A Random Walk Down Tech Street

Why Apple will dominate the near future of computing...

2010-02-01T02:40:00.003-05:00

Too many people believe the mobile market will play out like the PC market and that Android will crush Apple by taking a platform approach while Apple stays integrated. So here is a fun game: Name a HIT product in the mobile or consumer electronics space that wasn't built by a single company.

Struggle to come up with one? Well here is a short list of HIT mobile / CE products that came from a single company:

Palm Pilot
Treo
Blackberry
iPod
Garmin Navigation Units
TiVo
Nintendo Wii (really any gaming platform)
iPhone
Kindle

If you are really interested in understanding the details of why vertical integration wins the day in early markets read Clayton Christensen's books. The short answer is that in the early days of markets the technical integration points between various points in the technology value chain are not well defined and therefore you need a single company to own the end-to-end product to create the best consumer experience. Google finally woke up to this and that is why they are getting more involved in hardware (i.e. - Nexus One).

The mobile market will continue to be a market where innovation happens so quickly that there won't be well defined integration points for years to come. This will also increasingly be the case with the CE market as CE products (HDTVs, DVD players, Gaming Consoles, etc.) become network connected and their interfaces and interaction points with other products change dramatically.

Apple is the company best positioned to create hit products in markets where vertical integration matters. These aren't small markets (phones, portable media players, tablets, etc.) and the markets that will soon require vertical integration (CE products) will be markets that Apple will make inroads into.

Full disclosure - I own Apple stock and will continue to own their stock until I see the importance of vertical integration diminish, which I don't expect to happen for years to come.

Treat the disease not the symptoms

2009-02-20T18:43:00.001-05:00

One of the things that I have been frustrated with over the last year is that we tend to spend a lot of time talking about the economic crisis and the various government actions without realizing that what we are talking about are symptoms to a disease and the treatments of said symptoms, while we ignore the disease. The economic crisis is simply a symptom of the disease that is the lack of *financial literacy* in the country.

Walk into a room of highly educated home owners and ask them what percentage of their gross income should be spent on housing, and I am willing to bet that less than 10% will have any clue. Ask the average American about interest rates, how much debt they should carry given their income, the costs of credit card debt, etc. and they will look at you like you are their HS math teacher asking them about trigonometry. Yet, these are the practical life financial decisions people make every day.

I had the privilege of going to some great schools and I didn't take a single course that focused on any aspect of financial literacy. We have college students graduating with a mountain of credit card debit, and they don't even understand the hole they are in because they aren't financially literate. How many people who are carrying credit card debt run around passing along hot stock tips? Their financial ignorance results in them not knowing that the best return on investment for them would be to pay off their credit cards.

I believe that financial ignorance + greed is what fuels speculative bubbles and the logical crashes that follow. If the government wants to truly address the financial problems of the country they should put in place policies and programs to address the financial literacy disease that faces our country. After all, it was financial ignorance + greed that took us from one bubble (internet stocks) to the next (homes).

If don't improve our financial literacy today's financial crisis will feel like a walk in the park compared to the decades ahead of us when we will have millions entering their retirement years without the cushion of a pension and social security.

Finally, the lack of financial literacy makes it impossible for our elected officials to make the right financial decisions for our future, because their constituencies don't understand the problems we are headed for with respect to entitlements & our twin deficits.

Until I see action in this area I am going to continue to buy gold, because the worst will be ahead of us, rather than behind us.

Standard vs. Necessary

2009-01-04T19:31:00.002-05:00

I am going to test out a new approach to blogging. In the past I wanted to make sure what I had to say was really insightful, well I am going to switch to posting whenever I think what I am going to write *might* be insightful... so here we go.

In the course of starting a new venture co-founders are faced with innumerable decisions in areas they really don't have expertise. The vast majority of these decisions land in the legal arena where the "legaleze" is astonishing - making the decisions harder. I am fortunate in the fact that I have founded a company in the past, so I am able to read through the documents pretty efficiently and comprehend the material well. But I have found that the most important question to ask yourself and your legal counsel when faced with "legaleze" is the following: Is this standard or is this necessary?

Agreeing to terms simply because they are standard is something that I am not a fan of. It results in a situation where you don't really understand what you are agreeing to and why it is important (b/c your lawyer will constantly say "that is standard" and you will just nod and move on, rather than really understanding what is going on). So probe when you are reading through legaleze and understand what is going on and only accept a term if it is necessary, not because it is standard.

It's been a year, and what a year it has been....

2008-12-31T18:20:00.002-05:00

It has been over a year since I have posted, and I want to give a quick update to all of you about what has happened in the last year to me personally, and a little bit about what is ahead. Here is a quick run down on what has happened:

- Shortly after my last post in November of 2007, Tara and I had our second child - Samantha Williamson. She came 6 weeks early, but is doing great!

- Last March I had the great fortune to play a role in launching the Dash Express. I never expected to be briefing Walt Mossberg of the WSJ, doing an interview for the ABC Nightly News and the CBS Morning Show, but I had the great pleasure to take on those responsibilities and the launch went well.

- In June I decided it was time to get back in shape, so I applied management and economic theory to weight loss and lost 32 pounds in 90 days, and a total of about 41 pounds since June 1st. (I will post more on this later)

- August was a crazy month with the sale of Shelfari to Amazon and me leaving Dash to start a new venture. (I will post more on my new venture later)

- In September while spending time thinking about new business opportunities I had the chance to spend a lot of time observing the market meltdown (more on this in a later post).

- In Oct / Nov / Dec we formed our new company (Inquisitive Minds), raised a seed round of capital, and are executing on our product & vision (more on this later).

I will be posting much more frequently in 2009 on some of the topics mentioned above as well as on what it is like to launch a new venture in the midst of an economic meltdown.

Shelfari & Open Social

2007-11-03T20:16:00.000-04:00

The Shelfari team has been hard at work for while building on the Open Social platform, and last week they taped a video while at Google... here it is:

Great work guys!

what a week!

2007-10-22T03:11:00.000-04:00

Last week was crazy! I had a chance to present at the Web2.0 Summit with Rob Currie for Dash. It was a great experience and the presentation went off without a hitch. It really is easy to present when "things just work" and fortunately the hard work of our engineering staff made that happen, so I had the pleasure of showing off all their hard work. Here is a cool blog post from Tim O'Reilly that was written during and after our presentation.

Additionally, Shelfari has been doing GREAT lately. The site is gaining traction, the team is growing, and there was even an short mention in the Wall Street Journal this weekend. This is just another case of a great team doing great work!

Not all weeks are like last week, but I am hell-bent on making weeks like last week more frequent!

Getting ready for Web2.0 summit

2007-10-16T01:31:00.000-04:00

I am headed up to SF this week for the Web2.0 summit. I am going to be presenting with Rob Currie (President / COO of Dash) and we will be unveiling some cool new Dash features. If you are attending and want to get sync-up let me know: mark.williamson AT Gmail [dot] com.

Who wants to catch this falling knife?

2007-09-30T19:54:00.000-04:00

Click to see full sized picture:

More bad news for housing

2007-08-29T02:02:00.000-04:00

So the markets sold off today on the news that housing prices are dropping, and fast. I was happy to see that the data discussed today was the Case-Schiller Home Price Index, because after reading about many methodologies, I think that this is the best methodology out there. This past weekend I read the entire methodology document and I came across the following nugget of information:

The monthly indices use a three-month moving average algorithm. Home sales pairs are accumulated in rolling three-month periods, on which the repeat sales methodology is applied. The index point for each reporting month is based on sales pairs found for that month and the preceding two months. For example, the December 2005 index point is based on repeat sales data for October, November and December of 2005. This averaging methodology is used to offset delays that can occur in the flow of sales price data from county deed recorders and to keep sample sizes large enough to create meaningful price change averages.

YIKES... This methodology means that in times of fairly rapid movement the index can really get behind the actual changes since it is a moving average. I know there is a futures market based on this methodology... next step is to delve into that market and understand where people are putting their money. If I was a betting man I would say that the year-over-year declines are going to accelerate in a significant way over the coming months.

Best Baseball Game Ever!

2007-08-28T00:59:00.000-04:00

Last Tuesday night I had one of the best days of my life. My wife (Tara) and daughter (Abbie) bought me Cubs vs. Giants tickets for Fathers Day... and last Tuesday was our night to go. Abbie had so much fun! She sat there for the entire game routing for the Cubs and making friends with all the Cubs fans in the stands. Check out these pictures!

On Intelligence...

2007-08-27T03:14:00.000-04:00

I can't get the concepts I am learning from On Intelligence (the book I am currently reading), out of my head. The author is Jeff Hawkins, who is best known for starting Palm (of Palm Pilot fame) and Handspring (of Treo fame). Jeff's theories on how the brain works are fascinating, and the implications of his work, if correct, will be astonishing. A friend of mine named Phil Shoemaker works at Jeff's current start-up Numenta, and I am very glad that he turned me onto the book.

I HIGHLY recommend that new product developers, the intellectually curios, product designers, AI developers, parents, teachers, heck... basically everyone should read this book.

Why it will get worse - the data

2007-08-05T19:33:00.000-04:00

MarketWatch has an article today entitled "Western states went exotic with mortgages" where they layout data from First American LoanPerformance on the types of mortgages that were taken out across the country, and specifically here in California. If this data doesn't scare you about the near term housing market, I don't know what will. So here it is:

"Payment-option ARMs" (AKA - negative amortization loans... this is where you pay LESS than the interest on the loan and the difference between your payment and the interest due is added to the principle of the loan! Your payments will reset to a much higher amount 2 or 3 years later and will be set by the new interest rates at that time)

California - 24% of all refinanced and first mortgages in 2006
Nation wide - 11% of all refinanced and first mortgages in 2006

To give some perspective, in California, payment-option ARMs made up just 0.8% of all loans in 2003 before jumping to 7.5% in 2004 and more than 18% in 2005.

Interst Only (you pay just the interest, and no principle for the first couple of years, and then your payments reset to new market based interest rates, typically after 2 or 3 years)

California - 32% of refinanced and first mortgages in 2006
Nation wide - 22% of refinanced and first mortgages in 2006

This means that 33% (1 in 3) mortgages across the country last year were either negative amortization loans or interest only. In California, more than 1 in 2 were either negative amortization loans or interest only. Let me say it again... 1 in 3 nation wide and 1 in 2 in California!!!!!!! So if you think you have seen downturn, wait for the 2 to 3 years after these ARMs reset (2008 / 2009) and see how many people default.

Credit markets...

2007-08-05T19:22:00.000-04:00

About 2 weeks ago I wrote a post entitled "Back end of housing bust..." where I wrote about how it would be rough for consumers when wall street finally lost their appetite for mortgage backed securities. We that happened this past week. Banks can no longer package up some of their exotic mortgages and sell them off, so guess what... they aren't going to offer them any more. Read this story at MarketWatch that talks about some banks cutting WAY back on the products they offer.

It took far to long for this to happen. It will be very interesting to see what the fed does this week, if anything. I for one hope that they don't step in and clean this up for everyone. We need to get the housing market back to fundamentals... the norm needs to be 20% down payments on a 30 year fixed mortgages, not 0% down, interest only ARM. For that to occur there needs to be a lot pain distributed across the market (Hedge Funds, Wall Street Banks, Mortgage Companies, and Consumers).

The worst is yet to come...

2007-08-05T03:05:00.000-04:00

The median household income of silicon valley is ~50% higher than average, yet the median home price is ~3.5x... this will get straightened out over time, and it will get ugly for many people.

Foreclosures explode in CA

2007-07-26T01:39:00.000-04:00

As expected, foreclosures are going through the roof here in CA, and the Bay Area isn't immune. I had a great conversation with some business school friends last night about the housing market, and my point of view is that things will actually continue to get worse before they get better.

Here is the story from the SF Chronicle that details the most recent stats.

Here is the image from the story... it goes without saying that this picture is worth more than a thousand words:

Back end of housing bust...

2007-07-21T17:22:00.000-04:00

Up and down the economic value chain of the housing market there has been pain recently. I am clearly a housing bear, and having friends working on wall street, specifically in CDOs, gives me a little insight into how they are viewing paper these days.

Here is a must watch video if you want to understand why the worst is probably still to come with respect to the housing market. Remember, when wall street loses it's appetite for mortgage backed securities there will be a huge trickle down effect to consumers:

Can we move on now???

2007-06-29T23:50:00.000-04:00

I am a tech news junkie, and I am SOOO glad the iPhone launch is over with. We need to move on. Yes this is a game changing device, for a bunch of reasons. Other cell phone makers will have to raise their game and innovate in areas they have ignored. Probably most importantly, every carrier not named "AT&T" will need to reexamine their "closed platform" philosophy.

Techmeme....

2007-06-19T00:36:00.001-04:00

Years ago, I would start every hour by quickly pinging News.com to see if there was any breaking tech news. That was quickly replaced by bloglines, which became the hub of all my news. Today, I subscribe to 200+ feeds, so I can't jump into my feed reader and get a quick snapshot of the pulse of the tech world... that's where Techmeme comes in. I visit techmeme about 10 - 15 times a day to find out if any stories are breaking and to see what is happening in the world of tech news. Check it out if you are a tech news junkie like I am.

What Henry Said...

2007-06-08T02:46:00.000-04:00

I have been a bear for so long on housing that I now know what the Nasdaq bears felt during '98 - 2000. Henry Blodget (yes, that Henry Blodget) perfectly summed up my feelings on the housing market with this post:

NAR: Don't Worry, Housing Prosperity Just Around Corner

HousingcrashOff topic, but I can't help but note the similarities between the dotcom-crash rhetoric/predictions back in 2000 and the housing-crash rhetoric/predictions in the last 12 months.

Those of you who had the misfortune to live through the dotcom crash will recall that I and other analysts correctly predicted that there would be a slowdown and shakeout, but drastically underestimated its severity and duration. All the way down, we kept revising forecasts (read: cutting estimates) to previously inconceivable levels, and each time we cut them, we reiterated our expectation that the inevitable trough and upturn was about six months away. It wasn't until two years after the shakeout began, when half of online advertising revenue had evaporated and more than 75% of the companies in the sector had keeled over that the downturn finally ended... And by that time, most of us were so demoralized that we'd stopped predicting that there would ever be an upturn.

Housing obviously won't experience as deep a correction as the dotcoms did, but I haven't heard a single persuasive argument explaining why this downturn won't look like every previous housing downturn: i.e., will last a lot longer and drop much farther than most people think--until price/rent and price/income ratios return to or below their long-term trend. Instead, all I hear are arguments like this one, which are based not on long-term historical trends, but on short-term bubble-year pricing and price trends (arguments I am very familiar with, having made similar ones in late 2000 and early 2001):

WASHINGTON -- The National Association of Realtors again lowered its U.S. housing market forecast for this year, saying the market remains "soft." In its latest forecast for the real estate market, NAR projected that existing home sales will fall 4.6% this year to 6.18 million, compared with its previous forecast of a 2.9% decline. New home sales are expected to plummet even further. The NAR said new home sales are likely to fall 18.2% to 860,000, compared with the prior forecast of a 17.8% drop. While near-term prospects for housing remain fairly grim, NAR said sales should pick up toward the end of the year.

"Overall housing levels are historically strong, but sales remain sluggish compared to the recent boom," said Lawrence Yun, NAR senior economist, in a statement. "Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year," Yun added. Existing home sales are projected to rise 3.7% in 2008, to 6.41 million, according to NAR's forecast.

Talking at Where 2.0 this week

2007-05-28T23:22:00.000-04:00

While Bill & Steve debate at D, I will be talking at Where 2.0 on Wednesday. The topic... "Getting into the Car : Geo-located Information Breaks Free". It should be a fun session.

Facebook platform will be HUGE

2007-05-27T01:59:00.000-04:00

I have spent the day thinking about and researching the new Facebook Platform. I am convinced that this is going to be HUGE, and that within 18 months Facebook will surpass MySpace as the #1 social networking site on the web. I also believe that dozens of start-ups will survive solely based on this platform. Big, Big, Big...

Free Start-up idea of the day

2007-05-17T17:46:00.000-04:00

I have an idea or two a day for a start-up, and I am booked working on 3 companies (Dash, Shelfari, & MyTinyHands), so I am not looking to add a fourth anytime soon. Therefore, I am going to start blogging some of my ideas to see if they are interesting to anyone else.

Today's Idea - Using SMS to track business expenses. I would pay a few bucks a month for a service where I could SMS my business expenses as they happen, and then the service would automatically transform the messages into an expense report. I know I always forget $20 - $50 a month in business expenses like cabs, airport meals, etc... and this could save me lots of money.

Where is my killer Rhapsody Widget?

2007-04-30T16:32:00.000-04:00

I use Rhapsody all day at work, and I am constantly jumping between applications to manage my music experience. What I need is a killer Rhapsody widget (built on Yahoo's or Google's engine) that will sit on top of other applications and make it simple for me to manage my music experience. Here is a simple set of features I would need:

- Skip a song
- Add a song to my library
- Switch channels or playlists
- Jump into my library to switch albums

So... come on Rhapsody, where are we at here. There was a widget created a long time ago for Yahoo! but it hasn't been updated in years... hook me up!

Gov't Bail Outs in Housing?

2007-04-25T02:24:00.000-04:00

I am trying not to turn this into a "housing market blog", since my intent is to focus on technology, having said that, there is just too much here to keep my mouth shut. The State of California is considering getting involved an bailing out consumers who are in danger of entering foreclosure. The government should step aside and let the market deal with this issue.

Foreclosure data

2007-04-18T01:49:00.000-04:00

This is the outcome of the dynamic I just posted about:

Housing Data

2007-04-15T21:43:00.000-04:00

So I have long held the belief that the housing market is way over priced. My thinking is shaped by the rate at which home buyers were using "exotic" mortgages (read interest only / negative amortization, etc.) to buy the homes they wanted. I also believed that most people didn't fully understand what they were doing when they entered into these mortgages, which is why I think there will be a rash of foreclosures at all price points in the housing market.

Having said all that... why is that the data the press and government talks about is around median home prices and volume of houses sold? This is really meaningless data. What really matters, in my opinion, is the "income" (I am using income here as an approximation of the buyers ability to pay their monthly mortgage) of the buyer compared to the size of the mortgage taken. The housing bubble was fueled by "volume" and "median price" watchers, but if anyone analyzed the "income" of buyers compared to the mortgages they took out, it would have been CRYSTAL clear early on that is was a giant house of cards, the same way the stock market was a house of cards in the late 90's.

If anyone knows of a firm that analyzes data around buyer "income" and mortgage amount and structure, please let me know.

Microsoft

2007-04-07T15:37:00.000-04:00

Paul Graham wrote a post called "Microsoft is Dead"... I was midway through reading the post when I had to go help my daughter with something, and I was thinking as I walked back to my computer... "This is *really* old news"... funny enough he ends the post saying that there will be two reactions... one where people say "don't underestimate Microsoft", and the other "this is old news"... great anticipation!

Housing again...

2007-04-06T00:33:00.000-04:00

Silicon Valley seems to be in a housing bubble that just won't pop easily... but for all of you who think that SV housing is immune, please check out the following graph:

The above chart is for housing across the country, but I would love to see the same data for housing in Silicon Valley. I bet the index would be off the charts... literally.

How cool is this?!!!

2007-03-22T00:46:00.000-04:00

A few hundred million later...

2007-02-19T21:14:00.000-05:00

After flushing hundreds of millions down the drain in marketing & hardware subsidies, XM & Sirius finally did what anyone with half a brain would have done years ago, they announced their intent to merge. The combined company (if approved by regulators) should be able to significantly cut marketing, content, and hw costs. I am really looking forward to pouring over their financial statements after the deal closes to determine the synergies.

Dollar vs. Yuan

2007-02-13T02:59:00.000-05:00

Since the Chinese government has allowed the Yuan to "float" (and I am using that term loosely) against the dollar the above is what has happened.

LinkedIn, worth its weight in Gold!

2007-02-13T00:04:00.000-05:00

So I know there has a been a meme running around about the value of LinkedIn with respect to sourcing talent for job openings... and all I can say is that it is true. I posted a job opening for Shelfari, and I have gotten at least a dozen SOLID applicants. And all it cost Shelfari was $145 to post the opening!

Friday was a great day!

2007-02-10T20:02:00.000-05:00

Yesterday was a BIG day... I will provide more info in the next few weeks.

Good Bye ESPN.com

2007-02-02T22:58:00.000-05:00

I have had it with ESPN.com, and their continued use of ANNOYING pop-up ads. I will never visit their site again. CBS Sportsline... here I come. Don't let me down!

Short Rants

2007-01-17T00:37:00.000-05:00

There are a few things bothering me these days, and I just need to get them off my chest:

1) Pop-ups - How does any self respecting website still run pop-ups? How are there ANY companies left who want to be associated with these incredibly annoying ads? I have stopped visiting websites that have pop-ups and I am considering dropping any relationship I have with companies that run pop-ups. If I see another Vonage or Netflix pop-up I will cancel my account with each of them.

2) Mid Season TV Show Breaks - It feels like 6 weeks since the last new episode of Heros aired. It feels even longer for Lost. These huge mid-season breaks KILL my interest in these shows. As if young male consumers like myself need another reason to ditch TV! One of the reasons I love 24 is that the season runs uninterrupted.

3) TV Shows Running 1 Minute Late - I HATE it when a TV show runs 1 minute long. It is a Bull Sh*t trick to F'up DVRs and other technologies... and it pisses me off. If this practice, which has been around for far to long, I am going to start boycotting these shows.

Pop goes the bubble

2006-11-28T17:40:00.000-05:00

I have been talking about a housing bubble for some time now with friends and family... and today I got around to checking out Zillow for housing prices in California. All I have to say is "Pop"

Shelfari Blog Plug-in

2006-11-15T00:03:00.000-05:00

Shelfari today has launched a simple blog plug-in that lets people embedded their book shelf into their blogs. Check out my "Top 10" books below:

Abbie "reading"

2006-11-05T13:04:00.000-05:00

We started reading to Abbie A LOT when she was little, and at a really early age she could finish sentences in her favorite books. Then at around 2 years old she started to "Memorize" books, meaning she could recite them back page by page. Anyway, some family has expressed interest in seeing the video so here is a little video of her reading "The Little Mermaid" when she was around 26 months old... I realize that most people won't be able to understand every word she says, so at some point I will add subtitles ;-)

Shelfari is live

2006-10-11T04:12:00.000-04:00

Tonight is the night! Shelfari has launched!

It is late, so I won't run on about the virtues of Shelfari, that is for tomorrow night. For now, I am just going to ask you to go to Shelfari.com and check out the rocking visual design of the site.

Also, you can keep tabs on what I am reading by checking out my personal shelf at:

http://www.shelfari.com/williamson

Dash at DEMO

2006-09-27T02:18:00.000-04:00

A few months ago I posted about my new life down in Silicon Valley. Well today the start-up that I work for, Dash, launched it's first product at DEMOfall.

Before I go any further, I need to make it clear that the views expressed in my blog are mine alone and do not represent the views of Dash.

While I don't expect to post a lot about Dash here on this blog, I might occasionally drop a note or two about my experiences at a Silicon Valley start-up. I also wanted to let those that read this know why I am down in the Bay Area and what I am working on.

More on both Dash and Shelfari (the company I co-founded and I am on the board of) later...

Shelfari on "Seattle Web 2.0" list

2006-08-12T03:39:00.000-04:00

John Cook, the journalist that covers the venture and start-up world in Seattle, recently published his Seattle "Web 2.0" list. Somehow Shelfari got on the list despite the fact this blog is basically the only thing that has been said publically about the existance of the company. The good news is that nothing was revealed about what we are up to.

Side Note: When I lived in Seattle I read John's blog and columns religiously. I felt as though he was the one reporter in town that actually understood the venture community and the start-up world. I am still subscribed to it and recommend you check it out.

The fundamental flaws of "Swapping Networks" (most of them anyway)

2006-07-29T04:15:00.000-04:00

It became clear to me a few years ago that I wanted to get involved in start-ups. In the long run I knew I wanted to start my own company, but in the short run I was open to cutting my teeth at a start-up in progress. Last November / December I began a long process of thinking through three really important things:

1) What types of businesses excited me
2) What types of businesses have a proven track record of big time success
3) What opportunities were at the intersection of 1 & 2 that had yet to be built

I quickly found the intersection of my interests and a key success factor... it was all about Network Effect for me. A network effect business is a business whose value to end users is directly related to the number of other users using the service / product. The classic example of a network effect is the Fax Machine... not all that useful if you are the only owner of a fax machine... more useful when there is another owner, and incredibly useful if there are millions out in the world. More recent examples are products like Instant Messaging, PayPal, YouTube, and eBay. (note that 2 of these examples are eBay business...which is why last September I stated that eBay was actually in the "Network Effect Management" business)

Ok, so now I knew I wanted to get into the "Network Effect" business... but many of the "obvious" network effect opportunities were already being built out:

Communications - Done (IM, Skype, etc.)
Payments - Done (PayPal)
General Purpose Marketplace - Done (eBay)
Social Network - Done (MySpace)
Job Network - Done (LinkedIn)

Yet, despite this situation I really wanted to find a network effect business to build, and I felt as though eBay's General market place could be attacked potentially by "niche" community sites focused on creating a marketplace for goods. Around this time two things happened:

1) I started brainstorming ideas with my friend Josh Hug
2) I discovered Peerflix, which is the DVD trading marketplace.

At first I thought Peerflix was a GREAT idea and thought about ways to go after similar markets (such as CDs, Video Games, etc.)... but Josh & I quickly realized two things:

1) Product specific swapping sites were bound to become CROWDED markets.

We figured there would be 2 or 3 CD swapping sites and at least 2 or 3 video game swapping sites popping up. This analysis was pretty close to dead on... LaLa.com (CD trading) launched earlier this year, and Swaptree (a generalized trading platform for CDs, DVDs, Books, Video Games) has launched in closed beta.

2) All of these sites suffer from a number of fundamental Economics 101 flaws:

- Supply won't meet demand and you will end up with market failure: When a new product hits the market there simply won't be enough supply of this product (DVD, CD, etc.) to meet the demand of the users.

- Consumer are collectors of content they like and traders of the content they don't like:

People love to collect the books they read and put them on their bookshelf for their friends to see. Even though they are likely to never read the book again, they aren't all that interested in parting with the book if they liked it and believe that by displaying the book it says something about who they are.

Movies, unlike books, are often consumed more than once. I must have watched the movie Caddie Shack 100 times in college. If you really like a movie, you are holding onto it.

Now because you can basically "copy" a CD by ripping it, and then burning the content onto a CD, this specific issue is less of a problem for CDs.

3) Another problem of swapping networks is setting "Fair Market Value". Does my Ferris Bueller DVD really have equal value to The man who cried as Peerflix would have you believe (each are worth 2 peerbucks). In the Swaptree world it gets even harder to figure out fair market value because I could send out my Ferris Bueller CD to someone and get in return the best selling book Freakonomics. Is this a fair trade? I don't think consumers are going consistently feel like they are getting fair market value for their goods.

Here is the last fundamental flaw for trading sites... there is already a trading site that exists that solves ALL the problems listed above, it is called eBay! But wait you say... eBay isn't a trading site, it is a marketplace where goods are SOLD, not swapped. I believe that PayPal accounts have turned eBay into a trading site, where you get Fair Market Value for all your products (because you have a critical mass of buyers and sellers) and you take that value and dump it into your PayPal account. Then you use that same PayPal account to "purchase" a new item, like a book, DVD, CD, or whatever you want.

So for those people looking to get rid of the books, DVDs, CDs, and video games that they don't want... there is already a perfect trading site... eBay.

All this analysis brought Josh and I around to a different idea. That idea is Shelfari. We believe that Shelfari will meet the needs of an under served market, and of course, but product has numerous network effects.

Over the coming weeks I will be posting more about Shelfari, and why we think it is a great product that consumers will love. We are rapidly approaching our closed beta period, so if you are really interested and want to test it out let me know. Email me at Mark @ Shelfari.com.

I should also note that Kevin Beukelman joined Josh and I in our brainstorming and was instrumental in process of thinking through the idea.

Shelfari is coming

2006-07-22T18:40:00.000-04:00

The company I co-founded is getting ready to launch. The name of the site is Shelfari and can be found at http://www.shelfari.com

We are entering a closed beta period, and then will launch in beta soon after. If you are interested in learning more shoot me an email at Mark AT Shelfari.com

My new life...

2006-07-22T18:33:00.000-04:00

I haven't posted since last January for a reason... I have been incredibly busy! So what has happened, well here it all is:

- I quit my job working on Rhapsody (the subscription music service)
- I took a new job at down in the Bay Area (more on this later)
- This new job resulted in my family moving down to the SF Bay Area
- I co-founded a start-up, where I am now on the Board of Directors and a strategic advisor

So while I have been radio silent for a while, expect a little pickup in my postings in the coming weeks as we get ready to launch our new service.

Something is in the air!

2006-01-04T03:45:00.000-05:00

Last year I posted about how I was disappointed in CES. There is "something in the air" this year before CES that makes me think it is going to be a BIG show. I simply have this feeling that 2 years from now we are going to look back on CES 2006 as a landmark event that fundamentally changed the consumer technology landscape.... I am not yet sure how or why... but there is something in the air.

Technorati Tags: CES, CES2006, Innovation, ConsumerElectronics

Holiday Break... finally time to explore

2005-12-29T01:05:00.000-05:00

The last few months at work have been so busy I haven't had a chance to spend enough time with my family much less blog. This holiday I finally got the chance to play with a number of technologies / services that I have intended to check out since the late summer. I have been playing with GreaseMonkey scripts, numerous social networking sites applications, new FireFox extensions, etc. I haven't really had a chance to organize my thoughts, but I can say that I have been impressed by the new world we are living in. For those willing to explore and play around with new products services, there are numerous new expereinces available on the net that simply weren't around 6 months ago.

At the same time I am profoundly disappointed by how difficult computers and the internet are to use for the average person. I have spent numerous days recently providing "tech support" for my family around issues like wireless network setup, browser setting issues (text size), SPAM, anti virus issues, etc. Companies like McAfee who are trying to make things easier sometimes make things harder because they have too many settings / programs prompting people for information (Spam blocker, virus detector, privacy protector, etc., etc.).... can someone please fix this?

P.S. - I have written this post using a new FireFox plugin called "Performancing"... this extension has serious potential. It does a great job of integrating the blogging experience inside the browser. I am also interested to see if the technorati tags work.

Technorati Tags: techsupport, performancing,

Technorati Tags: techsupport, performancing,

Flock posting #2... w/ Flickr Pic

2005-11-01T01:34:00.000-05:00

This is the second test post using Flock. I am using the Flickr topbar to pull into pictures from my flickr account.

The picture above was taken from the window of my apartment last fall... not a bad sunset!

Technorati Tags: seattle sunset, Flock Test Post

this is a test blog w/ flock

2005-11-01T00:46:00.000-05:00

This is a test blog using FLOCK... a new browser everyone who reads this blog certainly knows about.

This is an edit test

Technorati Tags: test post

Testing feed ads

2005-10-23T20:46:00.000-04:00

I am testing adding adsense ads to my feeds. Not trying to make money, just trying to understand how google is trying to bring together their various products...

New look

2005-09-30T14:55:00.000-04:00

Just testing out a new look for the old blog. I will get around to customizing what ever template I finally select... but for now I am just trying out some of the standard templates to see how they integrate with adsense.

eBay - "Network Effect Managers"

2005-09-13T00:40:00.000-04:00

There are about 1 zillion articles on the Skype / eBay merger. Rather than pick apart the deal from a strategic, operational or valuation perspective, I want to make a point about eBay the company.

It is clear that for eBay to succeed they need to do one thing better than anyone else in the world, and that is manage network effect businesses. Each of their three businesses (eBay, PayPal, Skype) are built on network effects that drive growth... but the scary thing about network effects is that as easily as they build up, they can collapse (see Friendster). It won't be enough to simply manage each network effect independently, to be truly successful eBay must find ways for each network to feed the other networks of the business... creating synergies where 1 + 1 + 1 = 6. This won't be an easy task... anyone familiar with network effect businesses will tell you they are complex systems which must be analyzed quantitatively as well as nurtured (remember the backlash when eBay raised fees). Now imagine managing 3 interconnected network effect businesses!

I almost wonder if every employee at eBay should be given a secondary job title of "Network Effect Manager"

Platform Wars Are On!!!!

2005-08-22T01:45:00.000-04:00

I used to run a program called "Google Desktop Search"... now I am running a program called "Google Desktop"... The word SEARCH removed.

Yes, here it is ladies & gentlemen... Google has launched their first platform product, called "Google Desktop". Running the application in "Sidebar Mode" provides me a dashboard into my digital life... everything from news, to pictures, to email (gmail), to weather, etc. is supported in the dashboard. And the PLATFORM is open to developers! I have written numerous posts about the impending platform war and it is good to see that the war is finally on. Imagine writing plug-ins for the platform that leverage the MASSIVE computing power Google has at it's disposal!

Nobody has ever beaten MSFT in a platform war, so this is going to get interesting.

Kicking it w/ the Flockers

2005-08-13T01:29:00.000-04:00

About 6 or 7 months ago, two good friends of mine started down the startup path. I was certain they were going to come up with something cool... and they didn't disappoint. They are both key members of a company called Flock.... who is building a "social browser". I can't say much about it, but I will say that so far I am excited by the potential, and for the first time since downloading FireFox about 2 years ago I can imagine using a different browser!

New Job...

2005-07-02T02:44:00.000-04:00

About 2 months ago I moved into our digital music organization to work on an exciting new product. Our music organization is responsible for our kick ass music subscription product, Rhapsody. If you haven't had a chance to try Rhapsody, you should check it out... there is a free version of the product called "Rhapsody 25" that allows you to listen to 25 streams a month for free...

Anyway... I can't wait to talk about the product I am working on... and when the time comes I will be sure to post more about it.

New life at commodity prices?

2005-06-13T01:46:00.000-04:00

Apple computer PCs have always been at the high end of the market when it comes to price. Years ago, being 20% more expensive meant that a Mac cost $400 more than your standard $2,000 PC. $400 is A LOT of money to your average American.

Computer prices drop FAST... and today you can get a low-end desktop PC from Dell for less than $300! And prices are going to keep dropping over time... no doubt about it. So what does that 20% Apple premium cost now if the standard desktop is $400... well that is $80 bucks. Hence you see the Mac Mini at only $499.

So what is the point you may ask.... my point is that as PC prices drop the option to get a Mac is increasingly becoming a real possiblity for the average consumer. Sooner or later the price of a PC simply won't be the issue, it will come down to how easy the PC is to use, how well it performs the mundane tasks of email & web surfing, managing photos & short digital videos, while also interacting with CE devices around the home. Clearly Apple has an advantage in usability over Microsoft... it also has consumers snapping up iPods and getting exposed to their CE products and broader product line.

Dell, Intel, Microsoft.... 3 companies that have benefited from PC adoption driven by price declines. That dynamic is about to end, and each company needs to determine how they will survive in a fundamentally different world. I think Intel provided a partial answer last week... now it is time for MSFT & Dell to answer.

The power of brand

2005-05-19T23:56:00.000-04:00

People often underestimate the power of brand.... here are two examples of how brand can take commodity products and turn them into winners:

iPod Shuffle = product from 1999 = 58% flash marketshare

"My Google" = product from 1996 = Buzz all over the blogsphere

Any questions?

Infinite storage... the lock-in game

2005-05-01T23:37:00.000-04:00

One of the few areas of interest to me that I can write freely about is the webmail space. I have posted a lot about Gmail, Yahoo!, MSN, and the competition for consumer inboxes. I haven't had a chance to write since Google announced the always growing storage capacity for Gmail. I have seen a lot written about this but I have not seen anyone write about what I consider to be THE critical aspect.. switching costs.

In the long run, the marginal cost per GB of storage for someone like Google rounds to zero. Yet, the value of an email consumer certainly doesn't round to zero over time, in theory, it actually grows as advertisers are willing to spend more and more on adwords. Google doesn't need you to actually click on ads from within Gmail to make money off Gmail, they simply need you to EITHER click on these ads or perform additional searches with Google because you have a gmail account. Additional searches means incremental advertising inventory to be monetized. So if you were Google and you knew over the long run that your marginal cost for storage rounded to zero but that consumers with Gmail accounts were likely to search more on Google, what would you do? You would try and lock-in existing consumers and new consumers by raising switching costs.

With a GB or two of email, photos, videos on my Gmail account how likely am I now to ditch Gmail and move to another service? Not gonna happen! Google architected for this dynamic (or they were lucky and fell into it) by telling consumers to never trash email... just "archive it". This is all about raising switching costs and creating consumer lock-in. Now Google has taken certain steps, like enabling POP email access, that lower switching costs, but ask the AVERAGE consumer what POP access is and they will look at you like you are crazy. Yet, the average consumer knows they don't want to move thousands of emails to a new service.

With Yahoo! and Hotmail all raising storage capacity I don't expect too many consumers switching services if they have over 100 MB of email in an account... that is unless one of these competitors gets smart and builds what I asked them to a while back... an application whose sole purpose is to remove email account switching costs. This application would extract all your contacts, load them into your new account, email all these contacts with your new email address, extract all your email with organizational metadata and load them into your new account.

Help save the life of a baby!

2005-04-18T12:26:00.000-04:00

Below is a message I sent to all my family & friends... Please consider donating:

Family & Friends,

Roughly one year ago I had the scariest moment of my life. I was on a flight from Boston to D.C. and Tara went into labor 13 weeks early. When I landed and learned of her situation I ran and got on a flight back to Boston more scared than I thought humanly possible. Tara & I were blessed that doctors were able to stop her labor and Abbie came only 5 weeks early but every day thousands of people are not as fortunate. The worst part of all this is that doctors simply don’t know what causes premature labor, and therefore there is really no way to prevent this situation.

The March of Dimes has kicked off a 5 year Preventing Prematurity campaign to help stop the increasing problem of premature labor. May 1st is the March of Dimes Walk America, a walk to help raise funds for this cause. Our family has been very involved with this campaign because we were able to see first hand what a horrible problem this is - and we want to help stop it. We are a mission family for the March of Dimes, and we have our own family team for Walk America this year. We are "The Williamson Family Team" and are walking in honor of Abbie and for every baby that is born too soon.

I am asking you to please sponsor me for the walk this year. Our Family Team goal is to raise $8,000, and I am hoping we can make it. To make it even more exciting, Tara and I have a bet going on which one of us can raise the most money. The loser has to do the other person's chores for a month so I am really hoping to win. As my friends and family, this should give you extra incentive to sponsor me:)

You can sponsor me directly online at http://www.walkamerica.org/mwillmsn

Thanks for your support,

Mark

MyTinyHands.com up and running

2005-04-09T18:30:00.000-04:00

I am proud of my wife today... MyTinyHands.com has launched! My wife and I had our first child last July 4th, and she came 5 weeks early. Given how early she was our doctors urged us to make sure everyone washed their hands before touching her... we thought it would be easy to accomplish this, but we were shocked at how many strangers would just walk up to our stroller and reach in to touch Abbie. My wife wanted to put an end to this so she created a sign that asked people not to touch her without washing their hands. We were happy that it worked, litterally people would walk up to the stroller and stop to read the sign, then not touch her. What we were surprised about was how many other parents asked us where we bought the sign, because they had the same problem.

Over the last few months my wife has worked hard to launch this business and I am incredibly proud of her. The baby signs are great and will really protect your newborn. Check out the pictures below of Abbie with the sign on her stroller:

"Adverse Blogger Selection"?

2005-03-08T00:57:00.000-05:00

Does the blogsphere suffer from "adverse blogger selection"? A tendency for those with real expertise in an area sit on the sidelines reading blogs but not writing since they are actually in the action... leaving only those with limited expertise to blog on a topic.

Does this theory help explain why the best blogs are often written by those in the analyst or venture capital community, where they are essentially marketing themselves and their services by demonstrating a strong understanding of various industries?

I have a strong feeling that "adverse blogger selection" is at work... and that the majority of blog readers haven't even thought about this issue.

BitTorrent & The Long Tail

2005-02-08T01:35:00.000-05:00

I first found BitTorrent about 2 years ago when I missed an episode of Alias, the TV show on ABC which has a bit of a cult following. Like most that have used the P2P application, I found the networks efficiency at dealing with huge files astonishing. My first impression was that BitTorrent would take over the P2P world for large popular files, but that it would never be very good for "the long tail" of content. The reason is that you need someone always "seeding" content in the BitTorrent world, and I believed content that didn't have mass market appeal wouldn't be able to maintain trackers.

Well BitTorrent, like most disruptive technologies, evolved to meet the needs of users with long tail content needs. Applications like Azureus and others make it easier to seed content and gather content via RSS feeds. Today there is content like sporting events, TV shows for kids, 80s TV content, etc. all over the net. Missed the last Illinois basketball game??? you can find it on a site that hosts the most recent games as well as classic games from the '89 team.

What does this mean for content providers? With the shut down of centralized tracker sites like Suprnova, it means that hundreds of micro content hosting sites will emerge with out much fanfare... like they have been for the last few months. Content providers will think things are under control, but it will be too late... the masses will have adopted BitTorrent as their portal to the long tail, and once your unmet content needs are fulfilled by a service, it is hard to turn back.

What a big news day....

2005-02-01T01:26:00.000-05:00

There has been some big news today:

Microsoft has launched their search engine replacing Yahoo!

Netscape is getting ready to launch Netscape 8, which will be marketed around security

Looks like Wal-Mart will be selling iPods

Is Microsoft reconsidering integrating search into the OS?

What the heck... I just can't resist.. NEITHER ARE BLADES!!!

2005-01-29T21:44:00.000-05:00

Somewhere in my reading today I came across a post that pointed to an interested discussion happening in the blogsphere about the iPod. I stumbled across the discussion at slashdot posting and this posting by Robert X. Cringely.

Here is the abridged version of the current discussion: Everyone knows that Gillette (recently purchased by P&G) mints money from essentially giving away razors and charging a high price for the blades. Well, people are now asking which is the razor and which is the blade in the iPod/iTunes world. I think the discussion has gotten so far off base that I had to suspend my personal embargo on commenting on the digital music space. (When I started at RealNetworks I decided to not comment on areas that pertained to my work, but I think I can comment here w/o getting myself in trouble ;-)

While in business school you couldn't go a week with out someone saying "That is like the razor & blades approach" or "They should try and follow an 'Intel Inside' strategy"... When a business strategy has success you often see people try and impose the concepts of that strategy on everything in sight. This is clearly the case with the discussion happening around iPod/iTunes and Razors/Blades.

Neither the iPod nor the songs sold for the iPod are the blades. First off, the songs can't be blades because they don't "wear out" and unlike blades, if you don't buy new ones, you won't be looked at funny by your wife/girlfriend. More importantly, the songs don't possess the margins necessary for being the "blade" in this strategy. The iPod itself clearly can't be the blades... while the product contains the margins needed (especially when sold directly) it simply isn't being replaced on the cycle needed to be called the "blades" in this strategy.

I think the best case scenario for Apple would be that the industry shapes up to be along the lines of the telecom industry, where the songs are the service, essentially undifferentiated, and the real value is captured by the hardware makers (cell phone makers). I personally don't think the industry is headed in that direction, but it is clearly where Apple should hope it heads...

I don't think the relationship between the music player and content will be like the relationship between the cell phone and service. I honestly believe that in the long run it is content that is king, not hardware. It is the overall music experience that will dictate where the dollars are spent. If history has shown us anything, hardware commoditizes over time, and eventually the basis of competition shifts to some other attribute, preferably not price ;). Do we know of any industry where hardware is a commodity and it is the consumer experience that matters??? Can you say PCs & Software.

So what is the proper "business analogy" for the iPod/iTunes combination? I don't think there is one. It CLEARLY isn't razors & blades. It hasn't turned into Cell phones/service or PCs/software either.... to me the critical question isn't "What is the analogous business model for iPods/iTunes today?"... the critical question is "Where is the headed? Is it a unique model or will it head to a model we all understand today?"... I have my opinion on that, but I think sharing would get me in trouble, so I will stop here.

Google, Microsoft, and Yahoo! agree on something!

2005-01-19T01:37:00.000-05:00

Adam Smith reportedly said when a group of capitalists gather under one roof the talk eventually turns toward collusion against the public. Well today Google announced that they have been working with Yahoo! and Microsoft around search technology... but rather than collude against the public they have taken a major step forward for the good of the public.

While unknown to most of the public, there has been an underground war occurring on the net for the last couple of years... that war is around links. Because of the value of links in search results, people have created programs to create links to their sites. This is especially a problem for popular blogs and bloggers. See if you are a popular blogger you can't link to a site you don't like because that link will HELP that site, Robert Scoble has a good example of that here. Well now the search engines have come up with a way to "disable" the positive impact of a link, and that is great news for consumers. This means that search results will only get better over time. All 3 major engines will observe the same "disable" meta data, so there is a consumer standard!

Adam Smith would be proud!

CES - Incremental innovation vs. Disruptive Innovations

2005-01-15T17:56:00.000-05:00

I had the pleasure of working CES for my employer this year, and it was a very interesting 5 days down in Vegas. I was last at CES 2 years ago, and from my recollection, I had the opportunity to check out many disruptive technologies, including satellite radio, Plasma / LCD / DLP TVs, and many others. This year the show seemed to be all about incremental innovation. While I did spot numerous small companies with innovative products, I didn't find the "next big thing" like I felt I had when I saw XM 2 years ago. While this year seemed slow, I am confident with broadband speeds increasing, 3G networks being deployed, and moore's law still kicking, we should expect a big CES next year.

The devil you know vs. the devil you don't

2005-01-03T16:54:00.000-05:00

Is it the late 1990's all over again? Remember in the 90's when the music labels took Napster to court and put the company out of business... it was hailed as a win against digital music piracy. Only month later new applications like Morpheus and Kazaa emerged which have proven impossible for the labels to shut down due to their lack of a centralized server.

So here we are 5+ years later and with broadband penetration on the rise, sharing movies today is as easy as it was to share music 5 years ago. So when the movie studios looked at the hub of digital movie sharing, Suprnova, I hoped that the companies would seek to find a way to turn Suprnova into a legitimate operation. Instead the MPAA has shut down Suprnova and other BitTorrent sites and again it has been hailed as a victory over movie piracy.

Sometimes it is better to deal with the devil you know rather than the devil you don't, because I expect the P2P community to come out with brand new file sharing applications this year that will make the MPAA whish they had a centralized source to deal with. There has already been some hype around an application called eXeem, which is supposed to in essence reproduce the Suprnova experience, but in a decentralized fashion.

The game of "cat & mouse" between the content owners and those interested in sharing content will not end due to lawsuits... it will end when consumer needs are being met and when the cost associated with stealing content is greater than the cost associated with purchasing content.

Help those in need....

2004-12-30T13:30:00.000-05:00

If you can, go over to Amazon and donate to the American Red Cross to help those in need from the catastrophe in South Asia.

The link is on the home page, they have raised $5 Million dollars already.

Browser Share On The Move...

2004-12-17T01:00:00.000-05:00

Overall Browser MS
Originally uploaded by mwillmsn.

A month and a half ago I blogged that Firefox was up to 28% of my browser market share... well now that figure is all the way up to 45%. While I get a lot of traffic due to firefox related searches, it is hard for me to imagine that FireFox isn't continuing its gain on IE.

Consumer Technology Adoption... and other ramblings

2004-12-05T23:12:00.000-05:00

While I love trying out new technologies, I am FAR more likely to try out a technology if the "trial cost" is low. For example, the cost to try out a new HD-DVD player is high both from a monetary and time perspective. At the same time, the cost for me to try out new software is very low... it is often just the time to download / install since most software has free trials and can be downloaded off the net.

In order for me to try new tech products that carry an up-front cost they must have a crystal clear value proposition which is differentiated from what I am currently using. Well, VOIP has finally hit this point for me... my last bill from Qwest was $77, and that is FAR too high for local and long distance telephony over a landline. Vonage at $25 bucks a month will end up saving me a great deal of cash but also provide cool services like being able to listen to voicemail over the net and take my phone number with me when I travel.

I find many companies simply don't focus on the correct factors when it comes to driving consumer adoption. For example, if you are selling hardware technology products you should focus on different factors of technology adoption than software makers. Let me list out some factors of consumer technology adoption:

Relative Advantage - How do consumers perceive your product compared to the competition?

Ease of Testing - How hard is it for consumers to test your product?

East of Evaluation - How difficult is it for consumers to evaluate your product in comparison to the alternatives?

Compatibility - Is your product compatible with other products within the same ecosystem (example to follow)

Complexity - How complex is the product for consumers?

As you can easily imagine almost all of the factors listed above are easier to overcome if you are a software company compared to a hardware company. Imagine you are TiVo... You have to worry about:

Relative advantage - Do consumers really see a NEED for TV "time shifting"

Ease of testing & evaluation - TiVo's were expensive in the past so it made it difficult to test, but once someone used the product evaluation was simple.

compatibility - The funny thing about adoption of products "in the CE stack" is that most consumers expect that new products ARE NOT compatible with their current CE products. A study last year showed that only 52% of consumers felt that a DVR was compatible with their current TV set.

Ok... think about this for a second, if you are a TiVo exec, which factor of consumer technology adoption should you be focusing on... and how should you address it?

Hotmail finally responds

2004-11-17T02:09:00.000-05:00

Well it looks like hotmail finaly got around to increasing their storage capacity. I only noticed because my MSN messenger popup told me I had 100+ emails, which I knew was way more than my old 2MB capacity could handle.

Work has gotten really crazy, but I hope that in the next few weeks I can get back to posting on a more frequent basis.

The "Lock in realization"

2004-11-04T13:28:00.000-05:00

Disclosure: I am a product manager for RealNetworks... but the below story simply represents facts.

A good friend of mine is working on Wall Street and he shot me an email yesterday with a question I have gotten from numerous people. Here was the question:

"What if I have 4GB worth of songs on a laptop and want to get them to a new laptop... how can I easily do that?"

Easy question to answer, but while answering the question I learned that the 4GB of songs were purchased from iTunes and that this person was scared to move them from PC to PC because he heard about the limitations put on the number of PCs a song can be on.

Now for the "lock in realization"... I told my friend not to worry much about the PC issue, but that songs purchased from iTunes can't be put on other MP3 players and his response was "I didn't realize that". Ok... here is someone who has made a $1,000 investment in music and now is locked-in to the iPod.

If he wants to play these songs on a different device he is screwed. He will have to go through the hassle of burning hundreds of CDs and then ripping them. I of course went on to tell him that songs purchased from Real are portable to the most number of devices, including the iPod....

The reason I am raising this issue is that this is something thousands of consumers across the country are dealing with, and they won't be happy to learn they bought songs that lock them in to a platform.

FireFox ... not a flash in the pan.

2004-11-02T01:39:00.000-05:00

A story over at News.com details the continued acceptance of FireFox in the market. Mozilla based browsers (of which FireFox is one) now represent 6 percent of the market up from just 3.5% in June. I expect that the trend will continue given the lack of innovation from Microsoft on this front and the impending media hype around FireFox hitting 1.0 status.

It was reported about a month ago that tech sites like News.com had seen Mozilla based browsers representing around 20% of their traffic. At that time I saw essentially the same trend,... now my Mozilla based browser share is up to 28%.... with MSFT taking the other 72%.

At a little less technical site, MarketingPlayBook.com Microsoft has a 75% share with 7% safari and the remaining 18% mozilla based. Two different blogs, each on the technical marketing side, but not targeted toward the developer community seeing huge non-IE based traffic.

Get out the vote!

2004-11-02T01:37:00.000-05:00

Not that anyone reading this doesn't know it, but make sure to vote today! I ran into a bar tender the other night who said he wasn't going to vote b/c he didn't think it would matter, well the last election was decided by a few hundred votes in FL... so get out there and make your voice heard.

Where have I heard this before?

2004-10-22T18:52:00.000-04:00

According to News.com, Microsoft has stated that by the end of the year they will launch a desktop search tool to compete with Google's Desktop search (and their own junkie windows search).

Hmmm, I think I have heard of this one before. This past summer Microsoft announced that by the end of the summer they would increase the storage capacity for Hotmail in response to Gmail... well we are now deep into Fall and hotmail still has not upped their capacity.

Microsoft has lost all credibility around hitting ship dates, so I wouldn't hold your breath on this one.

Google Desktop Search - Changing Mass Market Behavior

2004-10-16T14:30:00.000-04:00

A lot has been written about Google's desktop search, but many writters focused on the obvious short term implications and not on what Google is trying to accomplish in the LONG RUN and how this application fits into that strategy. So, let me take a stab at articulating what Google is trying to accomplish.

As I have written about in the past (See my posting on how Google could topple Windows)Google wants to create a massive network computer that is the platform... essentially completing the vision of McNealy and Ellison, making the network the computer. Given this long term goal, how does Desktop search fit in? The critical aspect of Google's desktop search is that the only way to access the search app is through the Google WEB interface. The company could have simply created a desktop app to present the results, but they made the decision to put the desktop search results within the browser. They did this because it helps to train computer users that if they want to find personal content just go to Google.

It is very hard to change the behavior of consumers. In talking with TiVo execs they told me that they were surprised how hard it was to get people to change their TV viewing habits. They called this the inertia in the market... that consumers would just go on doing what they were doing, even if there was a better approach. By creating a desktop search application that works through the Google interface, the company is investing early (before their huge network computer is ready for the masses) to change market inertia.

Just think about it, if you are always connected to the net do you care where your files are stored (assuming privacy/security is addressed)? Heck, in using the desktop search application I am already ready to unload some data onto the Google network just to make it accessible in other places.

Is MSN asleep at the hotmail wheel?

2004-10-10T21:08:00.000-04:00

It has been over 180 days since Google announced Gmail. That means any company in the web based email business has had 180 days to react. It didn't take long for most... Yahoo! responded quickly and raised the capacity of Yahoo! mail accounts from 4 MB to 100 MB. Microsoft also announced that by the end of the summer they would raise the hotmail storage limit... well it is now October, clearly in the middle of Fall, and my hotmail storage is still a lowly 2 MB. I hate my hotmail account, with all the junk mail I get to that account it is constantly filling up, and I have to check it all the time just to make sure something that is important doesn't bounce.

So what are the boys in Redmond up to? Are they asleep at the hotmail wheel? I will tell you this much, I am ready to shut down my hotmail account because it is just too much of a pain to deal with compared to Yahoo! and Gmail. Why can't a company that dumps Billions into R&D with little to show for it pour some resources into being competitive in the web-based email market.

How to get your Gmail Atom Feed

2004-10-06T13:29:00.000-04:00

So I noticed that icon for my Gmail ATOM feed went missing yesterday, but yet the feed was still active. I assume this means that all of you who never saw the feed can probably get yours anyway by adding the following feed to your news reader.

https://gmail.google.com/gmail/feed/atom

I am currently using FireFox's "Live Bookmark" functionality for this. Let me know in the comments if this works for you in other aplications.

New Gmail functionality signals a Google Browser

2004-10-04T13:22:00.000-04:00

The Gmail team over at Google has been busy lately. Today they have added two pieces of functionality: (There might be more additions but I haven't seen them yet)

1) Improved contact management
2) Atom feed for your email

The Atom feed is what has me VERY intrigued. While many will look at this little feed as just a feature for ubber geeks, I view it as a major signal of Google products to come. Follow my logic for a second:

Gmail is a great application but it has a major drawback... you can only access it if you are online. This means that you can't make Google your primary mail application because if you find yourself without an internet connection, you can't email... Well inserting an Atom feed is a first step in fixing the connection problem. Using this feed Gmail users can now pull down their Gmail to a local client application. The feed today contains only summary information, (like subject, who the message is from, etc.) but there is no reason this can't be expanded to contain the full text of a message.

So, now that we know you can pull down part of your Gmail messages into a client application should we assume that Google will stop there and let random applications handle the user experience or do we believe that Google will want to have an application that controls that user experience? They will want to control the user experience, that is for certain.

So now I believe that Google will want a client application to help manage email that can be brought to that client in the form of an Atom Feed. Well, lets see... recently there was a high profile application that launched with the ability to pull such a feed... it is called FireFox.

Therefore I believe it is just a matter of days or weeks before Google announces their own browser based on FireFox that has built in support for Gmail. I am sure that any Google Browser will have additional functionality than just Gmail integration, but this is a big first step.

Cell phone saturation

2004-09-26T21:56:00.000-04:00

Anyone in the tech industry thinks a lot about consumer adoption. Growth is often powered by consumers accepting new technology to make their lives easier. When there aren't any new customers to aquire, a market is considered "saturated", which causes a problem since firms then simply fight to steal customers from other firms.

This weekend I saw something that shocked me, and led me to believe that the cell phone market has reached a critical saturation point. While my wife and I were walking to dinner this past weekend we walked by a homeless person in downtown Seattle talking on his cell phone. If this isn't market saturation, I am not sure what is.

A9 - Innovating in the right way

2004-09-18T16:22:00.000-04:00

When it became obvious that Google was going to hit is rich hundreds of search companies formed to try and become "the next Google". Many lumped A9, the search subsidiary from Amazon into that group, but in reality A9 approached the market in a MUCH smarter way than others.

Rather than focusing on creating the best algorithms for searching the web, A9 left that task to Google and decided to innovate on the user experience, and I must say I am very impressed. The site is simple and fast like Google, but much more powerful at the same time. I can conduct my simple searches and get Google quality results, but for searches that require it I can easily layer on top of the search results page additional information like images, reference info, etc. As a side benefit of having signed in with an A9 account (which is just my Amazon account) I get 1.57% off all my Amazon purchases.

Bottom line: Amazon approached their A9 venture in a very smart way, let Google handle the plumbing, and let A9 innovate on the experience.

Another reason blogs shouldn't be ignored

2004-09-13T14:05:00.000-04:00

I have often heard blogs characterized as "online diaries" for geeks. While this might have been the case a few years ago, blogs today have become a powerful force in journalism and business. There have been some recent examples, but here is one I experienced first hand.

Late last Friday Engadget (the best gadget blog out there) reported that Yahoo! was launching a line of branded CE products. Today Engadget confirmed this story as the real deal, and CBS Marketwatch is also covering the news.

As more and more companies understand the power of blogging, expect more news to be "released" this way... I say "released" because I am sure that Yahoo! leaked the news. No matter how the news was obtained this event just goes to show every company should be scanning blogs for information.

Time to kill some competition

2004-09-13T01:50:00.000-04:00

I normally don't comment on non-tech industries, but this one has been bugging me for a while.

I am a big believer that competition is great for consumers. Free markets promote competition and when competition gets too competitive, markets have a solution, companies get put out of business. Well it is time for the government to stop interfering with the free markets within the airline industry. For the second time in two years US Airways has declared bankruptcy.

Since coming out of regulation, the airline industry has proven inept at maintaining a healthy market dynamic. Airline after airline has entered into bankruptcy, and far to many have been allowed to clear their balance sheet and renter the market. US Airways should simply be put out of business and not allowed to emerge from bankruptcy. If they can clean the debt off their balance sheet and come out of bankruptcy they will simply be capable of entering into more price wars and force someone else into bankruptcy... and the cycle will continue.

TiVo & Netflix: What took so long?

2004-09-07T01:02:00.000-04:00

So I have publicly stated when I screwed up, (see my missed calls about Microsoft's dividends), but this time I finally got one right... really right.

Netflix & TiVo are about to enter a partnership... read about it here from Newsweek

Back in April I wrote a piece called "Netflix & TiVo - a partnership waiting to happen". I outlined how the two companies clearly should partner up since they have complimentary assets (TiVo has boxes in the home, Netflix needs to deliver content to a box in the home) and have close executive ties.

This all is in the context of the posting I wrote about TiVo's marketing strategy, which I characterized as "Becoming a platform". The real question that everyone should be asking themselves is does this partnership really help TiVo's real problem... which is that approx. 75% of all their subscribers are from DirectTV which doesn't allow them to offer the digital media option which is the key component of becoming a platform to offer services like Netflix on demand.

Given these circumstances, I have been calling for TiVo to literally give away their product and take a loss in order to get a real user base to become a platform.

So TiVo, if you are listening, start giving away those simple 40 hour boxes... get a user base, become a platform, then launch services like Netflix. That should be your strategy... don't put the cart before the horse.

Cuban has it wrong on Outsourcing

2004-09-06T15:04:00.000-04:00

Mark Cuban, the owner of the Dallas Mavericks and one of the founders of Broadcast.com which was sold to Yahoo! for Billions, maintains a GREAT blog over at Blog Maverick. Mark writes on everything from sports to the future of digital entertainment. This week he wrote a piece that centered around outsourcing, expensing stock options, prescription drugs, and social security. While this list of topics sounds more appropriate for a campaign stop than for commentary by a basketball owner, Mark is really an incredibly bright guy whose opinion on any topic is often thought provoking and important.

Having said that, Mark is flat out wrong in his comments about outsourcing. The premise of Mark's argument, which can be found here, is that he doesn't have a problem with outsourcing in general, he has a problem with how the money saved by companies is distributed. He says that the majority of cost savings associated with outsourcing are then kicked back to executives in forms of bonuses, stock options, etc. His solution is that insiders should not be able to sell stock or get corporate bonuses in any year they outsource jobs.

Let me break down his argument component by component. First, yes, executives that outsource are often paid more in bonuses and rewarded with stock options. This compensation is based on the fact that the companies which outsource are more likely hitting their corporate goals which execs are measured on, and therefore they get rewarded appropriately. The notion that there is a conspiracy to send jobs overseas to line execs pockets is crazy... execs are motivated by hitting the goals they are measured on and therefore will do what it takes to raise revenue and lower costs. If they do this they should rewarded as long as it is in the best interest of the company over the long term.

His solution to this "problem" is that execs shouldn't sell stock or get bonuses in years they outsource. This is a terrible idea. The solution Mark proposes will directly create a conflict between corporate goals and personal goals for execs. An exec might be able to save $1 Million a year by outsourcing some component of work, but he will think twice if his child is headed to college and needs to cash out some stock to pay the bills. Now the exec needs to decide between what is right for the company and what is right for him personally. We need to do more to align the incentives of execs and the firms they run, not create obvious misalignments.

MSN Launches Search

2004-09-03T23:08:00.000-04:00

Microsoft has quietly launched their new search engine. The company description can be found here: MSN Search Description

This is a smart move to launch late on the Friday of Labor day weekend b/c it allows the company to fine tune the application out of the media spot light and they can do a big push when people get back to work on Tuesday.

Free Gmail Accounts

2004-09-03T20:38:00.000-04:00

I have 5 free accounts to give away... so just click on one of the five links below and sign up. I will modify this posting when all the accounts are taken.

All 5 accounts have been taken... I will be giving more away as they become available.

Research made easy

2004-09-02T20:01:00.000-04:00

I spent half a day digging around the Net for some market data information the other day, and I came across the Google Answers site. I had forgotten about Google Answers... but I won't make this mistake again. For all the grief I give Google around their IPO and Gmail, they deserve major credit for Google Answers. The site allows you to ask a question and post a dollar amount you are willing to pay for the answer. But the best thing about the site is that the answers are there for EVERYONE to read. This site really is cool and you can learn a lot browsing through it. Next time you are in a bind looking for some information make sure to check the site out.

Gmail thinks Adsense is Spam

2004-09-02T19:34:00.000-04:00

I recently added the Adsense program to this blog. I really wanted to get a better understanding of how content owners generate revenue through ads and how difficult it is for them to manage the ad process.

So far the ads are doing fine... and I will write more about this entire experience later, but today something interesting happened. I was in my Gmail account and Gmail automatically filtered an email from the Adsens team to my spam... thought that was interesting.

Radio Silence

2004-09-02T19:23:00.000-04:00

So I have been really quiet over the past few days. It is because I have been really busy at work these days and because I am still trying to find the right balance of what I should comment on and what I shouldn't comment on.

As you all know Microsoft launched 3 major products this week... their music store, the new media player 10, and the portable media center devices. I would love to hear your thoughts on all three of these products via email or the comments below.

Google Browser

2004-08-31T00:56:00.000-04:00

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

2004-08-31T00:55:00.000-04:00

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

2004-08-28T13:53:00.000-04:00

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?

2004-08-26T17:39:00.000-04:00

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

2004-08-24T21:37:00.000-04:00

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

2004-08-24T21:24:00.000-04:00

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

2004-08-24T21:19:00.000-04:00

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?

2004-08-24T12:43:00.000-04:00

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

2004-08-23T17:44:00.000-04:00

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...

2004-08-19T18:00:00.000-04:00

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!

2004-08-17T12:24:00.000-04:00

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!