November 11th, 2006
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The whirligig that was Web 2.0 conference is finally beginning to spin down; but Amazon.com CEO Jeff Bezos’ talk at the conference will remain with me for a long time. Bezos was one of the handful willing to provide a vision of the future. It is hard to argue with Amazon’s ability to spot important trends before everyone else. We wrote about this over a year ago.
His talk, of course outlines his dilemma. On one hand, he runs a retailer; and on the other hand, he is leading a technological movement (on demand computing) that has had many false starts. His main revenue stream is a pennies-and-sense operation; but he sees the opportunity in the new on-demand/web services. It is a hard choice.
As an investor, you want Bezos to get Amazon’s retail business humming, but if you are a technology enthusiast, then his experiments in newer technology models are always intriguing. Our readers were equally divided, though given our community’s technological inclinations, no surprise that 50% of those who voted wanted Bezos and Amazon to experiment with S3 and EC2 type services. He gave a financial justification for Amazon’s move into on-demand computing type services.
For 11 years, we’ve been operating a web-scale application, with high reliability, in a high volume, low margin business, very conscious of our cost structure. I always think high volume, low margin businesses are more defensive – we look at the absolute dollar level of profit and free cash flow…we’re good at it, we know how to do it, and we think it can be a meaningful financially attractive business one day…Our biggest cost is not power, or servers, or people. It’s lack of utilization. It dominates all other costs.
Though, there are no plans to work this weekend, there is a good chance, that recent developments, Bezos’ comments and other random thoughts might inspire a new post, or perhaps would result in re-tweaking the current one. In case you were wondering about my whereabouts, I am answering emails - a whole pile of them. Have a good weekend everyone!
Written by Om Malik on November 11th, 2006 with no comments.
Read more articles on Software 2.0.
With all due respect, I believe that not enough of we pundits are grasping the big picture implied in Yahoo!'s announcement yesterday that it is pairing up with Cisco's Linksys division to offer a $99.99 list, Linksys-Dual Mode Cordless Phone for Yahoo! Messenger with Voice.
Let's look beyond the coolness- the handset with color display [...]
Written by IP Telephony, VoIP, Broadband on November 11th, 2006 with no comments.
Read more articles on Uncategorized.
I'm just back this morning from the ISPCON conference in Santa Clara, Calif.
This conference heavily draws from the ranks of Web hosting companies, small Internet Service Providers, and technology vendors who sell to each segment.
The event- which I cover here- took place in parallel time with this week's U.S. Congressional elections, and the news [...]
Written by IP Telephony, VoIP, Broadband on November 11th, 2006 with no comments.
Read more articles on Uncategorized.
There's lots of talk about online advertising, plenty of growth, and lots of repercussions among the media landscape as more readers and advertisers move to the Web. There's also many advertisers still unclear about what to do and where to go online - something Kevin Restivo and I discuss during this week's Talking Tech podcast. We also spend some time talking about the strategic dilemma facing Cinram, which is scrambling to figure out if there is life in the digital medium beyond the making of CDs and DVDs. The last time, Cinram really ventured online it entered into an agreement with MP3.com to make custom-made CDs in 2000 - a deal that failed to gain any kind of traction. Finally, Kevin and I touch on NTP's lawsuit against Palm. As many people know, NTP sued Research in Motion for patent infringement, and walked away with a settlement of more than $600-million. The question is whether NTP is really that much different than Qualcomm, which generates huge amounts of fees from companies using its technology. (Thanks again to David Jones, Ed Lee and Neil Johnson for their production work, as well as Amber MacArthur for doing the show's voice intro.)
Written by Mark Evans on November 11th, 2006 with no comments.
Read more articles on Uncategorized and Main Page and Podcasting.
If you were looking to learn something new, this week’s Web 2.0 Summit was not the place to be. However, if you were planning to catch up, make contacts and swap business cards, then the Palace Hotel’s grandiose hallways were where all the action was. It was rare to chat up anyone at Web 2.0 who had anything positive to say about the official content or news. The consensus seemed to be same old, same old; the reason to break out the checkbook and skip out on real work was to mingle.
The only concrete news out of the conference – that Intel was releasing an enterprise 2.0 suite to distribute products from Six Apart, Socialtext, NewsGator, SimpleFeed, and SpikeSource, and had set up options to invest in those it doesn’t already have stakes in, was all but ignored. The only people who brought this up with us were the CEOs of the five companies participating. The startup launch pad failed to dazzle; heavy on the Powerpoint and not on the impressive technology, and far too many of the companies part of the insular crowd, or often the investment portfolios, of the judges.
Speaking of working the halls—Fox Interactive and First Round Capital were especially visible. Every time we saw Heather Harde (SVP M&A at FIM) or Josh Kopelman (managing partner, First Round), they were corralling a startup on a couch (separately, of course) — not attending a session in the main room.
Much more so than last year, the event seemed like a get-together for a homogenous group of friends. The few outliers were treated as cultural exhibits. For instance, talk of the necessity of cooperation with the Chinese government by business-man-to-the-core Jack Ma, the CEO of Alibaba, was fiercely incongruous with the touchy-feely sentiments from familiar figures like Eric Schmidt, Ray Ozzie, and David Filo. GoDaddy CEO Bob Parsons drew nervous chuckles for his brash comments on buxom babes in advertising.
A teen panel seemed all the more awkwardly anthropological with the addition of the teens’ parents. For their part, the specimens were happy to indulge. “MySpace is like on Christmas morning,” said one teen, “and you go downstairs and you see the presents under the tree… I sign on and it’s like, dah-dah!”
When we were in Los Angeles a couple weeks ago, there was tangible excitement about the new age of digital media. The Hollywood types were bursting to talk about this revolutionary age of amateur talent ushered in by YouTube. This week, web 2.0 crowd treated the YouTube acquisition simply as a huge transaction, with the only interesting aftermath being lawsuits. Here, we’re so far ahead of the curve, it’s a race to see who can be cynical first.
Twice at the Web 2.0 Summit, we had funny conversations with people on the topic “what will be the online pet food of bubble 2.0″? Nominees on the floor are social bookmarking sites and mommy-oriented social networks. (These are not GigaOM-generated suggestions, mind you; both nominees came from chats with execs at such companies talking about how much competition they have!) What’s your pick? Tell us in the comments.
Written by Liz Gannes on November 11th, 2006 with no comments.
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No Lou Reed, no YouTube talk, no rockstar startups — oh right, I didn’t go to Web 2.0 yesterday, I spent the afternoon in a dark nook of the Santa Clara Convention center listening to engineers talk about silicon. Yep, it was Broadcom’s big analyst day, where the company’s executives show off demos of the latest chip technology and give presentations about how they are going to make investors a lot of money.
Actually Broadcom is one of the best positioned communication chip companies in the market (options scandal aside), leading in some categories like WiFi and bluetooth silicon, and increasingly concentrating on mobile handsets and consumer electronics chips. The company powers the Nintendo Wii’s bluetooth controller and wireless connection, and provides a multimedia chip for Apple’s video iPod. Analysts might whisper about the iPhone or a WiFi-enabled iPod, but if anyone knows the truth it’s this room full of Broadcom folks.
At the analyst day CEO Scott McGregor said the company is pushing even more into the cellular industry, where it has been trying to compete against the likes Qualcomm with only moderate success. Every company executive also said that Broadcom is also trying to win over more consumer electronics companies, like MP3 players and video players, though I didn’t see any sneak-peeks at future iPods or Zunes at the show. The company did announce its first chip solution for application processing, which runs multimedia in mobile phones and consumer electronics. It also announced a chip solution that combines both Blu-Ray and HD-DVD for media players, and said SanDisk is using Broadcom’s multimedia and power management chips for its V-Mate Video Memory Card Recorder.
On the demo floor the company showed off its mobile future, with a HSDPA chip solution (which isn’t on the market yet), as well as its mobile TV designs which will support all of the mobile TV standards (even MediaFLO.) At the show the company announced that its “M-Stream” mobile noise-canceling software will debut on the Treo 680 — improving the signals of existing cell phone calls is a hot area right now.
The wireless connectivity group is the fastest growing Broadcom business, and includes wireless technologies like bluetooth, WiFi and wireless VoIP. Mike Hurlston, Vice President for the Wi-Fi Group showed off the next-generation “draft-N” WiFi products and said the company recently added HP as its fourth laptop manufacturer partner, an agreement it will announce soon. He also demoed the latest Skype-phone made by Buffalo announced earlier this week. The company is working on other wireless technologies like Near Field Communication, GPS solutions, UWB and even made a mention of mobile WiMAX in power point materials.
It’s also true that the company has been dragged into the whole option accounting scandal. At the conference the acting CFO Bruce Kiddoo spent a good deal of time assuring attendees that the financial issues would be over soon. That plus depending on the sometimes cyclical semiconductor industry, means the stock can be pretty volatile.
Another Broadcom setback is its endless war with Qualcomm over who is infringing on what patents. While Broadcom recently won a small battle according to a judge with the International Trade Commission, I can’t help but think that the negotiations might be rather distracting. The CEO McGregor said that the fight is a long term investment for the company and its competitors, and Henry Samueli, the founder, CTO and Chairman of the Board, said the battles don’t affect day to day business. I asked Samueli if he was happy with the ITC judge’s latest decision that Qualcomm infringed on one patent but dismissed the other two claims. He said this is only the beginning.
Written by Katie Fehrenbacher on November 11th, 2006 with no comments.
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I've always been puzzled by IP-TV. Despite all the talk - and Microsoft's huge investment to get into the market - the prospects for IP-TV seem, at best, modest. It's not like consumers are clamouring for another way to receive television programming. And it's like the cablecos and satellite-TV service providers are dropping the ball in terms of new services. According to a recent In-Stat report, the cable industry is enjoy strong growth around the world as consumers demand for TV programming, as well as voice and data services. In-Stat found that of the 1.2 billion TV households around the world, 355 million are cable customers. This includes 106 million in China and 69 million in the U.S. The question is how the carriers are going to establish a foothold with IP-TV other than using lower prices than cablecos. Maybe the triple or quadruple plays will help them build some market share but attacking the cableco franchise seems like a Don Quixote-like exercise. In Canada, it will be interesting to see how well Bell Canada and Telus do with their IP-TV offers. Bell is still in "testing" while Telus has launched an IP-TV service on a selective basis in Calgary and Edmonton. The challenge is differentiation so there's a compelling reason for consumers to go with IP-TV rather than cable. Other than price, it may come down to services such as programming-on-demand in which every television show is stored on a server and available if and when the consumer wants it on a pay-as-you-go or subscription basis.
Written by Mark Evans on November 11th, 2006 with no comments.
Read more articles on ip-tv and Main Page and Media.
Not to get overly political, but Sony Computer Entertainment’s management is starting to remind me of the Bush administration. Despite constant dire warnings from so many experts (including an editor with the official Playstation magazine) that the PS3 is careening toward a disastrous launch, the company seems doggedly hellbent on staying the course, dismissing the resourcefulness of the competition, and in the face of mounting criticism, even going so far as to hire writers to post sunny good news about the PS3 on a “semi official” blog.
You keep hoping that Kaz Hirai will suddenly show up on a podium and announce a drastic rethinking of PS3’s pricing, or release schedule, or its online/download services, or its exclusive game line-up, something, anything, but the moment never comes. If the chart above linked to below doesn’t break through their cocoon of optimism, nothing will.
Created by jvm of Curmudgeon Gamer, it’s a comprehensive listing of videogame consoles released over the last 30 years, arranged by date and graphed according to their absolute price (cost on date of release), and relative price (current cost adjusted for inflation).
See the chart posted here. Even at a quick glance, it’s easy to draw some conclusions: the consoles that tend to succeed most in recent years are priced within the $225-350 range, in today’s numbers, while some of the biggest disasters (3DO, CD-i) are priced two or three times that.
At between $500 or $600, the Playstation 3 skews toward the danger zone, and has a price point comparable to the fairly disastrous Sega Saturn of 1995. (And by today’s dollars, it’s $150-250 more than the Playstation 2, released back in the day when it seemed Sony could do no wrong.) Priced at about $250, the Nintendo Wii seems best situated in the chart’s retail sweet spot.
Kudos to Curmudgeon Gamer for crunching the numbers. Maybe they’re too late in coming for Sony’s good, but they’re something. Then again, maybe Playstation has such powerful brand loyalty, millions of gamers will miraculously rise up next week to acclaim the PS3, despite the high cost. But from where I’m sitting, that’s about as likely as 150,000 troops being enough to secure the peace in a Middle Eastern country which… well, in a post-election spirit of national reconciliation, I’ll leave it at that.
Hat tip: Anthony J. Siino III.
Written by Wagner James Au on November 11th, 2006 with no comments.
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I'm just back this morning from the ISPCON conference in Santa Clara, Calif.
This conference heavily draws from the ranks of Web hosting companies, small Internet Service Providers, and technology vendors who sell to each segment.
The event- which I cover here- took place in parallel time with this week's U.S. Congressional elections, and the news [...]
Written by Russell Shaw on November 11th, 2006 with no comments.
Read more articles on General and Regulatory.
With all due respect, I believe that not enough of we pundits are grasping the big picture implied in Yahoo!'s announcement yesterday that it is pairing up with Cisco's Linksys division to offer a $99.99 list, Linksys-Dual Mode Cordless Phone for Yahoo! Messenger with Voice.
Let's look beyond the coolness- the handset with color display [...]
Written by Russell Shaw on November 11th, 2006 with no comments.
Read more articles on General and Softphones and yahoo and Cisco.