Friday, September 30, 2005

Fri - Liberty Media to buy Cablecom

Cablecom has cancelled their planned flotation after Liberty Media agreed to buy the Swiss communications company.

Liberty Media, the US media conglomerate controlled by John Malone will pay SFr2.83bn ($2.19bn) cash for Cablecom, which was simultaneously preparing for what would have been Switzerlands largets IPO since 1998.

Fri - WebMD stock rises rapidly after IPO

The stock of health information web site WebMD Health Corp rose as much as 71% in its first day of trading yesterday.

The New York company which operates opened for trading at $19.80 (at the upper end of their pricing range), up from its $17-50 IPO price, then rose rapidly, hitting a high of $30 per share.

And who said the tech bull market hasn't returned. Of course it has and expect it to continues through 2006 at least.

Fri - Dell struggling with customer support

In an article I recently wrote in businessuncut daily on the luxury PC, I stated that I had a concern with Dell's ability to deliver a support service worthy of such luxury products. I may have been onto something.

Complaints about Dell to the Better Business Bureau rose 23% in 2004 from the year before, and they're up another 5% this year. And Dell's customer-satisfaction rating fell 6.3%, to a score of 74, in a survey by the University of Michigan.

Dell may well be a victim of its own huge success in selling PC's to corporate and consumer America, after all, scaling customer support services is one of industry's toughest challenges. Just look at the airline sector for evidence. And, Dell also has to struggle with lower and lower margins when selling consumer computers in particular.

Dell has announced a raft of improvements, including hiring a load more support technicians and new support packages. They'll need to move fast on this issue as customer satisfaction remains consistently high for Apple, and they'll be competing more directly with Dell next year as they launch Intel computers. Plus, a reinvigorated HP have made customer service their core competitive weapon v Dell!

Fri - Red Hat has strong Q2

Red Hat, a leading open source software and services vendor has just announced a strong Q2 and has increased their revenue and earnings guidance for fiscal 2006. They exclaimed that the open source software movement is one of the few high growth areas of the corporate software sector.

They may not be that far wrong. Open source software should start to see its day dawn. We expect that 2006/2007 will see open source become more main stream amongst corporate and government buyers. Not so good for Microsoft, but good for leading open source vendors such as Red Hat and Novell.

Fri - Nomura to set up online unit

Nonura, Japan's biggest brokerage, has announced that it will set up an internet financial services company next spring to presumably allow it to take back lost market share in the nation's fast growing online broking market.

Internet powerhouses such as Etrade have taken too much business. Now Nomura is fighting back.

Thursday, September 29, 2005

Samsung to invest $33bn in chips

Samsung Electronics, the world’s second-largest chipmaker, is to spend $33bn over the next seven years on new production lines and a research centre to meet growing demand for semiconductors.

The investment plan to boost production capacity for semiconductors, which make up the lion’s share of Samsung’s profit, comes as the technology giant’s other businesses, such as flat-panel and handset manufacturing, suffer from sliding prices.

The chip sector just keeps growing, and with more and more devices needing chips there seems to be little end to this growth.

Thurs - US soon to roll-out WiMax

Samsung executives announced that they expect at least one major North American mobile carrier to roll-out WiMax next year.

Speculation surrounds Verizon and Sprint Nextel as likely candidates, given their long-standing relationships with Samsung. And this month Sprint Nextel and Samsung said they would begin lab and field trials of mobile WiMax early next year.

In Korea, WiMax technology is configured to give users up to 3Mbps with minimum rates of 512Kbps and an average of 1Mbps, similar to a fast cable or DSL internet connection. This would be much faster than the speeds available on 3G networks and could speed up the uptake of mobile data services and mobile video, as well as cheap internet based voice.

Bring it on guys, please!

Thurs - Real wins content deal with Cingular

Cingular, the US's biggest wireless service will use RealNetwork's video streaming technology to deliver video to its subscribers mobile phones.

This is important to RealNetworks as they were lagging Microsoft in the battle for streaming media technology. Verizon uses Microsoft's media player for their V-Cast mobile video service which delivers news and entertainment video clips over 3G.

Last week, Real launched its Rhapsody Radio streaming music service on Sprint Nextels mobile network.

Real explained that as part of the agreement Cingular's customers would also be able to download videos and games. Games would come from its RealArcade catalogue on a subscription basis. This service will also be available for O2 customers in the UK.

Thurs - Subscriptions slow for BlackBerry

Research In Motion, maker of the BlackBerry mobile device, reported a 57% rise in second quarter earnings, but reported slower than hoped for subscriber growth and software sales during the summer.

Apparently they added 620,000 subscribers in the last quarter, rather than the 620,000 - 650,000 the had projected. RIM said demand was dampened by "summer seasonality" in all markets, especially Europe. This does make me a little suspicious, I mean, what's new about summer seasonality, particularly in Europe! Surely they factored this into their predictions.

Is this the beginning of RIM feeling the heat from greater competition in 3G handsets and a revived Nokia, Palm and Microsoft Mobile? Apparently not, according to RIM, they're predicting a strong rest of year and forecasting that BlackBerry subscriber numbers will break through 5M by next March.

There revenue and earnings numbers do look pretty good.

Thurs - Google expands with new complex at NASA centre

Googel is expected to announce building a 1M square foot campus at a NASA research centre in California, a mile away from its existing "Googleplex" world headquarters in Mountain View.

Google's headcount just keeps soaring. It has increased by 70% in the last year, to nearly 4,700 at the end of June. The new complex would sit in a research park where NASA is linking up with universities, industry and non-profit organisations to "revolutionise the future, here, today".

Wednesday, September 28, 2005

Wed - DreamWorks quits NBC Universal talks

DreamWorks SKG says it has broken off discussions to sell iself to GE's NBC Universal and said that it would now explore replacing the company as the international distributor of its films.

The deal, that many in the film industry had assumed would complete, apparently broke down because NBC Universal tried to reduce the studio's asking price of $1bn by $200M. Plus, it seems that Spielberg didn't like losing autonomy and creative control under the terms of the agreement.

The fact that the last couple of releases by DreamWorks, such as The Island have been flops will not have helped. Even though DreamWorks is keeping their chin up, this must call into question the future of the studio. Let's see, but this is clearly worse for DreamWorks than it is for NBC Universal.

Wed - SanDisk launches 'gruvi' music card

SanDisk, the maker of flash memory cards generally used in digital cameras, has teamed up with EMI to launch a new music format that could eventually replace CD's and DVD's.

The new 'gruvi' music card is a finger-nail sized memory card pre-recorded with music and designed to play on mobile phones and hand-held computers. If the music cards take off, the company plans to launch movie cards next year.

Apparently, 12% of mobile handsets sold this year will have a card slot, going to 50% by 2010. The music cards can also be played on laptops and PC's that generally have a slot as standard. Both Panansonic and Sony have introduced TV's with card slots and BMW and Audi have integrated slots into their in-car entertainment systems.

Each gruvi card can hold about 6 albums, but the catch for early adopters could well be price, with a single mucsic card expected to retail at around $39.99. Saying that, I like the idea, particularly for movie cards.

Wed - Asian telecoms increasingly shifts to VoIP post deregulation

VoIP is forcing Asian telcos to look for alternative revenue streams. Deregulation has led to increased competition, resulting in falls in service fees at a time when customer growth is slowing in maturing regional markets.

Unfortunately for telcos, there's a new popular technology that threatens to cut revenues further: cheap internet-based phone systems, such as Skype.

The prospect that phone calls could soon become nearly free with the widespread use of VoIP services poses a danger to Asian telcos that are heavily dependent on voice calls to generate most of their sales and earnings, particularly the old PTT's such as Hong Kong's PCCW, Japan's NTT, Singapore's Singapore Telecom and Australia's Telstra.

Plus, these telcos are forced to cannibalise their voice business as they promote broadband and 3G. And there is a direct correlation between the growth VoIP and these services.

In Japan alone, the number of subscribers to VoIP services has jumped from 3.1M in 2003 to 8.3M in March 2005, compared with 60M regular fixed line subscribers.

In Australia, Telstra's fat margins from fixed-line services, which account for 38.5% of revenue, are under threat as the number of VoIP providers grows to around 40, 15 of which set up in the last 3 months alone.

So, the best line of defence for these fixed-line providers is to invest heavily in bradband and 3G networks and become leaders in the war for always-on IP customers both in the home and on the road. This means that telcos revenues will increasingly come from data and video rather than voice. But the shift is inevitable, so no point dragging feet for too long!

Wed - Sony defends their DVD format

Sony has dismissed concerns about the future of its next-generation DVD standard, called Blu-ray, after Intel and Microsoft announced their support for a competing format from Toshiba.

Sony exclaimed that the announcement from the two titans of the computer industry would have no impact on the format battle. This seems a little hard to believe. But, Sony have stated that Blu-ray offers superior features, particularly in copyright protection.

And the analysts are quick to point out that it will not be the PC industry that ultimately decides which format will win, it will be the content companies and the movie studios in particular, where copyright protection is important. But, the studios are currently split over which format to support. Proving that this format war could be long and protracted, which will be bad for all of us consumers.

Sony's Blu-ray will also get a major kick start next year when they launch the PlayStation3, which features the format. This format war gives Stringer yet another major challenge on his hands at the troubled Sony and I still find it a little hard to completely dismiss the relevance of Intel and Microsoft's clear backing for Toshiba's format.

Tuesday, September 27, 2005

Tues - Online ad market grows 26%

Search-based keyword ads largelly propelled the 26% growth - to a record $5.8bn - in US internet advertising revenues for the first half of this year.

This compares with $4.6bn for the same period last year, according to the Interactive Advertising Bureau.

Search ads made up 40% of the online ad revenues. Display ads made up 20% and classifieds 18%.

No wonder Googles stock keeps going up!

Tues - Palm smartphone to use Windows

Microsoft and Palm have teamed up to announce a range of Windows-powered smartphones aimed at the business and mobile professional market.

Under the terms of the alliance Palm has licensed the Microsoft Windows Mobile operating system for an expoanded line of Treo smartphones, the first of which will be available on Verizon's national wireless broadband network starting early next year.

The latest Treo's seem to be going down well, so this should be a step forwards for both parties. Make's you wonder how long Blackberry will be able to hold out with their more proprietary devices?

Tues - MTV & Warner in mobile video link

As well as listening to music anywhere, music fans will now be able to watch their favorite music videos on the go.

MTV Networks and Warner Music Group outlined an ambitious plan to offer music videos to mobile phone users around the world. This comes as part of a push by media companies to capture income from mobile phone users now that its possible to watch high quality video while on the move.

Indeed Sprint yesterday announced the launch of Sprint Live TV - a bundle of 19 polular TV stations including Fox Sports and ABC News Now to be streamed to subscribers over its network.

MTV and Warner Music will charge for their mobile music videos, but have not yet decided a payment model. The first of the digital video broadcast networks launched in Japan and South Korea a couple of months ago and similar services are due to debut in the US and Europe over the next 12 months. In praperartion, handset manufacturers including Samsung and Nokia have announced new phones.

I don't think we should hold our breath on this announcement. Mobile video will take a long while to gain broadspread adoption and the early technology is still a little less than user friendly.

Tues - Intel & Microsoft back Toshiba's HD-DVD disc format

Intel and Microsoft have announced their backing for Toshiba's HD-DVD technology for next-generation DVD's. This move may give them a significant edge over Sony's rival Blu-ray disc technology.

The companies hope their endorsemeent of HD-DVD will push the computer, comsumer electronics and entertainemnt industries to agree a single optical disc standard.

They argue that Toshiba's HD-DVD format offers higher quality, is more affordable and can be manufactured to be compatible with current DVD standards as well.

Toshiba and Sony have been at odds over which has the better solution for years, sparking fears af another disruptive and expensive format war such as that between VHS and Betamax over video cassette recorders.

Microsoft will engineer their next version of Windows to support HD-DVD in the default settings and Intel said that its new Viiv chip, designed for consumer entertainment PC's and devices would also be optimised for Toshiba's format.

Hollywood has so far split over the technology, with Time Warner, Viacom, Paramount and NBC Universal supporting HD-DVD and Walt Disney, 20th Century Fox, Sony Pictures and Universal backing Blu-ray.

Toshiba plans to ship HD-DVD players in December, while Sony will release Blu-ray in its PlayStation3 due for release next year.

The next generation discs will be capable of recording high definition films and video games.

This looks like bad news for Sony. Lucky Stringer is now on board!

Tues - Intel makes dent into wireless

Intel announced a deal with RIM to supply processors for next generation models of the Canadian company's Blackberry devices.

Intel has struggled to penetrate mobile devices but has developed a new line that offers improved performance needed to generate the extra power that hits the battery life of cell phones.

Intel is making progress with it's processors in smartphones such as the Blackberry and Palm's Treo. Even though this may be a step forward for Intel, they're still a long way from really penetrating the mobile sector. But, as the smartphone category of the wirless market expands, they should fare better.

Tues - Google expands internet index

Google has expanded its index of the internet to make it three times larger than any other search engine.

Google has been involved in a hotly contested debate with Yahoo over which has the biggest index of web pages. Yahoo claimed leadership in August saying it had indexed 19.2bn pages.

Looks like Google has hit back.

Monday, September 26, 2005

Mon - Intermix back's Murdoch's offer

Intermix Media's board of directors today rejected an unsolicited takeover offer from an investor group led by former CEO Brad Greenspan and reiterated it's backing for a bid from Rupert Murdoch's News Corp.

The balls back in Greenspan's court and the private equity groups backing him. I'd guess the Intermix guys have probably done the right thing. Being part of a larger group should give them the greater potential for future growth.

Mon - IBM, Microsoft and Symantec announce CDP products

Last week IBM announced a new set of products under the Tivoli brand to tackle the problems in backing up large amounts of corporate data.

Traditional back-up of vital information has so far happened nightly in data centres. This seems no longer sufficient for many companies, so IBM has come up with Continuous Data Protection, or CDP, proving that there is no end in sight to IT three letter acronyms. With CDP, the software can be set to save data every few seconds or whenever something is written.

If a computer virus or natural disaster strikes, a file's state can be rapidly "rewound" to the point just before the problem occurred. Hey, I could do with a bit of this, or maybe Google could, as I just lost my previous post re Sony for no good reason. If only!

IBM has apparently been keen to steal a march on their competition by announcing their CDP solution first and pricing aggressively at $35 to protect a desktop. Mind you, the fact that Microsoft and Symantec are apparently only announcing KCDP, i.e. 'Kinda CDP', because it is not really continuous, just every few hours, means IBM may not need to steal quite such a march. Their product sounds better. Either that or all these acronyms have just confused the hell out of all of us.

Mon - Sony Chief, Stringer elaborates on strategy

Over the weekend Howard Stringer has spent an inordinate amount of time expanding on his restructuring plans at Sony. I guess the negative comments from the analsysts has got to him.

He seems to be expanding on two key areas of his strategy. First of all, he's making it clear that he plans to continue with Noboyuki Idei's vision of integrating all of Sony's assets to deliver a new generation of tightly bound products, gluing together Sony hardware, software and content to unleash even more unique and innovative consumer gadgets. He cites Apple's ipod and itunes as an example to follow. Who wouldn't.

In this Stringer seems to acknowledge that his predecessor may have had the correct vision for Sony, he just lacked the necessary operational skills to carry it out. And it sure looks like you need a lot of those at Sony if Stringer's stories re corporate silo's, broken arteries and down right lack of corporate flexibility or basic teamwork are as standard at Sony as he expounds.

The second part of Stringer's strategy that he's elaborated further on is the reduction in headcount by 10,000. He tells us that if he'd had his way, he would have chopped a great deal more people. Proves that Stringer may be more diplomatic than we all thought, But, he seems to be hinting that he will get his way in the end should any unit or product line stumble.

So we all got to see a little more of the real Stringer. Now he needs to get on with the job at hand and forget about the analysts. They'll turn round if he turns Sony around. And I'm now getting dizzy so time to sign out!

Sunday, September 25, 2005

Sun - News Corp faces challenge for Intermix

Rupert Murdoch is facing a challenge to his attempted acquisition of Internix. News Corp, who has made a $580M offer for Intermix, the company that runs social networking site, has received a challenge from Intermix's founder.

Brad Greenspan, who owns 10% of Intermix and founded many of the sites owned by Intermix, has stated that he has the backing of private equity investors to buy half of Intermix's shares for $13.50, a considerable premium on News Corp's offer of $12.

This throws the Intermix board into a tricky dilemma. Brad Greenspan left acrimoniously in 2003, presumably disagreeing on strategy with many of the existing board members. His offer looks better on paper, should it turn into reality, but News Corp may well be a better strategic fit.

News Corp, in turn, now faces the challenge of whether they will need to pay more to ensure their ownership of Intermix. And Intermix is central to Murdoch's much touted internet acquisition spree and associated strategy. Murdoch will hate paying up, but he may have to.

Friday, September 23, 2005

Fri - Lenovo plans assault with $400 desktop

Lenovo, the world's third largest PC producer after Dell and HP, is poised to launch a new series of cheaper and more colourful Thinkcentre desktop computers intended to extend the brand to small business buyers neglected by former owner IBM.

Prices for models in the new E-series desktops are expected to start at less than US$400 without a monitor, about US$100 less than the current cheapest Thinkcentres. They will be launched in the next two to three weeks.

Looks like another bold move by Lenovo and one which takes advantage of their potential lowest cost manufacturer opportunity. Look out Dell and HP.

Fri - Sony chief's plan fails to excite analysts

Howard Stringer, the new CEO of Sony, unveiled his long-awaited restructuring plan for the troubled group. It was met with disappointment by the analysts.

Sony's plan:
- cut staff numbers by 10,000, or 7%
- reduce costs by Y200bn ($1.8bn)
- close 11 plants
- abandon its July profit forecast and face an operating loss this year
- full year operating loss of Y20bn instead of a Y30bn profit
- attain profitability by 2007 and a 5% operating profit margin by Mar 2008
- reduce no of product models by a fifth
- generate Y120bn from disposal of non-strategic assets and real estate

Stringer's new corporate vision for Sony is 'to focus selectively and aggressively on being the number one consumer electronics and entertainment company on the planet'.

Analysts seemed intent on a more radical restructuring at Sony, including much larger disposals of non-core assets such as their huge financial services unit. The problem for Stringer is that this unit generates a great deal of cash.

Analysts may be disappointed, but Stringer's vision looks right and let's face it his quiet, practical turn around approach worked in the last three years at Sony US. He gets my vote. Let's see.

Thursday, September 22, 2005

Thurs - Vonage to weigh possible sale

Vonage, the private internet telephony start-up is being encouraged to consider a sale while it moves ahead with plans for an IPO. UBS and Deutsche Bank, the banks chosen by Vonage to underwrite their stock offering has suggested they conduct a parallel process.

This is a standard tactic for a hot offering. If they cannot get a high enough valuation by selling the company to likely candidates from the Telco, Media or Internet sectors they will go ahead with the IPO. The general view is that if sold privately Vonage could go for up to $1.5bn.

At an IPO Vonage is looking to raise around $600M.

Thurs - Parsons puts the focus on AOL

Dick Parson's, CEO of Time Warner, said that focusing on AOL was his number one priority and that he was considering "structural and strategic options" to achieve it.

He seems to disagree with Mr Icahn's view (Mr Icahn has amassed enough ownership of Time Warner to merit a view) that the best way to increase Time Warner's value is to increase share buy-backs and to spin off all of Time Warner's cable business.

Parsons believes that the source of undervaluation is neither of these, but is the lack of performance at AOL. He therefore plans to accelerate the changes at AOL to morph the company to become both a serious free, ad based global portal as well as an ISP, presumably able to better compete in the ruthless broadband world (hence hanging on to Time Warner Cable).

Step number one is to separate out AOL's two businesses: one focused on being an ISP and the other an ad based portal to compete with Yahoo and Google.

Step 2 seems to be to improve AOL's portal's search service and maybe replace a partnership with Google with one with MSN and to make AOL more successful internationally.

Good luck Mr Parson's and move fast. Yahoo and Google have one hell of a head start.

Wednesday, September 21, 2005

Wed - Jobs in iTunes warning

Steve Jobs yesterday said that he would resist the "greedy" demands by some of the world's leading music companies to raise the prices on the popular iTunes music store, adding that such a move would encourage piracy.

Parts of the music industry seems to disagree, saying that they believe that prices around $1.29 would not dampen consumer demand.

Is there a growing rift emerging between the music labels and Apple? Mr Jobs had better ensure not. But, Apple launched it's iTunes service in Japan last month without Sony BMG and industry watchers expect continued friction between the two companies as the contract covering iTunes US nears expiration.

Wed - Sad day for IBM traditionalists

Another nail sank into the coffins of IBM traditionalists as Leonovo add a new colour to the ever black Thinkpad series, with the launch of the new Z-Series laptop. IBM PC's and laptops had always been offered in one colour and one colour only, proving just how much flair their marketers have.

Now IBM traditionalists must be spinning in their graves as the new Thinkpads from Lenovo are coming out with a "special edition" brush titanium cover as well as the traditional black. The fact that traditionalists are upset just proves how badly the PC division needed to be sold to someone else.

Lenovo are moving fast, as the new Z-Series is also aimed at the consumer and small business market, whereas under IBM their PC's were solely sold to large corporate customers. Look out Dell and HP.

Wed - 3 Italia listing aims for Euro2.5bn

Hutchison Whampoa wants to raise a higher than expected Euro2.5bn ($3bn) from the Milan listing of its Italian third-generation mobile business. The move will be the first test of investor's belief in the earnigs growth potential of 3G.

Apparently, the Hong Kong conglomerate controlled by Li Ka-shing, Asia's richest tycoon, had put a valuation of Euro1.8-2.5bn on the sale of 20-25% stake in 3 Italia in documents filed with regulators.

This could even mean that Li Ka-shing may be canner than anyone ever expected. After all, his 3rd Generation wirless network now seems to be proving a success. Their Italian business has already mustered 4.5m subscribers and their UK company, expected to IPO next year, is not far behind.

Who knows, Hutchison Whampoa may even make a half decent return on their Euro18bn foray into 3G.

Wed - Google accidentally reveals WiFi plan?

Looks like Google is prpearing to launch a wireless internet service called Google WiFi after all, according to pages found on their website.

The Google website has several references to Google WiFi, but provides few details. One page ( refers to a product called "Google secure access", designed to "establish a more secure connection while using Google WiFi".

Becoming a wireless access provider seems to be quite a stretch for Google, but they have boatloads of cash available and huge technical resources, so, I guess for now, why not. It will allow them to lock customers in even tighter, assuming they buy into Google WiFi.

Tuesday, September 20, 2005

Tues - Intel reveals 1,000-fold cut in transistor leakage

Intel, which has set itself a new priority of reducing the energy required for its chips, will announce today a 1,000-fold reduction in power leakage from transistors.

While the technology will reduce the drain on batteries in notebook PC's, it will apparently be a major boost for Intel's efforts to get its processors into mobile phones.

Tues - Siemens slashes thousands of jobs

Siemens, the giant German engineering and Technology company is to cut thousands of jobs at loss-making divisions.

Siemens plans to shake up management and cut 2,400 jobs at its IT services unit known as SBS. Speculation is rife that SBS could be seeking a strategic partner such as Atos Origin, IBM or EDS.

Further unspecified job losses will take place at the communications division, the company's largest, while the industrial logistics unit will be broken up.

Thus Klaus Keinfield, Siemens newish CEO contiues the shake up of Siemens following his sale of their mobile telephone unit to BenQ, the Taiwanese electronics maker this June.

It seems somehow ironic that Germany's industrial giant should announce yet another round of job cuts to try and improve the ailing business a day after the country's elections, in which unemployment and job security played a dominant role.

Tues - Friends Reunited could fetch $200M

The latest internet company likely to get sold for a good amount of money is Friends Reunited, the English network of websites founded on putting old school friends back in touch. They have set bidders a deadline of next week to submit offers.

Established media groups such as News Corp are apparently bidding with internet companies such as Yahoo and Ebay. Friends Reunited is owned privately by its founders and management.

The sale of yet another private internet company just proves that internet stocks are back in fashion and valuations are soaring again.

Monday, September 19, 2005

Mon - Is Time Warner in a corner over AOL

Last week saw news that Time Warner was in conversations with Microsoft over some kind of tie up between AOL and MSN. As a result Time Warner's shares bounced up to $18.90. Now, it seems the AOL genie is bursting out of the box. Time Warner shareholders are pushing Parson's to do something to unclock the value of AOL.

The real problem is that since the disastrous merger of Time Warner with AOL, AOL has been left to languish while Yahoo and Google have stolen the show. AOL and MSN's ISP based business models are proving to be inadequate under the barrage of broadband adoption. And AOL has been too slow to adapt to the more successful advertising based, free portal strategy.

AOL's management do seem to be stating that they recognize that the way forward is for AOL to develop a free, ad based portal to compete aggressively with Yahoo and Google. Rumours are now abounding of AOL getting spun out from under the huge corporate umbrella of Time Warner. Some are even suggesting that AOL get broken into two companies, one focussed on their original business, being an ISP, and a new company set up to compete head on with Yahoo/Google. Maybe the ISP could be sold to a group of private equity firms and the free portal company merged with MSN?

My gut is that Parsons should do neither. Granted, this may not be popular with investors and even Time Warners short term stock price, but as AOL continues to morph into a free, ad based portal, they ironically finally get to enjoy the benefit of Time Warner's vast amount of content. And this is exactly the piece that Yahoo and Google lack. Parson's could then boost the value of his entire group by making AOL work within Time Warner. Maybe poor old Mr Case was not so foolish after all.

Mon - What, Microsoft struggling?

The last week or so has seen a great deal of media coverage on Microsoft's woes. Most recently we have even seen Steve Balmer publically state that Microsoft's development processes are inefficient. Is Microsoft really stumbling?

Well, at first glance they do seem to be suffering from a series of self induced shots in the foot. Last year they were one of the first technology companies to retreat from lucrative options packages after Sarbanes-Oxley changed the way enterprises treat options, so that they now represent a major cost item for any company. Most tech companies are having to deal with the aftermath of this new ruling, but Microsoft went further and seemed to even embrace the ruling.

And this year Microsoft is seeing high profile defections of some senior employees to fast growing earlier stage innovators where the opportunity to make serious money from options is still real. Microsoft even went to court with Google over Google's now successful attempt to hire away one of their most senior guys in Asia.

Last year also saw Microsoft look rarely humbled by an onslought of free software (the open source movement)eating at their market as well as an onslought of hackers trying to take advantage of every crack in Microsoft's source code. The latter forced Microsoft to shift large amounts of developers over to plug security gaps in Windows and as a result delayed the development of the next version of Windows, now called Vista. This long delay in Vista has forced Microsoft into their most recent humiliation; that of admitting that their software development process and even strategy needs to change! Wow, Bill got it wrong?

The untouchable Bill Gates now looks well, human. He can make mistakes and he can get it wrong. He has apparently been preaching the benefits of their product development processes for a while. He believes in an integrated product development strategy, which basically means that Microsoft do one big release every few years and upgrade all parts of the product all at once. So, new releases of Windows also include major new releases of plug-ins etc as well. This helps keep Windows unique, mainly just because it is so all encompassing, so keeping competition at bay and keep the regulators away. After all, one of the ways that Microsoft stopped from getting split up or their business practices greatly altered was by stating that all their products and plug-ins relied on eachother. This almost forces them to do these massive all at once launches.

The problem with such all encompassing releases is that they're almost bound to end up getting delayed, as they are just too gargantuan, or they're likely to disappiont customers because they're not innovative enough. Well, Vista, due out at the end of next year looks like it may do both. So, Microsoft have to admit to being inadequate and now have to look at more regular, and less earth shaking releases as well as separate release cycles for different parts of Windows, including plug-ins.

The industry has therefore been scratching their heads wondering how Microsoft got into this mess in the first place, particularly over Vista. The same Microsoft that never publically admitted to such corporate failings, and after all, haven't their products always been late? Well, one thing has changed for Microsoft that people seem to be ignoring: Microsoft finally have real competition. The ever innovative world leader is now facing their own disruptive competition from Silicon Valley's latest darling - Google.

Google is proving that their model for software services over the internet is the way forwards and as a result Microsoft has to adapt. And for once Microsoft face a challenge that cannot be shoved to one side, even if solely beacuse Google is now worth nearly $100bn. And Google seem fearless. Finally the industry has a company that is willing to take Microsoft on and change the rules of the game. Ultimately that will prove to be good for everyone, particularly us concumers. Hey, it may even prove good for Microsoft too.

Thursday, September 15, 2005

Thurs - Nokia launch mobile email service

Nokia today announced the launch of a new mobile email service to compete with RIM. They are targetting it at their smartphone class of higher end mobile telephones and will offer their basic software for free to corporate users. They will make money by selling the server software at a couple of thousand dollars a time and by selling a professional user package for those that want something more advanced than the free stuff.

This is an interesting announcement from Nokia and one that should be successful. It may not hurt RIM too much and could even grow the overall market for mobile email for both io them. The most likely losers will be the handful of private companies competing with RIM.

Thurs - Google raise $4.18bn in follow-on offering

Google has just raised another $4.18bn in a follow-up sale of shares. They are offering the stock at $295, a small premium to their current share price. This will take their total cash pile to $7.1bn.

Rumours are spinning about what Google will do with all this money. Capital expenditure and acquisitions seems the best bet. But, who will they buy? Will the potential merger between MSN and AOL shake them into action? Might Google move more and more into the portal space and buy up online content sites - quite possibly.

Thurs - Microsoft & Time Warner chat over MSN & AOL

Rumours seem to be emerging that Microsoft and Time Warner are in conversations about possibly combining MSN and AOL. They may even be contemplating a full blown merger. This seems to make a lot of sense. After all, with the rise of Google over the last few years, one has to ask the question of whether there is room for four global, big brand portals.

Yahoo and Google seem to be the fitter two, so a coupling of MSN and AOL could be sensible. Given that the two of them are also ISP's, whereas Yahoo and Google are not, provides even more credence to their union.

We'll keep a watching brief.

Wednesday, September 14, 2005

Wed - Google launches Blog Search

Google today launched Google Blog Search. The service allows internet users to search across many/most (who really knows) of the worlds blog sites. People have been waiting for Google to launch such a service since they took over a few years ago.

I thought I noticed something different when I went into this morning. Unfortunately, after I realized exactly what Google was doing, and went to write this article, I could no longer access I guess the new service is not quite pronto yet. Oh, dear, lets hope Google doesn't follow too many of Microsoft's practices and launch services well before they're really ready!

But then, who can keep up with the increasigly exploding blogging universe. After all, there could be up to 50M blog sites already up (estimates seem to range from 12-50M) and a new blog site is being set up every second. Maybe we should cut google a little slack and use other blog search engines such as technorati until they are ready.

Tuesday, September 13, 2005

Tues - Nokia raises Q3 projections

Nokia today raised their Q3 projections for both revenues and earnings. They stated that growth came from 3G in particular. They seem to also be stating that their handset sales have grown faster than the overall market.

It looks like the re-organization at Nokia and their flurry of new product launches may be paying off. One should also not forget the power of their brand and sheer economies of scale and R&D budgets they can afford thanks to their huge market share.

I would suggest that the future looks rosy for Nokia. The real battle will be over 2nd and 3rd place in the mobile handset market. Look for continued gains from the Asian manufacturers. Motorola will be hard to shift, though, given their presence in the US market and their renewal under Zander.

Monday, September 12, 2005

Mon - Oracle to snap up Siebel for $5.85bn

Oracle today announced its intention to acquire Siebel Systems for $5.85bn. The acquisition will make Oracle the number one software player in the CRM space. Following on the heals of Oracle's numerous other acquisitions over the last period, including its takeover of Peoplesoft, this will vault Oracle into the big leagues of corporate application vendors with the likes of SAP, IBM and Microsoft.

Larry Ellison has for some time been announcing that the software industry is moving into a period of consolidation and will be led by a handful of giant, global suppliers who will increasingly offer complete suites of business software that come pre-integrated. Most industry pundits believe that Ellison's prediction is spot on and I certainly agree.

Oracle's tie up with Siebel makes a lot of sense and fills a key gap in Oracle's corporate applications offering. The challenge for Oracle going forwards is to integrate the company's they have bought, Peoplesoft and Siebel in particular. Indeed, the only unknown in this period of software industry consolidation is how effectively the acquirers management teams will execute on the integration process. But, Oracle seems to be doing an OK job with Peoplesoft so far.

So, thumbs up to Oracle for snapping up Siebel and roll on the consolidation of the industry.

Mon - Ebay to seal Skype deal

Looks like Ebay is buying Skype after all! Apparently the web auction company is in the final stages of sealing an agreement to buy the fast growing provider of voice calls over the internet.

It seems that Ebay will be paying $2.6bn now in cash and stock, and up to $4.1bn if Skype hits certain performance targets between now and 2008.

Ebay will integrate Skype with its own software to bring voice calls to its online market. It's good news for telecomm operators as Ebay is unlikely to compete with them, but Ebay is thought to see the acquisition as a way to jump into new markets, including charging fees to companies that use the voice service to generate sales leads over the internet.

Has Ebay overpaid? Is Skype likely to prove a risky move and a complex entity for Ebay to intergrate? Well, the positives seem to me to be that strategically this makes sense for Ebay. Skype will add a whole new dynamic to its already vibrant community, that could effect all participants positively. Adding voice to en email based service should greatly enhance the Ebay services. The key is to see if this increases the number of transactions Ebay conducts and/or the average value per transaction. Who knows, but my gut is that it should. The other positive for Ebay is that they will be the first company to effectively add voice services to online commerce. This should create a strong differentiator against competitors.

The downsides are that the Skype service is still in its infancy, and soo to the company and this could prove hard to integrate and manage. Plus, Ebay have had to pay one hell of a price for an as yet unproven bet on adding voice technology to internet commerce.

My gut tells me that the upside probably outweighs the downside. But, time will tell, and first the deal needs to be completed.

Friday, September 09, 2005

Fri - Sony launches new models to compete with Apple

The battle for dominace in the portable music market increased as Sony followed on the heels of Apple to unveil new products to reinforce their position in the fast growing market.

The new Sony Walkmans, which range from a 20 gigabyte model using a hard disc drive to a 2gb model that uses a memory card, are meant to be easier to use than the models Sony launched in the spring.

Sony is fighting hard to compete better with the runaway success of Apple's ipods and will now even allow its designers to move away from purely Sony-developed technology.

Apple sure continues to shake up this market!

Fri - Chips looking better for the year

Intel said yesterday that it was on course to hit third-quarter sales forecasts, while its nearest US rival, Texas Instruments, felt confident enough to raise its profit forecast significantly. Intel noted particularly strong demand for notebook PC platforms.

TI also announced a challenger to Intel's Viiv brand, launched last month to target the digital home. TI said its new DaVinci platform was the most advanced semi-comdutor technology in the world for next-generation digital video.

Fri - Ebay looking at acquiring Skype

Ebay is understood to be in early but "active" talks to acquire Skype, the European internet telephony provider. The transaction could be valued at $2-3bn.

Skype, headquartered in Luxembourg, but run out of London, is understood to have hired Morgan Stanley to advise it on strategic options, including a sale, an IPO or another form of capital raising.

A number of other companies, including News Corp, Google and Yahoo have had early talks with the company, but none of these have progressed further. Not surprising given the huge price tag on Skype.

Estimates at Skype's revenues seem to range from around $60m to $100m from the 2m paying customers that they have. That leaves Skype with around 50m free customers. So, I guess the valuation will be based on all these free and paying customers relationships and not a multiple of revenues!!

It seems like were getting back to the heady days of highly valued strategic technology assets. Venture backers in Skype, including Benchmark, must be bouncing off the walls in delight and it all just goes to prove how important internet telephony is becoming. Keep an eye out on one of Skype's big US competitors, Vonage, who looks like they may IPO soon.

Thursday, September 08, 2005

Thurs - Ebay turns 10

Last weekend 10 years ago, a programmer named Pierre Omidyar took a chance on an odd little Web site called AuctionWeb. Most of silicon Valley spent the summer of 1995 farting around dreaming up ways to use a new fangled technology called the Internet. Pierre's idea of course was an auction site that let anyone list an item or place a bid. He posted the code to his personal home page with the whimsical domain name:

Well, that was then and this is now. Ebay, with 64m active users, is on track to sell more than $40bn this year! Yes, that's $40bn in gross revenues!!

Ebay is a spectacular success, and not only because Mr Omidyar is now worth $10bn. It may not be a perfect market, but it has revolutionized pricing. The "value" of many things today is what they sell for on Ebay.

But the real scoop has only just begun. Ebay has also given ordinary people an economic foothold online. Selling on Ebay is the primary or secondary income for an estimated 724,000 Americans. This probably means that trading on Ebay is the primary or secondary income for around 1m people worldwide. No wonder I keep seeing adds for books or online tips on how to make money on Ebay. And I assumed they were just another pyramid scheme. But no, this stuff really works.

So, instead of writing for you guys, I should become the millionth and one digital day/market stall trader. Where is that old Rolex of mine anyway. Or, maybe I should move to the beach and sell sand to the Arabs. Either way, it looks like a whole new revolution has just begun. Home working here we all come!

Thu - Apple announces new music gadgets

Apple Computer yesterday unveiled a much-anticipated Motorola mobile phone that runs Apple's iTunes music software, as well as a sleek new music player that is thinner than a pencil.

The new music player, the "iPod nano", replaces the "iPod mini" and is seen to raise the bar for competitiors trying to topple Apple in the digital music player market.

The iPod nano comes in two models, with the higher end one priced at $249 and stores up to 1,000 songs or 25,000 photos.

Analysts seem to like the move "they just changed the rules of the game completely. Rival players are going to look big and clunky by comparison," said Van Baker, analyst at Gartner.

And lets face it things are looking pretty good for Apple as it is. Apple has sold almost 22m iPods as of the end of June and has captured 74% of the US digital player market. The company's iTunes online music store has sold more than 500m songs and controls more than 80% of the US market.

Perhaps Apple has learnt a bit since they allowed the PC market to get taken from them in the '80's by Microsoft, Intel and IBM. With such a stranglehold on this fast growing market they look hard to shake. So, Mr Jobs when will you launch the vPod for the soon to emerge digital video download market?!

Wed - PartyGaming decline takes shine off internet gambling

PartyGaming shares, listed in the UK, fell 33% today when the company gave a downbeat assessment of current growth rates. It also sparked unease about the online gambling sector in general. After all, the investor and analyst community has been rather sceptical and even scathing of such companies since they started going public on stock exchanges recently. The institutional investment community is struggling to get their head around businesses that could by all accounts seem to be operating illegally in the US, one of the largest markets for online gambling.

So, with the demise of PartyGaming's stock, the financial community can feel some satisfaction over their intial pessimism. But this will not last as the sector still has enormous room for innovation and growth. There are a stream of online gaming companies readying to go public over the next twelve months or so and PartyGaming are just about to get promoted to the London Stock Exchange's 100 largest companies by value!! Well, the internet just keeps confouding the critics and technophobe's; none more than the investment community - eh!

Tuesday, September 06, 2005

Tue - Copyright in the digital age

One of the biggest issues and challenges that the internet and the wider digital world has unleashed is that of copyright and copyright protection. The great opportunity that the internet, in particular, created was that of freedom of information. The problem is that with it came not just freedom of information, but also loads of "free" content. Some of it was meant to be free, and was indeed the roots of the internet as a network for academics and researchers, but lots was not meant to be free.

The growth of "not meant to be free" content flying around the ever growing global network, that the internet now is, has wreaked havoc with content owners worldwide. And I remember Alan Cane, then of the Financial Times, announcing back in the 1990's that the ultimate winners in the digital age would be content owners: "content is King". Well, I'm not sure that the music or publishing industry would wholeheartedly agree - at least not yet, anyway.

The last few years has seen a global revolution in file sharing and swapping which has led to tens of millions, maybe even hundreds of millions of people illegally downloading music files, movies and more. The most dramatically damaged industry has been the music industry, which has lost billions and billions of dollars of sales as a result.

But, could the tide now be turning? The last year or so has seen governments and courts around the world hit back. This week saw an Australian federal court order Sharman Networks to filter out copyrighted material from its Kazaa Media Desktop software within months or face closure. (Nearly 320M people have been estimated to have downloaded Kazaa.) This comes 10 weeks after the US supreme court ruled against Grokster, and found that makers of peer to peer (p2p) software that enables file-sharing between computers could be held liable for any copyright infringements by their users. Last month a Korean court required Soribada, a p2p network, to halt unauthorised file-swapping on its network or to shut down.

In the Kazaa case, Australian courts lack jurisdiction overseas, but the judgement should influence copyright infringement cases worldwide. It does seem as though momentum is now growing in dealing with copyright abuse on the internet. This is important given the explosion of the internet we are likely to see over the next decade as it goes mobile through wi-fi and wireless telephone networks, and as the internet delivers all means of communications from telephony to TV. As the internet matures and becomes all pervasive in your home, at work and in your palm, copyright does and will need to get protected.

For the consumer it will mean that those who want to find free content will find it harder and harder, particularly if it is illegal. For those of us willing to pay, the digital unleashing of content has only just begun. The next decade will deliver music, books, TV, movies, radio and loads more over the internet to your PC, your TV, your mobile phone, your wireless PDA or notebook, your car and much more. The itunes model from Apple has shown the world how to mass-sell content legally and profitably over the internet. They will prove to be the key tipping point in unleashing legal and valuable models for selling almost any kind of content to almost any kind of digital device.

Maybe Tom Kane will prove to be right after all; "content is King"!

Monday, September 05, 2005

Mon - SUN gradually recovering, announces new servers

Sun Microsystems announced the introduction of a new line of servers, called Galaxy, from their acquisition last year of start-up Kealia.

Kealia's Galaxy machine uses eight AMD chips working in parallel, which should enable it to nearly double the performance of existing systems based on four chips. Galaxy marks a return to SUN's roots as a maker of low-cost machines at a time when customers increasingly are seeking cheaper products based on chips from Intel and AMD. Galaxy does seem to provide a compelling offering based on price/performance.

SUN does seem to be stablising again as a company. SUN's total sales are projected to rise this year for the first time in four years and the company will benefit markedly from from the $4.1 billion purchase of data-storage software vendor Storage Technology, which will add more than $2 billion in annual sales.

SUN's gradual commercialisation of Java and embracing of open source software could also prove a valuable longer term strategy.

Mon - Judge in Australia rules against Kazaa

A judge in Australia has ruled against users of Kazaa for infringing copyright on their widely used file sharing system.

The judge has ordered the owners of Kazaa, Sharman Networks, to amend their system Even though he has not ruled that they have broken copyright law, he has ruled that they have enabled their users to break copyright law.

This is a welcome victory for the beleaguered music industry and a ruling that could prove to create an interesting legal precedent around the world. It does seem as though law courts and some governments are gradually tackling the issue of illegal copyright over the internet.

This could prove beneficial to the likes of Apple's popular itunes service.

Thursday, September 01, 2005

Massachusetts to switch off Microsoft

The state of Massachusets has laid out a plan to switch all it's workers away from Microsoft's Word, Excel and other desktop software applications, delivering what would be one of the most significant setbacks to the software company's battle against open source software in its home market.

They said that all electronic documents "created and saved" by state employees would have to be based on open formats, with the switch to start the beginning of 2007. The state also specified only two document types that could be used in the future - OpenDocument, which is used in open source applications like Open Office, and PDF.

So, the gradual swing towards open source software on the desktop may be developing a little bit of momentum. As Linux, and commercial derivatives of the operating system, and the software that sits on top, such as StarOffice from SUN, become increasingly mature, open source looks like becoming a real alternative to Microsoft software.

Linux has already made considerable strides in the server market, mostly taking share from Unix, but it looks like there is just enough evidence to conclude that 2006/7 may prove to be the years that Microsoft gets more heat from open source software on the desktop. Not since Lotus disappeared off to IBM in the nineties has there been any kind of viable alternative.

There could be a great opportunity here for SUN in particular, if they get it right. Let's see!