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what does duane do at bing


                                    Bing Webmaster Tools
                                    Speaks at shows, runs forums and
                                    blog, provides guidance on new WM
                                    tools
                                    www.bing.com/toolbox/webmaster

                                    Does he have a clue?
                                    12+ years as an inhouse SEO; ran seo at
                                    MSN; has helped Disney, GAP, Walmart +
                                    http://www.linkedin.com/in/dforrester

         @duaneforrester            And this helps me how?
                                    Blogging since 2001; owns 150 domains;
                                    builds, optimizes and monetizes
                                    https://twitter.com/DuaneForrester


Your data, always fully provided.
Your data, always fully provided.
Your data, always fully provided.
•   Keyword stuffing          •   SEO software works           •    Google and MSN Search launch                                                        •    Google fights spam
    all the rage                  very well for #1             •    Word spreads that links help rankings                                                    with Florida update;
•   SE submissions                placements                   •    DMOZ launches and starts directory                   •       First paid link             hurts legit sites
    help rankings             •   cloaking makes its                movement                                                     network appears        •    Blogging takes off
                                  appearance                                                                                                            •    Text Link Ads creates
                                                                                                                                                             network link buying
                                                                                             •   Google Toolbar shows PR –
              •       Dawn of modern search                                                      drives link requests
                      engines w/Altavista                                                                                                                    •     Google notes the
              •       Death of SE submissions                                                                                                                      “sandbox”
                                                                          •    First SEO conference
                                                                               held: SE Strategies                                                           •     Link Farms appear



      1994                  1995              1997                 1998             1999                 2000                    2002              2003                    2004


      2005                  2006              2007                 2008             2009                 2010                    2011              2012                  2013


                                                                                                                                                                            •   Social
                  •   XML sitemaps                   •   Google’s “Brand”           •   Canonical tag                        •    Google launches G+                            signals
                      jointly supported                  update uses “trust             appears                              •    G launches +1, tells                          continue
                      by all engines                     signals” to restack        •   Caffeine rolls out                        sites they rank                               to
                                                         SERP around                    allowing faster                           better displaying it                          influence
                                                         brands                         indexing – “real                                                                        SERPs
                                                                                        time” search is here         •   Bing partners with
•   Nofollow tags appear;            •    Universal search appears                  •   Tweets integrated                Facebook to                     •       Bing expands
    PR sculpting follows             •    Text Link Ads banned by Google                showing future of                integrate social                        social inclusion
•   G Jagger/BigDaddy                •    Wikipedia shows the future –                  social influencing               signals into SERPs                      with
    updates seek link spam                domain authority through                      search                       •   rich snippets                           FB, Twitter, Quora
                                          content depth                                                                  starting to be used                     & 4Square
                                                                                                                         by sites                        •       Rich Snippets
                                                                                                                                                                 impacting SERPs
    Your data, always fully provided.                                                   Data credit: gossip.greenlightdigital.com/blog/the-history-and-evolution-of-seo/
Where does Social fit in?




             Content         Social   User Experience   Link Building   SEO



Your data, always fully provided.
• Signal of topical authority
 • Real-time – engines want fresh
   content, fast
 • Integrated social signals influence click
   actions of searchers
 • Social signals remain only a few of
   thousands of signals for organic
   ranking




How users click on your results can impact rankings and when we show cues like your
Facebook friends with results, click rates can be impacted.



Your data, always fully provided.
Search – we're trying to solve…




Your data, always fully provided.   ComScore and Microsoft Internal Analysis
Moving Beyond Queries to Sessions
Increasing Use for More Complex Tasks

            Time Spent on
          Sessions by Length                                  Queries Over Time
                        0-3 mins
         >30 mins          9%                           Exact Repeats
           46%                                              19%                      Partial
                                                                                    Repeats
                                    3-10 mins                                         30%
                    Almost             12%
                                                                        Almost
                    50%                                                 50%
            of all time spent              10-15 mins
                                              10%
                                                                   of queries are
            searching is on                                         returning to
         sessions > 30 minutes                                     previous tasks

                                                        New Queries
                              15-30 mins
                                                           51%
                                 23%




Search Sessions are Long and Repetitive…

Your data, always fully provided.
A hotel that’s near Bryant Park, since
                                    that’s near my meeting, has reliable air
                                    conditioning, good smelling shampoo
                                    and a shower taller than me. A decent
                                    bar is nice to have. A coffee maker in the
                                    room is critical. I don’t care if it’s
                                    Starwood. Needs to be under
                                    $200/night.



Your data, always fully provided.
How social impacts search




                                    Hover




Your data, always fully provided.
The Case for Social
Humanity is leaving its traces…




Your data, always fully provided.
More than just traces, a collective convo…




 http://www.facebook.com/notes/facebook-
 engineering/visualizing-
 friendships/469716398919

Your data, always fully provided.
Twitter on NYE 2010




Your data, always fully provided.
•   Crawlability                                                        •   Content
     –   Xml sitemaps                                                        –      Build based on keyword research
     –   Navigational structure                                              –      Down-level experience enhances discoverability
     –   Rich media cautions                                                 –      Keep out of rich media and images
     –   Graceful degradation                                                –      250 words per page or more
     –   URL structure                                                       –      Produce new content frequently
     –   Robots.txt                                                          –      Make it unique – don’t reuse content from other
•   Site Structure                                                                  sources
     –   Links                                                               –      Content management – using 301s to reclaim value
                                                                                    from retiring content/pages
     –   URL structure and keyword usage                                     –      <LINK> canonical to help engines understand which
     –   Clean URLs – no extraneous parameters                                      page should be indexed and have value attributed to it
         (sessions, tracking, etc.)                                          –      404 error page management to help cleanse old pages
     –   HTML & XML sitemaps                                                        from search engine indexes
     –   Content hierarchy                                              •   Links
     –   Global navigation – springs form hierarchy planning +               –      Plan for incoming & outgoing link generation
         style of nav (breadcrumb, link lists, etc.)
     –   Rich media – don’t bury links in Javascript/flash                   –      Internal & external link management
         /silverlight/AJAX                                                   –      Content selection – planning where to link to
•   On-Page                                                                  –      Link promotion via social spaces – direct traffic & seo
                                                                                    value
     –   Head copy                                                           –      Managing anchor text properly
           •   Titles – unique, relevant, 60 characters or so long
           •   Descriptions – unique, relevant, grammatically
                                                                             –      URL structure can help insert keywords where they are
               correct, 160 or fewer characters (Google shows up to                 needed
               160 characters)                                          •   Social
     –   Body Copy                                                           –      Build your community
           •   H1, H2 and other H tag usage                                  –      Interact often
           •   ALT tag importance & usage                                    –      Share useful content
           •   Keyword usage within the content/text – see “Perfectly
               Optimized Page” image                                         –      Be consistent and useful
           •   Anchor text – using target keywords to support other          –      Grow facebook, twitter, etc.
               internal pages

Your data, always fully provided.
A Changing “Web of Objects”
 Real-Time Firehose                 People            Services




 Devices                            Places/Things   Multimedia


Your data, always fully provided.
To crawl a URL costs roughly a penny…a little less, in fact

                               There are over a trillion pages online, from ~ 650 million sites

                               We need to crawl them all to see if they’re worth indexing




             REAL-TIME               SOCIAL                       LOCAL & MOBILE COMMERCE




   DEVICES                   PLATFORMS                          SERVICES




Your data, always fully provided.                                                                 18
Your data, always fully provided.
Reinventing Search Across 3
           Dimensions
    Information
    Architecture
    Creation of new
    information via social
    graph and geospatial
    index
    Interaction Model
    Not just mouse and
    keyboard, but also
    voice, touch, gesture &
    vision
    Entry Points
    Not just browser, but
    devices, services and
    social networks




Your data, always fully provided.
Search - Evolved
Deliver knowledge by computationally understanding user intent.

    “Linda”          Query           Intent Detection            Task Derivation
                                     •   Who                 •    Purchase
                                     •   Where               •    Install
                 “home gym”          •   Others              •    Sell
                                     •   Semantic            •    Set fire to
                                     •   Research            •    Impress friends




                         Content
                         Services
                         Media           +              UX
                         Real Time


Your data, always fully provided.
Mobile will continue to influence social




Your data, always fully provided.
Your data, always fully provided.
• Build social followers & fans
   organically
 • Wall posts/tweets with links
   are perceived as more
   credible and useful
 • Share willingly and freely
 • Track results to understand
   what engages people




Your data, always fully provided.
• Leverage trusted sources
 • You can create a
   pattern, streamlining
   information gathering &
   sharing
 • Dump ideas that fail to
   resonate with followers
 • Prove your worth and
   people will follow



Your data, always fully provided.   image credit: http://mashable.com/2011/01/10/social-content-strategy/
• Use hooks to segment (more
   in a minute)
 • Plenty of niche areas to
   explore/exploit – start your
   fight where you can dominate
 • Choose your voice wisely;
   don’t be afraid to express an
   informed opinion
 • Watch what users respond
   to, then amplify along those
   lines
Your data, always fully provided.
• Be realistic – this is a
   business after all
 • Set goals and plan your
   work
 • There are no failures, just
   learning opportunities
 • Be thoughtful, helpful and
   informed




Your data, always fully provided.
•   So you want more shares for your content, do you?
    Try these ideas.
      •   Create lists: people love to consume content in
          list-form. Its quick, easy and simple.
      •   Use hooks: ego, humor, anger, contrarian – be
          careful with them, but when used well, they are
          highly effective.
      •   Participate in communities: when you are
          valued member of a community, the community
          supports you.
      •   Share others’ information: people love when
          what they share gets shared itself. Share from
          trusted sources.
      •   Ask questions: your followers will love the
          interaction and it’ll grow your following as
          others engage.
    Your data, always fully provided.
Trusted RSS feeds




                                                AUTOMATED
               MANUAL               AUTOMATED


                   Copy &
                    Paste


Your data, always fully provided.
•                              www.bing.com/webmaster
        •
            •            www.hootsuite.com
            •           tapbots.com/software/tweetbot/
            •         www.echofon.com/
        •
            •            statigr.am/
            •              inst.me/
        •
            •          www.curalate.com/
        •             www.evernote.com
        •           www.ifttt.com
        •            www.trackur.com
        •
            •          www.sprinklr.com/
            •         www.visibletechnologies.com/
        •                   www.socialmention.com
        •                         mehdoh.com/


Your data, always fully provided.
Your data, always fully provided.

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Bing Webmaster Tools Search and Social Webinar

  • 1.
  • 2. what does duane do at bing Bing Webmaster Tools Speaks at shows, runs forums and blog, provides guidance on new WM tools www.bing.com/toolbox/webmaster Does he have a clue? 12+ years as an inhouse SEO; ran seo at MSN; has helped Disney, GAP, Walmart + http://www.linkedin.com/in/dforrester @duaneforrester And this helps me how? Blogging since 2001; owns 150 domains; builds, optimizes and monetizes https://twitter.com/DuaneForrester Your data, always fully provided.
  • 3. Your data, always fully provided.
  • 4. Your data, always fully provided.
  • 5. Keyword stuffing • SEO software works • Google and MSN Search launch • Google fights spam all the rage very well for #1 • Word spreads that links help rankings with Florida update; • SE submissions placements • DMOZ launches and starts directory • First paid link hurts legit sites help rankings • cloaking makes its movement network appears • Blogging takes off appearance • Text Link Ads creates network link buying • Google Toolbar shows PR – • Dawn of modern search drives link requests engines w/Altavista • Google notes the • Death of SE submissions “sandbox” • First SEO conference held: SE Strategies • Link Farms appear 1994 1995 1997 1998 1999 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 • Social • XML sitemaps • Google’s “Brand” • Canonical tag • Google launches G+ signals jointly supported update uses “trust appears • G launches +1, tells continue by all engines signals” to restack • Caffeine rolls out sites they rank to SERP around allowing faster better displaying it influence brands indexing – “real SERPs time” search is here • Bing partners with • Nofollow tags appear; • Universal search appears • Tweets integrated Facebook to • Bing expands PR sculpting follows • Text Link Ads banned by Google showing future of integrate social social inclusion • G Jagger/BigDaddy • Wikipedia shows the future – social influencing signals into SERPs with updates seek link spam domain authority through search • rich snippets FB, Twitter, Quora content depth starting to be used & 4Square by sites • Rich Snippets impacting SERPs Your data, always fully provided. Data credit: gossip.greenlightdigital.com/blog/the-history-and-evolution-of-seo/
  • 6. Where does Social fit in? Content Social User Experience Link Building SEO Your data, always fully provided.
  • 7. • Signal of topical authority • Real-time – engines want fresh content, fast • Integrated social signals influence click actions of searchers • Social signals remain only a few of thousands of signals for organic ranking How users click on your results can impact rankings and when we show cues like your Facebook friends with results, click rates can be impacted. Your data, always fully provided.
  • 8. Search – we're trying to solve… Your data, always fully provided. ComScore and Microsoft Internal Analysis
  • 9. Moving Beyond Queries to Sessions Increasing Use for More Complex Tasks Time Spent on Sessions by Length Queries Over Time 0-3 mins >30 mins 9% Exact Repeats 46% 19% Partial Repeats 3-10 mins 30% Almost 12% Almost 50% 50% of all time spent 10-15 mins 10% of queries are searching is on returning to sessions > 30 minutes previous tasks New Queries 15-30 mins 51% 23% Search Sessions are Long and Repetitive… Your data, always fully provided.
  • 10. A hotel that’s near Bryant Park, since that’s near my meeting, has reliable air conditioning, good smelling shampoo and a shower taller than me. A decent bar is nice to have. A coffee maker in the room is critical. I don’t care if it’s Starwood. Needs to be under $200/night. Your data, always fully provided.
  • 11. How social impacts search Hover Your data, always fully provided.
  • 12. The Case for Social
  • 13. Humanity is leaving its traces… Your data, always fully provided.
  • 14. More than just traces, a collective convo… http://www.facebook.com/notes/facebook- engineering/visualizing- friendships/469716398919 Your data, always fully provided.
  • 15. Twitter on NYE 2010 Your data, always fully provided.
  • 16. Crawlability • Content – Xml sitemaps – Build based on keyword research – Navigational structure – Down-level experience enhances discoverability – Rich media cautions – Keep out of rich media and images – Graceful degradation – 250 words per page or more – URL structure – Produce new content frequently – Robots.txt – Make it unique – don’t reuse content from other • Site Structure sources – Links – Content management – using 301s to reclaim value from retiring content/pages – URL structure and keyword usage – <LINK> canonical to help engines understand which – Clean URLs – no extraneous parameters page should be indexed and have value attributed to it (sessions, tracking, etc.) – 404 error page management to help cleanse old pages – HTML & XML sitemaps from search engine indexes – Content hierarchy • Links – Global navigation – springs form hierarchy planning + – Plan for incoming & outgoing link generation style of nav (breadcrumb, link lists, etc.) – Rich media – don’t bury links in Javascript/flash – Internal & external link management /silverlight/AJAX – Content selection – planning where to link to • On-Page – Link promotion via social spaces – direct traffic & seo value – Head copy – Managing anchor text properly • Titles – unique, relevant, 60 characters or so long • Descriptions – unique, relevant, grammatically – URL structure can help insert keywords where they are correct, 160 or fewer characters (Google shows up to needed 160 characters) • Social – Body Copy – Build your community • H1, H2 and other H tag usage – Interact often • ALT tag importance & usage – Share useful content • Keyword usage within the content/text – see “Perfectly Optimized Page” image – Be consistent and useful • Anchor text – using target keywords to support other – Grow facebook, twitter, etc. internal pages Your data, always fully provided.
  • 17. A Changing “Web of Objects” Real-Time Firehose People Services Devices Places/Things Multimedia Your data, always fully provided.
  • 18. To crawl a URL costs roughly a penny…a little less, in fact There are over a trillion pages online, from ~ 650 million sites We need to crawl them all to see if they’re worth indexing REAL-TIME SOCIAL LOCAL & MOBILE COMMERCE DEVICES PLATFORMS SERVICES Your data, always fully provided. 18
  • 19. Your data, always fully provided.
  • 20. Reinventing Search Across 3 Dimensions Information Architecture Creation of new information via social graph and geospatial index Interaction Model Not just mouse and keyboard, but also voice, touch, gesture & vision Entry Points Not just browser, but devices, services and social networks Your data, always fully provided.
  • 21. Search - Evolved Deliver knowledge by computationally understanding user intent. “Linda” Query Intent Detection Task Derivation • Who • Purchase • Where • Install “home gym” • Others • Sell • Semantic • Set fire to • Research • Impress friends Content Services Media + UX Real Time Your data, always fully provided.
  • 22. Mobile will continue to influence social Your data, always fully provided.
  • 23. Your data, always fully provided.
  • 24. • Build social followers & fans organically • Wall posts/tweets with links are perceived as more credible and useful • Share willingly and freely • Track results to understand what engages people Your data, always fully provided.
  • 25. • Leverage trusted sources • You can create a pattern, streamlining information gathering & sharing • Dump ideas that fail to resonate with followers • Prove your worth and people will follow Your data, always fully provided. image credit: http://mashable.com/2011/01/10/social-content-strategy/
  • 26. • Use hooks to segment (more in a minute) • Plenty of niche areas to explore/exploit – start your fight where you can dominate • Choose your voice wisely; don’t be afraid to express an informed opinion • Watch what users respond to, then amplify along those lines Your data, always fully provided.
  • 27. • Be realistic – this is a business after all • Set goals and plan your work • There are no failures, just learning opportunities • Be thoughtful, helpful and informed Your data, always fully provided.
  • 28. So you want more shares for your content, do you? Try these ideas. • Create lists: people love to consume content in list-form. Its quick, easy and simple. • Use hooks: ego, humor, anger, contrarian – be careful with them, but when used well, they are highly effective. • Participate in communities: when you are valued member of a community, the community supports you. • Share others’ information: people love when what they share gets shared itself. Share from trusted sources. • Ask questions: your followers will love the interaction and it’ll grow your following as others engage. Your data, always fully provided.
  • 29. Trusted RSS feeds AUTOMATED MANUAL AUTOMATED Copy & Paste Your data, always fully provided.
  • 30. www.bing.com/webmaster • • www.hootsuite.com • tapbots.com/software/tweetbot/ • www.echofon.com/ • • statigr.am/ • inst.me/ • • www.curalate.com/ • www.evernote.com • www.ifttt.com • www.trackur.com • • www.sprinklr.com/ • www.visibletechnologies.com/ • www.socialmention.com • mehdoh.com/ Your data, always fully provided.
  • 31. Your data, always fully provided.

Editor's Notes

  1.  From a machine perspective, getting harder to process. From a human perrspective, its harder to make decisions. Social neuroscientists have described this phenom as Decision quicksand where you get sucked into every decision … the amount of choices you have for every decision makes it hard to decide.&quot;There was 5 exabytes of information created between the dawn of civilization through 2003, but that much information is now created every 2 days, and the pace is increasing...People aren&apos;t ready for the technology revolution that&apos;s going to happen to them.&quot; - Eric “Squirrel Boy” Schmidt, 2010. An Exabyte is 1 billion gigabytes. Or about 125MM Windows Phone 7s. So the world is creating enough data to fill a WP7 device for every man, woman, and child in the US – every day. Search engine model on links rapoidluy becoming unable to cope/strained/inprecise (scotty picture). Social isnt a fad, it’s a requirement to parse thru these data (need picture of scotty, other types of media (pics, video, etc that arent ‘indexable’ as a link)All about context -&gt;How much data is out there – there is no way to cut thru the clutter for any query.  Every query ends up beign as ‘important’ as the next one becauae our brains see a huge number of choices, so we assume they are all equally important.  How do we break the tie?----- From:Tren GriffinSent: Friday, April 08, 2011 8:49:54 PM (UTC-08:00) Pacific Time (US &amp; Canada)To:Litebulb - Ideas and Resources (FTE)Subject: Rational InattentionThursday, April 07, 2011   http://economistsview.typepad.com/economistsview/2011/04/rational-inattention.htmlRational InattentionThese models are interesting, but the mathematics underneath them can be challenging (here&apos;s a taste):&apos;Rational Inattention&apos; Guides Overloaded Brains, Helps Economists Understand Market Behavior, by AntonellaTutino, Economic Letter, FRB Dallas: Between Internet news sources, social media and email, people are awash in information, most of it accessible at near-zero cost. Yet, humans possess only a finite capacity to process all of it. The average email user, for example, receives dozens of messages per day. The messages can’t all receive equal attention. How carefully does someone read an email from a sibling or friend before crafting a reply? How closely does a person read an email from the boss?Limitations on the ability to process information force people to make choices regarding the subjects to which they pay more or less attention. Economists have long acknowledged the existence of human cognitive capacities, but only in recent years have models embodying such limits known as “rational inattention” found their way into mainstream macroeconomics.Rational inattention models have a broad range of applications. They may reconcile relatively unchanged prices and volatile ones and how the two play out in aggregate demand in the U.S. economy. Moreover, such models can capture salient features of the business cycle, providing a rationale for sharp contractions or slower expansions. Finally, rational inattention models have significant implications for monetary policy. Since the focus of these models revolves around formation of peoples’ expectations, understanding how individuals perceive the economy is instrumental to policymakers’ efforts to achieve output and price stabilization objectives.Rational Inattention: A PrimerOne macroeconomic school of thought—known as rational expectations—assumes that people fully and quickly process all freely available information. By comparison, under rational inattention theory, information is also fully and freely available, but people lack the capability to quickly absorb it all and translate it into decisions. Rational inattention is based on a simple observation: Attention is a scarce resource and, as such, it must be budgeted wisely.[1]A world with overwhelming amounts of facts and data means prioritizing activities, recognizing individual processing limitations and accepting the consequences when acting, even if all information isn’t fully analyzed. Given a physical constraint on the rate at which people can process information—referred to as Shannon’s channel, after Claude Shannon, a Bell Labs researcher who pioneered information theory in the 1940s—people choose how much attention to devote to different subjects so they can maximize their productivity.This seemingly abstract concept has a familiar resonance with day-to-day experience. For instance, the maximum amount of information that somebody can download from a computer at any one moment cannot exceed a number—the transmission rate—provided by the manufacturer. Likewise, a person cannot instantaneously respond to a given email. The amount of time it takes to answer email depends on its content and how much information that person wants to process to produce a sensible reply. The brain, which has limits on its processing abilities, is the channel through which an individual directs information, from the original email to the reply.Incorporating such limits introduces great complexity into economic models. Still, economists are making progress, and results from this new avenue of research can explain several important aspects of macroeconomic performance. For instance, consider the business cycle, the period of activity between booms and busts. Data tell us that in aggregate, output contractions are faster than output growth during a typical cycle. Yet, mainstream models, whose intrinsically symmetric structure tends to make business expansion and contraction roughly equal, cannot account for this characteristic.Rational inattention theory allows richer modeling that does not assume a symmetry of reactions to positive or negative economic shocks—an unanticipated beneficial boost in technology or an unexpected oil price increase doesn’t produce the same pattern of reactions.Moreover, rational inattention models carry far-reaching policy implications. The underlying theory aims to provide a solid structure to study economic expectations as well as the public’s reaction to change. If central banks successfully reconcile the two, they can more effectively communicate strategies and goals, thus achieving policy objectives.Choosing How to ConsumeData show that individuals react more quickly and strongly to loss of wealth than to an enhanced financial condition. The overall economy reduces output in response to a negative shock more rapidly than it boosts production in the presence of positive developments of the same significance.[2] Rational inattention provides a possible reason for such behavior. Individuals choose bits of information according to their interests; risk aversion may induce people to process negative news faster than positive news. As an example, suppose someone reads in the news that interest rates are falling and businesses are cutting budgets. An interest-rate reduction doesn’t generally prompt people to rush to the bank to obtain a loan so they can consume instantaneously. However, news that companies are cutting expenses, possibly including worker pay, might encourage individuals to more readily seek clarification about their job situation and start making savings plans. Such behavioral differences are an example of an asymmetric response to an economic shock involving consumption and income.Rational inattention theory produces both micro- and macroeconomic dynamics—individual decision making and broader aggregate behaviors—observationally distinct from standard models.[3] These attributes have motivated new research into developing models that make sufficiently specific predictions that can be compared with actual data for individual and group actions.[4]Making Labor ChoicesThe relationship between Shannon channel information processing constraints and the human brain’s capacity suggests how rational inattention may be useful for economic modeling. Consider a person who must decide how much to consume and work while facing uncertainty about wages. Choosing the appropriate amounts and kinds of labor and consumption requires paying attention to current and future savings as well as various ways of earning income from one’s work. Information-processing constraints come into play, limiting the number of combinations the person would realistically evaluate. Applying rational inattention to this situation provides a useful framework for how the task will be undertaken.For example, the theory’s predictions are consistent with business cycles and secular trends in the U.S.—consumption is more changeable than the number of hours worked.[5] People are more likely to modify how much they save than the amount of time worked, a behavior corroborated by data.[6] Moreover, a group of such behaviors, which may greatly vary among individuals, can be much less volatile when taken together in the aggregate.Selling Low, Buying HighWhy are items on sale always noticeable at the supermarket, while price increases get much less visibility? Rational inattention models suggest that stores have an interest in attracting the attention of the customer to temporary price cuts to increase demand in the hope that the merchants can maintain consumption when the items go back to full price and the discount fades. Models of price-setting are designed to generate price and wage rigidity—the notion that goods prices and salary are fixed for a long time.Rational inattention not only accomplishes this, but also explains which types of prices are most likely to remain rigid. Moreover, the theory can account for an important feature shared by many grocery store prices: frequent temporary discounting that reverts to a relatively stable price not prone to change outside of the “sale” periods.[7]Consider the price-setting of a monopolistic producer who pays limited attention to demand. Importantly, the price paths drawn from such models are consistent in ways that rational expectation models are not. For example, under rational inattention, producers’ responses to input shocks, such as a supply disruption, are delayed and gradual; prices are rigid through time, and when changes occur, they are significant. Pricing is asymmetric, with sales (low prices) advertised to pique customer interest while diverting attention from price increases.Computational complexity prevents the building of a rational inattention model that could explain a marketplace in pricing equilibrium, the point at which sellers can attract buyers to purchase all that they have produced. However, the literature has produced one example in which both consumers and producers have limited capacity to process information about prices.[8]In that model, sellers produce a range of similar goods and compete perfectly for shares of the market, while consumers decide what bundle of goods to buy and where to shop. An unanticipated technology change affecting producers provides an outside shock. In this model, firms make real profits even if markets are perfectly competitive and prices don’t change for a prolonged period. Mainstream theory predicts that when markets are perfectly competitive, producers can’t charge a high markup without losing customers. Rational inattention models predict that competitive producers, exploiting the limited ability of consumers to process information about pricing, can make larger profits.Brand-name products are a case in point. They are well advertised and, as a result, people may purchase them instead of often cheaper non-brand-name competitors, though the items may be essentially the same with little difference to justify a premium price.Making Policy ChoicesWhether rigid prices and wages occur because of market structure, such as monopolistic competition, or rational inattention has important policy implications. For instance, regulation may address a monopolistic situation, limiting a firm’s market power. Conversely, if rigidities mainly arise from rational inattention, then efforts should be made to more actively communicate the direction of monetary policy.Rational inattention also strongly affects policymakers’ communications strategies. Most obviously, the theory suggests that rationally inattentive people make the most of available information by analyzing those bits that are very relevant to their decisions and disregarding the rest. As a result, the public can make better decisions with better overall outcomes if policymakers are highly transparent about what they do and why.Because rational inattention theory predicts that people pay attention to information according to their needs, people have little incentive to take note of economic bellwethers in times of stability. By contrast, in volatile periods, market participants will allocate more time analyzing current and future macroeconomic indicators. That can result in more changeable behavior, including overreaction to news and policy changes.Rational inattention implies that monetary policy instruments serve a dual role in the economy—as a stabilizing and signaling device. The theory provides a solid framework to study the effects of the policy changes on private sector behavior by taking into account this double duty.An implication of this suggests that in troubled economic times, central bankers must pay closer attention to their message. By contrast, in less stressful periods, difficult policy choices can be made with less likelihood of market overreaction.In email parlance, it’s almost as if an important announcement has been diverted into a spam folder, where it may sit for a long time while attention is given to the daily flow of news and messages. The critical information is there but escapes detection and reaction until much later, if at all.NotesSee “Implications of Rational Inattention,” by Christopher A. Sims, Journal of Monetary Economics, vol. 50, no. 3, 2003, pp. 665–90, and “Rational Inattention: Beyond the Linear-Quadratic Case,” by Christopher A. Sims, American Economic Review, vol. 96, no. 2, 2006, pp. 158–63. See “Some International Evidence on Output-Inflation Tradeoffs,” by Robert E. Lucas Jr., American Economic Review, vol. 63, no. 3, 1973, pp. 326–34. “The Rigidity of Choices: Lifetime Savings Under Information-Processing Constraints,” by AntonellaTutino, Federal Reserve Bank of Dallas, unpublished paper, 2010. “The Empirical Relevance of Rational Inattention,” by AntonellaTutino, Federal Reserve Bank of Dallas, unpublished paper, 2011. See “Intertemporal Substitution in Macroeconomics,” by N. Gregory Mankiw,  Julio J. Rotemberg and Lawrence H. Summers, The Quarterly Journal of Economics, vol.100, no.1, 1985, pp. 225–51. See “Rationally Inattentive Macroeconomic Wedges,” by AntonellaTutino, Journal of Economic Dynamics and Control, vol. 35, no. 3, 2011, pp. 344–62. See “Rigid Pricing and Rationally Inattentive Consumer,” by FilipMatejka, CERGE-EI Working Paper Series no. 409, April 2010. “Implications of Rational Inattention on Market Power,” by Fabio Araujo and AntonellaTutino, Federal Reserve Bank of Dallas, unpublished paper, 2010.
  2. From Nouns to Verbs
  3. Industry Landscape Let me start by sharing how the industry landscape is evolving, Important trends that are driving the technology trend and business opportunities.  First is real time of the web. Twitter and Facebook are making the web real time. How do you keep track and copy of real time copy? Second is social web. We are witnessing the unfolding of the socialization of the Web where people and the social relationships among people are front and center. In addition to sites and pages, profiles and social graphs become first class citizens of the web. Increasingly, people are using social networks as a main way of interacting with the web.  Groupon and Foursquare: Local &amp; Mobile commerce We are digitizing the planet—every road, building—this opens up business opportunities—the business model may not be sustainable but the notion of daily deals is becoming entrenched—this works for businesses with high fixed costs and low marginal costs—they can take advantage of demand curves—for example, if you call a restaurant you can be guaranteed a table in 2mins, but you pay $25, or you can go at an off time and pay less—daily deals allows the business to manage this-imaging the economic opportunity Bing-Google: Two horse RaceThe top of the food chain/tip of the ice berg for consumer interface is always Search—Search is the consumer gateway for people to access information—the industry has consolidate on a global basis, it’s us and our friends over there—we have a fantastic opportunity by there is a lot of work to do, which I’ll talk about with our strategySo, all those are very, very important trends that have the potential to significantly change the landscape of the online industry. And we see genuine opportunity for us to ride these trends and to build a new paradigm for how to interact with the web, by primarily focusing on task completion. Vertically Integrated CompetitionWe are in an era whereby large companies compete by vertically integrating their assets together Your hardware, your OS your software, your cloud servicesThis is the overarching trendThe technological fundamental reason this is so is you can unlock consumer experiences values and business values cut across all these componentsThere is a lot of working going on at MS----usually we start with a consumer scenario and we say “what can we do on OS, what can we do with cloud based services, in hardwareFor example we’re putting nfc chips in our hardware—imaging the scenario where you can go to store and pay with your cell phoneOr Train stations in China the walls are painted with produce—you just point your phone and you can have it delivered to your house—so the wall is a virtual storeBut you need all of the vertical assets MS has all the assets software/hardward/os/cloud services, including sykpe which is a very important assetSo that’s another overarching trend 
  4. Our strategic vision to breakthrough is to : &quot;re-organize the web for task completion&quot;Key points:Here is a visual way to illustrate our vision by looking at how structurally the web has evolved, and where it is heading towards.The web grew up as a collection of hypertext documents. The structure of the web has been a giant topic graph where the links are connective tissues that hook the trillions of web pages together, and the text within the links, often noun and noun phrases, serving as the topic label for sites and pages. The search model today of mapping keywords to URL works because keywords are a topic expression of interests and we can understand user intent by analyzing keywords,We can also understand the web by analyzing the web content and the topic graph, to make user intent with URLs.However, the web has grown way beyond a collection of documents, it has rapidly become a full blown digital universe, with every person, every place, and everything being digitally represented. As a result, the new emerging structure of the web will enable us to do much better and moreSpecifically:Social: especially the Facebook social graph of 800M profiles, the billions of &quot;likes&quot; and &quot;share&quot; activities, is creating a new structure that enable us to understand user interests much more, enabling new ways to discover and interact. Geospatial: we are building a digital copy of the planet making every place and every road digitally available. This also creates a new and rich structure that connects the web together, enabling new ways to understand user context, and discover and interact much better particularly on mobile devices. Appification of the web: the Apps that are using rich visual controls and much more natural interaction models of touch, voice, gesture, enabling new ways to understand user actions leading to a new and richer structure that will connect all the apps together. Adding all that, the web is much richer in that we can re-organize the web so that Bing can offer much more compelling experiences that truly &quot;enable&quot;, &quot;assist&quot;, and &quot;enrich&quot; any human task. This is how we will breakthrough in Search! TRANSCRIPT OF THIS SLIDE FROM WINDOWS PHONE FIELD SUMMIT:We launched bing about two and a half years ago in June 2009, up to this point we’ve been making progress in terms of search market shares. Almost every month we’re chipping away, we’re growing our market shares, this is good, but not good enough, because we must fundamentally change the game in order to breakthrough, we’re here to breakthrough to lead in the future, not to only chip it away. Now the key is how do we breakthrough, why our partnership with you all is part of breakthrough, let me talk you through our thinking.  So how strategically this is the journey we’re going to be on, so start with, let’s look at the search, understand what’s fundamental about search because that will tell how the breakthrough path will be. Because search at it’s very core, it’s the gateway to enable every consumers to discover and access the digital experiences that live in the web of the online universe. That’s at the core, there’s many different ways of doing it, you can type in key words, you can speak to it, but at its very core it’s a gateway to enable people to discover and access. In order to break through the consumer experience to lead the future generation of search we must write important secular trends that’s causing fundamental information architectural changes, the structure of the web is changing, the way to breakthrough is to write those structure changes. Because otherwise, strategically whatever we can think about, whatever we can do, Google can do the same things, there’s nothing to prevent Google from doing everything we do. But only when we write the fundamental structure change and to connect those structure change with unique Microsoft assets, things that only we have, Google doesn’t have, that truly will enable a strategy, a dominant strategy that enable us to breakthrough, to lead in the future. So let me explain to you how this path can be, to start with, how search works today and we all know the way search works today is you type in key words and you get a list of results and you click on URLs. That’s how we as users navigate the web, the reason why that works, the reason why that works is because the information architecture, the structure of the web is fundamentally a topical graph because if we stop for a moment, reflect on the vastness of the web, the web is truly huge. For bing, our infrastructure footprint is much smaller then Google, but we today see over three trillion pages, meaning that bing’s crawlers see over three trillion URLs and we fetch somewhere between half trillion to one trillion URL, we fetch the URL, we not only have the URL, we fetch it. And each day we discover 50 billion new URLs a day, it’s a huge, huge space. Then you ask the question, what’s the structure that connects all the web together, that enables us to consumer, discover, navigate, as one product because the web is so beautiful we can’t really live without the web today.  All the information, all the knowledge, all the news, sports scores, financial, all that but the structure is really a graph, because that’s how the web gets started, the hyperlinks that connect everything together. The webs are linked together but what’s much more salient is not just those links but the text that you put in each links, any time you link to another site, right, you build the site, you say something about that, it turns out for English that mostly noun phrases, they serve as the topical label, the topical about which the page inside which you’re pointing to. So computationally it’s a topical graph that connects everything together, why this is important, because key words are topical expression of needs and interests. And the reason key words works is because the topical graph, that’s the roads and bridges of the web, you cannot navigate the web differently. Some of you may have heard me use the example print boarding pass. I travel with Southwest, most people if you travel you print boarding pass, the way you do is you type in Southwest into search engine, but Southwest is a geographical concept, it’s a name of book, it’s a name of groups, it’s a name of many different things, search engine will have no idea what you’re trying to do, it will give you everything about southwest, your intent is to print boarding pass but none of us will go to search and type in print boarding pass, the reason is you cannot navigate the web by verbs, the reason is the web isn’t connected by verbs, the web is connected by topical labels; those are the roads and the bridges of the web. It’s good, it’s useful, but it can be much, much better, it can be much, much better and that’s the fundamental start of break through(?) because there’s new information architecture, new information structure that’s being created everyday that we can use to build fantastic and new set of consumers search experience for the future.  Let me talk through some of the key things in our strategy thinking, first is social, because what facebook has done is really a profound phenomena because user profiles, sharing activities, truly become mainstream. Across the globe, the numbers are amazing, on facebook there’s over 4 billion sharing activities per day, 4 billion per day. 1 billion sharing activities per day in the United States, anytime you click a like button, you listen to music on spot a file, you read from Washington Post readers, these information are captured, this person read that news article, this user is interested in this kind of music, so you can imagine, now the digital graph is in additional to topical you have this social graph overlay with interest graph, who is interested in what. And those new information architect enable us to build a new consumer surfaces, new ways of discover and interact. Young generation in particular, I have a daughter, second year in UC Berkley, she use facebook to discover most of the stuff and there’s more to be done, which I’ll talk a little bit more about it. So this is a very, very important part of what we try to do to breakthrough because you’re riding a fundamental train, causing a structural difference in the web and then we have a strong partnership with facebook because it’s particular context that your political equivalent of enemies are enemies and enemies as friends really applies because Google is hell bent try to kill facebook. So as long as Google doesn’t fumble terribly we have a set of opportunities to work with facebook richly because we’re deeply both motivated to defeat Google, to disrupt Google so that’s one important trend we’re doing.  The second a lot of you are pretty much aware of because it’s very germane to mobile devices, it’s the geospatial dimension, because geospatial coordinate, locations become another emerging structure that ties all the detailed experiences together, particularly for mobile devices. Because on the mobile devices typing a URL, clicking on links, it’s just a fundamentally natural and we as human being we all live in the physical world, we connect to other human being, organization, products, services, all in the geographical, geospatial matters so therefore there’s new digital surface areas such as check in, near me now all those that become better ways for you to discover and access and interact. Again, search is about discover, access, interact and these are better ways to type in key words, click on URLs so using spatial is a key dimension to differentiate. We in particular, thanks to a lot of good work from all of you have a ten year partnership with Nokia and they own a company called Navteq, which is strong in geo location datas and Nokia and us are working very, very closely together using our strengths so that we can meaningfully differentiate on the spatial dimensions.  And third on is certainly most important, particularly long term for our company’s overall competitive strategy which is something we call the apptification of the web. Apps is a new form of on ramp, in many ways the OS, the home screen becomes equivalent of the future browser. Because our small form factors when bandwidth was a constraint, using browser, reading pages, is not the best way to discover and interact with different pages. Using apps, using different paradigms, particularly touch, voice, gesture based is much, much more natural that enable the users to interact the digital services much richer. Now, the key, key question is there’s a structural revolution that’s going on, because apps now link together. When you, one day have millions of apps, how do we discover, how do we interact, what’s the connective tissue that hooks all those apps together, that we see is Microsoft opportunity. Because we can build digital experiences that enable all those apps to connect together in rich, meaningful manners, using our company’s unique assets so that we can build a truly differential services and experiences. In particular the collaboration between bing and Windows Phone, the collaboration between bing and Windows 8, the collaboration between bing and Xbox are key initiatives that enable us to build not only new consumer app experiences but create a new digital information architecture so that we can lead for the future.  So those are all the key structural differences that we can harvest. The key things, the key things, that one let’s build a competitive consumer experience that address fundamental, deep, human needs, discover, access, information; that use the web, particularly use the web as delivered through devices, particularly mobile devices, to fundamentally enable, assist, enrich, any human activity. That’s our aspiration and we can see it, we absolutely have the wherewithal, have the resources, have the partnership, to deliver that future mission.  So that’s in a nutshell our vision for the long term future, we say the web is great but can be far, far greater if we can organize the web differently. Today’s web are organized by key words and indexes, URLs, that’s good, but not nearly good enough. We want to reorganize the web so that it fundamentally serves far greater purposes and unlock much, much greater values.
  5. We believe that search will be re-invented along 3 dimensionsThe information architecture will be different as the underlying web architecture moves from just topical to topical, social, geospatial and task oriented.The interaction models will be different; it will no longer be just mouse and keyboard, but also voice, touch, gesture, vision and mutli-modal (multiple way of inputs in the same device)The entry points will be different; no longer just via the browser, but going into devices via apps and operating systems and services, particularly social networks.That in a nutshell is how we think search will be re-invented. With that lets move on to our progress to date…
  6. So once we have all these objects, and begin to understand intent, we can do some magic
  7. 9 billion to 25 billion in the next 8 years