Central Perk

marți, 25 martie 2014

Knowledge Graph 2.0: Now Featuring Your Knowledge

Posted: 24 Mar 2014 04:10 PM PDT

Sometime in January, Google quietly rolled out a change that I believe could revolutionize organic search. Currently, the impact is limited, and it may take months or years for the full effect to be felt, but the underlying shift is fundamental to the future of the Knowledge Graph and the delicate symbiosis between Google and webmasters.

Answer box 1.0

Let's start at the beginning. I've written a lot about the current generation of answer boxes (sometimes called "direct answers" or "one-box answers"). These display quick answers to what are usually concrete questions. For example, if I want to know when the Willis Tower here in Chicago is open, I can search for [Willis tower hours] and get:

Google's ability to understand questions has expanded significantly in the past couple of years, probably pushed forward even more by the Hummingbird update. For example, I can get the same answer box by querying [when is the Sears Tower open].

So, where is this data coming from? Typically, it's coming directly from the Knowledge Graph, and you can spot it pretty easily. Here's the Knowledge Panel for [Willis tower]:

I've added the red arrow â€" as you can see, the information in the answer box is taken directly from a property in the Knowledge Graph. You can easily reverse it, too, to create endless examples. Let's take the property "Construction started: 1970" and turn it into a query, like [when was the sears tower built]. You'll get another answer box:

Most of this information comes from a very limited number of sources, including Freebase, Wikipedia, and Google+. Freebase is structured in terms of entities and properties (think object-based, as opposed to article-based), which makes it a perfect fit for Knowledge Graph.

Google's dilemma

There's a problem, though. The main sources of data for the Knowledge Graph are curated by people. Ironically, Google is facing the same dilemma with Knowledge Graph in 2014 that led to the creation of internet search engines in the first place. Put simply, the scope of information is much too large, and growing too quickly, for any human-edited approach to scale. Google can't just hire Wikipedia editors â€" they need a new data source.

Google is hardly blind to this problem. In a research paper published just this year, Google outlines the basic issue (hat-tip to Andrew Isidoro):

The paper goes on to explain a method of extracting missing knowledge graph data on demand, using Google's existing search technology. Welcome to...

Answer box 2.0

Luckily (for them), Google already has one of the largest data sources on the planet â€" their index of the worldwide web. What if, instead of looking for answers in a limited set of encyclopedic sources, Google could generate answers directly from our websites?

That's exactly what they've done. For example, here's what you'll see at the top of a recent search for [social security tax rate]:

Unlike answer boxes based on the Knowledge Graph, this new format pulls its answer directly from third party websites, giving them attribution via the page title and link. In many ways, this is an additional organic result, and like all answer boxes in the left-hand column, it appears above "#1".

These longer answers look more like search snippets, but there's also a second version, triggered when Google can find a definitive answer on a third-party site. Here's the new answer box for the query [September birthstone]:

This example includes a longer snippet, but the direct answer â€" "Sapphire" â€" is highlighted, more in the style of a traditional answer box. Again, the source page's title and URL is shown below the snippet.

How do we know, beyond the third-party attribution, that this isn't coming from the traditional Knowledge Graph? Try a variation on the query, like [september's birthstone]. I get this result:

Here's the answer box for a longer query [what is september's birthstone]:

Interestingly, the short answer ("sapphire") is no longer capitalized, because that's how Google found it on the source page. In my personal testing, these variations weren't consistent, so Google may be using some kind of query refinement. Regardless of that, it's pretty clear that these answers are being generated on the fly.

The new number one

These answer boxes are essentially a new organic result, and clearly disrupt the traditional top results. So, where are these answers coming from, and how do you get one? We don't have a lot of data yet, but in every case I've seen, the URL used to create the answer box also appears on page one of Google results. So, you have to already be ranking well on the term.

In most of the cases that I've seen so far (again, the data set is small), the answer is coming from the #1 organic position. For example, here's the answer box and #1 result I get for [marine corps' birthday]:

So, military.com is essentially getting two listings on this SERP. In some cases, though, the answer is coming from a result lower on page 1. Here's the answer box and part of page 1 for [richest man in the world]:

In this case, Time Magazine gets credit for the answer box, even though it's all the way down in #8, and Forbes has all three of the top organic spots. What's even worse is that Time article directly cites Forbes as the source, even in the search snippet. So, what's going on here?

I suspect this comes down to fairly basic on-page factors. The main Forbes article is a bit design-heavy (it has limited crawlable text) and uses an "infinite" scroll approach. None of the Forbes pages directly mention the phrase "richest man in the world", especially in proximity to Bill Gates' name.

What if I change my query to something that Forbes targets better, like [world's richest people]? Here's the result I get (all of these searches are incognito, but I can't rule out some sort of query history effect):

It's interesting that Google seems to be inferring that I want to know the world's richest person (and is bolding "Bill Gates"), but doesn't feel that the answer is definitive enough to break it out as a short answer. Even since starting this post, Google has made refinements to the matching system, but currently it seems like on-page keyword targeting is fairly critical.

It's just the beginning

Google clearly has a long way to go. Some of the answer boxes are pretty ridiculous. Take, for example, a search for [hair color]:

This is a pretty ambiguous query, and it doesn't seem well suited for any kind of answer box (let alone one that's one step away from a salon advertisement). Expect Google to put a lot of time and money into improving this system over the next year.

While this post is focused on answer boxes, Google is using a similar approach to expand knowledge panels. For example, here's a search for [biology]:

Notice the "Related topics" section â€" only one of those results is coming from Wikipedia. Google is building a decent chunk of this knowledge panel on sites in their index. The attribution on these is much more subtle â€" only the small, gray text goes to the source site. The blue links (except for "Wikipedia" at the top) go directly to more Google searches.

Is the balance shifting?

It's easy to see how this progression is inevitable â€" Google has to expand the Knowledge Graph, and they can't rely on human editors and static data sources. While this data may be good for users, it represents a shift in the balance between Google and webmasters. There's always been an implied symbiosis â€" Google crawls our sites and extracts information, but they send us traffic in return. We may not always like how they do things, but the end result has benefitted millions of site owners.

What happens when a user can get a simple answer quickly, and that answer is extracted from a third party page and cannibalizes the organic clicks? What happens when third-party data is being used not to drive traffic to the source, but to more Google searches? It seems to me that the symbiosis is threatened.

For now, there's not much you can do. You can work to retune your on-page content to appear in these new entities, but you do so at the risk of harming your own organic traffic. It's probably better to be in the answer box than let your competitor be there, but it's hardly an ideal choice. The best I can say is to be aware of your money terms â€" not just how you're ranking, but how those SERPs actually look in context. At some point, we may all have to decide if giving away our data is worth what we get in return.

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AdSense Insider March 2014

Your Publisher ID: ca-pub-1492172262972996

March Edition
In this issue of AdSense Insider, you’ll discover how to track your site’s mobile performance, how a local site grew into an online guide for tourists and how to adjust reporting to your local time zone.

Product News

Scoring your mobile site

If you’re interested in how mobile users navigate your site, check out your publisher scorecard. The PageSpeed Insights mobile analysis provides data on your site's performance on mobile devices.

Back by popular demand

We’ve brought back some popular features to the new AdSense homepage. You can now directly access your Google Analytics account and keep track of important information, including finalized earnings, all in one place.

Latest buzz

Online tourist guide stays free of charge
In the last ten years, SanFranciscoChinatown.com has become a go-to guide for tourists and locals visiting San Francisco’s Chinatown. See how AdSense and DFP helped finance founder Kevin Hsieh’s online guide to events, culture and history in the city he loves — and then share your AdSense story.

Help us help you with our semi-annual survey

We’ll be launching our semi-annual survey on April 23rd and would love to hear from you. If you’d like to participate, review your contact information and opt-in to receive 'occasional survey' messages.

We’ll keep you posted with more news in April.
Until then, see you online.

Did you know:

90%

The Google Display Network reaches 90% of global internet users.*
*source: comScore.

Tip:

Try time zone reporting to get the most relevant reporting based on your location.

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Seth's Blog : The debilitating myth of musical chairs

The debilitating myth of musical chairs

I was invited to a fancy gathering the other day. Thirty of us, chatting amiably over drinks, then invited to sit down to eat.

A little slow on the trigger, I was the last one over to lunch. To my horror, there were only 29 seats at the long table. All of my Jungian anxieties triggered in one moment. No room for you, you don't belong here, you probably shouldn't have come in the first place.

After a deep breath, I walked over, got a chair from along the wall and scooted myself in.

Epic disaster, averted.

It turns out that in the connection economy, where the network effect creates value and abundance in those connections, it's pretty unlikely that there are precisely one-too-few chairs at the table you hope to sit at. And if there are, it turns out that it's easier than ever to bring your own chair.

Even better, start your own table.

In school, we teach kids to try out, to work to make the cut, to suck it up and give up when they don't. We forget to teach them that the better approach (the adult, real world approach) is to just start your own team. One hyper-ironic example: A friend didn't make it past the final try-outs for the improv club at school. Bummed out, he moved on, never realizing that he could start his own improv club...

If you're spending a lot of time worrying about musical chairs, it's almost impossible to be generous and connected. If you've got one eye on the lookout for when the music will stop and which chair you're going to grab, it's inevitable that you're not really focusing on the amazing people you're with. On the other hand, once you stop playing that game, it seems as though new chairs just keep materializing.

• Email to a friend •

luni, 24 martie 2014

Mish's Global Economic Trend Analysis

BRICs Under Attack: S&P Cuts Brazil's Credit Rating to One Notch Above Speculative
Will Prices Rise Significantly When Velocity of Money Picks Up?
Stupidity is Logical and Understandable; So, How Stupid Will Things Get?
Monetary Perspective on QE and Tapering
China Output Contracts at Quickest Pace in 18 Months

BRICs Under Attack: S&P Cuts Brazil's Credit Rating to One Notch Above Speculative

Posted: 24 Mar 2014 10:24 PM PDT

BRICs (Brazil, Russia, India, and China) cannot seem to get much love lately. Today, it's Brazil's turn to say "show me the love".

Reuters reports S&P Cuts Brazil Credit Rating.

Standard & Poor's cut Brazil's sovereign debt rating closer to speculative territory on Monday in a blow to President Dilma Rousseff, whose efforts to stir the economy from a years-long slump have eroded the country's finances.

Brazil had its long-term debt rating downgraded to BBB minus, the agency's lowest investment-grade rating. S&P changed its outlook to stable from negative, meaning further downgrades are unlikely for now, which will come as a relief for both politicians in Brasilia and financial markets.

The move was widely expected but the timing surprised some investors.

"The downgrade reflects the combination of fiscal slippage, the prospect that fiscal execution will remain weak amid subdued growth in the coming years, a constrained ability to adjust policy ahead of the October presidential elections, and some weakening in Brazil's external accounts," S&P said.

The agency said that fiscal credibility had been "systematically weakened" following cuts in the government's main budget target, and that loans by state-run banks had "undermined policy credibility and transparency."

The Brazilian finance ministry rejected S&P's arguments and said the downgrade contradicted Brazil's solid economic fundamentals and healthy standing compared with other major economies.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Will Prices Rise Significantly When Velocity of Money Picks Up?

Posted: 24 Mar 2014 12:18 PM PDT

Several people have written recently telling me that price inflation is under control only because the velocity of money (the alleged rate at which money circulates) is falling.

Reader Mark pinged me with this statement "Falling velocity is deflationary. It indicates people are saving their cash." Others have expressed similar opinions, typically in reference to this chart by the Fed.

Velocity

Discussion of Ratios

That chart looks ominous. Is it?

First, please note the chart says velocity is a "ratio". A ratio of what?

Velocity = Value of Transactions/Supply of Money.
The value of transactions = Price * Transactions.
In other words
V = (P)(T/M) where where V stands for velocity, P stands for average prices, T stands for volume of transactions, and M stands for the money supply.

Multiplying both sides by M yields the frequently cited equation: M(V) = P(T).

Economists use real GDP as a measure of P(T).
Thus M(V) = GDP. And of course V = GDP/M

The ratio in the above chart is Real GDP/M2. Clearly velocity is falling.

Velocity Theory

The widely presented theory is "prices will rapidly rise if velocity increases." One problem with making such assumptions is in regards to measurement.

What is Money? Is it M1, M2, M3 (discontinued), MZM, TMS1, or TMS2? Each one will give you a different measure of velocity. The Fed provides Three Measures of Velocity.

And what about GDP? Recall that government spending, no matter how useless, adds to GDP. If the government paid people to spit at the moon it would add to GDP by definition. And as stupid as that sounds, it would have been less destructive than bombing Iraq to smithereens, making enemies in the process, and reducing the supply of oil at the same time.

If GDP is debatable and money is debatable, and prices cannot be precisely measured in the first place, can velocity mean much?

Three Important Statements Regarding Velocity

Velocity is falling because money supply is rising faster than GDP.
If the Fed stops printing (more precisely if money supply is constant) and GDP goes up, velocity will go up automatically. Prices could actually drop with rising velocity if the volume of transactions goes up enough to make up for it!
As an implied result of statements one and two, we can correctly deduce that rising or falling velocity will not cause anything in particular to happen to prices.

Is Velocity Like Magic?

Also consider some similar observations made by Frank Shostak in the Mises Daily article Is Velocity Like Magic?

Velocity Has Nothing To Do With the Purchasing Power of Money

Does velocity have anything to do with prices of goods? Prices are the outcome of individuals' purposeful actions. Thus John the baker believes that he will raise his living standard by exchanging his ten loaves of bread for $10, which will enable him to purchase 5kg of potatoes from Bob the potato farmer. Likewise, Bob has concluded that by means of $10 he will be able to secure the purchase of 10kg of sugar, which he believes will raise his living standard.

By entering an exchange, both John and Bob are able to realize their goals and thus promote their respective well-being. In other words, John had agreed that it is a good deal to exchange ten loaves of bread for $10, for it will enable him to procure 5kg of potatoes. Likewise, Bob had concluded that $10 for his 5kg of potatoes is a good price for it will enable him to secure 10kg of sugar. Observe that price is the outcome of different ends, hence the different importance that both parties to a trade assign to means.

In short, it is individuals' purposeful actions that determine the prices of goods and not some mythical notion of velocity.

Consequently, the fact that so-called velocity is "3" or any other number has nothing to do with average prices and the average purchasing power of money as such. Moreover, the average purchasing power of money cannot even be established. For instance, in a transaction, the price of $1 was established as one loaf of bread. In another transaction, the price of $1 was established as 0.5kg of potatoes, while in the third transaction the price is 1kg of sugar. Observe that, since bread, potatoes, and sugar are not commensurable, no average price of money can be established.

Now, if the average price of money can't be established, it means that the average price of goods can't be established either. Consequently, the entire equation of exchange falls apart. In short, conceptually, the whole thing is not a tenable proposition, and covering a fallacy in mathematical clothing cannot make it less fallacious.

Velocity Does Not Have an Independent Existence

Contrary to mainstream economics, velocity does not have a "life of its own." It is not an independent entity--it is always value of transactions P(T) divided into money M, i.e., P(T/M). On this Rothbard wrote: "But it is absurd to dignify any quantity with a place in an equation unless it can be defined independently of the other terms in the equation." (Man, Economy, and State, p. 735)

Since V is P(T/M), it follows that the equation of exchange is reduced to M(PxT)/M = P(T), which is reduced to P(T) = P(T), and this is not a very interesting truism. It is like stating that $10=$10, and this tautology conveys no new knowledge of economic facts.

Conclusion

Most of the discussion to date regarding the velocity of money has been ridiculous.

Velocity can rise when prices are going up
Velocity can fall when prices are going up
Velocity can rise when prices are falling
Velocity can fall when prices are falling

Given GDP = P(T), you can repeat the above four statements substituting GDP for prices. Doing so, please note that rising prices with falling GDP would be the dreaded stagflation scenario, something Keynesian theory once suggested was "impossible".

In short, it may very well be that prices rise with rising velocity, but they may also rise with falling velocity. Thus ...

Velocity is an essentially meaningless result in an essentially meaningless equation. Rising or falling velocity will not cause anything to happen.

Yet, the debate over the importance of velocity rages on.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Stupidity is Logical and Understandable; So, How Stupid Will Things Get?

Posted: 24 Mar 2014 11:10 AM PDT

As president Obama arrives in Europe to meet German chancellor Angela Merkel, Pressure mounts on Merkel Over Sanctions in Ukraine Crisis.

When Angela Merkel, the German chancellor, meets Barack Obama, US president, at The Hague nuclear security summit on Monday, she will come under pressure to back economic sanctions against Russia.

Meanwhile, in Germany, belief is growing among top policy makers that economic penalties might soon come. Norbert Röttgen, chairman of the Bundestag's foreign affairs committee and a leading member of Ms Merkel's CDU party, said in a newspaper interview on Sunday that "further western sanctions, including economic sanctions" were "inevitable".

Günther Oettinger, German EU energy commissioner, late last week called for the imposition of economic sanctions on Russia in response to the annexation of Crimea, even without waiting for further aggression from Moscow.

"I consider sanctions, which hit economic relations, involving exports, imports and investment, as logical and understandable," the senior CDU politician told Die Welt newspaper.

But those doing business with Russia have not given up the fight. Eckhard Cordes, the head of the Eastern Committee, the powerful Russia-oriented business lobby, argued, in an interview on Friday with Handelsblatt, the business daily, that sanctions on Russia would not work.

"We have a strategic partnership . . . to bring our peoples together," Mr Cordes said. "And now we want to cover ourselves with sanctions? I find that difficult to imagine."

Stupidity is Never Difficult to Imagine

Cordes finds sanctions "difficult to imagine" but Merkel's CDU party chief says further sanctions are "inevitable".

Upping the ante, German EU energy commissioner, Oettinger, a ranking CDU politician wants increased sanctions without waiting for further aggression from Moscow. Oettinger says sanctions, which hit economic relations, involving exports, imports and investment are "logical and understandable"

Since sanctions won't work and are a sure-fire Negative Sum Game, this is what Oettinger is really saying: "Stupidity is Logical and Understandable".

Russia Imposes Sanctions on 13 Canadians, Including MPs

While waiting for inevitable stupidity from Germany, the Globe and Mail reports Russia imposes sanctions on 13 Canadians, including MPs.

The Russian government has banned entry to 13 Canadian senior civil servants and politicians in retaliation for punitive actions that Ottawa levied on Moscow elite over the annexation of Crimea and the destabilization of Ukraine.

The largely symbolic sanctions, which do not target Prime Minister Stephen Harper or Foreign Affairs Minister John Baird, come hours before the Group of Seven is expected to suspend Russia from the G8 and cancel a planned summit in Sochi.

According to a statement circulated by the Russian Foreign Ministry, the list of targeted Canadians includes a handful of senior servants, a couple of senior ranking Conservatives, three Tory backbenchers and outspoken opposition critics.

Mr. Baird called Moscow's tit-for-tat action against Canadian lawmakers and officials a "badge of honour" for Canada in its campaign against the annexation of Crimea.

Stupidity Is ...

Logical
Understandable
Inevitable
A Badge of Honor

With all that going for stupidity, especially with major egos involved (see Buffoon Bluffery; What are Sanctions Really About?), no one can precisely answer the question "How stupid will things get?"

Here's one thing we do know for sure: Failure is Truly Success!

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Monetary Perspective on QE and Tapering

Posted: 24 Mar 2014 01:42 AM PDT

In Reflections on the Yellen Taper-Hike Announcement; What Does the Fed Know? I quoted the opinion of Saxo Bank Chief economist Steen Jakobsen.

Steen commented "Please, do not think for one minute that FOMC have any clue about the economy six months from and even less so looking into 2015."

I am certainly in agreement with Steen, and gave my own look into what the Fed knew or didn't in Hilarious Transcripts of Fed Minutes from 2008 Reveal Completely Clueless Fed.

Opinions aside, let's take a look at facts from a monetary point of view.

My friend "BC" pinged me with the following chart.

Monetary Base vs. Loans and Leases

click on any chart for sharper image

Note that the adjusted monetary base is playing catchup to loans and leases of all commercial banks.

When that happens, and I believe it will, taper or no taper, will base money be sufficient to cover all credit?

Not quite. Taking a lead from "BC", here is a chart I put together.

Credit Market Instruments Liability vs. Monetary Base

This is precisely what fractional reserve lending has wrought. Total credit liabilities approach $60 trillion. Those liabilities are backed up by about $4 trillion in base money supply.

Some people might object the above chart reflects money substitutes and not money. Fair enough. So how much base money covers checking and savings accounts?

Monetary Base vs. Checking Plus Savings Accounts

Some readers will recognize the above chart as True Money Supply "TMS2" vs. Base Money Supply.
TMS2 consists of currency plus all the individual components of checking and savings deposits.

In terms of how much base money covers savings and checking accounts, you can see about $6 trillion is missing. Loans and Leases are another matter as is Total Credit Liability.

So when the Fed says it will "taper", let me ask some simple questions:

In what timeframe?
For how long before the next monetary expansion happens?
What happens in the event of a recession or even a serious global slowdown?
What will other central banks do?

Bonus Question: What is this likely to mean for gold?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

China Output Contracts at Quickest Pace in 18 Months

Posted: 23 Mar 2014 11:58 PM PDT

The HSBC Flash China Manufacturing PMI shows Output Contracts at Quickest Pace in 18 Months. The overall PMI index, new orders, and production were all lower.

Key points

Flash China Manufacturing PMI™ at 48.1 in March (48.5 in February). Eight-month low.
Flash China Manufacturing Output Index at 47.3 in March (48.8 in February). Eighteen-month low.

Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co - Head of Asian Economic Research at HSBC said: "The HSBC Flash China Manufacturing PMI reading for March suggests that China's growth momentum continued to slow down. Weakness is broadly-based with domestic demand softening further. We expect Beijing to launch a series of policy measures to stabilize growth. Likely options include lowering entry barriers for private investment, targeted spending on subways, air-cleaning and public housing, and guiding lending rates lower."

In the face of an explosion of credit, still growing imbalances, malinvestments, property and other bubbles, it is a mystery why anyone expects China to make efforts to "stabilize growth".

To stabilize growth implies more bad loans and more SOE malinvestment. Given China's massive housing vacancies, support for still more housing is ridiculous.

More malinvestment is possible of course, but the longer China attempts to keep the credit party going, the worse the ultimate implosion.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

marți, 25 martie 2014

Knowledge Graph 2.0: Now Featuring Your Knowledge

Knowledge Graph 2.0: Now Featuring Your Knowledge

Answer box 1.0

Google's dilemma

Answer box 2.0

The new number one

It's just the beginning

Is the balance shifting?

AdSense Insider March 2014

Seth's Blog : The debilitating myth of musical chairs

The debilitating myth of musical chairs

More Recent Articles

luni, 24 martie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Pagini

Persoane interesate

Arhivă blog

marți, 25 martie 2014

Answer box 1.0

Google's dilemma

Answer box 2.0

The new number one

It's just the beginning

Is the balance shifting?

luni, 24 martie 2014

Pagini

Persoane interesate

Arhivă blog

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