Redeye VC

Josh Kopelman

Managing Director of First Round Capital.

espite being coastally challenged (currently living in Philadelphia), Josh has been an active entrepreneur and investor in the Internet industry since its commercialization. In 1992, while he was a student at the Wharton School of the University of Pennsylvania, Josh co-founded Infonautics Corporation – an Internet information company. In 1996, Infonautics went public on the NASDAQ stock exchange.

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Monthly Archives for 2010

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Google wants your voice...

Ursula_2 Is there really something for nothing?  Almost all free services (whether it be network television, online search, or free directory assistance) offer something for free to consumers because it is being subsidized by third-party advertisers.  That’s nothing new or surprising. 

As an investor in Jingle Network’s 1-800-FREE411 service, I’ve spent a lot of time thinking about Google’s free directory assistance offering – and wondering why they are offering it without any advertising.  Why would they take on that cost (including the toll free call + call completion + SMS cost) for nothing?  Is it just to gain market share, or is there another reason?  It was only after I read Tim O’Reilly’s recent blog post, that the answer hit me: Just like the witch Ursula in the Little Mermaid, Google wants your voice.

Take this quote from Mike McCue (CEO of TellMe) from February of 2007 (just two months before Microsoft bought TellMe):

“…our search index is better than Google's right now. The grammars that we have -- we do about 10 billion speech utterances a year. So what we are able to do is make the speech recognition system smarter and smarter. And that is something that Google can't get until they get that similar kind of traffic. How are they going to get that traffic? It's a chicken-and-egg problem.”

So is Google collecting our utterances?  It appears they are – check out Google’s 411 Privacy Policy:

“We also collect and store a copy of the voice commands you make to the service, so we can audit, evaluate, and improve the voice recognition capabilities of the service.”

Assuming each call has four utterances – and costs 3 cents each on average – then it would cost Google about $8M for 1 billion utterances (or $80M to match TellMe’s 10 billion utterances).  A bargain compared to buying Tellme for $800M.  I agree with Tim O’Reilly’s conclusion that Google’s launch of a directory assistance product was accelerated (and is driven) by their desire to compete with Microsoft.

But one thing Tim didn’t discuss is the privacy implications of Google’s actions.  Google is recording and storing voice prints of all users - and it's not a stretch to imagine that they are matching them up to caller-id numbers to build out user profiles.  And this is very valuable data to have.  Collect enough voice signatures and you can tell if a caller is a male or a female – and possibly even detect where they are from by their accent. 

And Google’s privacy policy lets them save your recordings for an undisclosed period of time.  Should Google own your voice?  What privacy issues does that raise?  All of the recent   controversy   about Google’s privacy policy doesn’t even contemplate them archiving your voice.  Given the high level of concern about Google’s retention of text search logs, I imagine it won't be long until privacy advocates focus on this as well.  [Insert shameless plug here -> If you don’t want your voice recordings saved, feel free to call 1-800-FREE411 -- they don’t store any voice recordings…]

I think it’s important for consumers to recognize what they are “paying” for a free service.  With 1-800-FREE411, you’re “paying” by listening to their advertisements.  With Google, you’re paying by giving them your voice.  At least Ursula clearly disclosed her bargain to Ariel.