast data only when a passenger sits in thus ensuring that we don’t see a taxi parking lot as traffic jam. The error in the readings due to taxis going slowly or not moving on traffic free roads will be quite minimal. Secondly data points will increase in peak traffic giving more information in the time period we require it most in.

The cost of installing the location transmitter and aggregating the information by the taxi firm can be offset by a paid subscription service that Im sure people will be more than will to pay for. Augmenting this might be advertising revenue that could be generated by ads from companies located on the routes the subscriber is looking to move on.

From what I know, google is already working on a system of this sort however, the key driver needs to be the owner of the vehicles that generate the traffic broadcast

Anybody to try it out?

Note to people travelling from Dubai to Al ain and Jabal Hafeet.

Note to everybody travelling from Dubai to Al ain and Jabal Hafeet.

We headed out to Jabal Hafeet yesterday and had been forewarned about the notoriously confusing route (especially once you enter Al Ain). But we have made it back almost on our own and would like to note the tips that helped us through.

Up to Jabal Hafeet

· From Dubai – Take the Al ain Road - E66 towards Al Ain

· Once you enter al ain through the Tea Pot round about (named by me), keep moving ahead following the “other tourist attractions” signposts. In the intial rounds you will have difficulty finding Jabal Hafeet written on any of the signposts and hence this feels like a little leap of faith. You will find yourself moving in the general direction of the town center.

· Just before the town center, you will find signposts that start mentioning Jabal Hafeet & Green Mubarazah. Keep following the signs from then on.

· Landmarks in case you get lost (not in any order)– Hili Fun City, Town center, al ain sports club

Back from Jabal Hafeet

· This route is trickier you don’t get a signpost to Dubai till much later, so there is a possibility of you moving around in circles.

· From Jabal hafeet move towards al ain

· Once nearing al ain, take the route towards town center.

· Somewhere along the way you will start seeing signposts showing routes to jimi mall. move towards jimi mall.

· As you near jimi mall you start getting signposts showing directions to Dubai

· Landmarks in case you get lost (not in any order) – Town center, Jimi Mall, hili border post, hili fun city

Hope this helps. Al ain though is a beautiful city and a wonderful city to get lost. So feel free to chart another way if you feel adventurous

Dreams from my Father by Barack Obama

Dreams from my Father by Barack Obama

Read the title again. Its not bad grammer, it is exactly how it is laid out. The book is about dreams from a father and a son’s journey into the life of his deceased father, into another continent & culture. The recent popularity of Barack Obama has meant that the book assumes a different halo but even shorn of the author’s notoriety this is a very well written autobiography. The book apparently was written before Obama became a senator and a superstar orator and covers his life from childhood, learning the meaning of being differently coloured to his trip to Kenya to discover his roots and his journey into the life of his father and his grand father through the stories told by his people.

In a manner the book is divided almost chronologically into distinct parts:

· Barry growing up in Hawaii

· Barry’s time in Indonesia

· The teenager Barry learning about himself

· Barack’s time in Chicago as an organiser

· Barack’s trip to Kenya

The thread that runs across the book is one of self discovery. It starts with Barry getting to understand the differentness of his situation growing up in Hawaii as a brown kid of a white mother and a black father with a cultural heritage rooted in two continents. The story never flows in a sequential fashion and the writer takes you back and forth through time giving you the back story of the characters. The story then moves onto his adolescence and his discovery of the subculture of the Blacks in America and his attempts to identify with this group. One gets to see his confusion regarding his actual bearings within the place and his attempts to absorb a culture he has not been born into. You get a glimpse of his mother and grandparents’ efforts to help him with his confusion.

The second part of the book relates to his work in Chicago as an organiser among the poorer neighbourhoods of Chicago. As before, the section is studded with stories of people he interacts with and the struggles and compromises that have to be made at each level. One gets to read about his initial stumbles into this process and the lessons he learns while on the field. Obama’s early works made him work closely with the church in the various neighbourhoods and here he realised the enormous organising power of the Church in a modern western society. This is specially true in the lower stratas of the society where the Church forms the only aggregator of the masses. It is the church that works as an assimilator of people and also a cross pollinator of ideas and. Like earlier, this section is filled with stories of characters each straddling the amorphous space between self interest and community service. His interactions also open to him this notion of the purity of culture and how the black people of America look at Africa almost romantically for their roots

The last part of the book deals with his journey into Kenya to discover his roots. Obama has the company of his sister as they travel in time and space through the stories told by the extended family and relive the lives of their father, their grandfather and the ancestors before them. This section stands as complete contrast to the previous one however as one reads through one gets a general feel of the common thread that runs through.

In many ways, this book is about a persons journey as told through the stories of people he comes across. Either deliberately or otherwise, Obama, with his life creates a metaphor of the general coloured people – people in an alien land with identities linked back to Africa. He acknowledges this and undertakes this journey and towards the end, in his meeting with a Kenyan historian realizes that this notion is nothing more than romantic belief – that the pure Africa as imagined the blacks is no more a figment of imagination as the noble past but it is required for the people to maintain their sanity. As with Jewish belief of Zion, the power of this concept is immense only in the imaginary form and quickly dissipates when one starts questioning it.

This book in essence is not a biography but story of the people who feature in Obama’s life. Obama just acts as a recorder and assimilator of stories as he tries to make sense of things. The pattern is evident through the course of the book, you get to hear about a person and his belief and as the author then delves deeper trying to reason the belief. All in all, this book is a wonderful read. This is one person whose memoirs are going to be very interesting.

Living By Numbers

http://www.wired.com/medtech/health/magazine/17-07/lbnp_nike

The latest edition of the Wired Magazine has a very interesting piece on Living by Numbers. About how many of us are turning into self experimenters, observing, recording and analysing minute aspects of our lives to have a better understanding of how we work.

In many ways this is not even news as everybody has some idea about numbers associated to themselves. How much do you weigh, for example. Or hows your BP or blood sugar levels etc. People now are moving beyond to register stuff like mood, feelings and emotions to somehow understand patterns within ourselves.

It would sound hideous to puritans but it’s the next thing I guess.

Dubai Mall Fountains

Awesome video of the Dubai Mall Fountains.

http://www.youtube.com/watch?v=mPENxYIQhGw

FW: Secret of Googlenomics: Data-Fueled Recipe Brews Profitability

In the midst of financial apocalypse, the gadflies and gurus of the global marketplace are gathered at the San Francisco Hilton for the annual meeting of the American Economics Association. The mood is similar to a seismologist convention in the wake of the Big One. Yet surprisingly, one of the most popular sessions has nothing to do with toxic assets, derivatives, or unemployment curves.

"I'm going to talk about online auctions," says Hal Varian, the session's first speaker. Varian is a lanky 62-year-old professor at UC Berkeley's Haas School of Business and School of Information, but these days he's best known as Google's chief economist. This morning's crowd hasn't come for predictions about the credit market; they want to hear about Google's secret sauce.

Varian is an expert on what may be the most successful business idea in history: AdWords, Google's unique method for selling online advertising. AdWords analyzes every Google search to determine which advertisers get each of up to 11 "sponsored links" on every results page. It's the world's biggest, fastest auction, a never-ending, automated, self-service version of Tokyo's boisterous Tsukiji fish market, and it takes place, Varian says, "every time you search." He never mentions how much revenue advertising brings in. But Google is a public company, so anyone can find the number: It was $21 billion last year.

His talk quickly becomes technical. There's the difference between the Generalized Second Price auction model and the Vickrey-Clark-Groves alternative. Game theory takes a turn; so does the Nash Equilibrium. Terms involving the c-word—as in clicks—get tossed around like beach balls at a summer rock festival. Clickthrough rate. Cost per click. Supply curve of clicks. The audience is enthralled.

During the question-and-answer period, a man wearing a camel-colored corduroy blazer raises his hand. "Let me understand this," he begins, half skeptical, half unsure. "You say that an auction happens every time a search takes place? That would mean millions of times a day!"

Varian smiles. "Millions," he says, "is actually quite an understatement."

Why does Google even need a chief economist? The simplest reason is that the company is an economy unto itself. The ad auction, marinated in that special sauce, is a seething laboratory of fiduciary forensics, with customers ranging from giant multinationals to dorm-room entrepreneurs, all billed by the world's largest micropayment system.

Google depends on economic principles to hone what has become the search engine of choice for more than 60 percent of all Internet surfers, and the company uses auction theory to grease the skids of its own operations. All these calculations require an army of math geeks, algorithms of Ramanujanian complexity, and a sales force more comfortable with whiteboard markers than fairway irons.

Varian, an upbeat, avuncular presence at the Googleplex in Mountain View, California, serves as the Adam Smith of the new discipline of Googlenomics. His job is to provide a theoretical framework for Google's business practices while leading a team of quants to enforce bottom-line discipline, reining in the more propellerhead propensities of the company's dominant engineering culture.

Googlenomics actually comes in two flavors: macro and micro. The macroeconomic side involves some of the company's seemingly altruistic behavior, which often baffles observers. Why does Google give away products like its browser, its apps, and the Android operating system for mobile phones? Anything that increases Internet use ultimately enriches Google, Varian says. And since using the Web without using Google is like dining at In-N-Out without ordering a hamburger, more eyeballs on the Web lead inexorably to more ad sales for Google.

The microeconomics of Google is more complicated. Selling ads doesn't generate only profits; it also generates torrents of data about users' tastes and habits, data that Google then sifts and processes in order to predict future consumer behavior, find ways to improve its products, and sell more ads. This is the heart and soul of Googlenomics. It's a system of constant self-analysis: a data-fueled feedback loop that defines not only Google's future but the future of anyone who does business online.

When the American Economics Association meets next year, the financial crisis may still be topic A. But one of the keynote speakers has already been chosen: Googlenomist Hal Varian.

Ironically, economics was a distant focus in the first days of Google. After Larry Page and Sergey Brin founded the company in 1998, they channeled their energy into its free search product and left much of the business planning to a 22-year-old Stanford graduate named Salar Kamangar, Google's ninth employee. The early assumption was that although ads would be an important source of revenue, licensing search technology and selling servers would be just as lucrative. Page and Brin also believed that ads should be useful and welcome—not annoying intrusions. Kamangar and another early Googler, Eric Veach, set out to implement that ideal. Neither had a background in business or economics. Kamangar had been a biology major, and Veach's field of study was computer science.

Hal Varian, hight priest of Googlenomics.
Photo: Joe Pugliese

Google's ads were always plain blocks of text relevant to the search query. But at first, there were two kinds. Ads at the top of the page were sold the old-fashioned way, by a crew of human beings headquartered largely in New York City. Salespeople wooed big customers over dinner, explaining what keywords meant and what the prices were. Advertisers were then billed by the number of user views, or impressions, regardless of whether anyone clicked on the ad. Down the right side were other ads that smaller businesses could buy directly online. The first of these, for live mail-order lobsters, was sold in 2000, just minutes after Google deployed a link reading see your ad here.

But as the business grew, Kamangar and Veach decided to price the slots on the side of the page by means of an auction. Not an eBay-style auction that unfolds over days or minutes as bids are raised or abandoned, but a huge marketplace of virtual auctions in which sealed bids are submitted in advance and winners are determined algorithmically in fractions of a second. Google hoped that millions of small and medium companies would take part in the market, so it was essential that the process be self-service. Advertisers bid on search terms, or keywords, but instead of bidding on the price per impression, they were bidding on a price they were willing to pay each time a user clicked on the ad. (The bid would be accompanied by a budget of how many clicks the advertiser was willing to pay for.) The new system was called AdWords Select, while the ads at the top of the page, with prices still set by humans, was renamed AdWords Premium.

One key innovation was that all the sidebar slots on the results page were sold off in a single auction. (Compare that to an early pioneer of auction-driven search ads, Overture, which held a separate auction for each slot.) The problem with an all-at-once auction, however, was that advertisers might be inclined to lowball their bids to avoid the sucker's trap of paying a huge amount more than the guy just below them on the page. So the Googlers decided that the winner of each auction would pay the amount (plus a penny) of the bid from the advertiser with the next-highest offer. (If Joe bids $10, Alice bids $9, and Sue bids $6, Joe gets the top slot and pays $9.01. Alice gets the next slot for $6.01, and so on.) Since competitors didn't have to worry about costly overbidding errors, the paradoxical result was that it encouraged higher bids.

"Eric Veach did the math independently," Kamangar says. "We found out along the way that second-price auctions had existed in other forms in the past and were used at one time in Treasury auctions." (Another crucial innovation had to do with ad quality, but more on that later.)

Google's homemade solution to its ad problem impressed even Paul Milgrom, the Stanford economist who is to auction theory what Letitia Baldridge is to etiquette. "I've begun to realize that Google somehow stumbled on a level of simplification in ad auctions that was not included before," he says. And applying a variation on second-price auctions wasn't just a theoretical advance. "Google immediately started getting higher prices for advertising than Overture was getting."

Google hired Varian in May 2002, a few months after implementing the auction- based version of AdWords. The offer came about when Google's then-new CEO, Eric Schmidt, ran into Varian at the Aspen Institute and they struck up a conversation about Internet issues. Schmidt was with Larry Page, who was pushing his own notions about how some of the big problems in business and science could be solved by using computation and analysis on an unprecedented scale. Varian remembers thinking, "Why did Eric bring his high-school nephew?"

Schmidt, whose father was an economist, invited Varian to spend a day or two a week at Google. On his first visit, Varian asked Schmidt what he should do. "Why don't you take a look at the ad auction?" Schmidt said.

Google had already developed the basics of AdWords, but there was still plenty of tweaking to do, and Varian was uniquely qualified to "take a look." As head of the information school at UC Berkeley and coauthor (with Carl Shapiro) of a popular book called Information Rules: A Strategic Guide to the Network Economy, he was already the go-to economist on ecommerce.

At the time, most online companies were still selling advertising the way it was done in the days of Mad Men. But Varian saw immediately that Google's ad business was less like buying traditional spots and more like computer dating. "The theory was Google as yenta—matchmaker," he says. He also realized there was another old idea underlying the new approach: A 1983 paper by Harvard economist Herman Leonard described using marketplace mechanisms to assign job candidates to slots in a corporation, or students to dorm rooms. It was called a two-sided matching market. "The mathematical structure of the Google auction," Varian says, "is the same as those two-sided matching markets."

Varian tried to understand the process better by applying game theory. "I think I was the first person to do that," he says. After just a few weeks at Google, he went back to Schmidt. "It's amazing!" Varian said. "You've managed to design an auction perfectly."

To Schmidt, who had been at Google barely a year, this was an incredible relief. "Remember, this was when the company had 200 employees and no cash," he says. "All of a sudden we realized we were in the auction business."

It wasn't long before the success of AdWords Select began to dwarf that of its sister system, the more traditional AdWords Premium. Inevitably, Veach and Kamangar argued that all the ad slots should be auctioned off. In search, Google had already used scale, power, and clever algorithms to change the way people accessed information. By turning over its sales process entirely to an auction-based system, the company could similarly upend the world of advertising, removing human guesswork from the equation.

The move was risky. Going ahead with the phaseout—nicknamed Premium Sunset—meant giving up campaigns that were selling for hundreds of thousands of dollars, for the unproven possibility that the auction process would generate even bigger sums. "We were going to erase a huge part of the company's revenue," says Tim Armstrong, then head of direct sales in the US. (This March, Armstrong left Google to become AOL's new chair and CEO.) "Ninety-nine percent of companies would have said, 'Hold on, don't make that change.' But we had Larry, Sergey, and Eric saying, 'Let's go for it.'"

News of the switch jacked up the Maalox consumption among Google's salespeople. Instead of selling to corporate giants, their job would now be to get them to place bids in an auction? "We thought it was a little half-cocked," says Jeff Levick, an early leader of the Google sales team. The young company wasn't getting rid of its sales force (though the system certainly helped Google run with far fewer salespeople than a traditional media company) but was asking them to get geekier, helping big customers shape online strategies as opposed to simply selling ad space.

Levick tells a story of visiting three big customers to inform them of the new system: "The guy in California almost threw us out of his office and told us to fuck ourselves. The guy in Chicago said, 'This is going to be the worst business move you ever made.' But the guy in Massachusetts said, 'I trust you.'"

That client knew math, says Levick, whose secret weapon was the numbers. When the data was crunched—and Google worked hard to give clients the tools needed to run the numbers themselves—advertisers saw that the new system paid off for them, too.

AdWords was such a hit that Google went auction-crazy. The company used auctions to place ads on other Web sites (that program was dubbed AdSense). "But the really gutsy move," Varian says, "was using it in the IPO." In 2004, Google used a variation of a Dutch auction for its IPO; Brin and Page loved that the process leveled the playing field between small investors and powerful brokerage houses. And in 2008, the company couldn't resist participating in the FCC's auction to reallocate portions of the radio spectrum.

Google even uses auctions for internal operations, like allocating servers among its various business units. Since moving a product's storage and computation to a new data center is disruptive, engineers often put it off. "I suggested we run an auction similar to what the airlines do when they oversell a flight. They keep offering bigger vouchers until enough customers give up their seats," Varian says. "In our case, we offer more machines in exchange for moving to new servers. One group might do it for 50 new ones, another for 100, and another won't move unless we give them 300. So we give them to the lowest bidder—they get their extra capacity, and we get computation shifted to the new data center."

The transition to an all-auction sales model was a milestone for Google, ensuring that its entire revenue engine would run with the same computer-science fervor as its search operation. Now, when Google recruits alpha geeks, it is just as likely to have them focus on AdWords as on search or apps.

The across-the-board emphasis on engineering, mathematical formulas, and data-mining has made Google a new kind of company. But to fully understand why, you have to go back and look under AdWords' hood.

Most people think of the Google ad auction as a straightforward affair. In fact, there's a key component that few users know about and even sophisticated advertisers don't fully understand. The bids themselves are only a part of what ultimately determines the auction winners. The other major determinant is something called the quality score. This metric strives to ensure that the ads Google shows on its results page are true, high-caliber matches for what users are querying. If they aren't, the whole system suffers and Google makes less money.

Google determines quality scores by calculating multiple factors, including the relevance of the ad to the specific keyword or keywords, the quality of the landing page the ad is linked to, and, above all, the percentage of times users actually click on a given ad when it appears on a results page. (Other factors, Google won't even discuss.) There's also a penalty invoked when the ad quality is too low—in such cases, the company slaps a minimum bid on the advertiser. Google explains that this practice—reviled by many companies affected by it—protects users from being exposed to irrelevant or annoying ads that would sour people on sponsored links in general. Several lawsuits have been filed by would-be advertisers who claim that they are victims of an arbitrary process by a quasi monopoly.

You can argue about fairness, but arbitrary it ain't. To figure out the quality score, Google needs to estimate in advance how many users will click on an ad. That's very tricky, especially since we're talking about billions of auctions. But since the ad model depends on predicting clickthroughs as perfectly as possible, the company must quantify and analyze every twist and turn of the data. Susan Wojcicki, who oversees Google's advertising, refers to it as "the physics of clicks."

During Varian's second summer in Mountain View, when he was still coming in only a day or two a week, he asked a recently hired computer scientist from Stanford named Diane Tang to create the Google equivalent of the Consumer Price Index, called the Keyword Pricing Index. "Instead of a basket of goods like diapers and beer and doughnuts, we have keywords," says Tang, who is known internally as the Queen of Clicks.

The Keyword Pricing Index is a reality check. It alerts Google to any anomalous price bubbles, a sure sign that an auction isn't working properly. Categories are ranked by the cost per click that advertisers generally have to pay, weighted by distribution, and then separated into three bundles: high cap, mid cap, and low cap. "The high caps are very competitive keywords, like 'flowers' and 'hotels,'" Tang says. In the mid-cap realm you have keywords that may vary seasonally—the price to place ads alongside results for "snowboarding" skyrockets during the winter. Low caps like "Massachusetts buggy whips" are the stuff of long tails.

Tang's index is just one example of a much broader effort. As the amount of data at the company's disposal grows, the opportunities to exploit it multiply, which ends up further extending the range and scope of the Google economy. So it's utterly essential to calculate correctly the quality scores that prop up AdWords.

"The people working for me are generally econometricians—sort of a cross between statisticians and economists," says Varian, who moved to Google full-time in 2007 (he's on leave from Berkeley) and leads two teams, one of them focused on analysis.

"Google needs mathematical types that have a rich tool set for looking for signals in noise," says statistician Daryl Pregibon, who joined Google in 2003 after 23 years as a top scientist at Bell Labs and AT&T Labs. "The rough rule of thumb is one statistician for every 100 computer scientists."

Keywords and click rates are their bread and butter. "We are trying to understand the mechanisms behind the metrics," says Qing Wu, one of Varian's minions. His specialty is forecasting, so now he predicts patterns of queries based on the season, the climate, international holidays, even the time of day. "We have temperature data, weather data, and queries data, so we can do correlation and statistical modeling," Wu says. The results all feed into Google's backend system, helping advertisers devise more-efficient campaigns.

To track and test their predictions, Wu and his colleagues use dozens of onscreen dashboards that continuously stream information, a sort of Bloomberg terminal for the Googlesphere. Wu checks obsessively to see whether reality is matching the forecasts: "With a dashboard, you can monitor the queries, the amount of money you make, how many advertisers you have, how many keywords they're bidding on, what the rate of return is for each advertiser."

Wu calls Google "the barometer of the world." Indeed, studying the clicks is like looking through a window with a panoramic view of everything. You can see the change of seasons—clicks gravitating toward skiing and heavy clothes in winter, bikinis and sunscreen in summer—and you can track who's up and down in pop culture. Most of us remember news events from television or newspapers; Googlers recall them as spikes in their graphs. "One of the big things a few years ago was the SARS epidemic," Tang says. Wu didn't even have to read the papers to know about the financial meltdown—he saw the jump in people Googling for gold. And since prediction and analysis are so crucial to AdWords, every bit of data, no matter how seemingly trivial, has potential value.

Since Google hired Varian, other companies, like Yahoo, have decided that they, too, must have a chief economist heading a division that scrutinizes auctions, dashboards, and econometric models to fine-tune their business plan. In 2007, Harvard economist Susan Athey was surprised to get a summons to Redmond to meet with Steve Ballmer. "That's a call you take," she says. Athey spent last year working in Microsoft's Cambridge, Massachusetts, office.

Can the rest of the world be far behind? Although Eric Schmidt doesn't think it will happen as quickly as some believe, he does think that Google-style auctions are applicable to all sorts of transactions. The solution to the glut in auto inventory? Put the entire supply of unsold cars up for bid. That'll clear out the lot. Housing, too: "People use auctions now in cases of distress, like auctioning a house when there are no buyers," Schmidt says. "But you can imagine a situation in which it was a normal and routine way of doing things."

Varian believes that a new era is dawning for what you might call the datarati—and it's all about harnessing supply and demand. "What's ubiquitous and cheap?" Varian asks. "Data." And what is scarce? The analytic ability to utilize that data. As a result, he believes that the kind of technical person who once would have wound up working for a hedge fund on Wall Street will now work at a firm whose business hinges on making smart, daring choices—decisions based on surprising results gleaned from algorithmic spelunking and executed with the confidence that comes from really doing the math.

It's a satisfying development for Varian, a guy whose career as an economist was inspired by a sci-fi novel he read in junior high. "In Isaac Asimov's first Foundation Trilogy, there was a character who basically constructed mathematical models of society, and I thought this was a really exciting idea. When I went to college, I looked around for that subject. It turned out to be economics." Varian is telling this story from his pied-è0-Plex, where he sometimes stays during the week to avoid driving the 40-some miles from Google headquarters to his home in the East Bay. It happens to be the ranch-style house, which Google now owns, where Brin and Page started the company.

There's a wild contrast between this sparsely furnished residence and what it has spawned—dozens of millionaire geeks, billions of auctions, and new ground rules for businesses in a data-driven society that is far weirder than the one Asimov envisioned nearly 60 years ago. What could be more baffling than a capitalist corporation that gives away its best services, doesn't set the prices for the ads that support it, and turns away customers because their ads don't measure up to its complex formulas? Varian, of course, knows that his employer's success is not the result of inspired craziness but of an early recognition that the Internet rewards fanatical focus on scale, speed, data analysis, and customer satisfaction. (A bit of auction theory doesn't hurt, either.) Today we have a name for those rules: Googlenomics. Learn them, or pay the price.

Senior writer Steven Levy (steven_levy@wired.com) wrote about the Kryptos sculpture at CIA headquarters in issue 17.05.

IRONY AT IT'S BEST

IRONY AT IT'S BEST

90 people get the Swine Flu and everybody wants to wear a mask.

A million people have AIDS and no one wants to wear a condom

New office words

-New Words for 2006

TESTICULATING. Waving your arms around and talking sh!t.

BLAMESTORMING. Sitting around in a group, discussing why a deadline
was missed or a project failed, and who was responsible.

SEAGULL MANAGER. A manager who flies in, makes a lot of noise, craps
on everything, and then leaves.

ASSMOSIS. The process by which people seem to absorb success and advancement
by sucking up to the boss rather than working hard.

SALMON DAY. The experience of spending an entire day swimming upstream
only to get screwed and die.

CUBE FARM. An office filled with cubicles

PRAIRIE DOGGING. When someone yells or drops something loudly in a
cube farm, and people's heads pop up over the walls to see that's going
on. (This also applies to applause for a promotion because there may be
cake.)

SITCOMs. Single Income, Two Children, Oppressive Mortgage. What yuppies
turn into when they have children and one of them stops working to stay
home with the kids or start a "home business".

SINBAD. single working girls Single income, no boyfriend and desperate.

STRESS PUPPY. A person who seems to thrive on being stressed out and
whiny.

PERCUSSIVE MAINTENANCE. The fine art of whacking the crap out of an
electronic device to get it to work again.

ADMINISPHERE. The rarefied organisational layers beginning just above
the rank and file. Decisions that fall from the "adminisphere" are often

profoundly inappropriate or irrelevant to the problems they were
designed to solve. This is often affiliated with the dreaded "administrivia"
- needless paperwork and processes.

404. Someone who's clueless. From the World Wide Web error message
"404 Not Found," meaning that the requested document could not
be located.

OHNOSECOND. That minuscule fraction of time in which you realize that
you've just made a BIG mistake (e.g. you've hit 'reply all')

BEER COAT. The invisible but warm coat worn when walking home after
a booze cruise at 3am.

BEER COMPASS. The invisible device that ensures your safe arrival home
after booze cruise, even though you're too drunk to remember where you
live, how you got here, and where you've come from.

BREAKING THE SEAL. Your first pee in the pub, usually after 2 hours
of drinking. After breaking the seal of your bladder, repeat visits to
the toilet will be required every 10 or 15 minutes for the rest of the
night.

JOHNNY-NO-STARS. A young man of substandard intelligence, the typical
adolescent who works in a burger restaurant. The 'no-stars' comes from
the badges displaying stars that staff at fast-food restaurants often wear
to show their level of training.

MILLENNIUM DOMES. The contents of a Wonderbra, i.e. extremely impressive
when viewed from the outside, but there's actually naught in there worth
seeing.

MONKEY BATH. A bath so hot, that when lowering yourself in, you go:
"Oo!Oo!Oo! Aa!Aa!Aa!".

MYSTERY BUS. The bus that arrives at the pub on Friday night while
you're in the toilet after your 10th pint, and whisks away all the unattractive
people so the pub is suddenly packed with stunners when you come back in.

MYSTERY TAXI. The taxi that arrives at your place on Saturday morning
before you wake up, whisks away the stunner you slept with, and leaves
a 10-Pinter in your bed instead.

PEARLHARBOUR. Cold (weather). An example of it would be -

"It's a bit Pearl Harbor" out there (there's a nasty nip in the air)

PICASSO BUM. A woman whose knickers are too small for her, so she looks
like she's got four buttocks

SALAD DODGER. An excellent phrase for an overweight person

SWAMP-DONKEY A deeply unattractive woman

TART FUEL. Bottled premixed spirits, regularly consumed by young women

AEROPLANE BLONDE. One who has bleached/dyed her hair but still has a 'black box'.

GOING FOR A McSHIT. Entering a fast food restaurant with no intention of buying food,
you're just going to the bog. If challenged by a pimply staff member, your declaration to
them is that you'll buy their food afterwards. This known as a McShit with Lies.