Yossi Vardi, the Attention Economy, and You
You are the product
Yossi Vardi is a remarkable father of Israel's high-tech and internet industries. He has been involved in the founding and development of almost 100 high-tech startups. His ICQ was the first big instant messaging app, sold to AOL in 1998 for $407M, back when that was a lot of money.
I first met Yossi in 1995, in Amman, Jordan. Impressed with a speech of his, I approached him and asked for a business card (remember those). He didn’t have one, so I asked for his phone number. Peering over his glasses at me, he remarked, “if you’re so smart, you’ll figure it out.”
Fast forward three years, I get a call from him. “Mr. Rosenschein, I think you are an idiot.” “Well, Yossi, that’s well known, but could you be more specific?” “Yes, I saw a package you developed called WordPoint that translates words you point at on the screen. But, if you connect it to the Internet and look up full information about any word, then you’re on to something.” “Wow, Yossi, what a great idea.” “Well, Bob, that’s my gift to you.”
And thus GuruNet, later Answers.com, was born. Yossi became an early investor in us, along with Mort Meyerson and Mark Tebbe, and the rest is history.
What always impressed me about him, besides his insights, was his generosity. I will not go into them all, but suffice it to say he more than once helped Answers.com enormously.
It turns out, we weren’t the only ones — and here is how this affects you.
In 2001, Yossi made a suggestion to Sergey Brin and Larry Page at Google that changed the industry and the world economy (source: David Vise, “The Google Story”, p. 100). He suggested that Google make money by dividing the results page with a vertical bar. The left ⅔ would be free organic search results, but the right ⅓ would be ads. And not just any ads, but text ads that don’t resemble the old graphic ads — and also text ads relevant to the search query.
People once would ask how Internet companies made money. Not anymore.
At one of Yossi’s Kinnernet conferences, I met Stanley Fischer, who was then Governor of the Bank of Israel (similar to the Federal Reserve Bank). I asked him something mundane about dollar-shekel exchange rates, and he told me the following story. John Connally, former Texas governor, joined the Nixon administration as Secretary of the Treasury in 1970. At a time of a strong dollar, several European ministers complained about it. “Gentlemen,” he replied, “the dollar is our currency — and your problem.” (I mention this story because one of the quiet threats today to the U.S. economy is if the US$ were to lose its status as chief world currency.)
BTW, Stanley Fischer’s son, David, spent many years at Google and then was recruited by Sheryl Sandberg to become Facebook’s Chief Revenue Officer (from 2010 - 2021). Why do I tell you this? Because, at this point, Google and Facebook together dominate 54% of the U.S. $460 billion digital advertising market, according to Scott Galloway. Guess what they’re selling… attention, and you are the product!
For a sense of how addicted we all are to our smartphones, here is a simple chart, also from Scott Galloway’s new “Adrift: America in 100 Charts,” of:
AVERAGE DAILY UNLOCKS AMONG U.S. SMARTPHONE USERS (2018)
Wondering if this is right or wrong, or even good or bad, misses the point. It is where we are. What we might do going forward… that is for a different post.
Stanley Fischer died yesterday at 81. He will be remembered for stabilizing and helping transform Israel’s economy from a more socialist to a more market-driven one and helping usher in Israel’s age of “Startup Nation.”
As for Yossi, my personal esteem and gratitude to him has never been greater. He is a brilliant and inspirational man, who will always hold a place in my heart as a warm and generous friend.