Google Browser

There has been a lot of talk about a "Google Browswer" which I am in favor of. But before launching their own branded browswer (most likely based on Mozilla's FireFox) I would like to see Google get their site working with FireFox. Today I couldn't finish my Adsense forms with Firefox, it consistently had problems but worked with IE. Additionally the blogger tools don't work well with Mozilla... there are numerous bugs in the spell checking tool inside FireFox.

So before you launch your browser, which I hop you do, PLEASE get your in house sites to work first!

My apologies

I am sorry if anyone had trouble with the site today... I modified my site to add the Google AdSense program that you see to the left, and didn't properly test it. I will report what I find from these ads.

Mark

HP's iPod - A distribution deal by any other name

There has been a huge amount of news around the launch of HP's iPod. While this product launch was not a surprise (HP announced this a long time ago) what was a surprise to me is that the product is essentially nothing more than Apple's design with no meaningful HP branding.

With their launch of numerous CE devices (Plasma TVs, media adapters, etc.) what does HP's inability to negotiate any real branding on the "hPod" mean? It means that Apple has a lot of market power right now in the portable device arena, which is obvious. What isn't obvious is that it also signifies HP's willingness to be almost nothing more than a distributor if they don't think they can win in a market.

Lets be clear here, this is NOTHING more than a distribution deal. HP clearly doesn't have control over the products design or features. I am also certain that HP doesn't have too much control over pricing, branding, or any other marketing function. No, HP has control over a single aspect of the hPod... and that is distribution.

Should I continue?

When I started blogging I was a business school student just letting my opinion on certain topics be known. I really enjoyed being able to write on any topic at any time. I could call out Sony for various mistakes in the market without worrying about anything... I could praise Google one week for creating Gmail then bash them later for what I would consider poor execution of a good strategy. I simply didn't have to worry about anything since even though I was interviewing with many of the companies I would bash I felt comfortable standing behind my point of view in any interview.

Now that I have started work at RealNetworks I have found that I can't really talk about the topics I love... consumer electronics, digital media, etc. I am simply concerned that my views will either be viewed as RealNetworks point of view or that I will give away how I view a certain industry. For example, I have strong views about certain things in digital media and how it will interact with CE devices, but I can't express those thoughts because they are the same concepts I will fight for here at Real.

So I have been thinking about a few options... One option would be to just stop writing on the topics that I have conflicts with. The problem with this option is that these are the very topics I am most passionate about. A second option would be to kill this blog and then start up a new blog where I would write under a different name. A third option is to just stop writing all together.

If you have some advice please email me or post in the comments for this posting.

Thanks!

Browser campaign slams IE

There is a great campaign being run over at Browse Happy that is pushing people to try alternatives to Internet Explorer. I learned of this site through a News.com article that is linked below... but one of the quotes stood out so much I had to call it out here:

"'We believe that customers will choose the browser that best meets their needs,' a Microsoft representative said. 'We believe that most will continue to choose IE when they evaluate all of the factors: end-user functionality, site and application compatibility, developer extensibility, enterprise manageability, and security backed by the processes and engineering discipline employed by Microsoft.'"

This is a joke right? Since Netscape died how many people really have taken the time "evaluate" alternative browsers? How many people even know there are alternative browsers out there? What percentage of those people are probably scared to try something new in fear that it won't work the way they need it?

This campaign will help to remedy some of those issues. But one of the issues I would like to see fixed is that I have to have internet explorer installed if I want to go to the Windows Update site. The site doesn't support FireFox... How is this not a blatant abuse of their Windows monopoly? Microsoft is forcing me to keep IE on my computer if I want to browse over to the Windows Update site. Shame on them.

Microsoft in the TV value chain

Microsoft has been trying to get in the TV value chain for some time now. Think about all their TV plays... WebTV, UltimateTV, investments in Comcast and other MSOs, codec development for next generation DVD players, etc. Well it looks like they have made some inroads with their IPTV initiative. Now you can look forward to that blue screen of death on your TV as well!

Instant Messenging still growing

The diffusion of technology through the mass market is always an interesting phenomenon to watch. IM was "cool" to me in the mid 1990's. My generation has been using IM for close to a decade, but as we all know it takes time for the masses to pick up new technologies, and this past year has apparently been a boom time for instant messaging.

Some of the technologies I expect to see boom in the next 2 - 5 years are Syndication (RSS / ATOM) and BitTorrent (or another "smart" P2P technology). Each of these technologies is pretty mainstream to those always looking for what's next, but to the masses they are still way to hard to use to really have a great impact.

VOIP - feature, product, or company?

Eight months ago I was at a talk given by Marc Andreesen and he was asked about all these anti-spam companies that were getting started. Marc's reply was that people often confuse some basics of business... a stable company should be made up of multiple products and these products are made up of multiple features... all adding value to a customer. He claimed that spam filtering wasn't something to base a company on, since it wasn't even a product, it was a feature that belonged in another product.

With the announcement thatLinksys and Vonage have teamed up to integrate the linksys routers more closely with the vonage service I have started to wonder if telephony services have moved from being a "product" to being a "feature". In the coming year we will see VOIP functionality being deployed in various products including home routers and set-top boxes... with numerous companies pushing to get their VOIP offerings integrated into these access points I wonder when a company like Cisco (which owns linksys) doesn't jump into the fray and just build this "feature" into their product set (assuming no IP issues).

Company, product, feature... there was not doubt in the past that home telephony was a single product that minted money for huge companies, but I really question if in the near future home telephony isn't just a feature that needs to be offered within the context of other products just to be competitive.

The most powerful company in CE

A while back I wrote a piece about Walt Mossberg calling him the most powerful man in Consumer Electronics. Well today it is time to talk about the most powerful company in CE... no I am not talking about Sony (which would have been the easy winner years ago), I am talking about Best Buy.

With the infusion of Korean & Chinese CE manufacturers the CE market has gone from a brand game to a distribution game. While names like Sony still command a price premium, that premium is slowly eroding... becoming less important... what every company needs to survive these days is distribution. The key to distribution in CE is Best Buy. Best Buy is the countries largest CE retailer and their lead is growing... they are doing so well they are pulling away from Wal-Mart... a great feat.

Every company from Gateway which is getting back to focusing on computers to AT&T, which is trying to transform itself to a VOIP company is now selling through Best Buy.

The guys at Best Buy know they are kings today, but they aren't resting on their butts sipping champaign... they know that Wal-Mart is a big threat... but they also know that Cable companies represent a threat. With the purchase of Geek Squad last year Best Buy signaled their intention to really fully own any given customer... Geek Squad will come and consult you on what you should buy and install if for you... Don't hold your breath for Wal-Mart to make the same move. This move was in defense of the Cable companies and RBOCs which will want to do the same thing.

Convergence is creating odd competition, and sometimes the key to success is simply recognizing that your competitors today won't be competitors tomorrow.... I think Best Buy understands this, and therefore I think they have a good chance of retaining their power in the CE industry.

Response to Harmony...

After posting about the importance of choice brought forth through RealNetworks new Harmony technology, Aaron Raphel, a friend of mine from MIT sent me the following points which he wanted to put in the comments. I think he raises good points so I wanted to address them here. Each section below is his comment followed by my response:

Aaron
1) I agree that choice is good for consumers, but what's wrong with consumers *choosing* Apple's model of iPod/iTunes integration? You assume that someday, I will want to move my music from my iPod onto a different MP3 player, and I question that assumption. I don't feel locked in at all--I had full choice of MP3 players, music stores, streaming services, etc. and I chose Apple. Just because other companies have less attractive offerings doesn't mean that Apple is doing anything wrong.

My response:
There is NOTHING wrong with consumers *choosing* Apple's model of integration... but I wonder how many iPod owners know that if they want to choose another MP3 player later on they will have to go through a difficult process to get their songs onto those devices. My guess is that consumers don't know they are locked in. This is all about choice, and we want to make sure consumers make an EDUCATED choice... and if they choose Apple's integrated closed approach, great... if they choose Real's interoperable open approach great... but atleast they have a choice.


Aaron:
2) If the courts decide that Harmony violates a law, then customers who purchased music *thinking* they could play it anywhere will lose. I'm not saying that Real did anything wrong, but there are numerous scenarios where the Real songs I purchase today won't play on my iPod in three months. Harmony may be legal, but it's also legal for Apple to change their firmware to prevent Real music from playing. Ethical issues aside, consumers may still lose out.

My repsonse:
For songs purchased from the Real Music Store to not work on an iPod will require that Apple either 1) Sues RealNetworks or 2) Purposefully breaks our Harmony implementation. While I am not a lawyer, I have talked to lawyers who believe that our implemention is perfectly legal and in the spirit of interoperability. If Apple decides to do a firmware update we will work hard to implement a fix that ensures your songs get on your player. Either action by Apple will be without question anti-consumer. Think about it, if they do this they are trying to eliminate consumer's ability to choose, and I doubt they will do it. My best guess is that the likelyhood of a consumer switching MP3 players in the future to a player where their music bought through iTunes is no longer supported is much greater than the odds of either one of the above happening.


Aaron
3) Can someone please explain to me how the music that Real offers is different
from the music Apple offers? I could see the argument about consumer benefit
making sense if Real offered a completely different music library, but as far
as I can tell, they don't.

My Response:
For the most part each music service has the same library of songs... this is because the major labels aren't playing favorites and giving similar deals across services. While the content offered is similar, the Real Music Store has all of their music encoded at 192Kbs while the iTunes Music Store is encoded at only 128Kbs.. while you won't notice the difference on crappy headphones, you would hear a difference on a home stereo.

Aaron:
4) As a shareholder in Real, I wouldn't be so excited about a loss leading
strategy that's designed to grow market share. That seems like a risky
strategy, because I see no reason for consumers to stay loyal (see point 3
above). Yes, I can get my music cheaper, but if it stops working (point 2),
then I lose. Unlike Microsoft's dominance of the OS market, I think Apple's
large market share is because of a superior product and service, not any
strongarm tactics. If that's the case, then I can't see this music sale
helping Real.

My Response:
Any marketing promotion/campaign is designed to have a positive ROI... we believe that this promotion will in the long run have a high payoff. Hopefully we will gain more users of our music services while at the same time educating users around the advantages of choice and better quality music.

Now the choice is yours!

Choice is good... No wait, choice is GREAT! Last week I blogged about how when I set up my broadband connection in the home I got a better deal because there was competition (read choice) in the market.

Today RealNetworks (whom I work for... but all postings represent my thoughts and not the companies) has created a choice for consumers. With our new RealPlayer 10.5 with Harmony consumers can buy songs from the Real Music Store and put that song on roughly 90% of all secured digital playback devices. Why does this matter you may be asking... here is why. Imagine you have an iPod today and you have bought 500 songs from iTunes. In a couple years if you want to switch over to a different "MP3 Player" you won't be able to simply load your songs onto the device and go. Yes you paid for the songs, but since Apple has decided that they want to make money through their iPod product, they want to lock you into their products. To get your songs onto your new devices you will have to spend hours burning CDs and then re-ripping the songs. So while you "own" your songs from iTunes, Apple owns you... how is that right?

Rather than worry about lock in you can buy songs from the Real Store and not worry about lock-in, because with RealPlayer 10.5 you can take those songs and load them on an iPod today, a Rio device tomorrow, a Samsung Yepp the next day and so on...

While I am obviously biased because of my affiliation with Real, anyone who reads this blog knows I favor free markets and competition. This is a big step in the right direction for consumers.

Now for the objective news... even if you think I am full of it and just pumping my company, you can check out the service for CHEAP!!! Only $0.49 for a track and $4.99 for most albums... that is around a 67% cheaper than most CDs at the store... how is that for consumers winning!

Google... promising revolutions, producing evolution

Why is it that I have the exact same feeling about everything Google announces... and that feeling is this:

WOW... what a great concept, that is awesome! Why hasn't someone else done that yet!

This feeling of excitement is then always followed up by disappointment. The company is so visionary at times, and then so poor at executing on that vision. I have rambled about the poor execution of Gmail, but tonight it is time to ramble about the poor execution of the IPO.

The Google IPO process was supposed to represent a major break from the standard IPO process. In the past shares were distributed to the underwriting firms to dole out as they saw fit. The underwriters then gave shares to their best clients, or even execs whose companies they want to do business with. The shares are then priced at a less than fair value price to ensure everyone in on the ground floor makes out. Essentially it was a scheme that promised only that the rich would get richer. Not only were the underwriting firms lining the pockets of their best clients (or people they wanted to have as clients), they typically took somewhere around 10% of the total IPO price... so they got 10% of the cash, lined the pockets of their friends, just for acting like a clearing house.

Along comes Google, and properly they approach a situation where they have market power and decide they don't like the current process... They decide that their IPO should be available to everyone. They also think that 10% is far too much to give up to just a group of suits who do no work except put together some slick powerpoint and excel (Sorry to all my investment banking friends out there). And lastly, they also decide that they will determine the price that the IPO will go out....

The above is the GREAT CONCEPT... AWESOME! part for any Google concept.

Now for the poor execution. The first mistake is that the company waited until August (when most of Wall Street is on vacation) to IPO. Secondly, the per price share of $108 - 135 will appear far from attainable to the average investor that Google was trying to open the market to. Here is my biggest pet peeve, while the company states that the IPO auction is available to anyone, the firms running the process of accepting bids have NOT made this auction available to the general public. Check out this quote from my fidelity website:

"Participation in the Google IPO through Fidelity is reserved for brokerage customers with a minimum of $100,000 in certain assets held at Fidelity, members of Premium Services, or customers who have placed 36 or more stock, fixed income, or option trades in a rolling 12-month period."

Can you tell me how many "average investors" can meet these requirements? How many school teachers have $100k sitting in their brokerage accounts? How many construction works have traded more than 36 times this year?

Like everything about Google, they offer a glimpse of what a revolution could be, but ultimately they fall short and produce evolutionary results.

Google & Playboy - The Irony

Looks like tomorrow (or today depending on where you are in the world right now) is the day bidders will be able to place their bid for shares in Google. This despite breaking news today that Google may have violated their "quiet period".

I find it ironic that many view the the stereotypical geek as a male who relies on Playboy for happiness... and now it appears that playboy is giving geeks across the world a headache with their timely publishing of an interview with the founders.

The execution of this IPO process reminds me a lot of the execution Google has shown in launching Gmail... TERRIBLE!

Playing the Cable company off the Telco

As some of you know I recently moved to Seattle, which meant that I had to set up cable service and phone service (no DirectTV option for me in my high-rise). This gave me a perfect opportunity to test exactly what is happening in the broadband internet market. If you have read this blog before you know that I believe consumers are the big winners in the DSL vs. Cable Modem race, and when fixed wireless broadband comes around, consumers will win even more... so today was market test time.

I called Qwest, my local phone company here in Seattle, and they offered me DSL for $26 bucks a month if I took phone service (I need the phone service for my old ReplayTV or I would be all about Vonage). So I took the phone service and said I would call back around the DSL. Next call was to Comcast, where they told me that my cable modem would run me $45 a month if I took digital cable. So I told them thanks but no thanks, DSL would only run me $26 a month... it was like I said the magic word "DSL", because the rep on the phone quickly offered me the cable modem for $29 a month... which I then took since it will be about 3x faster than the DSL line.

This is why the federal gov't needs to do more to stimulate competition, in this case I saved $16 a month... that is $16 bucks that could have gone to a local monopoly, but instead will probably end up going to another local business.

Get ahead of the curve... "Seeing What's Next"

Clayton Christensen's latest book, "Seeing What's Next" is finally out. Innovator's Dilemma took the concept of disruptive technologies from academia to the main stream and helped to change the way all executives look at techology. This book reportedly will try and layout a framework on how to predict what technolgies will become the next big thing. I just ordered mine, and would recommend anyone in the tech industry to check it out.

p2p could save Microsoft lots of money

With service pack two (SP2) for Windows XP being around 80 MB for most, you can imagine the bandwidth costs for Microsoft in distributing the code world wide. Well this is the perfect medium for p2p networks to show their legal use by helping Microsoft save costs by distributing the software over their networks. News.com has a good story on the topic... check it out here.

Example of how consumers win with competition

I am always shouting about how great competition is. I love competition because it spurs innovation, drives down prices and results in better, cheaper products. Here is a great example from the DVD market. DVD manufacturers are now making only $1 per unit in China. These low margins show that no single firm has pricing power and that prices in the marketplace are being driven down close to marginal cost.

So what does this mean to you, it means that you pay less for a DVD player and therefore you have more to spend on other things, like DVDs.

Roxio ditches software to focus on music.

In news that affects my life, Roxio has announced they are selling their CD burning software unit to focus on the digital music market. The company's marketing strategy is clearly to penetrate the market by getting college students to use the service that is "free" to them in the sense that the university is paying for it. Time will tell if this model will work... sounds similar to the Apple model in the PC industry, and we all know how that turned out.

TiVo's Marketing Strategy - Becoming a platform

For months I have been calling for TiVo to lower prices and broaden their distribution if they want to survive. Today the company announced that they have lowered prices and extended distribution. The company will now offer a rebate of $100 on each unit sold, making the 40 hour series 2 unit only $99. The company will also start selling Humax branded recorders at Sam's Club... an important step in getting broader distribution.

As I have stated before, the company has a finite window to build a user base from which they will launch future services. While not exactly possible due to channel conflict, but optimally, I believe the company should be giving away their 40 hour unit for free to really get a user base out. Soon I expect for them to announce a video on demand alliance with Netflix, who needs a way to reach TVs in the home.

Good Recap of Google IPO Issues

BusinessWeek has a good recap of all the recent issues facing the Google IPO.

Technology Vs. Hollywood Series Cont.

I have written about these battles so many times I have lost count. Dan Gilmor (whose blog you should read everyday) has done some great work in reporting that Disney has asked the FCC to control all digital music This would be a MAJOR loss for consumers. The FCC should NOT be interfering with the design of hardware... they made this mistake once with the digital broadcast flag and I am scared they will do it again with music.

Windows SP2 finally out...

The associated press is reporting that Microsoft has finally released Service Pack 2 for Windows XP. This patch for Windows has been eagerly anticipated since it is expect to fix numerous security issues. SP2 was expected months ago and it has been reported that Microsoft had to pull resources off other products like Longhorn to get this update out. For those of you on dial-up you will probably want to order the update on a CD since the download could be around 80 MBs!

Sony makes the right move for a change

I have a small fascination with standards battles. The winner of these battles often can walk away with millions, if not billions, from having won, while the loser often has to put their head between their legs and adopt the very standard they fought against. What also makes these battles so interesting is that they are played out over relatively long period of time, with each company responding to another companies move... it is like watching a chess match.

Today Sony launched their version of a "check mate" move, by announcing that their Playstation 3 console will utilize Blu-ray disc technology. The implications are huge... since millions of games will be sold on the Blu-ray discs, these disks will ride down the cost curve potentially quicker than the competition.... giving this technology a clear cut cost advantage.

This of course is all until Microsoft announces that the next version of X-Box will only work with high-definition DVDs... I have said it before, and I will say it again, this is the BetaMax vs. VHS battle of my generation.

From wall street darling to potential flop???

Things aren't looking perfect for Google anymore. Back in April and May nobody could say a bad word about them... now today everyone is questioning the valuation the company has put on itself, the ability of the company to launch products, and now apparently the company has screwed up issuing shares and options to employees.

Looks like "timing is everything" for this IPO. Three months ago, Google could do no wrong, today they can do no right.

Good News or Bad News for iPod buyers?

Toshiba has announced that they will delay shipping their 30 and 60GB 1.8-inch hard drives. One can only hope that they have put off these larger drives due to their inability to meet demand for the drives they currently have on the market. Or maybe this is actually bad because now you shouldn't expect that huge iPod anytime soon.... maybe the glass is half full.

Now get OneNote for $100

While I raz on Microsoft often in this blog, I have openly praised their new OneNote application. I think it is the best thing to come out of Redmond in years. Well now you can buy the application for $100, about half of its previous price.

I swear this application is probably worth the $100. I don't have it on my work laptop yet, but I will probably buy it because it will save me TONS of time. Give it a shot, it could just save you hours a week.

P.S. - After gushing over a Microsoft product I feel the need to remind all of you to go out and try FireFox, it is MUCH better than Internet Explorer... ok, now I feel normal again.

Hollywood vs. Technology... Part V (I think)

I have written a few times about our friends in hollywood who are against consumers utilizing technology to consumer their content in new ways. Well today it looks like the tech industry has scored a victory as TiVo has won an FCC ruling allowing them to enable "sharing" of content across TiVo set-top boxes. TiVo has been a very good citizen when it comes to trying to play well with content owners, and I am surprised that the MPAA would try and shoot them down in the midst of all the trouble they are already facing. Hollywood should learn to work with companies that respect their rights and not try and shut them down at every turn. Look what happened when they refused to work with Napster, they killed the company only to be challeneged by a more difficult foe in Kazzaa.

$500 bucks per bug

Looks like the Mozilla Foundation is going to pay $500 to people who find serious bugs in their applications. While this type of bug killing approach might work for an open source community, I wonder what would happen if Microsoft would have done the same thing years ago... oh, wait, I know what would have happened, the company would have gone broke and made millionaires out of security experts.

That one was just too easy!

It is good to own the pipes...today that is

It seems like I can't go a day without reading about the cable companies impending plunge into the world of telephony. A recent study even states that while Vonage and others have the early lead, the cable companies will win in the end. I honestly wonder how long before fixed wireless access starts to poke holes in the armor of the cable companies. I wonder if 10 years from now we will look at cable companies the same way we look at dial up internet service providers... cool in their time, but so out of date.

No doubt companies like Intel, AT&T, and Verizion Wireless are working hard to make this day a reality. And around the same these wireless alternatives come to market, companies like Verizon and Bell South will be launching their "Fiber to the home" offering... which will offer REALLY FAST data transfer rates... think of downloading in a movie in seconds, not minutes or hours.

Who knows which way the market will tip, but one thing is for sure, billions of dollars are being bet on each side every year.

The Doom 3 effect

Remember that posting I made about Back-to-School and Doom 3 driving sales for PCs during the month of August? Well News.com just wrote a similar piece talking about the gaming industries role in driving new PC upgrades.

I can foresee a time 3 - 5 years from now where the ONLY thing driving new PC upgrade cycles will be gaming. While I am not an expert on the PC upgrade cycle, I would be willing to bet that most PC upgrades today are based on the need to manage and manipulate large media files like pictures from digital cameras, home movies, etc. People have long since stopped upgrading simply to get the next version of Windows or the latest processor. Heck, most people simply browse the web and do email, they don't need 3 GHz for that. Today they need monster hard drives, like 80 - 100 GB for their digital media.... just wait until you can have a terabyte of data, and the need to upgrade will simply be for high end applications like gaming... that is unless Intel and Microsoft have a killer application up their sleeves we don't know about.

Safe in Seattle

The move is just about done. We arrived in Seattle today and I will get back to work tomorrow. I have absolutly love my job so far and can't wait to talk about it more online someday. As you could probably guess, I am a big proponent of blogging and hope to utilize this medium to communicate with customers.

The move is on...

Tommorrow morning the movers show up, and then on Tuesday morning the family and I are off to Seattle for good. Boston/Cambridge was fun, but we are excited about Seattle. Due to all the moving and flying I am not sure I will post much Monday / Tuesday, but I will be back in full force later in the week.

Best wishes to Steve Jobs

According to the Wall Street Journal Steve Jobs had surgery to remove a cancerous tumor from his pancreas. Steve will take the month of August off to recover.

I wish Steve a speedy recovery and best wishes. I pray he and his family come out of this stronger than ever.