May 2007: Microsoft Yahoo is a done deal even if they don't know it yet
This is a great move for Microsoft, but if RIMM stock drops to a reasonable earnings multiple, it would be an almost necessary buy for MSFT too.
The reason:
Smartphones have become an essential business tool, like the desktop computer in the 80s.
In a downturn, in particular, if you buy 500 employees an iPhone you look spendthrift, buy them a Blackberry and you look plain thrifty. Buy them anything else and you might look stupid.
The Apple Mac OS may have been more like the OS that powers business computers today, but the less innovative DOS is what made Microsoft dominate. An overlooked reason is purely psychological, and predated the raft of software that made it a rational one: DOS looked more business like.
DOS succeeded at a time when command line computing seemed like the real deal compared to cartoon-like mouse and icon interfaces.
Similarly, a device like the iPhone looks like a luxury consumer device, while a Blackberry is less innovative and more boring. Like conservative office furniture, it looks right for business and is the best of breed. Smartphone alternatives like Palm increasingly look like also rans. A Blackberry will be the de facto business standard smart phone and therefore it competes on Microsoft's home turf.
Microsoft need Blackberry, because its the right kind of crappy.
The Stock Market is about to crash, soon.
If you think that this won't affect the mini tech bubble, get ready for your adsense revenues to halve in the six months following.
I suspect, however, that this crash will be bad enough to make things like that mere 'trifles'.
FSU Editorial: "2007 Market Crash" by Greg Silberman 07/26/2007
Web businesses will succeed based upon their competitive advantage in acquisition of the finite resource of attention.
The quantitative measure of this will be the cost per bit, where the cost is the acquisition cost per user divided by the amount of time and therefore the number of potential transmittable 'bits' the users' attention is captured for.
Traditional economics is based upon the notion of scarcity. But this scarcity tends to be relevant only in the production, not the consumption of things.
This is because the cost per unit of consumable energy, or more generally, information - the bits consumed per bit delivered is usually very high.
As an example, the number of bits of information in the atoms that make up a book is much higher than the atoms that store the book in digital form on a computer.
Because of this, the cost of duplicating a computer file is much less than a scribe written bible or even a printed book - so much so that scarcity seems to disappear and the cost of distributing things like a song goes to zero.
Because the supply side was so choked, the symmetry in the scarcity of both production and consumption was invisible. But it exists , there are a finite number of people on earth and a finite number of hours that people can spend listening to songs.
As the scarcity of production drops the scarcity of consumption - the attention scarcity becomes the limiting factor.
The competitive advantage for the manufacturing industries of the Industrial Revolution was in economies of scale in production. For internet companies, competitive advantage is in capturing people's attention.
The Attention Economy: An Overview
Not if, but when, will Google be bigger than Microsoft?
Google has grown 400% over the last 3ish years, while Microsoft has basically flatlined.
If the current trend continues, then Google will be bigger than Microsoft before the end of 2008. In many ways that doesn't seem unrealistic - Microsoft may be more like IBM and Google more like the fictitious Tyrell corp.
Some other interesting things have happened in the tech rebound. Apple, which is less than half the size of Google, is now worth more than the entire gaggle of Internet behemoths other than Google (Amazon, Ebay and Yahoo), put together.
And some things haven't changed. Oracle is also worth about the same as Amazon, Ebay and Yahoo.
Since Web2.0 largely runs on open source DBMS unlike the original Oracle powered dotcoms, this might come as some surprise. But one can never underestimate the value of enterprise and small business software. Its what is keeping Microsoft in suspended animation, and what has accounted for the largest acquisitions this time round, in 'Sillycon' Valley.
In other words, web2.0 is Google and they buy cheap or enterprise or develop in-house. Maybe that's why web2.0 investors and entrepreneurs alike are such Facebook evangelists. A Facebook IPO may be the last vestige for their hopes and dreams.
GOOG: 543.34 0.00 (0.00%) - Google Inc.
It may or may not be a good idea for Microsoft to buy Yahoo, but that almost doesn't matter.
Its inevitable that they have to.
Om has a poll running:
GigaOM » Should Microsoft buy Yahoo?
Here's an idea that has been bugging me for a while: what if the Tit for Tat game theory strategy is not successful in the real world, ever?
Here's why - Tit for Tat works because it creates a (technically unstable) equilibrium. In models of reward/retribution between two players Tit for Tat is always the best option.
But we know that in the real world there are rarely two systems that are isolated, and grievances are normally propagated down generations when retribution is against a different individual that has been strereo-typed as having similar characteristics. This creates a potentially infinite cycle of violence, even when Tit for Tat is used as a strategy by every actor.
I believe this could be modeled very simply by creating a 3 party risk/reward game where a certain percentage of plays from a -> b would randomly affect party c (but the players would not know about this random variation). This is a better simulation of real-life and I believe would show that Tit for Tat does not work without a more altruistic dampening affect.
Tit for Tat - Game Theory .net
1. US loses control of middle east foreign policy.
Israel says will use Nuclear tipped warheads to attack Iran's nuclear facilities, unless the US attacks.
Saudi Arabia says will invade Iraq to protect Sunni Iraqis if the US pulls out.
The president has a mandate for neither of the options allowed to him, domestically.
2. Recession signs.
Weather related losses, over leveraged debt, house price declines a weak dollar and middle east political instability. The sooner the inevitable recession comes, the quicker and milder it will be, 2007 if we are lucky, but probably 2008.
3. Global warming hits reinsurance.
Insurance has traditionally been a guaranteed money maker, you asses the risk and take a premium while the government pays to mitigate much of that risk, with things like the police and fire services and the military. But the weather is different, and the weather will play a bigger factor than ever in Insurance and nobody will have the correct risk model. At the top of this house of cards is re-insurance. Only the biggest will be able to survive and 2007 may see the first collapses.
4. Fox news fires O'Reilly.
Rupert Murdoch is not a Republican. He is someone who produces what people want to hear. Less people will want to hear people like O'Reilly so he will be canned and Fox will move away from the embarrassing failure of neo-conservatism.
5. First web 2.0 flameouts, although bubble keeps growing.
Who will be the new Boo.com. There are too many stupid web 2.0 companies and there will be a die off starting this year, even if the mini bubble continues for another year or so.
6. Microsoft flatlines after initial vista hype wears off.
Microsoft used to own the command line. Now Google do. Millions of dollars of promotional spend on Vista will wear off quickly, a Microsoft 's stock price will start a long slow decline.
7. Socialists win French presidential elections.
Arguable France needs Sarkozy like the UK needed Thatcher in the late 70's, but they won't get him.
8. Bush betrayed by the right. Bush's fate is controlled by his own people, not the Dems. Somewhere there is probably a piece of paper that proves that he lied to go to war in Iraq. If someone decides to slide that to a reporter across a car park floor in DC, then his last days in office will not be the stalemate that the Democrats have in store for him.
9. Gordon brown becomes uk prime minister.
But does win the next election.
10. Democrats make choice between socially liberal fiscally conservative libartarianism and Lou Dobbs style perochial neo-fascism.
Lets hope that the Dobsians don't derail things.
The Apple Revolution. Hasta la Vista Microsoft.
JMP securities suggest that Microsoft may lose Windows Vista users to OSX.
How could an operating system, such as OSX, with such a tiny market share gain dominance without a fundamental change in computers as big as the one that replaced mini computers with desktop PCs?
There is an elephant in the room. The change has already happened and people just haven't noticed.
The elephant is the laptop. Laptops have been around for ages, but several factors, have recently conspired to make them the primary computing tool.
The reason this is fundamentally different is that a laptop is a very personal thing, its as different a computer as a PC was to a room sized Vax.
A laptop is a truly personal computer, one that connects to business data when needed, but which should naturally be yours. You may not own your office furniture or your desktop PC, but owning your laptop will be as natural as owning your briefcase while your company still owns the documents inside.
A truly personal computer does personal things like manage your photos and music. Only one company has an operating system that does this well.
A truly personal computer is an object that says something about your personality like the clothes you wear and the car you drive. Amazingly, only one company makes computers that are not butt ugly.
A truly personal computer should be easier to maintain, less prone to infection and able to link to the businessy stuff when needed. One company shines here.
The PC revolution was the Microsoft revolution. The laptop revolution may be Apple's.
Apple shares hit new high as analysts say Mac OS X may beat Vista - Mac - Macworld UK
Table of inflation adjusted (dec 2005 prices) oil prices. Today's shutdown of the US's biggest and most geopolitically stable oil source puts oil at $77 a barrel. It is still more than 10% cheaper than in 1980 - but the climate and the political climate is much more unstable. At this point, a recession is innevitable, and is probably the least of our worries for anyone who has read a history book.
Technology:
1. Digg gets acquired.
2. Google releases Google Calendar and Google Micropayments and OEMs Google maps as a UI for portable iPod like GPS handhelds. Click spam becomes a real worry.
3. Microsoft does a $10billion plus acquisition.
4. Apple takes on Tivo with a Mac Mini style product with Front Row built in.
5. Energy scares and middle east politics dampen the economy such that 2006 is not like 1999 for Web 2.0.
Not technology:
6. US switches foreign policy away from direct military involvement to insurgency funding in Venezuela and ups anti-Chavez rhetoric.
7. Castro dies and Chavez threatens to stick his nose into Cuba.
8. Cracks appear in the Saud's control over Arabia and information leaks suggesting that Ghawar oil field is water logged.
9. Natural gas prices spiral, US house prices cool and plans for renewed US nuclear power push are drawn up.
10. The first signs of long term problems between the US and China appear over disagreements over Iran.
When IBM approached little Microsoft to supply them with an OS to service a market for computers that individuals owned, they did not see the lock in that would mean that Microsoft would soon be telling IBM what to do.
The combined hubris and stupidity of the record labels is repeating this game of switch with Apple. The music guys thought that they could test the waters with electronic delivery with an also ran like Apple and use tight DRM to make sure that they weren't fueling the file sharing networks.
As this excellent piece in brainwash points out, AFF's Brainwash :: The recording industry's new clothes, they have created the Microsoft of music.
Apple now owns the customer, even if you have most of your music as MP3s on an iPod but a few songs you have bought from the iTunes music store, you have a real dollar value switching cost. I wonder how many of the increasingly ubiquitous iPod users even know that they can't easily take their songs to a non-Apple product.
I expect that before long there will be court cases for Apple to display disclaimers on their products saying that they cannot move songs to a non-Apple environment, or cases to legitimize software that bypasses Apple's DRM and converts songs to regular MP3.
By the time that these have dragged through the courts, Apple will have won. But the real irony is that it won't be file sharing advocates pushing these cases, but the recording industry.
Apple holds the cards precisely because it and not the recording industry, controlls the DRM.
Ten years ago, I started a design company and our biggest client was Levis. Levis were trendy and they fed the trend by sposoring DJs and independent record labels and bands. We got the gig for Levis, in fact, because my business partner knew the manager of Massive Attack and Levis were involved in promoting Massive Attack's climb to fame.
Five years Later, when I moved to the US, Levis was in the process of a big fall from grace - and the business guys blamed it on late outsourcing and bad design.
Last month, I noticed that a few trendy people were wearing Levis in NY, in an almost ironic anti-fashion way. A bit like the daft Trucker Hat fad.
When New York bounced back from its 70's 'Taxi Driver' nadir, Giuliani was given credit for its revival, people proposed all sorts of theories, such as a trickle up effect from cleaning subway cars, others pointed out the obvious - perhaps its just a natural cycle.
This week Levis announced a 5 fold increase in profit for the quarter. No doubt people will laud their business acumen, but if the fortunes of an entire city can be cyclical then the fashion cycle of hipster to mainstream to hipster is almost certainly so.
I suspect the cult jean manufacturers True Religion and Seven for Mankind will shortly go the way of designer jeans after the 80s, and be adorning thrift shops everywhere. They are exactly out of phase will Levis.
APP.COM - Levi's second-quarter profit jumps almost fivefold
My guess is that Miller Gossiped, i.e. the leak went Judith Miller (NYT) -> Administration -> Cooper (Time) and Novak (WaPo).
Whether there is any evidence that Plame's name went twice around the merry-go-round (Administration -> Miller) is another matter.
Whatever the scenario, what amazes me is that few people seem to question that this was a vindictive act rather than a cockup.
Ahem – what follows is the sort of thing that I can’t imagine discussing in New York. So in honor of leaving San Francisco am posting one of the things that I’ve been mulling over for quite a while, regarding SETI.
Much SETI activity has resolved around looking for messages, in the form of electromagnetic radiation. Shouldn't we start by looking for the reverse, a conspicuous absence of electromagnetic radiation, if we want to look for alien intelligence?
”Misconceptions Regarding Dyson Spheres and the Fermi Paradox” discusses the central idea:
“almost all advanced technological civilizations should not have a "visible stars"! If we had the technology to conduct extensive surveys of brown dwarfs we might find that many of them are being disassembled to supply fuel and construction materials for meta-minds. The unresolved problems of the missing baryonic dark matter and the gravitational microlensing observations, suggesting 200 billion "masses" orbiting our galaxy, hint at the possibility that such entities may exist.”
The second law of thermodynamics states that in a closed system entropy increases over time, entropy being a measure of disorder, where such things as information are, in theory, low entropy. In the case of planets revolving around the sun, the sun burns out and entropy increases over time. Planets that get in the way of the sun absorb some of its heat and then re-radiate it, over time. On our planet, at some point the energy received from the sun (possibly indirectly via geo-thermal activity) resulted in generating molecules that self-replicated. Of all the number of possible states in a system, once you get self replicating things, something strange happens – life, order, information, buildings, cities. From genotype and phenotype to extended phenotype, there is a conspicuous local decrease in entropy, if the number of living things or their manufactured byproducts continues to increase as one generation dies or crumbles.
Because the state of a system which results in self replicating things, will inevitably continue once going, it is the most likely end state for any system with constant energy input, over time (albeit infinite time). In other words, if life is possible, and it is, then it should be inevitable, and the more life the more order. And with energy input from a star, or indirectly via things like oil, the more life, the more life. As Fermi pointed out, if this seems inevitable – where is everyone when it comes to little green men. It would seem more profoundly weird if the universe were not infested with other life, since it would require a more complicated explanation.
Because of this, and our insatiable urge to explore, we figured that perhaps someone somewhere may want to send us a message. Since the quickest messages travel at the speed of light, then we should look for a light beacon, or more specifically a radio beacon. (Since one would imagine that a message has low entropy, one would think that there is an apparent paradox with a message being contained in an electromagnetic wave which by definition carries energy – as with any measure of entropy, the entire system has to be taken into account – and so the entropy or information contained in a message may depend on the energy used by the encoder and transmitter of the message, or even the history of previous messages).
There may, of course, be messages out there waiting to be picked up – the urge to communicate does seem to be a trait that we and higher organisms have, but there is an instinct which every living thing shares - survival. As human beings go to war over trapped solar energy in the form of oil, our long term existence relies on direct energy from the sun. Taken to an extreme this would involve letting none of the sun’s energy go to waste, and is the idea behind a Dyson sphere, a theoretical construction designed to allow a civilization to absorb all of the suns energy by surrounding it entirely. Without taking things to extremes, however, one could imagine that an ever growing civilization could reach a point where it would slow down the rate of increase of entropy of a solar system, and may indeed significantly reduce the normal detectable energy output of the star from beyond it.
Without suggesting for a moment that the surprising amount of dark matter in the universe is in fact dimming caused by aliens crowding round the fire, as it were, with Dyson spheres blocking out suns. If it does turn out that the biggest sign of life is a lack of signal, it does beg the obvious question of how would we know?
(According to Dyson himself, a Dyson sphere would re-radiate its energy in the infrared - I don't understand why this re-radiation would necessarily happen unless the sphere and its population had reached a steady state)
It’s possible that a star hugging civilization would also send out a message – and perhaps this message would be intermittent, a fluctuation between lights out and lights on, to conserve energy.
(It would be hope that intermittent would not be too short. When pulsars were discovered, their regular radio wave pulses were thought to be candidates for an alien message, instead of radiation directly from a star. Which poses a serious question as to how we would detect the difference between regularity caused by inanimate objects vs. animate ones.)
In any case, I believe we should be looking for a message not just in the spectrum where it is normally quiet, but in a direction where there appears to be a conspicuous nothing.
The Internet Stock Blogoutlines the case that Yahoo is most likely to buy six apart, because "Yahoo! has no blogging platform".
Dave Pell pointed out an interesting idea, that when a large company makes an acquisition in a particular area, then it is difficult for them to acquire a competitor to it, since there would be internal resistance or operational complications from the existing team within the company. Consolidation tends to happen on the outside.
On that basis, Google has Blogger and Microsoft has Spaces. So maybe Yahoo would buy Sixapart? Perhaps, since Google have Picasa, Yahoo could also buy Flickr.
With Sixapart and Flickr, Yahoo would have added two formidable services to their arsenal.
People say that Hungarian is the language of the future, and it always will be. Similarly, you get the feeling that speech recognition is the technology of the future and always will be. Until recently the same was true of Internet telephony.
There are many technologies that fail because they don't pass the 'good enough' test.
Having noticed that more and more friends are using Skype these days, it seems that VOIP passes the good enough test, for once the marketing blurb is right - it just works.
In fact, beyond that, two recent examples illustrate that it is now better than other means of telephony.
Example one: a friend's cellphone ran out of juice, he resorted to war driving to find an open wifi network to contact me, his web based email didn't work, couldn't get a good enough connection to Instant Message me, but VOIP worked just fine.
Example two: a friend called via VOIP from India yesterday. The VOIP worked just fine, better than an Indian landline at $3 a minute, and when calling a US cellphone, it was the cell carrier that dropped the call.
VOIP is not only much much cheaper, but it is better.
Predictions for 2005:
1. Wikiyahoo - Tagging/Folksonomies become the tech talk of the town. Flickr gets acquired
2. Googlets - People cash out and leave Google, creating a startup frenzy in SF
3. An Englishman’s home is a castle in ruins - House prices eventually crash in the UK
4. ReVive la France - Sarkozy preps himself for a successful 2007 presidential bid in France
5. Boingboing blingbling - Gets acquired
6. Click here to drain our bank account - Click Spam worries affect Google’s share price
7. A Google dollars - A cluster of IPOs such as Kanoodle, to capitalize on Internet advertising hype
8. The ‘C’ word – Civil war in Iraq
9. Commitalism - People start to talk about Shanghai as eclipsing NY as the center of the world
10. iPhone - Apple compete with Sony and do a deal with a mobile related company such as Nokia
11. Sleepy in Seattle - Microsoft look vulnerable on three fronts as PC costs drop making their OS look relatively expensive, monoculture security issues cause enterprises to move to products such as Firefox, weblog style publishing encroaches into sacred Office territory
12. Microsix – Microsoft buy Six Apart – they should, but they prob. won’t
13. CD nonplayer - Restrictive DRM built into more and more consumer devices.
14. One person, one vote, one viable party - Blair reelected in UK
15. Bass, how low can you go - The dollar stabilizes temporarily
16. Enterprise software – What is it good for? Huh, absolutely nothing, pay me again
Microsoft is caught in a potential pincer movement where it will have to:
1. compete in a consumer market where MP3 players, media PC's and laptops will be sold as luxury goods with value-added hardware and software design, something that is not Microsoft's strong point.
2. compete in a business market, where the vulnerabilities of buying into a monoculture cost time and money.
As Firefox continues to grow its market share, the difference between now and the Netscape days is that Internet Explorer is often a disease ridden product. The advantage of having it preinstalled on most machines is outweighed by genuine benefits of switching, and large corporations have IT staff that will do that for people, to save time and money. It is not hard to imagine a headline - 'Merrill Lynch to switch to Firefox'.
A friend was recently dissing a competitors use of Apple Mac's for their Internet cafe business, why would they use a niche product, which is more expensive.
Well, these days a Mac is less costly because it is less prone to viruses, spyware and adware.
Microsoft's business was built on the fact that if you had the same OS and software as other people, it was easier to share information with other people and things were easier and cheaper to maintain. Monopolies were a good thing in software and users benefited.
Then came the Internet, and monopoly software was open to attack from around the word.
These days most communication is over a network that doesn't care what plaform you use and documents based on standards that can be used by any vendor's application.
As the proprietary standards culture has migrated to the open standards culture driven by the Internet, proprietary software has become victim to the innevitable problems of a monoculture - it is vulnerable to disease and therefore costly to insure against attack.
There is nothing new in stating that Microsoft has problems with its virtual monopoly. However businesses will still buy Microsoft's products - or maybe not, it seems that the real threat is that the people who can save most money by switching to rival platforms are not individuals but large corporations, Microsoft's bread and butter.
Alexa today shows a traffic rank of 1,255 and a 1.5% reach for Burger King's subservient chicken. Related Info for: subservientchicken.com/
Trying to create an Internet meme like this is hard, but Burger King have pulled it off.
What is likely in the future is that savvy advertisers will track sites like Technorati and endorse new memes as they take off.
Looking back at someone looking back at someone looking forward.
"The 1957 launch of Sputnik and the first space shuttle launch in 1981 were 'far more important to the information society than to any future age of space exploration.'"
1. Enterprise software backlash. After being a temporarily fashionable haven from the dotcom collapse, enterprise software takes a beating
2. Hybrid social networking and blogging services emerge
3. VOIP makes the music industry’s woes look small compared to that of the telcos
4. Cisco (Linksys) release a cheap consumer WiFi/VOIP handset
5. Apple pits against Sony with a Media PC
6. Purchases of individual songs from music download sites bring about the return of meaningful top 40 charts.
7. Tivo gets ‘betamaxed’ by no rental fee PVR service
8. Bush defeats Dean, but a larger than normal voter turnout attributed to the ‘Internet effect’
9. Sharon’s support weakens in Israel
10. Blair survives publication of the Hutton report relatively unscathed
11. Saddam’s trial is postponed to 2005
12. Racism on the rise in Europe
13. Parmalat opens a wave of corporate scandals in Europe
14. Michael Jackson fires his attorney
15. Healthy living becomes fashionable, Wholefoods is in, McDonalds out
16. The slacker look is out, a booming economy brings about a return to sharp dressing, 60’s style
Add your predictions to the comments.
Have a happy, safe and prosperous New Year!
"In principle blogging promises us something close to Tim Berners-Lee's original vision of a writeable web because anyone can create their own constantly-updated site."
It seems that even the mainstream press are now saying that weblogging constitutes something more important than personal online diaries. Weblog tools are how you publish online and are as important for publishing on the Internet as the browser was for, well, browsing. Perhaps just like the word browsing effectively means reading things on the Internet (or we'd be gophering), blogging will mean publishing on the web, publishing anything, not just a diary.
Apple Music Store is out. Three years after Napster there is finally a pay-per-song, jukebox-style application and, like everything Apple do, it looks beautifully executed. But is this a good deal?
Each song costs 99c.
An average CD has 10 tracks.
CD list price: $19
CD wholesale price: c $12
Ave. cost of pressing and shipping: $2
Looking at these numbers, the music industry has only been prepared to discount the music by the actual cost of manufacturing and shipping the CD.
In other words the arrogance and stupidity of the music labels is unabated, they still refuse to admit that online music changes the economics and mechanics of the marketing and distribution of music beyond removing the costs of a physical storage medium.
Perhaps this isn't so much the death of the CD, but another step towards their own suicide.
Follow the money: who's really making the dough.
Steve Hall points out that because links to individual postings often produce the traffic to weblogs, there needs to be an advertising system for weblogs adaptable to variable traffic to individual permalinked items. The notion of advertising at the 'page' level is meaningless for weblogs.
I believe the permalink model will inevitably extend to all web publishing - a web page is a virtual rendering of one or more items, individual postings have self contained meaning and therefore value.
To put it another way, the web is a web because of links. Links point to information elsewhere, and information exists within content, not pages. If there are no permalinks to individual pieces of content, then the advertising model of the web will never be able to fully take advantage of linking. Eventually everthing on the web will have a permalink.
"Slate wrote an article about a post on Gawker that then linked to a post on Adrants about the PUMA Ad Sensation. Traffic to Adrants sky rocketed. Ten thousand visitors, in fact, yesterday and 3,000 so far today. Normal daily traffic is between 500-800 visitors a day. If Adrants had an ad program up and running that placed ads only at the top of the page, the advertiser, and Adrants, would have lost out big time on that bonus traffic. Worse, those ads would be counted as served impressions when, in fact, they would never be seen. Not a good ad strategy. What is needed is the ability to "embed" ads (graphic and/or text) dynamically within individual posts based on traffic level so that any ad is always "served" to the most highly viewed area of the site."
Microdocs
suggests that Microsoft must compete with 'the Google Operating System'.
From a technical perspective it would be very easy for Google to become closer to the features offered by an OS. Previously I suggested that Google could start immediately with a much better 'Find' facility than the terrible Windows version, which is painfully slow and doesn't do full text search over documents on your hard drive.
From a business perspective, however, Google is unlikely to anything obviously hostile to Microsoft. Nobody wants to repeat the mistake that Netscape made when they tried to take on Microsoft and lost spectacularly.
The Gulf War made CNN, it was the cable news covered war. Since that war, the web has emerged: this is the web covered war, from moblogged war protests to webloggers in Iraq, the channels of choice are weblogs.
The independant reports: "The internet has democratised everything - including being a war correspondent."
Independant: News agencies lose battle on the internet
Here's a prediction: someone will say something overtly political at tonight's next week's Oscars causing a huge outburst of feigned surprise. Here's another prediction, if nobody says anything political tonight, calls of conspiracy and much thespian flapping will follow. It's a bit like the celebrity Catch-22 below:
"Daniel Day-Lewis, Best Actor nominee for 'Gangs of New York,' described the Catch-22 that celebrities find themselves in -- as they are constantly quizzed by reporters about their political views.
'The media are sick and tired of people in my profession giving their opinion, and yet you're asking me my opinion,' said Day-Lewis. 'And when I give it you'll say, 'Why doesn't he shut up?''"
United Press International: Analysis: Is a Hollywood blacklist coming?
There is renewed optimism about the potential of the Internet and digital technologies. My prediction: its a good time to invest in innovative technology, but for the Telecoms and Media companies investors haven't yet faced up to the fact that they are companies that are based on business models stemming from the world of fixed circuit phone calls and analog media. This is gone forever.
"most dotcoms have failed, and the telecommunications industry, which raced to build the infrastructure for cyberspace, is staggering under $1 trillion of debt. Yet it would be wrong to conclude that this is the end of the internet revolution. Boom and bust often follow the introduction of radically new technologies. In the 1870s America's railroad industry boomed in much the same way as the world's telecoms industry in the late 1990s, only to collapse in a similar heap of bankruptcies, accounting scandals, stockmarket losses and enormous debts. America's economy fell into recession.
A few years later, a reviving economy together with advances in railway engineering triggered a new wave of investment. Railroads quickly revived, changing American business forever."
The Economist Digital dilemmas
A predictably excellent essay by Clay Shirky on the threat to phone companies from Voice Over IP and WiFi networks.
"they've [the Telcos] digitized their entire network up to the last mile, but are still charging the high and confusing rates established when the network was analog."
Shirky: Customer-owned Networks and ZapMail
Clay describes Fed Ex's failed fax service - where they supplied a network of faxes and charged less than physical delivery of documents. This failed because people bought faxes themselves. Clay asserts that charging existing rates for telephone calls is a scam that can only be pulled off if the Telcos keep control of the last mile. If people buy products like SIP phones (Internet phones) and use the Internet then they have taken control of the last mile.
Whilst this is great stuff, there is an addendum to the argument.
The problem is that this assumes that no-one owns the Internet as a network, and this is only partially true. A large portion of Internet traffic flows over networks controlled by the Telcos. As they lose the battle for the last mile they will be able to use the leverage they have over the backbone. To do this they will need to be able to differentiate the type of traffic (web browsing, phone calls etc.) flowing over the network. True, costs will crumble, but what we are seeing is a convergence of the all you can eat Internet access model and the pay-per-use voice network model.
The analogy here is the road network versus the rail network. Existing telephone companies run rail networks (and some of the roads). Buying a product like a VOIP hub to use over the free Internet is buying a car to save on monopolistic rail fares. But someone needs to maintain the roads, and there are taxes for their usage and tolls for the bridges.
I suspect that the short term outcome will be much as Clay describes - a revolt against expensive land lines and effectively free phone calls - but nothing is free for ever and in the long term there will be payment. Perhaps network usage will be based upon a bandwidth per datatype fee (text messaging will be more expensive per bit than video) and the Internet will replace private switched networks for most uses other than point to point or mission critical uses such as bank transactions and EDI.
Although not very well known in the US, Espotting has search engine paid placement sewn up in Europe.
As Overture faces pressure from Wall St. to maintain growth to justify its current valuation, Espotting looks like an obvious acquisition target to improve Overture's position in Europe.
1. Verity will dominate enterprise search trailed by Autonomy with Google nipping their heels at the low end.
2. The categorization space will cease to exist other than a few niche players, possibly Stratify and InXight.
3. The enterprise portal space that effectively vaporized with the acquisition of Epicentric and mundane performance of Plumtree will be replaced by EAI vendors. They will raise the portal idea to the next level, linking enterprise applications that have standardized web services based APIs.
4. There will be an inevitable weblog backlash as big players show interest but get it wrong.
5. There will be an XML backlash as people realize that companies have been paying lip service to standards whilst building a colossal Tower of Babel.
6. Telco's that did not get burnt by 3G licenses such as Italia Telecom will go on shopping sprees and get some good stuff cheap.
7. Japan will provide financial aid to North Korea to stop military posturing.
8. House prices will crash in parts of the US and most of the UK.
9. The US will eat less fast food.
10. The US and Britain will go to war with Iraq on the 27th January.