Google IPO site online

The Google IPO site is now up and running. While I have no intention of buying shares through the auction, I went through the process of getting a bidder ID number... and it was very easy. Maybe I should put it up on eBay... just kidding!

Is Microsoft the GE of the tech world?

General Electric is a large diversified conglomerate that focuses on various industrial markets. For a while now I have felt like Microsoft has become the GE of the technology industry. Microsoft is very much like a large diversified conglomerate, but it focuses on technology. While it isn't as diversified as IBM, Microsoft seems to have its hand in every major market in both the consumer and business space. With Microsoft's move to distribute cash through dividends, it is becoming harder not to think of them like GE.

Samsung is the next Sony

Often when you work for a company the natural instinct is to believe that your company is great and will ultimately succeed in the marketplace. I felt that way while I was at Samsung last year and wondered if I was incapable of being objective. Now that I have been away from the company for a year I believe I can be more objective:

I am utterly convinced that Samsung will surpass Sony in the next couple of years in both brand equity and CE market share in the US. The only thing holding Samsung back is that the company is still heavily managed from Korea, and they don't allow US executives that understand the US market run the show. If they fix that issue, this company will dominate for years.

Rough day for Intel

It seems like Intel has been having a rough year. First the whole AMD kicking their butt thing, and now today they have released two other pieces of bad news. Their top end 3.6GHz chips are in short supply, and they have officially announced that they will delay their 4 GHz chips until next year because they want to make sure they have enough supply during launch. These operational mistakes by Intel are uncharacteristic, but more importantly they have once again opened the door for AMD to take market share. This year could be AMD's opportunity to really turn this market from a Monopoly controlled market to a duopoly. For consumers sakes I hope they can pull it off.

Trusting Microsoft with your finances?

Apparently some customers of Microsoft's Money product have been locked out of their finances stored online since Monday. Could you imagine if you were a small business and couldn't keep track of your company finances for 4 days?? Even worse, if you use the service to pay bills online and you can't do so because of this bug. Simply put when it comes to online banking service providers need 99.999% uptime.

How hard is counting?

Two market research firms can't seem to count... well actually that isn't the problem, the problem is that they can't agree on how to define the handheld market. While this is kind of fun to joke about, it highlights an increasing trend in the consumer technology field of convergence. Your competitors today will not necessarily be your competitors tomorrow. It is increasingly important for firms to think about the long term direction of their products and how the dynamics of the industry will change as new competition emerges from convergence.

Dirty Trick by Yahoo!

I finally got around to customizing my new laptop from work. I am now in the middle of installing Yahoo! Messenger, and I have found that Yahoo! is playing dirty.

There are two options when installing Messenger, one is the "Typical Install" which includes installing Messenger, the Yahoo! toolbar as well as Yahoo! services like search, Maps, Bookmarks, Games, etc. If you decide you don't want all those "features" installed you can choose the "Custom Install" option. When you choose the custom install option the install FORCES THE USER TO SET YAHOO! AS THE DEFAULT SEARCH ENGINE. In essence, when you decide to install Yahoo! Messenger you better be ready for Yahoo to take over your search expereince, because they won't let you get away with leaving your system as is!

Shame on you Yahoo! There is no need to act like this... you have traditionally be very consumer friendly and this is the type of tactic I would expect from Microsoft.... shame, shame, shame!

Since when has choice been a bad thing for consumers?

First things first... I recently started working for RealNetworks and all my posts represent my personal thoughts, and don't represent the company. Ok, with that out of the way....

I was recently baffled when I read Peter Burrows' article on how RealNetworks' new Harmony technology is bad for consumers. For those of you that don't know, Harmony is technology developed by Real that allows users of the new Beta RealPlayer to load hundreds of devices, like the iPod, with music purchased at the Real Music store. What this means is that the thousands of iPod owners out there now can buy music from a company other than Apple itself.

Mr. Burrows argues that this additional choice is bad for consumers because Apple's control over the music service and hardware allowed for the creation of a great customer service that resulted in the explosion of the digital music market. I will concede the point that this closed architecture created a great consumer experience, but does that mean that every tech architecture should always stay closed? Should IBM have never opened up the PC? Should BestBuy start selling their own DVD players that will only play DVDs bought at BestBuy?

History has shown us that it is typically a closed architecture that helps to bring a new technology/product to the masses, because closed architectures are good at creating strong consumer experiences. History has also show that market forces over time break these systems open because as the market and technology mature, a closed system is no longer necessary to create a compelling user experience. In addition closed systems are typically more expensive than an open system because a single company is typically not able to sustain an advantage at every component in the architecture. Therefore it is inevitable that over time the closed systems that helped to establish a market must open up to help really grow and mature the market. Should the company that controls the closed system be able to dictate the pace of an entire industry? Should that company be able to lock their customers into their products as long as they would like?

Fundamentally Real is simply trying to offer consumers more choices when it comes to purchasing their digital content. Before Harmony, if spent $300 on an iPod, the only legal music service I could use to fill my iPod was iTunes. So lets say I spend $1,000 on filling up my iPod with music and in 3 years I want to buy an portable music player from iRiver... all of a sudden I realize I can't take the AAC files I bought from Apple to my iRiver... does that sound right? Now with Harmony, when you buy your music from Real you can load that music on ANY of the hundreds of portable devices that the RealPlayer will support. No more lock in! At the same time, no company is forcing you to buy music from Real or use the Harmony service (like you were forced by Apple to use iTunes).

So I ask you... how is this bad for consumers? This is clearly good for consumers. This is choice. This is free markets at work. This simply good for everyone who believes that consumers shouldn't be locked in.

Online ad spending - $16 billion by 2009

While I have seen lots of surveys around the growth of online advertising, this one doesn't seem to be aggressive enough. I recently heard that males in the roughly 17 - 24 demographic spend around 16 percent of their time online. I would expect this time to increase across all demographics and for the dollars to follow proportionally. Now I am sure the people that conducted the survey followed the same logic, but only 9% of ad money going online seems really low to me in 2009.

Bugs in CE devices vs. Computing Bugs

I have personally found a lot of evidence that consumers have different expectations when it comes to computers and CE devices. According to the prevailing mental model, CE devices just flat out work and they don't become obsolete for 5 or more years. Meanwhile, computers are buggy systems that crash every now and then and become obsolete in around 2 or 3 years.

With the convergence of CE and computing consumers will have to learn to tolerate a bug or two here or there. Unfortunately, for TiVo a bug in their software has become news worthy. Imagine if every Microsoft bug got this much attention... there wouldn't be enough ink to print out all the stories.

Gateway enters retail partnership with....

In a shocker (I hope you can feel the sarcasm in my writing) Gateway has announced that they will sell product through BestBuy. Given the CEOs former employment at Best Buy, this strategy was as hard to predict as the predicting the sun will come up tomorrow.

And I thought 5 mbps was fast!

When I was living in Boston I had RCN as my broadband provider. RCN offered 5 mbps download speeds which was blazing fast. Time Warner Cable is now planning on offering 6 mbps through its Road Runner service. At 6 mbps consumers will easily be able to enjoy online services like high quality video streams (think live sports, movies streamed to the pc, etc.)

Work & Blogging

So far this week I haven't had much time to blog... my first week of work has kept me busy. Well hopefully tonight I will unleash a torrent of posts to catch up on the last few days.

Gateway CEO speaks out

Gateways new CEO, Wayne Inouye, has not talked to the press much since taking over the company a few months ago. In an interview with news.com Wayne outlines his plan to resurrect Gateway. The most interesting quote of the article in my opinion is as follows:

"We provide highly configured, very inexpensive products that provide an exceptional after-purchase service. I really look at eMachines as being like Toyota, and I look at Gateway as Lexus."

This dual brand approach in an interesting strategy since these brands used to represent entire companies, not just product lines within a company. It will be interesting to see how the company tries to align consumers around the brands through distribution and branding.

Why Google isn't worth anywhere close to $30 Billion

On the same day that Google announced they expect to IPO with a valuation most likely exceeding $30 Billion, Microsoft quietly reminds all those paying attention why you shouldn't bet the farm on Google.

Today Microsoft released a beta version of their MSNBC Newsbot. The site is very similar to Google's News site, but has one major difference, the ability for the software to adapt to show you the news you want to see. After reading a few stories I found the site was able to quickly find and recommend news stories I was interested in. The service isn't perfect, first off the site annoyingly shows a history of all the stories you have clicked on at the bottom of the page which I find somewhat invasive, and also the page isn't easily customized like your My Yahoo! page. Yet given these drawbacks it is easy to see the potential behind an "adaptive news service". Toss in the potential ability to have blogs recommended based on your reading habits and I think you have a winner.

So, given this new reminder of the brutal competition that will exist in the market, do you think Google deserves the type of premium they are seeking? I think the only way to say yes to that is to believe my "perfect storm" scenario for the company.

Brother and Sister play nice after 3 years.

When AOL bought Time Warner (yes I know it was a "merger", but get real, AOL bought TW) the acquisition was based on the premise that content and distribution would play well together. Almost 3 years later AOL and TW are finally starting to fulfill that promise. Exclusive content on the net is a great way to retain customers and drive revenue... if any company has both the content and the distribution channel to make it happen, it is Time Warner.

Interesting day to start at RealNetworks

Tomorrow is my first day of work at RealNetworks. After arriving in Seattle I did my usual tech news reading and came across this report from News.com that details RealNetworks' plan to open up the iPod by allowing songs bought through the RealNetworks music store to be played on the iPod.

My only comment on this matter is that this move by Real represents a huge step forward for consumers. A few weeks ago I wrote how many companies selling digital music have decided to compete by locking in consumers. This move by Real shows that the company is not interested in locking in consumers through DRM, Codecs, Players, etc, but instead interested in providing consumers the best digital music experience possible, with the freedom to buy music and be sure you can play it anywhere on any device.

When the ability to download the beta software goes live I will post a link to it.

Huge innovation in music

I could make a big argument that the world of audio hasn't had many major innovations other than distribution formats over the last few decades. Well I am honestly excited by this innovation in music.It appears that the people behind MP3s have developed what is best described as "3D sound". Imagine sitting in a movie theater and having is sound like the car on screen is driving through the middle of theater. How cool is that... make sure to check this out.

iTunes: an insurance policy against piracy?

Remember when artists refused to allow their music to be sold online? Well now bands like U2 are using the online channel as an insurance policy against piracy. The band has promised that if songs which were recently stolen showed up online they would release the album on iTunes right away. Now if we can only convince the world to ditch CD releases all together...

Expensing stock options

There has been a huge debate in corporate America around how companies should account for the stock options issued to employees. Huge names like Warren Buffet have stated that it is time for corporations to expense charges associated with stock options, while the entire tech industry has fought against it. While I am no Warren Buffet (he actually has more hair than I do... oh and more cash too), I feel like weighing in on this issue.

In my opinion it is impossible to overstate the importance of this issue. At stake here is the very entrepreneurial soul of America. While Buffet is correct when he states that there are real costs associated with stock options his assessment that it is better to be approximately right than precisely wrong is incorrect in this instance. While today's method of simply ignoring the cost is poor, forcing companies to expense options would do incredible damage to the entrepreneurial energy of America.

Expensing options would force many companies to stop issuing options all together, and thus they will have a harder time attracting employees. To thousands of Americans stock options remain the catalyst behind their willingness to take a risk in a high tech venture. Every day that goes by countries like India are producing high tech college graduates that are starting companies that are eating away at the low end of the technology marketplace. To thrive America needs to continue to innovate and create new high tech markets like Nanotech... but without options how many people will be willing to take a huge risk in starting this industries if they won't get a proportional return for the risk they took?

Given my opinion I was glad to see that the house of representatives shot down a bill to force companies to expense options. Until the finance gurus figure out a better way to calculate the true costs of options we should continue to be precisely wrong, because to be approximately right in this matter is far more dangerous.

From the "If you can't buy them..." category

Comcast might have failed in buying Disney earlier this year, but that hasn't stopped the companies from creating an offering the joint company would have been proud of. It appears that Comcast has struck a deal with Disney to provide Disney and ABC content to Comcast broadband subscribers. The content will include some of the ABC news content along with some Disney children's content.

This deal makes me wonder what companies like Time Warner, who own both content and distribution, are waiting for... they need to get on the Video over the net train before it leaves the station.

Sound familiar?

Over a month ago I called the LG Philips initial public offering "a suckers IPO".   Looks like the market is agreeing with that assessment.  News.com has an article around the cool reception the market is giving to the impending offering. 

After getting burned on a few predictions I felt like I had to show that even a blind squirrel does find a nut every now and then.

HP gets it right

While Sony trotted out their dual layer DVD recorder months ago, they forgot to make the DVDs that users record compatible with most existing players. Fortunately, HP actually looked at this issue before releasing their dual layer DVD burner... Finally a company that looked at the CONSUMER experience!

"For users who want to create video DVDs on their PCs and play them back in the living room, excellent compatibility is a must," Steve Johnson, HP DVD product manager, said in a statement. "We identified and investigated the potential issues and waited until we got it right."

Gates gets it right

I bash Microsoft all the time, but Bill Gates is doing a great thing by donating all the cash he will receive from Microsoft's $3 per share special dividend to the Bill & Melinda Gates Foundation. That means that the foundation will pick up an additional $3 Billion dollars from Gates! While I may detest his business practices, I admire the mans philanthropic endeavors and I hope other do as well. Good job Bill!

Microsoft Finally Announces Plan for Cash

Yesterday Microsoft finally announced that they will be returning cash to the owners of the company... the shareholders. For the first time in recent memory, the company has surprised me in a positive way with the amount of cash being returned. First the company will double its yearly dividend from 16 cents a share to 32 cents a share. While this isn't exactly a huge number when looked at from a dividend yield perspective, the company has been agressivly raising the dividend recently and I am hopeful that will continue over the next few years. In addition to raising the yearly dividend, the company will have a special one time dividend of $3 per share. The last part of the program calls for the company to buy back around $30 billion in stock, which will reduce the number of shares outstanding, therefore raise the EPS and raise the stock price over time.

All of these programs combined will result in around $75 billion being "returned" to shareholders. Now that the company has committed to keeping less cash at hand I wonder if we can expect better corporate repsonsibility when it comes to entering the right businesses (see all of Microsoft's failed hardware plays) and mergers (see the proposed SAP merger).

University spending on consumer tech

When I was an undergrad at the University of Illinois all I got was an email account and file space to create websites and store files. Back then the school was really promoting the creation of websites since Marc Andreesen had just finished creating Mosaic (the browser he created while still at school). Today Engadet is reporting that Duke University will buy each new incoming Freshman an i-Pod. This is on the heels of Universities like Penn State giving students access to online music services like Napster. So what exactly is the role of Universities when it comes to giving students technology?

When it comes to the Penn State deal with Napster, I think it is a good thing because it is a "Win-Win-Win-Win" situation for all the groups involved. The school is probably saving money on bandwidth costs by reducing p2p file sharing, while also limiting their liability with the music studios. Students are getting a music service for a very low price (reportedly only around $3 per student) and they now less tempted to pirate songs. Napster is getting thousands of students using their service and they will have a great advantage in turning these students into full paying customers when they graduate. And the last win is for the music companies. These type of agreements get students used to using legitimate services and not Kazaa.

As much as I like the Napster deals, I loathe the Duke / Apple deal. Engadget has it right when they call the school out for wasting money. The schools is spending $500K on this deal that could be used to help hundreds of financially disadvantaged students pay for school. Additionally, giving students iPods probably will only induce students to steal music... how many kids do you know can afford to spend $7,000 filling up their iPod with songs?

DVD copying on next generation DVDs

It looks like a groups of tech companies and hollywood have come to an agreement around fair use for next generation DVDs. While the details are not yet out, as I have said before it is good to see these groups working together. Now if only there was a group at the table that represented CONSUMERS... too bad the EFF wasn't invited!

Gateway getting out of CE products?

Ever since Gateway bought eMachines, the company has been in flux. While Gateway bought eMachines, it was the eMachines management that took over the combined company. One of the first moves the company made was to close down the Gateway country stores. Now it appears that the company is reconsidering its entry into the Consumer Electronics space. This really is a shame in my opinion since I am a believer that in the near term companies that can offer packages of products that all work together will be at an advantage. I had high hopes for Gateway, but now it appears that company will stop trying to lead the CE / Computing convergence.... leaving that job to companies like Sony who like to use proprietary technologies and closed architectures in their technology.

AT&T to launch 3G services soon

Almost every major outlet has been reporting that on Tuesday AT&T will announce the launch of 3G services in 4 markets in the US. I have been an AT&T subscriber for 5 years now and I have been sooooo excited to ditch AT&T for another provider since my contract is now up. That is until I learned that one of the cities they will launch the 3G service in will be Seattle.... where I am moving to. I will now have to seriously consider if I should give AT&T another shot and try their 3G offering or ditch them and wait for Verizon or someone else to offer 3G in my market.

Microsoft consolidates media & entertainment groups

Looks like Microsoft has decided to consolidate all their media & entertainment groups into one unit. While I don't have the details of the consolidation, I know in the past that almost every business unit at Microsoft had some type of media / entertainment group in it, and that these groups didn't always play nice together. For example, X-Box was in one unit of the company while Windows Media Center was in another, forcing many to wonder which would be the center of Microsoft's attack into the home. Also of interest is that it appears Bill was able to recruit a big name exec, Blair Westlake, the former chairmen of Universal Television & Networks Group to run the unit.

Some drawbacks of VOIP

Voice over IP has been gaining momentum all year as consumers look for a cheaper telephony solution. Yet all is not perfect with VOIP services, as this News.com article points out. Problems with dialing 911 and using services like TiVo can be problematic... but in my opinion shouldn't keep consumers from taking VOIP seriously. The FCC will mandate a fix to the 911 issue, and issues with services like TiVo shouldn't be too hard to work out within a year.

Microsoft & Lookout - What does this mean?

Microsoft announced today that they are acquiring Lookout, a small Silicon Valley software company that makes software to search through emails within Outlook. Am I the only one that really wonders what is going on over at Redmond? Isn't Outlook part of the Office suite that generates billions in revenue and profits? Isn't the company dumping millions into R&D around search? My final question is why would Microsoft need to go out and buy lookout given the resources they have and the fact that they should have more knowledge around Outlook than any other company in the world. Granted they might have bought the company on the cheap, but I just wonder if this is another case of the company wasting more shareholder money.

Orkut: Its all about data and "influencers"

There are a number of reasons a company like Google would launch a social networking site like Orkut.
You could imagine the company selling advertising within communities;for example there is a thriving community around the Simpsons, with thousands of members... it would make sense for there to be ads selling Simpsons DVDs, t-shirts, etc. With membership approaching the 1 million mark, this could help drive a little revenue for the company.

I believe that Google is getting something far more valuable from orkut, and that is data. A while back I commented about how the combination of Gmail, Blogger, Search, and Orkut was helping Google create a perfect profile of people.

What I failed to think about at the time is that Google could be collecting something much more valuable, information on who the "influencers" are in various countries. I define "Influencers" as the set of people that help to drive popular culture and define what is "cool". Apparently Orkut is VERY COOL in the country of Brazil. Over the past month hundreds of thousands of Brazilians have joined orkut. When Orkut was around 500,000 users (just a couple of weeks ago) Brazilians represented something like 25% of the user base. Today with Orkut having 883,000 member, Brazilians account for 43% of the users. That means the number of Brazilians has exploded from 125,000 to 380,000 in just a few weeks. When I do a search to see the number of users, I can seriously have a hard time finding new users that aren't from Brazil.

You may be asking "Ok, cool stats Mark, but why does this matter?". This matters because Google through the Orkut database can track back through the relationships in Orkut and determine what users where the "influencers". While there won't be a single "influencer" that made Orkut popular in Brazil, there will be a relatively small number. Now imagine the ability to buy advertising on an "influencers" home page... WOW! You want your product to become hip in a given country, buy advertising from Google and target those "influencers".

LCD supply trying to catch up to demand

Walking through Best Buy these days you are likely to be dazzled by a wall full of LCD and Plasma TVs. After tearing your eyes off the TVs, you are likely to have a heart attack when you see the price tag... normally over $4,000 bucks. But don't be afraid, help is on the way.

The Joint Venture between Sony and Samsung to product LCD TVs has just finished building their new LCD Plant. Plants just like this one are popping up all over Asia with production ramping up over the next year. So what should you expect in terms of prices... check out this quote:

"The new S-LCD plant is optimized for big panels that can fit into televisions, said iSuppli analyst Riddhi Patel. 'It's going to make the large-size LCDs available at a more reasonable rate,' she said. Partly because of the new factory, the average price for LCD televisions that are 40 inches or larger should fall from about $8,000 to $1,500 by 2008, Patel said."

AT&T - your "powerline" broadband provider?

I wonder how many times a day the CEO of the AT&T pounds his head on his desk and curses Mike Armstrong. As you know, a few years ago AT&T owned a cellular network, a long distance business, and most importantly a huge cable tv business. After splitting up the company, AT&T is now trying to get back into the businesses it just left. After the acquisition of AT&T wireless by Cingular, AT&T will start selling wireless service under their name again borrowing from the Sprint Network. To recover the broadband piece of the puzzle, it appears that AT&T is going after selling broadband over powerlines.

Tech & Hollywood working together

Looks like some of the biggest names in Hollywood and technology are working together to create content protection for next generation DVDs. Hopefully the people in these negotiations will remember that the vast majority of consumers are not evil and they should not create a system that prohibits the majority from using the content in a fair way because of a few rotten apples.

Doom + Back to School

The month of August is usually a strong month for PC sales due to the back to school buying that occurs every year. Well this August we should see another force helping to drive PC sales,
the release of Doom 3.

I am not a huge gamer, but I do know that Doom 3 is expected to be one of the largest PC game releases ever. Reportedly the complex graphics will require gamers who want to play to have the most up to date video cards and processors. Normally you wouldn't expect a single game to have an impact on PC sales, but this one might be just that big.

Time to grow up... Seattle here we come

New degree, new baby, now it is time for a new city and a new job. I will be out in Seattle looking for an apartment this week and I will start my new job in about 2 weeks. I will be a product manager for RealNetworks and I am looking forward to getting started. I will write a little more about my job after I get started, and I can promise that I will try and utilize blogging to communicate with the users of my product. It is important to realize that everything I write here are my thoughts and opinions and don't represent any organization I am affiliated with.

Ok... enough of that, feel free to give me Seattle tips in the comments section. I need to find that perfect place on the cheap!

The rise of FireFox

For a couple of months now I have been watching momentum build behind the Mozilla based browser FireFox. A few weeks ago I made the switch myself and recommended that anyone reading this blog give FireFox a try. When even greater security problems were discovered in IE I have been wondering what is happening with market share in the browser space... well today News.com has a great article detailing exactly what is going on.

According to WebSideStory, Mozilla based browsers like FireFox have gone from 3.5% market share on June 4th to 4.6% on July 9th. Microsoft's IE has lost 1.3% of the market over the same time, down to 94.1%. While I am not saying that IE is in any real trouble... they still have 94% of the market, there are anecdotal signs that consumers are looking for something better. The first sign for me is that my father (who I will admit is more tech savvy than the average consumer) asked me today about switching from IE to Mozilla. The second sign is that almost everyone I have talked to says that once they have tried FireFox, they will never go back to IE.

Everyone knows how fond I am of competition... competition spurs innovation. Therefore I am openly rooting for Mozilla to continue to gain market share. I hope every FireFox / Mozilla user helps to market the browser to their friends and that the browsers wars get restarted.

Exactly how happy do you think all the Picasa employees are today?

Every small company in the valley that remotely works in the same space as Google must dream of being bought by the firm pre IPO. Well today Picasa is living that dream. Picasa has developed software that allows users to manage and share their digital photos. Back in May Google announced that Blogger would support Picasa so users of the service could post photos to their blog.

More proof that competition rules...

Just 6 months ago there was no more boring market that the free web based email market. The two dominant players, Microsoft (Hotmail) and Yahoo, had no incentive to innovate or invest in their product offering. That all changed on April 1st when Google announced their entry into the market with Gmail. Since that announcement Microsoft has announced they will relaunch Hotmail with 250 MB of storage, and Yahoo has already relaunched their mail service with a new interface and 100 MB of storage.

In more signs that this market matters, Yahoo! announced they will acquire Oddpost. Oddpost provides web based email, photo, and news aggregation services. Does anyone think any of this would have happened if Google hadn't announced Gmail?

Continental Airlines offers free Wi-Fi

Continental Airlines offers free Wi-Fi service no... not on their flights, but in their Presidents Clubs. This news got me thinking... how long will it take after Wi-Fi is offered on flights before the airlines start to give it away? I can imagine all "Platinum" frequent flyers getting free wi-fi, or something along those lines. In essence, I think the airlines will just throw away another revenue opportunity because all they ever compete on is price.

Does Microsoft have any credibility left with release dates?

"Service Pack 2 for Windows XP will be released in June... wait, make that July.... did we say July, what we meant was August, and we mean it this time."

It now appears that Microsoft's service pack 2 for Windows XP (the service pack that should help plug some of the giant security holes in Windows) won't be released until August. Not only has Microsoft had to pull developers off of Longhorn to work on SP2, but they are going to deliver it way late. I am starting to wonder when we will hear about Longhorn slipping another year to 2007.

Idiots in action

I don't like judgmental people. Yet in writing this blog I know that I am sharing my opinions about companies and people, and those opinions may appear judgmental. This is one situation where I don't mind appearing judgmental!

News.com has an interesting article about CD copy protection and the problems it is causing consumers. The article is great because it epitomizes exactly what is wrong with the music industry: they don't care about their consumers!

A recently released CD with copy protection hit #1 on the charts, and due to the copy protection on the CD consumers are having a hard time ripping and transferring the songs to their iPods. These companies are so concerned about piracy that they are willing to make the consumers WHO ARE STILL BUYING CDs (all 10 of them), jump through hoops to get their music on their iPod. These consumers who are obviously somewhat savvy about technology (they own iPods) now have an incentive to either download the songs they want from the album from iTunes or to steal the album outright to get the music on their iPods.

Watching the record industry over the past 5 - 7 years has been like watching someone try to put out a fire with gasoline.

100 Million served and counting

Apple has announced they have sold over 100 Million iTunes. While I believe that numbers like this represent the willingness of consumers to pay for digital music, I don't believe that this validates the Apple model of selling songs for 99 cents each. I continue to wonder how consumers are loading their iPods with music... is it really from iTunes or is it from Kazza? I can't imagine a new consumer in the digital music market paying $3000 and taking the time to fill up their iPod with legal music. I really believe that over time the music subscription model will prevail for those serious music lovers.

P.S. - This really reminds me of when McDonalds used to have "5 Billion Served" on all their signs

Michael Powell of the FCC starts blogging

The power of bogs can be amazing. Last week Michael Powell, Chairman of the FCC, started a blog. While most in Washington would probably want to use a blog for a one way conversation, Mr. Powell understands that blogs are meant to start conversations. He openly calls for people to send him their thoughts, and I would recommend that you do just that, I know I will!

The coming attack of portable media centers

Amazon is now taking pre-orders for portable media centers like this Creative Labs 20 GB Zen. Don't expect these devices to take off anytime soon for the following reasons:

Price - at $499 this device isn't priced for the mass market. Additionally, the value proposition for this product (aka - why someone would buy it) is currently really hard for the average consumer to understand. The concept of taking audio along with someone has been around since the Walkman, but taking video is completely different and spending $499 on a product you don't understand is a tough sell (see the early days of TiVo)

Ease of Use - No matter what the manufactures and Microsoft will tell you, getting content onto one of these devices simply won't be easy for most people. Consumers don't understand all the issues around codecs, various ways to connect the device, etc. And just wait until someone tries and load one of these devices with a DVD they already own and they find out they are breaking the law (The DMCA prohibits breaking the encryption of digital content even for obvious fair use situations as this).

Microsoft's Mid-life crisis

I have read about 20 stories detailing Microsoft's "mid-life crisis", but this one over at BusinessWeek is short and to the point. While a lot of stories on this topic focus on the need for Microsoft to find new areas to grow revenue, I think this story hits upon a much larger issue, and that is employee moral. I have talked with people at Microsoft and they certainly don't have that same "change the world" energy as they did the past. Many of the people I know there look at it as a "job". I compare this to the time I have spent talking with folks at Google, and the difference is unbelievable. Google employees are fanatic about their ability to change the world and make a difference... so much so that I times the culture is almost cultish.

Moogul, a potentially interesting service

Just when you thought every internet based business idea had been taken, along comes a company like Moogul. Moogul is a service that will help you "borrow" from friends and strangers alike. The idea is simple, I have something in my house that someone else would probably want to borrow, and vice versa. Moogul helps facilitate this trade.

Given that the value of Moogul will be proportional to the number of users of the service it will be critical for the site to ramp up fast, before a site like eBay gets into the game.

Who said portals couldn't make any money?

Remember a few years ago during the internet bust when everyone was saying there was no way to make money on the net? Well yesterday Yahoo! announced they made $112.5 Million in the past quarter, not too shabby.

While Yahoo's stock has dropped because Wall Street was hoping for another blow out quarter, the turn around at Yahoo! shouldn't be overlooked. It appears to me that Terry Semel has created a company that has the right balance of media savvy and technology know how. Maintaining this balance will be critical as the company continues to compete with technology powerhouses (Google and Microsoft) while at the same time showing companies interested in advertising with them that they have the media know how.

Posting Via Email

I am an addict when it comes to staying on top of tech news, so I am going to try and post via email. Please forgive any formatting problems with my posts for the next few days, as sometimes Outlook and Blogger don't play well together.

Competition in digital music

Firms in industries with competition must compete for customers. The firms in each industry must decide what the basis of competition will be in their industry while not breaking anti-trust laws.

For example, the beer industry has clearly decided that they want to compete for consumers based on advertising and distribution. You rarely see a price war break out with Bud Light being priced at cost and Miller Lite being priced at cost trying to win new customers. Both Miller and AB know that if they compete on price they will both lose money. Just look at the airline industry, they compete on price and therefore firms have a very hard time making money.

The digital music industry appears to be trying to figure out what the basis of competition should be. Firms know that to most consumers, digital music is digital music, and therefore if they compete on price, firms on average won't be able to make money. This is why almost every firm offering digital music downloads attempts to lock in consumers in some fashion. Today most are trying to use their DRM technology along with a portable music player to lock in consumers (think iTunes and iPod).

Consumers in the long run won't stand for incompatible music standards and lock-in, but that doesn't mean that firms won't try and establish their technology as the industry standard. This is why Sony launches ATRAC even though there are numerous codecs that are good enough for consumers.

Are accessories where the $$$ is?

Philips Electronics recently announced they will purchase Gemini Industries, a maker of accessories for consumer electronics devices. Accessories are often the products in the CE industry that carry the highest margins. I spent the summer of 2003 as an intern for Samsung Electronics America and at the time they could sell a high definition TV with a solid margin, but the margins wouldn't compare to the margin on the $500 TV stand that was often sold with the set itself.

5lbs 2oz, 17in

These are the stats of the miracle that entered my life last night. While she came about 5 weeks early, both mom and baby are doing great and we couldn't be more blessed. I don't expect to write much this week, but I will certainly be back soon.

Importing your contacts into Gmail

I didn't intend to blog this weekend, but given how critical I have been of Gmail, I thought I should recognize when they do something well. Google has provided the ability to import your contacts into Gmail! The good news is that the import function uses a CSV file format and it is easy to use. It took me about 2 minutes to load all my outlook contacts. The only bad news is that while Yahoo! will allow you to export your contacts in a format you can import to Gmail, AOL and Hotmail don't have the ability to export address books, so as of now you are out of luck.

For full details check out the Gmail Help Center

One gadget I will never want....

I think I have found the one gadget that I will never want. While I have seen "voice lie detectors" at shops like Sharper Image for years, it appears that these devices are starting to move into corporations and possibly consumer markets. The last thing I need is to have one of these laying around the house and have my wife ask me "how was dinner" or "do I look fat in this"?

For those of you in the States, have a happy 4th of July weekend!

Now available on your "My Yahoo!" page

A few years ago I started viewing Yahoo! as a media company who didn't really understand or care that much about technology. This perception has changed over the last 7 or 8 months, and one of the things that helped to change my view is Yahoo's adoption of RSS. For example, anyone with a My Yahoo page can add RSS feeds to their page. Even though Google's Blogger (which I use for this site) only supports the Atom syndication format, you can still get a feed for this site on you "My Yahoo!" page by clicking on the "Add to my Yahoo" image below. You will also see this image on the right hand side of this page under my Blog Roll.

Is Sony making a HUGE mistake?

Sony made a splash today with the announcement of 2 hard drive based digital music players. And while initial reports, like the one linked above, state the device will playback MP3, WAV, and WMA file formats, the men over at Engadget (the best Gadget blog on the net) have done some investigating that comes to a different conclusion. According to this posting, it appears you will have to convert your MP3, WAV, and WMA files to Sony's ATRAC3 format.

I have been saying for a long time that I think Sony is out of touch with consumers (see postings on their Wireless TV products, and their Music Store) but this takes it to a new level. Does Sony not realize that music enthusiasts who would be willing to spend $400+ on a portable music player already have thousands of digital songs, and they don't want to take the hours necessary to convert them to the ATRAC3 format. Not only will converting the songs be a pain, but given that you can't play the ATRAC3 format on other devices, you will now have to store and maintain all your songs in 2 formats! This is a company that needs to start thinking about CONSUMERS, and not format/standards wars.

Classic Microsoft

Along with PageRank, one of the most innovative things Google did was keep its user interface simple and streamlined. Today Microsoft is pulling a classic "Microsoft move", as it tries to catch up in the search engine market. Check out this new stripped down MSN search page, and tell me that it doesn't remind you of Google's interface.

When a competitor gets ahead of Microsoft the company will first try and catch up to the firm by imitating the firm's products and features. Then if possible, they will tie the product back to existing products like Windows and Office to leverage their market power. As they start to gain market share they will increase the rate at which they innovate, pushing hard to get to a tipping point, where the market will tip in their favor. When they reach the tipping point (typically some point around 30% market share) the company will pull back resources and redeploy into other markets and the rate of innovation on the product will slow dramatically until they are tested again.

Microsoft is clearly following this strategy in search. Today they are in the "imitation" phase, with the launch of Longhorn they will be in the "tie in" phase. This strategy is so easy to follow that Google and Yahoo know it is coming. I only hope that they fight it off better than the firms in other markets.

21st century Betamax vs. VHS

I used to wish I was old enough to remember the VHS vs. Betamax standards war. Being the geek I am, I would have probably bought a Betamax and gotten screwed in the end, but since it is THE classic standards battle, it would have been worth living through in real life.

Well, now I can live through my generations Betamax vs. VHS, as the HD DVD standard begins to battle it out with the Blu-ray DVD standard. Given the history of these standards I don't expect them to merge, so we can expect there to be some big winners and big losers in this fight, which always makes it interesting.

Finally Ellison trumps Gates

One of the most interesting things about the antitrust case against Microsoft a few years ago was watching the videotaped deposition of Bill Gates. Gates got pushed around the stand and looked both childish and incompetent at times. Unlike Gates, it appears that Larry Ellison can hold his own on the stand. While I haven't seen a videotape of his testimony, the summary provided makes it appear that Larry did a good job articulating Oracle's reasons for trying to buy PeopleSoft.

While I think Oracle's claim that they won't have any pricing power after acquiring PeopleSoft is a joke, I think Larry did a good job articulating the potential threats that would cause pricing pressure. This is also clearly a situation where Microsoft sitting on $60 Billion in cash can really help Oracle, because it makes the boys up in Redmond a legitimate threat to enter the market and cut prices.

Put down that Pentium 3 and put your hands in the air!

It looks like the defense department is now considering putting that dusty old desktop computer (and anything more powerful than it) on list of items that would require a license to export. Read more about this here.