The insanity of buying a Gmail account

Like any good second year MBA student right now I spent the day on the golf course trying to get my game to a respectable level. Upon returning home I have been wading through email, blogs and the like... well I finally got around to checking out eBay to see what is going on with the selling of gmail accounts and all I can say is "WOW"

As of now there are about 130 invitations being sold and this auction is up to $168 Dollars right now!!!! My favorite part about some of these listings is that they highlight "LIMITED TIME" and "FREE SHIPPING". Let us think about this for a second: (Note the following should be read in the most sarcastic tone possible)

"LIMITED TIME": I think what the seller is trying to say here is "There is a LIMITED TIME window that I can sucker you idiots into paying over $150 for what will be free shortly". Or maybe what the seller means is "The flood of other people that will offer gmail accounts means that I will only be able to take advantage of you for a LIMITED TIME"

"FREE SHIPPING": Ok, this is my favorite one of them all. If you are savvy enough to know what Gmail is and that accounts are being sold on eBay then you know there is NO SUCH THING as "shipping" a gmail account! Given that you know there is no such thing as shipping, then you should realize that someone advertising "FREE SHIPPING" for an email account knows they are selling to suckers!!!!

My final thought on this topic for today is more of a question than a thought: Who do you think will make more money off of Gmail in the next 2 weeks, eBay or Google?

Buying Gmail

So exactly how bad do people want Gmail? Apparently people want it bad enough to pay for it. Some time last night Gmail gave the ability to current testers to invite others to the service. It didn't take long for people to begin selling Gmail invitations on eBay. People are paying over $40 just to get an invite. I find this whole thing a little crazy. Don't people realize that this service will be FREE soon?

I had 2 invitations, and one went to my wife and the other went to a friend of mine at school who is as into tech as I am, but he is like 100 times smarter. I will sell my next invitation for $1,000,000 dollars, so if you are interested, shoot me an email.

For cheaper accounts check out this eBay link: Gmail accounts on eBay

Google IPO

Unless you have been living under a rock or in a cave you have heard about Google's impending IPO. Well, today it became official that Google will go public with the filing of its S1 with the SEC. There will certainly be hundreds of blog postings and news articles about the impending offering, so I won't bore you with the basics. I will only try and highlight some of the facts that can probably won't be mentioned in most articles. I will also read through the S1 and post about the interesting statements I find there.

Interesting tidbits:
- The founders, Larry & Sergey combine for close to 31% ownership in the company
- CEO Eric Schmidt has a 6% ownership
- The VC firms Kleiner Perkins Caufield & Byers and Sequoia Capital each have a 10% ownership
- There are two classes of shares, and a vote with a class B share counts as 10 votes while a class A share vote counts as only a single vote. This according the reports is intended to help fend off any unwanted takeover requests (hmmmm... I can't think of a single company with over $50 billion in cash that would want to buy Google, other than that small firm in Redmond)
- I can't wait to read the S-1, but here is a quick quote that makes me think it will be a fun read: "A management team distracted by a series of short-term targets is as pointless as a dieter stepping on a scale every half hour," ... this is what Page wrote in the S-1 in reference to why Google won't give quarterly profit advice.

Pepsi's & iTunes

So it turns out that the huge "100 Million Song Giveaway" turned into the redemption of only 5 million songs. Given the amount of press that covered this promotion, I would guess that both firms are happy with the outcome... even if it didn't drive huge additional purchases of Pepsi or tons of new customers to iTunes.

Given the 5% redemption rate, lets all wait for the Coke 1 Billion song giveaway... yes, I am only half kidding.

The Open-Source Response to Longhorn

Microsoft's next version of Windows, code named Longhorn, is scheduled to come out in 2006. Despite being almost 2 years away, the open-source community is planning its response. One of the key features of Longhorn will be the blending of the browser and the OS... so to retaliate, the open source group Mozilla (open source browser) and Gnome (the open source UI) have begun talks about how they can work together and compete.

Microsoft is clearly making a giant bet with Longhorn, and it has bet that they will be able to out innovate the open-source community. This type of cross collaboration within the open-source community has the potential to define the success of open-source in the future. If the collaboration between Gnome and Mozilla works well, the executive team in Redmond will have an even bigger problem on their hands than they currently think they do.

Gmail: First Impressions

I have had Gmail for about 24 hours now and here are some of my first impressions:

The good news:
- This is the best web-based email system by a large margin (Compared to the systems I have used)
- The "conversation" approach to grouping emails together is great. I hate it when I get a reply email from someone and they didn't include the original message with that email... well this solves that problem
- The concept of "labeling" emails is really not that different than "folders"... it is just semantics to me
- As expected the search functionality simply rocks... there are a ton of great searching options that I am sure will become more valuable as I load more content into this account
- Shortcut keys are potentially great, but they will take some getting used to
- There are a TON of cool features that I learned about from other users. For example, if you sign up for gmail using the following approach for a username: FirstName.LastName@gmail.com you won't need to worry about people forgetting the . in the name. So messages intended for John.Doe@gmail.com will get there even if they are sent to JohnDoe@gmail.com Also, the system supports "Plusing"... So when I signup for a site and I don't want to give them a real name, I can give them John.Doe+SPAM@gmail.com, and then set up a filter to trash any messages sent to that account.
- Find all the best tricks of the trade at: Gmail Gems

The bad news:
- There is no support for RSS/Atom feeds... this would be AWESOME
- Gmail has the 90%+ solution in place but to really take the world by storm the Gmail team needs to make switching to gmail easier.
- Gmail should build a tool to extract messages from hotmail, yahoo! and other email systems to make the switching process easier
- Gmail should be able to pull all my contacts from my other accounts automatically and then email all of these contacts at once letting them know I have switched to Gmail... again lowering switching costs
- Currently there is no support for forwarding or POP3
- There is no client for gmail. I know the point of Gmail is that it is web-based, but if Google came out with a client to use when I am offline (on flights, etc.) then I would seriously consider dropping outlook. (Of course I would then need to be able to sync all this data)

Now onto the whole thing about having ads and links next to your messages. Currently there are both sponsored links (ads) and related webpage links next to your email. I have found related links on all my email messages (This may be because all my email is from MIT and there appears to be a ton of related links to MIT) but I don't have ads on all my email.

For the times I have gotten ads they haven't bothered me at all... and actually one time I found them useful. A group of my friends and I are headed out on a graduation trip in May and we have been trading emails about golfing down in the area... and the ad for the message actually caught my eye as relevant.

As I continue to learn about the application I will keep you posted.

Comcast shuns TiVo and will test Motorola/Moxi set-top-box

This is starting to feel like DVR week to me. For TiVo, this could be one of the longer weeks in the firms history. Yesterday Comcast announced that they will trial a "Motorola Broadband Media Center With Moxi." This device is packed with features including:

• DVR functionality


• Dual tuners


• Some of the test units will be HDTV compatible


• Some of the test units will be networking capabilities to pull photos, music and videos off of a home computer


• And apparently, this device may have a cable modem

So what does this all mean for TiVo, the darling of the DVR industry, which currently has about a 39% share of the DVR market. It means that the odds that they will reach a deal with a large cable company are now very slim, and that they are more reliant than ever on DirecTV for near term subscriber growth. The bad news on the DirecTV front is that today NDS (Which is owned by News Corp. the same parent company as DirecTV) has come out and stated they want to fight it out with TiVo for the DirecTV business. So assuming that TiVo can't get a deal with the cable firms where should they head?

With a law suit under way against EchoStar and a deal already in place with DirecTV, there aren't many other domestic deals to be done with service providers. So one option would be to sit back, relax and be happy as a niche player in a market that will grow incredibly in the next few years. They could become the "Apple of the DVR market" and just allow their loyal customers to keep them profitable and afloat as a niche player. The other option is to fight back.

To fight back TiVo needs to find other ways into the home other than the set-top-box route it has taken to date. Having seen the possibility of not getting a major service provider deal, TiVo began partnering with the makers of DVD recorder boxes. Additionally, the firm bought a home networking startup called Strangberry in the hopes of adding better home networking functionality to the service. So I believe the firm now needs to transform itself from a "DVR" company to a true home entertainment company by striking out and making some of their own interesting alliances. I posted yesterday about the potential of a partnership between TiVo and Netflix. Maybe they should also consider partnering with RealNetworks for a music subscription offering. The transition to the digital home is well underway, and I believe the next 4 - 6 months will help define what role TiVo will play in this market.

I've Got Gmail

Since April 1st I have been wondering what the Gmail service would be like to use. Well tonight, through my Blogger account, I received an invitation to use the service. I will be playing with the service over the next few days and I will certainly let you all know what I think.

Netflix & TiVo - a partnership waiting to happen

Netflix has com out and announced that they intend to deliver movies to the home via the Web by next year. The CEO of Netflix, which has around 2 million subscribers, expects his service will have around 5 million members by 2006 all paying $22 per month. While he didn't break out what percentage of subscribers will be watching movies via their download service, Netflix clearly has been betting on the download business for a long time now... just look at the name, it isn't "DVD by mail".

The real questions to ask around this service are the following: Will the 5 major studios, who all own CinemaNow, license their content to Netflix to deliver via the net? Whose DRM software will Netflix choose? Will companies like Comcast and Time Warner kill netflix via VOD? What distribution deals (if any) will Netflix need to pull off to make this successful?

Let me propose an interesting partnership. What if Netflix and TiVo partnered together to deliver Netflix videos on the TiVo service? The two companies could bundle their service fees together, and for maybe $25 per month consumers could get both the TiVo service and the Netflix service on a single bill? Both companies have loyal user bases who adore their services. Each offers the same value proposition, "Get the entertainment you want to watch conveniently, and watch it when you want to." I would also be willing to bet there is a decent size overlap in the user base. Even better will be opportunities to cross promote each others products to users who don't subscribe to both services.

TiVo's recent acquisition of Strangeberry signaled their intention to get into the home networking space that will allow users to pull content off of various sources and watch it on the TV. This is exactly the functionality that Netflix will need until all TVs have direct internet access. Additionally, it doesn't appear that TiVo is going to pull off a distribution deal with any of the major cable companies, so this partnership will give TiVo some VOD features that cable companies will promote via their DVR enabled boxes.

And now for the kicker: TiVo's CEO Mike Ramsey is on the board of Netflix and we can be certain they are talking about this opportunity frequently.

GREAT WSJ Article on DVRs

I don't work for the WSJ (as if my poor writing skills didn't give that away already), but if you are interested in the consumer electronics industry, cable industry, entertainment industry, or the DVR market you must run out and get a copy of the Monday WSJ. It has a great article on the inherent risk that cable companies face when they roll out DVRs.

In summary the article runs through all of the conflicts that exist in companies like Time Warner and Comcast who are both cable operators and owners of cable channels (Time Warner owns TNT, TBS, etc. & Comcast owns E!, etc.). While the cable operations portion of these firms want to roll out DVRs to raise their average revenue per subscriber (ARPU), the content side of the house is still scared about what DVRs will do to their advertising revenue. The article also outlines great statistics around DVR adoption, consumer TV viewing habits, and the basic economics of the market.

Now that we got the basics out of the way here are some of my thoughts on the issue:

Satellite companies like EchoStar and DirecTV rolled out DVRs well in advance of the cable companies since at the time they didn't have the programming conflict of interest. This service helped EchoStar & DirecTV gain thousands of converts from the cable companies. Recognizing that the DVR was a feature they couldn't afford to ignore all the cable companies have jumped into the market to offer their own solution. This doesn't mean that the content side of these firms is happy about the change. I believe that DVRs will fundamentally change the economics of the TV industry, but the question is what form will it take. Some in the cable industry will want consumers to pony up more cash for a "commercial free" TV service. Some TV shows will try and make money by doing more product placement deals (think Coke and American Idol). I think both of these models are flawed.

Paying for "commercial free TV": I don't believe the majority of consumers are willing to pay hundreds of dollars a year to just not see commercials. I honestly believe that consumers are interested in commercials that either entertain them or are targets specifically to their current needs. (More on this in a second)

More product placement: When I talk with marketing executives they say the following: "I shell out millions a year on commercials, and I don't know if anyone is watching, I don't know the demographic very well, I have no ability to follow up with interested consumers, etc." I don't see how product placement really changes all these problems.

So here is the model I support: DVRs represent a platform for changing the advertising market in a positive way for everyone. As I mentioned before, I believe consumers are interested in ads that target their current needs. There is no reason a DVR couldn't know what your needs are. For example, I am in the market for a new car, I really wouldn't mind watching 2 minutes of car commercials targeted specifically at me. I am also about to move to a new city, so I wouldn't mind ads for moving services or places to live in my new city. (I am assuming this can all be done without revealing all this personal information to the world) Additionally, DVRs represent a much better platform to understand the demographics of viewers at a much deeper level. Advertisers could then target their ads at a much more receptive demographic.

BOTTOM LINE: It is easy to say that DVRs represent a threat to the TV value chain, but the industry should look at DVRs more as an opportunity. Advertisers today have the ability to spend money with Google and perfectly understand the return on that spending and the demographics they are reaching. The TV industry now has the opportunity to provide greater demographic information to a more interested audience, and they should take advantage of this opportunity. Ultimately, the industry will have no choice, just ask a current user of TiVo what they think of their device and they are likely to tell you that it has changed their life. DVRs really do deliver on the unfulfilled promise of VCRs (that promise was the easy ability to record shows), and consumers will continue to snap up these devices quickly so the industry better adjust as quickly.

Former NFL player Pat Tillman dies in action

This is my first non-tech related posting but when I saw this story I felt the need to post on it:

Back in 2001 Pat Tillman was a professional football player for Arizona Cardinals was living what most people would consider the "American Dream." After 9/11 Pat turned down a $3.6 Million dollar contract with the Cardinals in order to join the military. Pat joined the Army Rangers and headed off for war in Afghanistan and Iraq. Today the Pentagon released news that Pat died during a mission in Southeast Afghanistan.

Every life lost in military action deserves the type of public recognition that Pat will get over the next few days. Having said that, when Pat gave up his $3.6 Million to stand up and fight for our country he became an American hero to me. May his soul rest in peace and may his family have strength in their time of need.

The CNN story about Pat Tillman can be found here:
SI.com - NFL - Former Cardinals safety Tillman killed in combat - Friday April 23, 2004 1:16PM

Sony Launches their Luxury CE Brand - Qualia

Twice - The consumer electronics industry magazine has detailed the following information about Sony's new luxury brand, Qualia.

"What do a $3,900 two-mega pixel digital camera, a $2,600 pair of headphones, a $1,900 handheld MiniDisc player and a $30,000 HDTV projector have in common? They are all part of Sony's ultra-high end Qualia line that was introduced by Sony here, on April 21. ":

The industry has long known about the launch of Qualia, but this still represents an interesting move for a firm that is in the midst of some turmoil. I previously wrote about "the Sony Shock", which was Sony's terrible earnings announcement that lead to the company announcing an entire new strategy. Part of this strategy was to lay off 20,000 people world wide, and move all the marketing and engineering functions within Sony Electronics from NJ to California. As part of this move the company has lost some top execs and is generally considered a little shaky at the moment.

Why does all this matter? While products in a luxury brand will carry better margins, this line of products will require a large investment in new complimentary assets. Sony will need to build out new distribution channels, new retail outlets, a new sales force, and a specialized customer care group. Launching all of these at such a time of turmoil will require flawless execution by those still at Sony. I hope the gamble pays off, but don't expect to find me paying $1,900 for a mini-disc player.

Comment Board Added

I have added a "Tag-Board" to the site. A "tag-board" is simply a place for visitors of the site to leave general comments and feedback. Please let me know what you think of the functionality, but lets give it a try and see if we can't get a lively discussion going.

Apple officially tells RealNetworks to get lost

Apple has said it won't open up the iPod to other music services and Jobs stated that: "To be honest, it's just not worth it.."

I just don't understand this... Jobs has an opportunity to unite with a partner in RealNetworks whose interests are perfectly in line with Apple's. Apple just wants to sell iPods, Real just wants to sell songs, and both just want to keep Microsoft from dominating this market. Apple isn't making any money on their iTunes service and Jobs has claimed it can be a loss leader for selling iPods, so what is the problem with having more music stores selling music that will work with iPods???

Does this whole scenario feel familiar? Apple creates a breakthrough product that creates an entire industry. Apple refuses to open up its product architecture. Apple becomes a text book example for poor technology strategy. I just hope for all of Apple's shareholders that I am wrong on this one, because I think Jobs is just being foolish.

I eat Crow

Two or three times on this site I predicted that today Microsoft would announce a plan to disburse their piles of cash. This prediction was based on the rapid rate at which the legal department in Redmond was taking care of anti-trust cases.

For dinner tonight I had a giant plate of crow. I was wrong. I will stop making predications about this matter and simply state that during the press conference execs said they will talk about a larger dividend or stock buyback on or before their analyst meeting in July.

For a full recount of the earnings announcement check out the CBS Marketwatch article here:
Microsoft beats Q3 earnings target; profit falls 38%

Name a company not getting into the TV business...

Remember 5 years ago when buying a TV involved looking at maybe 3 or 4 brands... you had your usual suspect such as: Sony, JVC, Panasonic, etc. Well in the very near future a better question appears to be "What consumer technology company isn't in the TV business?" All of the following companies have announced their intentions to enter, or are already in, the digital TV business: Gateway, Dell, HP, Motorola, and now Cannon. Why is there a rush into the television market? It is simple economics... think of it in the following way: (Note, most of the data below is just an educated guess on my part)

There are approximately 100 Million homes in the US. Let us assume that on average there are 2 TVs per home. That gives us around 200 Million television sets in the US. Most (as in like 99%) of these tv sets are not HDTV compatible. In a normal year around 10 Million TV sets are sold. Think of people buying a new TV set every 10 years and moving the old set down to the basement. So in the past, the US television market was about a 10 million unit business with companies like Sony having great brand recognition, distribution, manufacturing capabilities, etc. Not exactly an attractive market. So what has changed? HDTV.

The move from today's NTSC format to HDTV is expected to greatly accelerate the replacement cycle of TVs. Broadcasters are supposed to give up their analog frequencies at the end of 2006 or when 85% of consumers are capable of receiving digital broadcasts, which ever comes first. So now the entire consumer buying cycle for televisions is thrown off. As early adopters buy HDTV sets and the amount of HDTV content grows, a virtuous cycle is created because more people are exposed to HDTV consumers see the value proposition of the better picture and word of mouth starts to grow. I am certain that analysts across the country have done this analysis already, but lets assume that the replacement rate for TVs double over the next 5 - 7 years. That means that the market is now double in size! 20 Million units per year, and since these products are considered high end, the margins will be attractive to players like Gateway, Dell, and HP who are used to PC style margins. Also, given the projected dominance of LCD in the marketplace moving forward and that these traditional computer companies have an understanding of LCDs due to the 15 - 17" screens they have been selling with desktop units the opportunity is too large to pass up.

Summary: The switch to HDTV will greatly increase the unit market size in the short term (next 5 - 7 years). This increased market size, high margins, and familiar technologies are very attractive to companies like Dell. Additionally, the switch to HDTV will open up what I call the "entire entertainment stack" to new producers. (entertainment stack = DVD / DVD-R, DVR, VCR, Home theater, etc.) With all these new entrants expect there to be a shake out period and expect a small number of these new entrants to be long term players in the TV market.

For that price it should do the laundry too!

Numerous firms have started to sell consumer electronics gear at astonishing prices. Nokia has been selling a premium cell phone that goes for thousands, Sony is about to launch an entire line of CE products so expensive you will need to mortgage your house just to get a TV. Well now a German firm has introduced a set of headphones that sell for $3,000.

Yes you read that correctly, three thousand dollars for a set of headphones. Apparently the sound quality is out of this world, but I can't imagine paying more than $20 for a pair of headphones, no matter how good they are. Fortunately, the firm seems to know that the market for a product priced this high is small because they have apparently only produced 999 units.

The eBay economy

I love earnings season. Every 3 months we get a sense for which companies are thriving in the market (Motorola) and which are hurting in the market (Nokia). After the closing bell today, eBay announced their financial results for the last 3 months, and they were absolutely stellar.

With earnings of $200 Million on sales of $756 Million, eBay has shown a great ability to grow in any economic condition. Most importantly, eBay is seeing growth in the sector necessary to justify the lofty valuation wall street has given it.... their international business.

International revenue grew 87 percent to $257 Million... representing a healthy 34 percent of revenue. The U.S. business grew at a healthy 39 percent.

So what does this mean for eBay going forward? Well the company expects sales for the year to hit $3.15 billion which will result in earnings of around $1.06 per share. Strategically, expect the firm to really continue focusing on the international part of their business... especially China.

Nokia's pain is Motorola's gain

Nokia recently announced a disappointing quarter, but apparently Nokia's loss is Motorola's gain. Motorola announced a great quarter yesterday and beat revenue estimates by almost 2 Billion dollars! This isn't Walmart, where $2B isn't a big deal, analysts were expecting around $6.8B and Motorola came in at $8.6B.

As one would expect, Motorola's stock is surging on this news.

The Microsoft Way: If you can't beat them, buy them.

So what is the quickest way to land a job with Microsoft? Apparently all you have to do is become a successful seller or Linux. Karl Aigner, who used to work for SuSE (The former German Linux distribution company which was recently purchased by Novell), was the person responsible for the huge sale to the city of Munich.... well Karl is now gainfully employed by our friends out in Redmond.

Full story can be found here:Microsoft hires key rival from SuSE Linux

Hollywood vs. Technology Part IV

Apparently Rob Glaser, CEO from RealNetworks, and I agree that Hollywood needs to start thinking about customers when it comes to digital media. Check out some of his quotes from the annual National Associates of Broadcasters conference:

"Taking secure music off the PC is a morass of incompatibility. This is not going to fly in the mainstream market."

"It's kind of a Soviet model," - referring to Apple's closed DRM environment

A complete write-up from News.com can be found here: Glaser envisions digital tech for the taking

AOL's response to Gmail?

Jim Hu, a writer from News.com, wrote about how AOL plans to open its e-mail system to third party applications like Eudora & Outlook. Jim claims the new system, which will be launched this Thursday, is designed to stem the subscriber loss in the dial-up business and potentially gain new subscribers.

I think Jim is missing the big picture on this issue. The big picture is that the competitive landscape of web-based email has forever been shifted because of Gmail, Google's 1000 MB web-based email product announced on April 1st. By allowing users to now use third party applications to manage their email, AOL has essentially upped their email "storage capabilities", since users could now archive emails through an application like Outlook. I really view this move as a simple response to the Gmail announcement that may help stem the tide of users switching to Gmail when it becomes available to the public.

If Gmail doesn't launch soon, and more companies are able to react like AOL has, one would have to question the decision of Google to announce the service so early.

Hollywood Vs. Technology Part III

In what appears to be almost a weekly occurrence, I once again find myself writing about Hollywood's continued fight against technology. This week a program know as the "Automated Copyright Notice System" (ACNS) is being rolled out at campuses around the country. The ACNS system is designed to make it easier on ISPs and universities to monitor their network for copyright infringement.

The software is said to work in the following way (or some close variant of the description to follow): A University running ACNS would send a message telling a student that they are sharing an illegal copy of a movie or song, and that their access to the internet is cut off until the file is removed from their system. It is unclear if a student will have the ability to protest or exactly how the software scans a users hard drive for illegal content.

Again I just don't think Hollywood gets it. If I am a student and I want to share my music collection with other students, I will simply switch to the file sharing network that isn't being monitored well by the ACNS... and I can promise you that sharing networks will be devised to avoid ACNS. Hollywood should put more time into making their content easily available online for a reasonable price, and less time fighting a losing war. This past summer when the RIAA started suing people for download music they claimed online file sharing really took a hit, what the RIAA missed is that all the sharing didn't stop, it just moved to less mainstream applications like BitTorrent and eDonkey.

Broadband keeps on rolling

The Pew Group recently conducted a survey around the continued growth of Broadband use. While much as been written about the explosion of broadband and the market share gains for DSL, I have yet to see the following stat: What percentage of home broadband users regress back to dial-up and for what reasons?

Having lived with a cable modem for 2 years now I hate being on dial-up anywhere. My parents don't have broadband and it is incredibly painful to have to dial-up to get email... heck, I can't even stand broadband that isn't wireless. My point is that as more and more people experience broadband in the home, companies should expect little churn back to dial-up, especially as broadband providers get better at tiering their service (i.e. - you pay only $15 for 1 Mbps, $25 for 3 Mbps, $45 5 Mbps, etc.).

If you have seen the statistics I am interested in please let me know through the comments beneath this posting.

The Microsoft ATM still paying out

One week ago I wrote about how Microsoft was settling every lawsuit in sight to clear the slate so they could announce a plan to disburse part of their cash hoard Well that trend continued today with Microsoft settling the Minnesota antitrust case. This settlement is just 3 days before their quarterly earnings announcement. I still expect a one time dividend disbursement along with them raising their quarterly dividend.

RSS - How it changed my life

Yesterday I blogged about RSS basics... essentially writing about what RSS and News Readers are. Today I want to tell you how RSS has changed my life and how it might change yours if it hasn't already.

First thing you should know about me is that I am an information junkie. I like to be know exactly what is going on in the industries that interest me, and therefore I used to have to visit about 10 - 15 websites a day along with 10 - 15 blogs a day to stay on top of the tech world. After getting familiar with RSS and using a News Reader, I visit 2 - 3 sites a day for news and have the rest delivered to me!

So what is the big deal? Here is the big deal:

1) I now spend 1 - 2 hours READING new material, rather than looking to try and figure out what is new on a site.
2) I have found great new sources of information. I now have about 30 news feeds that I aggregate and read, as opposed to the 10 - 15 I used to read.
3) I get all this information stored offline so I can read it at any time. For example, I was on a flight from California back to Boston and I was able to catch up on all my news despite being offline.

Ok... now for some drawbacks:
1) If you take 1 day off from reading your news, you will quickly feel like you are WAY BEHIND in your life. For example, I took maybe 2 days off and I came home to over 400 new pieces of news to filter through... that took some time.

So now you see how RSS is used now... but think about all the practical applications in the future. This architecture is a simple way for consumers to subscribe to digital data. So lets say you are a bio-tech researcher interested in a particular gene. You could subscribe to a feed around all the publications that mention that gene. Now imagine that you a cancer patient, and want to be kept up-to-date on all the latest alternative treatments, RSS and a news reader could take care of that for you.

Don't get me wrong, I realize that this is really a simple publish and subscribe architecture, but the ability to efficiently aggregate digital data (news, music, video, etc.) in an automated fashion could really help make our lives easier.

RSS & News Reader Basics

If you are reading this, you certainly understand what a Blog is. Well, if you read multiple blogs or even news sites without utilizing RSS, you are spending a lot of time jumping from site to site to find out what is new on a site. At some point in time you must have asked the question, "Why can't I just get all the updates to the sites I read sent to my desktop?"... Well RSS (Really Simple Syndication or Rich Site Summary) is the technology that makes this possible. So how does this all work you may be wondering? I like to think about it like this: (Note: This is a description for the everyday internet user, so I have left out all the details of rdf, xml, etc.)

- Every time a site updates it's content, an application will create a "RSS feed" for the site. Think of this feed as all the new information from the site without all the HTML and other presentation information.

- People looking to access RSS feeds will download a "News Reader"; whose purpose is to go out and check all the RSS Feeds you are interested in and to bring down the new content from those feeds. Now a person that reads Blogs you don't need to waste your time checking many sites to see if there is any new information, you can just go to your News Reader and see what has been updated and read it there. I have tried numerous News Readers and here are the thoughts on the ones I have used:

- News Gator: News Gator is a news reader plugin for Outlook. Pros: The application is great for users of Outlook that like to use Outlook as their information hub. Cons: News Gator is not free and you will need to pay $29 for the application after a 30 day trial

- RSS Bandit: Pros: RSS Bandit is my current news reader simply because it gets the job done and is free. Cons: It has some annoying aspects such as letting me know every time it checks my feeds even if nothing has changed on any of them.

Here is a good RSS FAQ you should check out: Voidstar - RSS FAQ

NOTE: I currently don't have a public RSS feed, but if you are interested in one let me know through the comments on this post.

Apple to Real: Get Lost

Yesterday I blogged about RealNetworks overture to Apple to open up the iPod. Today it appears that Apple has told Real that they aren't interested. Apparently Jobs wouldn't even meet with Glaser... here is a quote from the Real spokesperson:

"He's in the neighborhood, but whatever meeting Rob wanted with Steve isn't happening," RealNetworks spokesman Greg Chiemingo said Thursday. "Steve just doesn't want to open the iPod, and we don't understand that."

I think that Apple is making an incredible mistake by not opening up the iPod. Locking in users to the Apple music platform (you can only buy music for the iPod from iTunes, and songs purchased from iTunes only works on iPods and no other portable music devices) is not a winning strategy. In a WSJ report earlier this week Jobs was quoted as saying: "'The iPod already works with the No. 1 music service in the world, and the iTunes Music Store works with the No. 1 digital-music player in the world,' he said. 'The No. 2s are so far behind already. Why would we want to work with No. 2?'"

Well, since Steve asked, let me answer. You work with No. 2 for the following reasons:
1) When RealNetworks asks you to "open up" the iPod, all they really want to do is to sell music for the device. Jobs has stated that they don't plan on really making money on the iTunes store, they just want iTunes to drive sales of the iPod, where they really make their money. Having another service, like Real's music service selling songs that will play on the iPod will only HELP sales of the iPod and slow the adoption of other devices.

2) There is a small firm up in Redmond that is planning to take over the digital music industry. Bill and the boys are backing the WMA music format and is licensing it widely to all the major music stores, but the WMA format won't play on an iPod. So, Steve, you join with a No. 2 to make your format an even stronger No. 1! Having more music services selling the AAC format with your DRM technology will enhance your ability to fight off Microsoft, and Apple will need that help.

3) I believe the digital music business is just he first digital media service war, with the next being digital video services. By partnering with other companies, and proliferating their DRM technology, Apple will have some momentum in the DRM market and hopefully get a chance to play in the digital video space.

Here is a link to the full AP story: AP Wire | 04/16/2004 | Apple Rebuffs Online Music Alliance

RealNetworks to Apple: Partner or we will go with Microsoft

The digital music landscape is about to shift in a big way. RealNetworks CEO Robert Glaser (a former Microsoft exec) sent an email to Steve Jobs last week essentially saying that if Jobs doesn't open up the digital rights management software used in iTunes and iPod, that he will be forced to partner with Microsoft on the WMA format. How do I know all this? It turns out that the email Glaser sent directly to Jobs was leaked to the press and a great story about it is over at News.com: RealNetworks seeks musical alliance with Apple

I think this development has two interesting aspects I would like to talk about:
1) The impact of Real's impending deal with either MSFT or Apple
2) The strategic implications of the email leak

RealNetworks over the years has really moved from a technology company to one that is focused on distribution and client software. This is shown by the fact that Real hasn't really made a strong push into the DRM space, and their willingness to use other companies technology. Today's digital music landscape shapes up as: Apple Vs. Microsoft. We have all seen this battle play out once before and know how it turned out... and hence the offer from Glaser to Jobs which can be read as: "You made the closed architecture mistake once, don't do it again!" Which ever company that Real partners with will gain great momentum in the marketplace. We all know the disdain that Real has for Microsoft and that they would much rather partner with Apple, but it seems as though Jobs believes he can win this on his own... which brings me to the leaking of the email.

When a CEO of a public company sends another CEO of a public company an email around a strategic alliance, one wouldn't expect to read it the next week in the New York Times. Apparently the email was leaked from an Apple executive, and I would have to guess that it was either Jobs himself or someone leaked it with Jobs' approval (if it wasn't done with Jobs' blessing everyone should sell Apple stock).

So why leak the message? By leaking the message Jobs has put Glaser in a weaker position to partner with Microsoft. If Glaser comes to Redmond to smoke the peace pipe and cut a deal they will know that he has exhausted all of his other options... meaning that an Apple deal didn't go through and that Glaser is desperate to cut a deal. Now the people at Microsoft are smart enough to know that if Glaser wants a deal he was probably unable to work something out at Apple, but now he might not have a credible threat of an Apple partnership when he shows up to talk with Bill and the boys in Redmond.

A9 comes out of hiding

Last year Amazon announced they would be getting into the search game by starting a subsidiary called A9. Today A9 launched and you can go check it out here: A9.com The main features that differentiate A9 from other search sites are its UI (user interface) which gives you a feeling that you have pages you can flip to and it appears you can save your search history by creating a user account.

Now I wonder if all the privacy advocates will rise up against A9 because it can save your searches. Post your thoughts on A9 in my comments section below!

Edited to add the following:
It turns out the search results listed on A9 are from Google. Take a look at the following page to see the highlights of the service:

http://www.a9.com/-/company/whatsCool.jsp

Yahoo! strikes back

I can't recall a firm getting more press than Google has over the last 6 months. It really feels like the media is in a feeding frenzy and the less information out there about the company the more they crave the info and everytime there is any news it is covered nationally.

Yahoo! is fighting to get the attention of consumers by getting back to some advertising basics. Tonight while watching TV I have seen 3 new commercials for Yahoo!... they all end with the following tag line:

"Search engine, Shopping Engine, Life Engine"... which is followed by a new Yahoo! logo.

My dream - ubiquitous connectivity

The high speed Wi-Fi network I have set up in my apartment has changed the way I live my life. Information is never further away than a few keystrokes on my laptop, I can stream music from my desktop (which I have turned into a home media server), etc. I really love wireless access. I really hate when I leave my apartment and I no longer have an internet connection.

The idea of ubiquitous connectivity, the ability to connect to the internet from anywhere at any time, has been a dream of many since the internet became broadly used back in the mid 1990's. That dream appears well on its way to becoming a reality with a new service from Verizon called EV-DO (an abbreviation for Evolution-Data Optimized). The service which is now available in San Diego and Washington D.C. offers download speeds of between 300 and 500 kilobits per second... close to DSL speeds!

I head about EV-DO (along with a competing offering from AT&T called Edge) a LONG time ago. As a consumer who can't get cell phone reception in the middle of Boston I was highly skeptical of the service and decided I would wait to try it before talking about it. So why am I talking about it now? Well, Walt Mossberg, the famous technology writer from the Wall Street Journal wrote a glowing article about the EV-DO service. Walt is one of the most influential reviewers of new consumer technology products and he is a hard person to sell on a product or service. When Walt puts his seal of approval on a product/service, he really likes it. Well his review of Verizon's EV-DO offering was GLOWING. He talks about how he could drive around in a car and not lose the connection, and he didn't lose a connection to the high speed service until he was 25 Miles outside of D.C.

I really think high speed ubiquitous connectivity will change my life more than my Wi-Fi connection ever could. Imagine having an always on connection to stream music, videos, get email, etc. This type of new connectivity will open up opportunities for entrepreneurs to create really great new services that we haven't even dreamed of!

For those of you with subscriptions to the WSJ here a link to Walt's review of EV-DO. I apologize about all the blogs around WSJ articles... I will try and cut back a little.

If the economy wasn't tough enough, now you have to fight spam filers

Spam has always been just a mild annoyance to me. For years I have managed numerous email accounts to avoid the issue of spam. I have a Yahoo! mail account, 2 hotmail accounts, as well as my student account which I never use for anything other than real business communication (I even used javascript to create the mailto link on the right hand side of this page so bots won't be able to pick up the address.)

But now Spam is affecting my job hunt, and that is more than an annoyance. I targeting a small number of firms and I have set up "job agents" on these firms career websites to email me when new positions become available that match my criteria. I have noticed that I haven't gotten any new openings emailed to me recently so I checked out the sites manually... and guess what... there are numerous new matches for me. It appears that some of these messages are getting killed by spam filters. Not only are spam filters killing messages I have subscribed to, they may also stop my emails sent to companies from getting through. The WSJ has a great article about this if you have a subscription: WSJ.com - Stringent Spam Filters Mistakenly Block E-Mailed Resume

Bottom line: Spam used to just be annoying, now it may be affecting people's ability to get a job... which is much more than an annoyance.

BMW & Hydrogen-Fuel Cars

BMW has come out and stated that they want to release Hydrogen-Fuel cars within the next four years. With gas prices marching higher the incentive for consumers to switch to cars powered by alternative fuels is growing. Here is a link the a WSJ article on BMW's plans... please be aware this is a subscription site: WSJ.com - BMW Plans Hydrogen-Fuel Car

How to make a political career using Google

The net has become an important place for any politician. Much has been written about Howard Dean's use of Blogs and the internet in the recent presidential primaries. California State Senator Liz Figueroa has decided to use Google to get her name out into the public space. Is she buying ads from AdWords around important issues to her constituents? Is she blogging about important issues and getting indexed by Google?
No, she is trying to get the California legislator to block the launch of Gmail over privacy concerns! With the media frenzy around Gmail, this Senator has some great quotes showing her incredible in depth knowledge of the internet space:

Senator Figueroa on the Gmail Ads generated from keywords within email:
'We think it's an absolute invasion of privacy. It's like having a massive billboard in the middle of your home,'

My reply:
- I hope she tries and stop spam filters, because they "read" my email too! Then it really will be like a massive billboard in my home.
- Small contextual ads in my web based email system = "...like having a massive billboard in the middle of your home"... GIVE ME A BREAK... has this woman ever been on the net? Has she not seen all the popup ads, video ads that launch with sound without permission, banner ads, etc.?

I am sorry about this rant, it is a little late, I didn't sleep much last night, and I am a little punch. I just hope that the people in California that this State Senator represents don't have any really important issues to be concerned about, like crime, budget deficits eating away at educational funding, etc....

The Digital TV Market

Unless you have been living under a rock, you know that Digital TVs are taking hold in the market place,heck even WalMart is selling them. The men and woman over at In-Stat/MDR have gone out on a limb and projected that exactly 93 Million digital TV sets will be shipped in the year 2008. Ok, so maybe they didn't say there would be exactly 93 Million units sold, I just like to poke fun at the market research firms that predict market sizes in the future... I am still waiting for a company to go back and aggregate all the market research predictions and see what firms has been most accurate in various markets.

Windows XP: Classic Overshoot?

It appears that Microsoft may be experiencing a classic problem of a product overshooting the demand of the market (ignoring that old pesky security attribute). A good article over at News.com details this, but let me take a shot at explaining what I think is happening:

Enterprise customers don't really see a difference between Windows 2000 and Windows XP on the desktop... both operating systems are relatively stable compared to previous versions of Windows and both are probably equally insecure. Both operating systems can run Office XP, the most prevalent productivity suite on the market, so if you are an IT manager and need to allocate your time and money, why would you waste it on upgrading desktops to XP from 2000? Even more scary for Microsoft is that it appears that customers who already own licenses for XP aren't upgrading to the OS. While Microsoft is betting that Service Pack 2 for Windows XP will spur new upgrades (SP2 is expected to fix many of the security problems facing the OS now), this looks like it might be a band aid on a gun shot wound.

The real question for Microsoft is will Longhorn really deliver a compelling value proposition over XP and other Operating Systems to really drive enterprises to upgrade. It certainly appears that the company is betting is OS business on it, because the OS won't arrive until 2006 giving Linux plenty of time to start creeping into the enterprise world... many have down played Linux on the desktop, but with every passing day the OS is becoming more stable, more applications are being written for it, and most importantly, big companies like Novell are entering with serious plans for Linux on the desktop.

The Microsoft ATM

Is it me, or does it seem like there is a giant ATM up in Redmond called Microsoft? Today Microsoft announced they have settled yet another patent dispute, this one around Digital Rights Management (DRM) technology with InterTrust. So why is Microsoft trying to clear up their legal battles so quickly... here is my take.

Microsoft is sitting on over $60 Billion dollars in total current assets and there has been increasing pressure to return some of this cash back to shareholders. The company has talked about waiting to return cash to shareholders until after some of their legal troubles are straightened out... well that day has come. My bet is that on April 22nd Microsoft will announce a special one time dividend as well as a huge increase in their quarterly dividend.

Finally, as a shareholder, I will be able to really tap into the Microsoft ATM!

Sony's Wireless TV... proof Sony is still out of touch.

Does Sony's Wireless TV represent a return to it's innovative past or does the product represent another sign Sony is out of the loop? When I first saw the Sony Wireless TV at the Consumer Electronics Show, I couldn't decide if it was the next walkman or another sign the company is out of touch. Well, I think I have made up my mind... Sony is still out of touch.

Numerous articles have been written about the "Sony Shock" (about a year ago Sony missed it's quarterly numbers in a HUGE way), but we all know that when a firm misses a quarter that badly, it was the decisions made long before that were the cause of the miss. In the case of Sony, a large part of their recent problems is that the company has really stopped innovating and they have missed some MAJOR trends in the Consumer Electronics (CE) market. For example, Sony missed the transition from CRT based TVs to the thin LCD, Plasma, & DLP TVs that are now selling like hot cakes. Sony's slow reaction to the shift in what some would consider it's premium product line (TVs) shows how out of touch they were. In response to the "Sony Shock" the company began to shut down CRT production plants and established a Joint Venture with Samsung to produce LCD TVs. I will write more on this JV at some point in the future, but I think it is obvious Sony wasn't in the typical market power position they are used to during these negotiations.

NOTE: Much of what follows is from articles I have read as well as the video around the product that can be found here: http://news.com.com/2009-7353-5136726.html Just click on the Video entitled: Sony TV promises entertainment on the go"

Ok, so back to the question at hand... why does the "Wireless TV" show that Sony doesn't get it? First, the article doesn't mention this, but the product runs on 802.11 A/B/G (yes, all 3) wireless networks, so Sony hasn't gone off and created a new wireless standard for this product... this is a good thing. The product may also, come with other sized client devices, like a 5 inch small LCD unit. So what is the problem you ask....

First off, the tablet will only run off of a Sony "base station"... and no other devices can connect back to this base station, so even if I have a laptop with wireless capabilities, I can't view the content from the base station. Second, it is unclear if this base station acts like a wireless access point to all my wireless devices or just to my Sony client devices... why would I want ANOTHER access point in my house? Assuming the base station does not have TiVo like functionality, the promise of "watching my shows from back home" is the dumbest thing I have heard of in a while. So you want me to lug a 5lb LCD tablet (which isn't a full fledged Tablet PC) with me so I can plug it into my hotels ethernet jack to watch TV? Why don't I just turn on the TV 2 feet away from the hotel desk? While I am all for the idea of thin client devices in the home that can act as both internet tablets as well as Video players, I don't want to buy something from Sony that will lock me into their platform when I can buy the same technology from other manufacturers for cheaper and not get locked in. Heck, there are so many "digital media adapters" out there today, that you could get a cheap DMA, and a low end tablet PC and get the same functionality... without the lock in, and while getting a full fledged tablet PC.

Hollywood Vs. Technology - Part Two

Last week I blogged about the tech industry dragging Hollywood to the money trough time and time again despite Hollywoods reluctance. Well this Hollywood Vs. Technology battle seems to me as a little less one sided.

Thomson, the parent company of RCA, has announced they will launch a DVD player that can automatically skip or mute scenes that parents view as not appropriate. The DVD player will have 14 filtering levels and has gotten Hollywood all up in arms again. Big Hollywood names like Steven Spielberg are sponsoring a lawsuit saying that this product violates the rights of directors who expect their product to be viewed in it's entirety and without being censored.

Normally, with the promise that Hollywood will sue your pants off, a company like Thomson might back down and not release the product... but when WalMart and KMart are pre-ordering this product, the market potential is just too great. Can't you just imagine WalMart pushing this DVD player as the "Family Friend DVD Player." While selling through WalMart gives a company HUGE volume, it usually entails very small margins for firms. Like with almost every consumer electronics device these days, Thomson is looking to generate revenue from a service. The DVD player needs to know what scenes to skip, and the unit comes loaded with only 100 films of information. For $4.95 you can download additional titles as they come out.

Now let me ask the following question... there appears to be a market need for "Family friendly" versions of movies, so could Hollywood meet this market need and make money rather than fight it as simply "wrong"... I say yes. Why not simply price discriminate, and offer a DVD that comes with both the original content as well as one that is family friendly? Hollywood could voluntarily markup the content of the movies they release, and charge more for these movies.

(Note: I am segmenting the market with the assumption that parents will want both a full version of a movie to watch when the kids aren't around, as well as a kid friendly version).

Living the Mac life

Last Thursday a security firm announced that they had found the first Trojan horse for OS X. Now the firm is fighting with other security experts round the severity of the code that was found. As a long time Windows user this gives me yet another view into the life of Mac users... they fight over the potential problems with viruses, while it seems like us Windows users have to be worried about REAL viruses everyday of the year. All I know is that Microsoft had better live up to the promises of Service Pack 2 for Windows XP, or they will have an even greater credibility problem when it comes to security (assuming their credibility could get any worse.)

BitTorrent Question...

Marc Canter has posted a post from the Digital Music Weblog on his site. The original post talks about how BitTorrent has really gotten powerful over the last few years... and the original author asks: "How soon before youÂ’ll be able-with one click-download every prime-time TV show or last yearÂ’s top 500 CDs in one click?!"

My answer: Not too far off in the future... Here is a really powerful idea that has had me thinking for weeks... the integration of RSS and BitTorrent. I clearly didn't have the original idea to integrate RSS and BitTorrent, but the power could be unreal. Imagine that you signed up for an RSS feed for every Friends episode ever posted on Suprnova.org. With the integration of RSS and BitTorrent you could easily within a week have every episode... although illegally. So to answer the original question of "How soon before you can download every prime-time TV show or last year's top 500 CDs in one click?"... I think we are not more than months away from the fundamentally having the software ready, thquestionon is who will take the time to put together the actual packages.

Now for the fun question.... when will Hollywood and the Music industry wake up to the power of BitTorrent. I know for a fact that they monitor the large BitTorrent sites, and since IP addresses are exposed while you are downloading data, it is easy to track down users. (A friend of mine got a nasty email from MIT telling them that a hollywood studio was going to seek prosecution if he kept downloading movies). But while they simply monitor the activity on the major Torrents, when will they try and utilize the technology (which is incredibly powerful at distributing files in high demand and large file size) to distribute data for services such as MovieLink? It is time for Hollywood to take a cutting edge technology, embrace it, and utilize it for the good of consumers and their own benefit...

Google + Gmail + Orkut + Blogger= Complete Profile
I have gone on record stating that I believe that the privacy concerns over Gmail are being overblown. I still believe this to be the case, but lets take a second and think about all the personal data that Google is amassing about its users. I will use myself as an example:

- As you can see I am using Blogger and Blogspot to manage this blog. Google has access to all of my writing (and hence a good idea of my interests) in this blog both through Blogger and it's indexing Bot (Not that I actually think I am getting indexed).

- I use Google as my primary search engine. As I have read and been told by friends, Google keeps a cookie on my machine with a history of my searches... this is a lot of information about what I am looking for on the net.

- I don't use Gmail, but if I did use it, Google would have access to my contact list and all my email data. In addition it would have access to any information I need to provide to just use the service.

- I am an active user of Orkut, and it was this application that actually got me thinking today. Orkut has feature called communities. These communities are for people with similar interests to share thoughts, information, schedule events, etc. Yesterday, Orkut rolled out a feature within communities called "related communities". For example, as a member of the "Bloggers" community, it lets me know that there are related communities called: "Moblogs", "BlogShares", "Fan O Feedster", "Blogtalkers", etc. The rumor within the "Orkut Design" community is that these related communities are based off of overlapping memberships of various members. So now Orkut not only has a good sense of what my interests are, but I am willing to bet they could use all the data they are collecting from Orkut to accurately predict how attractive other communities would be to me.

I have knowingly signed up and given Google all the information I just listed above, but as I sit back and look at the big picture, WOW do they have a ton of information about me. I have had numerous interactions with Google and I believe their employees really do live by the slogan "Do no evil". I see this mantra as Googles way of saying we won't do to users what Microsoft has... we will not lock in users and stifle innovation. I just hope that as time moves forward, they are able to keep the "Do no evil" mantra as a serious criteria when making business decisions. I am sure Bill and the boys up in Redmond never set out to do any evil either. If the recent backlash against Gmail has taught Google anything, it is that they really need to start thinking more seriously about privacy issues and ensuring users that they will continue to "do no evil".

More evidence of the "Wal-Mart Effect":
TWICE- Sears Exiting Seven CE Categories, Revamping Departments:

"As part of the re-assortment, the mass merchant is exiting seven product categories, including PCs, peripherals, component and mobile audio, film cameras, cellphones and PDAs.
According to a Sears spokesperson, the retailer arrived at the edits by analyzing every CE SKU and removing those with the smallest market share.
The products will be replaced with 'more relevant and productive' categories, the spokesperson said, including deeper assortments of digital cameras, DTVs, gaming hardware and software, DVD movies and other digital products."

Sears is clearly moving out of lower margin products and moving up to the high margin CE products (HDTVs, software, etc. all have much better margins and growth rates than items like PCs). This will spell more trouble for firms like Ultimate and Tweeter. Just wait until Wal-Mart starts carrying higher end HDTVs... Sears will be in trouble too.

Hacks Beware:
Students for a long time have known that institutions of higher learning have employed tools to detect plagiarism... well now hacks from around the world should be scared..CNN.com - New software detects plagiarized passages

Now seeking your comments:
This blog has been up and running for less than a week now, and I finally got around to adding the ability for people to comment on my posts as well as trackback. I would love to hear your thoughts on my postings.

Thanks,

- Mark

Wal-Mart at it again:
Wal-Mart has been disrupting the retail landscape for decades. Recently, Ultimate Electronics, a high end consumer electronics retailer, announced another disappointing quarter of losses. Wal-Mart doesn't sell high end consumer electronics, so what do they have to do with with Ultimate's bad quarter?

Wal-Mart has made a huge push into low end consumer electronics over the past few years. Last year Walmart announced they would start selling Sony products in their stores, and thus started Walmart's march upstream. The smart execs at Best Buy have been watching Walmart for some time and knew that this moment was coming, so they quickly jumped into super expensive, high end products like Plasma and LCD HDTVs (The products Ultimate sells). Moving upstream has put companies like Ultimate and Tweeter in serious trouble. Utilizing the internet, consumer are educating themselves about high end products before hitting the stores, thus making Tweeter and Ultimate's specialized sales force almost irrelevant. So how does the story end? I am not certain, but I don't think Walmart will become less of a factor, and Best Buy is loving the margins on the high end, maybe Ultimate and Tweeter need to get into the super high end products for the ultra rich.

The beauty of disruption.. Dell keeps rolling
Back in 2002, Dell stated that they wanted to reach $60 Billion in sales within a few years... given the down economy and their revenue of $30B at the time, this was a bold statement and goal. Well, now Dell has $60 billion in it's sight.

As everyone who reads this blog knows, Dell doesn't really innovate at the product level, they innovate in distribution. As technology products commoditize, Dell enters the market and is able to cut costs through their distribution system and gain market share by selling at a lower price point. Generally speaking, this model hasn't shown any signs of being challenged. So other than stealing market share in their current product segments, where can Dell expect growth?... Consumer Electronics!

As HDTV starts to penetrate the home, the entire home electronics "stack" is going to be replaced. When you get your new HDTV, consumers will get a new DVD player, new DVR, new home theater system, etc. The question for Dell is how long should they wait (read: how commoditized do the products need to be) before really pushing into this market? The success of Gateway's 42" plasma TV has shown the willingness of consumers to buy CE products through the web. I think Dell is being far too conservative in its consumer approach, and they need to take advantage of this HDTV stack replacement, and build a better consumer brand.

So why should Dell risk entering this market more aggressively? First, the margins on CE products are much higher than the margins that Dell gets on PCs and servers today. Second, I think another big opportunity in this space is SERVICES... yes, I am telling Dell to get into the consumer services business... and here is why. I am a huge believer in the idea of the "Digital Home"... and having spent some time this summer looking working for Samsung and looking at this market there will clearly be a market opportunity for a firm to provide "digital home support."

Imagine the following scenario: I own a Sony HDTV and have it hooked up to my High Definition TiVo. I also own a few laptops, and a central PC where I store all my home videos and MP3s. I have a few extra bucks and I have subscribed to MSN's MLB package so I can watch my beloved Cubs while living in Boston. For some reason, I can't get my Cub's games to show up on my TV where I want to watch the game. I call up MSN and they say "It works on your PC and that is all you can expect". I call up TiVo since I have the Media Option package and they tell me that it is a probelm with the TV, not their product. I call up Sony, and after running through a bunch of steps they determine that the TV is fine and it is something else. I call my cable company, and they tell me to get lost. What is the average consumer supposed to do? Would the average consumer pay $9.95 a month for a service that will provide onsite help for these types of problems... I think the answer is yes! And if you look at recent commericals from CompUSA and other retailers, they see this opportunity as well.

Sports content driving technology adoption:
It appears that the online technology world and offline technology world agree on one thing... sports, not sex, sells! The offline world has known this for some time. For years consumer electronic companies have been using sporting events, like the super bowl, to promote the sale of items such as big screen TVs. But now both online media firms (Yahoo!, Real, Microsoft) and offline firms (Samsung, Sony, etc.) are using sporting events to drive the adoption of new technologies.

To spur the adoption of HDTV Samsung partnered with MSOs around the country for a "March Madness" promotion on their HDTVs and cable service. Recently, CBS and the NCAA offered an online video feed of the first few rounds of the NCAA tournament (Note: I used this service and it allowed me to see out of market games... and it ROCKED!). Now MSN, in a similar fashion to RealNetworks strategy last year, is using its deal with MLB to spur the adoption of MSN premium. As firms continue to use major sporting events to drive the adoption of new technologies, consumer will learn to wait for these event before purchasing expensive products like HDTVs.

While I don't have the time to look back on historical data, I wonder how much people would have saved by waiting until March to buy their HDTV set rather than during the holiday season...

And you wonder why the EU ruled the way it did?
In classic Microsoft fashion, only weeks after announcing their deal with Major League Baseball, Microsoft has started to utilize their Windows monopoly in the streaming video world. Apparently, MSN if offering a great deal to new MSN Premium users that will allow them to get the entire season for about $30... the catch, MSN Premium is only available to Windows users. So if you have a MAC or Linux machine, you will have to pony up $100 for the season... interesting price discrimination.

Yahoo!'s blow out quarter
Yahoo! had a HUGE quarter... check out the results here: Yahoo tops Q1 expectations, sets 2-for-1 split

Hollywood STILL doesn't get it!
Years ago Hollywood sued Sony over the BetaMax, claiming that VCR functionality would ruin their business. This is just another example of technology companies dragging Hollywood, kicking & screaming, to the money well. While reports have surfaced showing that illegal music downloads have little impact on music sales, industry insiders continue to slow down the adoption of new technologies that could mint them money.

Hollywood's latest target, HDTV. While Hollywood continues to fight about potential piracy of high definition content they continue to miss the big picture: Speeding up adoption of HDTV will actually slow potential piracy... and here is why. It is currently VERY hard for the average consumer to download video content today. While networks like BitTorrent make it easy to download very large video files, these networks are not easy to use, much less understand for the average consumer. Heck, it takes me hours explaining it to my friends here at MIT! Now imagine that instead of downloading a 400MB show, you have to try and find a network to download a 1.3 GB show... in an XVID codec that 99% of consumers won't know how to even play!

Hollywood should speed up the adoption of HDTV to help them create spur current markets (like HD-DVDs, consumer HD Camcorders, etc.) as well as spur the creation of markets we can't even think of. One of the issues that frustrates me most about this issue is that any digital rights management technology put into these products will be thwarted in a matter of months. Heck, the AAC DRM technology employed by Apple in iTunes has now been made irrelevant.

Why go to the Vatican when you can get the Pope on your Cell phone?
I can't believe it, but it appears the Pope will have messages sent out via cell phone to millions.

Broadband revolution continues
News.com has an interesting article around the growth of broadband here in the U.S. As soon as I got my broadband connection I became a new person. I started to use the internet more than ever before (and I was an addict to start with)... and my always on connection has helped me to build a digital media library that I need help managing. While many companies promise to provide the hardware and software to help manage digital media in the home, I am waiting for a reasonably priced solution that is COMPATIBLE with my other systems to hit the market... when it does, I am buying!

Are you listening Michael Powell?
VOIP to date has been able to steer clear of all the regulations that traditional phone services have to deal with... and it appears Michael Powell, Chairman of the FCC, is hearing from many sources that the FCC should keep VoIP regulation-free. I have seen Mr. Powell speak numerous times, and I believe that he will fight against regulation, I just hope he can get the entire committee to join him on this one.

Opps... Things get a little more rocky for Gmail
News came out today that Google didn't register the name Gmail with the US patent and trademark authorities. What is most surprising in this mistake is the following quote from Shane Smith, from The Market Age, whose firm now owns the trademark Gmail:

"When the news came out about Google's Gmail last week, I went to the U.S. patent and trademark authorities. I thought maybe we were in trouble. But they hadn't (registered),' Shane Smith, group chief executive of Market Age, told Reuters on Wednesday. "

Skype keeps on innovating:
For those of you that haven't heard of Skype, it is a p2p voice over ip (VOIP) application that lets users make free phone calls over the internet. (Did I use enough acronyms there for you?) Well, in the past you had to be in front of your laptop or desktop to use Skype to make phone calls, well that has all changed. Now you can use Skype from your PDA! Skype was created by the same group of guys that started Kazaa, so they know how disrupt industries.

This past year I was in a class and I asked my classmates who had heard of Skype (at the time it had been out for about 2 months) and I was surprised to see that about 5 other people had it and used it. Not surprising was the fact that all these students were international students who used the software to make free international calls.

The Genius of Gmail:

Old Landscape:
Microsoft and Yahoo! have been offering free email service (2MB and 4MB respectively) for a long time. To generate revenue from email each has done banner ads as well as offering account upgrades (think $50/year for 50MB) to give users more space.

Enter Gmail:
Google’s entry into the market is pure genius. Many questioned why you enter with 1000 MB, which appears to be overkill. 1000 MB isn’t overkill at all; it is the perfect amount to make users believe they have enough email storage to not delete items. Users will now keep more email and use Google search to help them find their email… thus making Google a larger part of their life when it comes to information retrieval. It is also the perfect amount to force Microsoft and Yahoo! into a tough decision…. how to change their business model.

Imagine you are Microsoft or Yahoo! and you have thousands of customers paying yearly fees for a service that is about to become obsolete… what do you do? The interesting part is that Gmail is disrupting the business model of free email. I would bet the farm that Banner ads don’t generate the revenue to support 1 GB of free email, and that Google has run the numbers and they really believe that contextual ads will do the trick. I think it is clear that the Microsoft / Yahoo! model of having users pay yearly fees for email accounts based on storage is now dead. Will Microsoft and Yahoo! counter with innovative features and business models, or will they just simply match Google? I bet they just follow… Now for some thoughts about what Gmail is lacking:

Missing Items:
Lowering switching costs when it comes to email is HUGE, and the Gmail team needs to lower this barrier in the following ways:
- Create tools to import email, contacts, calendar info, etc. from other services
- Optional mass email to contacts about new email account
- Pull email automatically from old account
- Other features I have not yet thought of...


Here is some more info about Gmail… including features and screenshots:
To better understand the product lets talk a little about the features as well as look at the screen shots. Lets start with the features:
- 1000 MB of free storage
- Search your email using Google
- Grouping of email by thread
- Ability to “label” email
- Key shortcuts – I really don’t know what this does... but it looks cool

Now for the screen shots:
Rather than steal them from his site, I will just point you to: Fury.com

The Genius of Gmail:

Old Landscape:
Microsoft and Yahoo! have been offering free email service (2MB and 4MB respectively) for a long time. To generate revenue from email each has done banner ads as well as offering account upgrades (think $50/year for 50MB) to give users more space.

Enter Gmail:
Google’s entry into the market is pure genius. Many questioned why you enter with 1000 MB, which appears to be overkill. 1000 MB isn’t overkill at all; it is the perfect amount to make users believe they have enough email storage to not delete items. Users will now keep more email and use Google search to help them find their email… thus making Google a larger part of their life when it comes to information retrieval. It is also the perfect amount to force Microsoft and Yahoo! into a tough decision…. how to change their business model.

Imagine you are Microsoft or Yahoo! and you have thousands of customers paying yearly fees for a service that is about to become obsolete… what do you do? The interesting part is that Gmail is disrupting the business model of free email. I would bet the farm that Banner ads don’t generate the revenue to support 1 GB of free email, and that Google has run the numbers and they really believe that contextual ads will do the trick. I think it is clear that the Microsoft / Yahoo! model of having users pay yearly fees for email accounts based on storage is now dead. Will Microsoft and Yahoo! counter with innovative features and business models, or will they just simply match Google? I bet they just follow… Now for some thoughts about what Gmail is lacking:

Missing Items:
Lowering switching costs when it comes to email is HUGE, and the Gmail team needs to lower this barrier in the following ways:
- Create tools to import email, contacts, calendar info, etc. from other services
- Optional mass email to contacts about new email account
- Pull email automatically from old account
- Other features I have not yet thought of...


Here is some more info about Gmail… including features and screenshots:
To better understand the product lets talk a little about the features as well as look at the screen shots. Lets start with the features:
- 1000 MB of free storage
- Search your email using Google
- Grouping of email by thread
- Ability to “label” email
- Key shortcuts – I really don’t know what this does... but it looks cool

Now for the screen shots... rather than steal the screen shots and claim they are mine, go look at them at: Fury.com

The Genius of Gmail:

Old Landscape:
Microsoft and Yahoo! have been offering free email service (2MB and 4MB respectively) for a long time. To generate revenue from email each has done banner ads as well as offering account upgrades (think $50/year for 50MB) to give users more space.

Enter Gmail:
Google’s entry into the market is pure genius. Many questioned why you enter with 1000 MB, which appears to be overkill. 1000 MB isn’t overkill at all; it is the perfect amount to make users believe they have enough email storage to not delete items. Users will now keep more email and use Google search to help them find their email… thus making Google a larger part of their life when it comes to information retrieval. It is also the perfect amount to force Microsoft and Yahoo! into a tough decision…. how to change their business model.

Imagine you are Microsoft or Yahoo! and you have thousands of customers paying yearly fees for a service that is about to become obsolete… what do you do? The interesting part is that Gmail is disrupting the business model of free email. I would bet the farm that Banner ads don’t generate the revenue to support 1 GB of free email, and that Google has run the numbers and they really believe that contextual ads will do the trick. I think it is clear that the Microsoft / Yahoo! model of having users pay yearly fees for email accounts based on storage is now dead. Will Microsoft and Yahoo! counter with innovative features and business models, or will they just simply match Google? I bet they just follow… Now for some thoughts about what Gmail is lacking:

Missing Items:
Lowering switching costs when it comes to email is HUGE, and the Gmail team needs to lower this barrier in the following ways:
• Create tools to import email, contacts, calendar info, etc. from other services
• Optional mass email to contacts about new email account
• Pull email automatically from old account
• Other features I have not yet thought of...

Here is some more info about Gmail… including features and screenshots:
To better understand the product lets talk a little about the features as well as look at the screen shots. Let's start with the features:
• 1000 MB of free storage
• Search your email using Google
• Grouping of email by thread
• Ability to “label” email
• Key shortcuts – I really don’t know what this does.

Now for the screen shots:

http://www.fury.com

Trains passing in the night:
This news is a little old, but still worth talking about. On March 31st Sony announced they will open new retail outlets across the country. The next day, Gateway announced it is shutting down their stores.

I don't think I have ever seen two firms that are competing in the same industry taking exactly opposite strategies at almost the exact same time. So what forces are working to cause these two firms to head in opposite directions?... let me take a stab at it.

Gateway's recent purchase of eMachines has resulted in a new management team at Gateway which is being headed up by the former CEO of eMachines, Wayne Inouye. Before eMachines, Wayne was a VP at Best Buy and is certainly sensitive to issues of channel conflict that have kept Gateway products out of Best Buys and other major CE retailers. So Wayne's decision to shut down the retail stores (which were losing money anyway) and get back to a more basic distribution strategy seems to fit with his background.

So what would explain Sony's actions? Well, Sony is Sony, meaning they have such power in the market that retailers like Best Buy can't credibly threaten them when channel conflict arises. Sony actually has so much power it was able to get concessions from WAL-MART last summer when they came to a distribution deal. Sony views their new retail outlets as a chance to demo their products in an integrated fashion... which more consumers will care about as CE product interoperate.

While each firm is taking a strategy contradictory to the other's, I would argue that each strategy is appropriate given each firm's place in the market. Only time will tell on this one, but give the major changes at Gateway, I would not count them out yet.

LCD Vs. Plasma Vs. DLP:
Forbes has a decent article about LCD Vs. Plasma Displays. Having interned at Samsung in their Digital Consumer Electronics group, I have been following this market for some time. Most in the industry think that LCD will win the day, you can see that through the joint venture announced by Sony & Samsung... but surprisingly Penelope Patsuris left DLP TVs out of her discussion.

DLPs (Digital Light Processor) televisions are rear projection TVs that use Texas Instrument's DLP chips to generate an incredibly great picture while only having a depth of about 19 inches. Samsung essentially owned this market last year but recently Gateway and RCA have entered the market in a major fashion. RCA showed off a DLP TV at the consumer electronics show this year that was about 7 inches deep and could be hung on a wall.

While everyone is betting on LCD for the future, ask any Best Buy sales person, and they will tell you DLP is the hottest TV out there. While I won't bet against the continual improvement and price drops in LCD, I think too many are counting DLPs out too soon.

Paul Andrews agrees:
Looks like Paul Andrews with the Seattle Times agrees with my assessment (see post below) of the Sun / Microsoft agreement. : "the truth behind Microsoft's and Sun's motivation may lie in two potent enemies, who have formed their own imposing alliance.

I'm talking about IBM and Linux. The strides they have made in serving large corporations and the Web networking markets have been striking and are still expanding. Any advances IBM and Linux make come at the expense of Sun's Unix and Microsoft's Windows platforms. "

The Camera Phone Effect:
I attended a lunch today where Michael E. Raynor, co-author of Innovator's Solution, spoke about the book. During the speech he began talking about how camera phones are disrupting the entire photography industry. And almost like it was scripted, BusinessWeek has posted an article about "The Camphone Revolution". The point Michael made about Cameraphones is that they help people do what they want to do with photos... and that is sharing them. By combining the picture taking device with the sending device, these phones are really disrupting the entire industry. I think the big winners in this trend will be the wireless carriers if they play this right. With local number portability increasing churn, wireless carriers need to get find new services that will help them retain customers. Can you imagine if Verizon or AT&T offered a mblog for all their camera phone carrying subscribers for an additional $4.95 a month? What a great way to help customers share their pictures with family & friends, lower churn and raise their ARPU (average revenue per user).

Linux at Home:
So Wal-Mart is now offering PCs running Sun's Linux. The microtel computers will cost around $300 and will only be available on Wal-Mart's online site for now. While this isn't the first foray into Linux computers for Wal-Mart, I continue to wonder how long it will take for Linux to catch on with consumers. I think it is now time to for all the major consumer software applications to be ported to Linux to really get this ball rolling... can anyone think of a great music application that should be ported... iTunes anyone?

What was he thinking?
Charles Cooper's article entitled: "Why Gmail gives me the creeps." is shockingly off base for someone in his position. As soon as GMail was announced privacy advocates everywhere began to pen articles about how terrible it is for Google to be "reading" everyone's email.... and why people shouldn't trade their privacy for 1000 MB of free storage.

Here is why Charles and other privacy advocates are so off baseon this one: Simply ask them if they use Yahoo! Mail, Hotmail, or any other email software where there are spam fighting filters. I would bet the farm that they do, and these filters "read" email in the same way that Google's GMail would "read" mail. I don't recall these same concerns being voiced when spam filters are added in hotmail, Yahoo! Mail or any other application (Outlook 2003).

Great Idea or Just Cool Feature?
Robert Scoble seems to have fallen in love with a "Magic Outlook Folder" that he will use to blog about emails and other items he drops into this folder. The folder apparently will take the contents of an email and automatically post them to his blog. Now Robert has been doing the Blog thing for a LONG time, but I can't imagine that this is as revolutionary as he is making it out to be. He is talking about this changing the world of knowledge management, but I just don't see it. First of all, how many people really blog about their email and want the exact email that they received to be posted on a blog. If bloggers started doing this I would bet their email volume would drop FAST... I know I wouldn't want my messages posted on someone's blog.

One interesting aspect of this "Magic Folder" is how easy it will be for Google to replicate the functionality. With GMAIL getting ready to launch I imagine it would take about 2 days for someone on the GMAIL team to add the Blogger icon and clicking on the icon automatically posts the message to the users blog.

SUN & MICROSOFT
On Friday Sun & Microsoft buried the axe by agreeing to a 10 year deal that will get the two companies to work together to have their platforms interoperate. Scott McNealy & Steve Ballmer claim that this deal was driven by customer needs... I claim they are telling a half truth.

For the first time in a long time Sun & Microsoft's interests are aligned... they have a mutual enemy, and that enemy is Open Source. Both firms are struggling to come up with a great strategy to deal with Open source and I view this agreement as part of their response to open source. By getting their platforms to interoperate the two firms have built a positive externalities into their products, and assuming that they really work together to make these platforms work better together, you can be sure they won't make it easy for linux to interoperate.

Introduction:
The time has finally come.... I have been trying to hold off from starting a Blog for some time now. As a graduate student in the midst of a job hunt, I am burning the candle at both ends and I know that any blog I started would take up substantial time.

So why start now? I have been looking for a blog that posts about both technology news, gadgets, technology strategy issues, etc. and I haven't found one that really appealed to me... so I decided to step up to the plate. I don't know how this will turn out, but I do know that I say what is on my mind and not hold back. Let the posting begin!