Wednesday, November 30, 2005

Wed - Walt Disney narrows bidders for ABC Radio

Walt Disney, has narrowed the field of bidders for its ABC Radio division. The move that should pave the way for a sale of the unit before the end of the year. Analysts have estimated the unit could be valued at between $2bn and $3bn.

There are apparently only three bidders left. They include Entercom Communications of Pennsylvania, Cumulus Radio of Georgia – which recently acquired a large portfolio of radio assets from Susquehanna Pfaltzgraff, a Pennsylvania-based conglomerate – and Kohlberg Kravis Roberts, the US private equity group that unexpectedly emerged as a player in the race in recent days.

Disney’s radio group includes 72 stations, with 44 in the top 25 markets. In 2004, Disney group reported an estimated $710m in revenue.

The company decided to consider a sale following the appointment of Bob Iger as the new chief executive, which prompted a review of all the media group’s assets – which include theme parks, animated film production, film studios and the ABC television group.

A sale of its radio unit would represent another step in the reshaping of the global media industry, which is haveing to cope with depressed stock prices and increased competition from telecommunications providers and technology providers. Media Conglomerates are getting the worse of it and breaking up seems the shortest route to boosting share prices. Time Warner should pay heed.

Wed - TDC to be finally sold - oh, please!

Nordic Telephone Company (NTC), a private equity consortium led by Apax, has finally announced an agreed cash bid for TDC, valuing the Danish telecoms group at $12bn.

TDC’s board said it would recommend the bid, but the agreement does not rule out the telecoms group’s freedom to consider an alternative offer.

Please God, let's hope this is the end of the saga and TDC can stop hogging the business press and get back to being the relatively uninteresting regional phone company that it is.

Wed - Cingular and Orange announce global partnership

Cingular Wireless, the largest US mobile carrier, and Orange, the European wireless group, agreed to work together to provide consolidated mobile services to multinational companies with operations in both the US and Europe.

Companies with operations in the US, Britain, France, Netherlands, Belgium and Switzerland will be able to manage their wireless usage through a Web portal called WorldView Wireless Information Navigator – a service that Cingular inherited when it acquired AT&T Wireless earlier this year.

Companies will also be able to use minutes from their home country while roaming. It also looks like consolidated billing will be on the cards. Shame though that such mobile partnerships are still not attacking the core issue of how to get international roaming charges down. Now there's an opportunity!

Tuesday, November 29, 2005

Tues - traditional retailers stage comeback online

For the last handful of years the likes of Amazon and Ebay have ruthlessly dominated online shopping in the US. Now it seems that the traditional retailers are staging a powerful comeback.

The number of online visitors to Wal-Mart, Target and Circuit City more than doubled on the Friday after Thanksgiving against last year. So, while Ebay's traffic slipped 8% to 9.4M and Amazon's grew 11% to 4.6M unique users,'s soared 120% to 3.3M users, Target's increased 143% to 2.9M users, Best Buy increased 75% to 2.1M users and Circuit City's doubled to 1.7M users.

So, Ebay is still No1, Amazon is No2, No3 etc etc. And the value of online shopping for the beginning of the holiday season looks good with Visa US stating that spending on its cards on online purchases increased 32% to %544M on Friday and Saturday.

So, it looks like the "brick and mortar" retailers are finally learning how to compete against the pure play etailers, by combining physical stores with online efforts. Expect this trend to continue.

Tues - TDC finally gets bought?

It looks like one of the longer running and more tedious take-overs is about to get concluded. TDC, the somewhat uninteresting Danish telecoms group, that has been hogging the business press for the last 6 months looks like it might finally get bought and can become uninteresting again.

And for all the press it looks as though the bidding war we all hoped for to end this episode on a at least a slightly exciting note will not happen after all. The lead bidder, a buy-out group led by Apax seems to be set to win because the other bidders are having trouble getting their bids in.Mmmm.

To be more specific, Swisscom has been stopped from bidding by the Swiss government who owns them and has decided in their infinite wisdom that international expansion does not make any sense. And the rival private equity group led by BC Partners is having trouble filing their bid in time.

So it looks like TDC will go to the Apax group for $11.5bn and at least go down in the books as one of the largest leveraged buy-outs. Unless of course BC Partners decide to inspire us all a little longer by trunping the bid, in which case it would be a larger leveraged buy-out. I'm all for Apax getting the deal mainly so TDC stops hogging the wires!

Monday, November 28, 2005

Mon - "Click to Call" web adverts the next big thing

Google has now all but announced their "Click to Call" service which is presumably aimed at small businesses who do not have web sites. Now, you can place an ad on Google's sites that has a little picture of a telephone on it. The consumer clicks on the ad and is then prompted to enter their telephone number in a pop-up box. Once their telephone number is entered then Google automatically dial the number and connect the merchant with the consumer.

This could be big. It seems that the Kelsey Group believe that this infant market for "Click to Call" could be worth between $1.4 and $4bn by 2009. Mind you, they've given themselves such a wide margin for error that you've gotta monder how much finger in the air magic was involved. None the less, for those consumers who are OK with telesales calls to their home, this could be the way to go. I'm still a little confused about who pays for the call, but there ya go.

And it seems as though "Click to Call" is catching on with Ebay, Yahoo and AOL all launching services. Theirs differ though in approach and seem a little less slick than Google's. So, "Click to Call", along with Google Base, could prove yet another major nail in the coffin for traditional press listings and yellow pages companies.

Mon - Swiss government stops Swisscom from growing abroad

The Swiss government has just set of a major controversy both at home and abroad as they seek to scupper Swisscom's attempts at growing internationally by acquiring Eircom of Ireland and maybe even TDC, the Dutch operator.

So as the Swiss government reminds us all of just how important it is in this modern world to ensure that governments are kept as far away as possible form the running of their countries companies, I can't help feeling that they will not back down.

And like a Swiss army penknife going through soft swiss chocolate (ooh, its making me hungry), it looks like the government may end up having to sell off Swisscom to ensure they cannot interfere again. But, this may not happen soon enough to halt the scuppering of deals with Eircom and TDC or even the en masse resignation of the top team at Swisscom.

All this just so that the Swiss government don't lose the nice dividends they get from Swisscom every year. And who said the Swiss were diplomatic and balanced.

Mon - 3 Italis set for IPO and acquisition

3 Italia, the third generation mobile phone company owned by Hutchison Whimpoa, said its IPO should take place in the first quarter of 2006. This could make it the first big IPO of the new year.

3 also announced that they are buying the Italian TV station Canale 7, proving that people other than Silvio Berlusconi can actually own TV stations in Italy. 3 stated that they'll set up a network to supply their 4.8M customers (haven't they done well) with pay-TV and interactive services to their 3rd generation mobile devices.

It seems that positioning themselves as a media company will make them worth more at the IPO than as a straight forward telco. I hope they're doing this for more than just their valuation as merging advanced mobile networks with media assets has to be the future. That's the real reason they can be worth more.

Friday, November 25, 2005

Fri - consumer electronics sales to be big this Xmas

It looks like consumer electronics sales are set to grow nicely this Xmas in the US in particular, according to the CEA. And digital music players are the number one choice.

The CEA’s annual Holiday Spending Survey tracks the consumer electronics devices consumers intend to give as gifts, as well as those they hope to receive. Digital music players topped both lists this year displacing the digital camera at the top of last year’s gift list and the plasma TV at the top of last year’s wish list. The survey showed consumer interest in buying a portable digital music player has risen eight percentage points from 2004, to 28 per cent.

It also seems that consumers are buying into convergence products such as mobile phones that are also camera's and/or music players. Notice that the Xbox isn't at the top of the list.

Fri - Ecclestone sells Formula 1 again

Bernie Ecclestone, founder and head of Formula 1 has sold the company to Cinven Capital Partners. This is now the second time he has sold Formula 1.

He will remain in charge of the business that turns over more than $1bn by managing and selling the rights to the Formula 1 car racing franchise.

Fri - Murdoch on future of traditional classified ads

Rupert Murdoch, Chairman of News Corp, continues his drubbing of traditional print media in favour of digital advertising by stating yesterday that he believes that classified ads in print newspapers will migrate to the internet.

He partly believes that its an age issue as under 30's just don't seem to be interested at all in classifieds on print. They want online ads.

Well Murdoch certainly isn't wrong. I just wonder whether even he is underestimating the speed at which advertising of all sorts, not just classifieds, will shift to the internet and soon to mobile phones.

And the internet advertising market keeps moving forwards and innovating. The next big thing that Google has started offering is click-to-call wherebye you click on an online ad and it enables the advertiser to call you. This could be powerful. And Ebay has bet on it big time with their acquisition of Skype.

Thursday, November 24, 2005

Thurs - RIM reduces outlook for new subscribers

RIM announced yesterday that it would have to reduce its outlook for new subscribers because of delays in shipping 2 new devices, the new BlackBerry 8700 and 7130. This sent their share price down.

RIM seems to be stumbling this year. As well as being challenged on meeting their aggressive growth numbers, they also face a potentially expensive patent dispute that just won't go away.

It does though look to me that even though in the short term Blackberry continues to do ok, they have just surpassed 4M users, they are perhaps starting to feel the pressures of an increasingly competitive market. After all, with 3G technology becoming increasingly pervasive and Wi-Fi hotspots popping up everywhere, they will get increasingly squeezed by mobile phone companies on one side and wireless laptops on the other.

And with competition from the likes of Nokia, Microsoft, Motorola and a potentially stronger Palm, I think that Blackberry's glory days may be waning. As mobile phones get better and better at doing wireless email, can Blackberry really survive the onslaught from the all powerful handset manufacturers? I'm not so sure. But then, that's just me.

Wednesday, November 23, 2005

Wed - Hollywood does a deal to halt web piracy

The US movie industry won an important breakthrough in its fight against online piracy yesterday as it struck a deal with BitTorrent, the creator of a technology that is widely used for copying movies and TV shows illegally over the internet.

By creating a quicker way to download data-intensive video files, BitTorrent's technology has become the basis for the first widespread internet distribution of movies and TV shows. Wisely, the Motion Picture Association of America has agreed to help BitTorrent turn their technology into one which focuses on enabling the legal distribution of movies and TV.

Under the agreement, the search engine at will remove links to any pirated material. The agreement could also lead to the eventual adoption of BitTorrent's technology by the studios. It does at least seem as though the movie industry is learning from the painful lessons of the music industry, who failed for so long to curb web piracy.

It will also be interesting to see if BitTorrent can make it to become a legal service - after all, all attempts in the music industry failed. But, hey, BitTorrent also announced raising a bunch of money with a VC. Oh, that should do it!!

Wed - Greg Maffei makes his first move as head of Liberty Media

Greg Maffei, ex CFO of both Oracle and Microsoft, has made his first move as CEO of Liberty Media. He and John Malone (Chairman) have made their first foray into the increasingly lucrative market for online games by buying a 51% stake in Fun Technologies for $195M.

Fun, which is listed in Toronto and London, specialise in online versions of skill games such as solitaire, chess and Sudoku. It seems that online skill games are growing as fast as online gambling with players rising at an astonishing rate of 30% per quarter.

Expect this to be the first of a few acquisitions by Liberty Media in the growing online games market. My guess is that Greg Maffei and John Malone will prove to be a compelling and successful team together. Liberty Media should have an exciting future.

Wed - Sony Ericsson moves up in world rankings

Sony Ericcson has pushed LG Electronics out of the number four position in global mobile handset sales in the 3rd quarter thanks to strong demand for its Walkman phone.

The other interesting fact now is that Nokia and Motorola have further cemented their positions as number 1 and 2 respectively. Both of them saw market share gains and are pulling further ahead of the pack and ahead of Samsung in particular in 3rd slot.

As the mobile phone industry gets bigger and bigger, the rules of scale are applying, with the number 1 and number 2 seeing the greatest profits and as a result the greatest returns, which they can then invest in further market share gains. Expect it to continue.

Tuesday, November 22, 2005

Tues - Google to put culture on the internet

Google has just thrown its weight behind an ambitious and controversial plan to put the world's cultural memory online.

The plan, which is US-led and hatched by the Library of Congress, would create digital copies of the large stores of historical manuscripts, personal diaries, voice recordings and other cultural items held by national libraries around the world.

Google has donated $3M for the initial work of devising technical standards and carrying out pilot studies for the project, known as the World Digital Library.

This could well lead to challenges from foreign governments and bodies seeking to protect their cultural IP. Goog luck to the Library of Congress and Google for trying to take the lead and for being willing to take on likely challengers. This is a good one for society. We wish them well.

Tues - Intel to Manufacture "Nand" flash memory

Intel broadened its relationship with Apple and announced a joint venture with Micron Technology to manufacture "Nand" flash memory chips for the iPod.

"Nand" is faster than "Nor" flash, used in many mobile phones, for handling music and images. Intel's "Nand" JV will provide a direct challenge to Samsung, the leading manufacturer of "Nand" flash memory.

In further evidence of Apple's strategic shift to "Nand" technology for their iPods going forwards they have pre-paid $1.25bn to secure flash memory until 2010. This move has enabled Apple to entice other key chip manufacturers to start developing "Nand" chips while also providing them with a competitive weapon against other digital music device makers who may struggle to secure chips at such competitive prices.

Apple will now be able to tap Intel/Micron, plus Hynix and Toshiba as well as Samsung. This makes Apple less dependant on one supplier (Samsung) for such a critical component. Solid move Apple.

Tues - Reuters teams up with AOL & MSN messaging

Reuters has agreed that their messaging services will become compatible with AOL and MSN. Now Reuters 300,000 odd highly charges trader and broker customers will be able to chat with their families and mates on AOL or MSN. Not an earth shattering deal, but proof that the days of messaging interoperability are here to stay.

Come on Yahoo - time for you to make some moves or you'll get left behind. How about Google?

Tues - Online advertising soars in US

Internet advertising revenues in the US reached $3.1bn in the last quarter. This is the highest ever recorded and a 34% increase on the same period last year.

And the Interactive Advertising Bureau (IAB) said the total spent on internet advertising could exceed $12bn this year, way above last years record of $9.6bn. The largest chunk of this online advertising now comes from search based advertising, a la Google. Poor old DoubleClick, they have faded into the shadows thanks to Google and search based advertising.

This will provide yet more evidence of two critical trends that will contiunue well into the future. The first is that online advertising is here to stay and will continuously grow for the next many years. The demise of traditional advertising has only just begun. But it will be brutal going forwards. The second is that search based advertising in general will absolutely change the software industry. Software will be sold as services and advertising will be how software companies will earn their money going forwards - particularly to consumers.

So, anyone wanting to start a new company, you can't go much wrong by launching a necessary online software service backed up by Google ads. And if your a traditional media company - get into the internet in a bigger and better way fast or you'll leave all the money to Google, Yahoo etc.

Monday, November 21, 2005

Mon - Tivo announces deal with iPod

Tivo has just announced a contraversial agreement with Apple for viewers to be able to download programmes recorded on their Tivo device to a video iPod. This puts them in a direct clash with the TV studios who may now try and stop them.

There are some fascinating intellectual copyright issues up for grabs here that could set some interesting precedent for the future. For consumers it is clearly a good thing. Tivo sure likes rocking the boat with the TV stations.

Mon - Microsoft goes boom with the Xbox

Microsoft starts selling the Xbox in the US at midnight tonight. Finally they have a real steal on the competition in the vital games console market. They also now have their second key connected device to penetrate the worlds living rooms.

And Microsoft have a huge one year lead over their rivals, for the next generation of Sony's and Nintendo's new devices are not expected to start shipping until next October or even November.

And Microsoft are not a company to waste such a lead. Expect Xbox sales to take off starting tonight. This should allow Microsoft to take their share of the market for video games consoles to a close second to Sony by the end of next year. That leaves Nintendo in trouble.

And finally it looks like the much heralded dawn of true multimedia, connected games consoles for the bright screen, AI, bradband world is on us. Better get down to your local Best Buy fast. Where are my car keys!

Mon - Cisco and Sciantific-Atlanta

Well, I guess everyone is after the living room. Microsoft are going in via two routes - the Xbox and the PC Media Centre, Apple are going in via the iPod and now Cisco are betting its the future by spending a whopping $6.9bn to buy Scietnific-Atlanta, the 2nd largest maker of set-top boxes for the cable industry.

And by linking up SA's set-top boxes with Cisco's Linksys wireless home router, you could conceivably hook up all your digital devices from the set-top box, so delivering cable to multiple TV's for example.

And SA gives Cisco access to the cable companies as they provide key back end sytems for them, but their latest set-top boxes also provide a digital video recorder, DVD player and burner. So, they could actually provide stiff competition for Microsoft's Madia Centre via the cable companies but direct to the consumer. This could prove the first time that Cisco goes up against Microsoft in a serious way.

So, the SA deal looks a shrewd one for Cisco. And our living rooms and houses are going to come seriously into play for yet another of Silicon Valleys most powerful players. Hang on to your TV's folks - they're about to get lit up big time!

Friday, November 18, 2005

Fri - TDC now officially in play

TDC has received a firm offer from a buy-out consortium that values Denmark's leading telecoms group at more than $11.5 bn. This also marks the formal kick-off for the bidding war over TDC.

The bidders should include two buy-out groups. There is the Apax led team that have made the offer and all the running so far, but hot on their heals are a rival buy-out group comprising Apollo, BC Partners, Cinven and Silver Lake.

The wild card could be Swisscom. Either way, it looks as though TDC will soon have new owners and the European telco consolidation process takes another step forward. After all, if the buy-out groups triumph they will presumably use TDC as a vehicle to become a consolidator itself in the European market or ensure that it swiftly becomes a target.

Fri - Google's off!

Yesterday, on the back of two product announcements - Google Base and Google Net, Google's stock price went over $400 and their market cap went to over $110M. And the consensus seems that their stock price should go higher.

So, Google is now worth more than eBay and Yahoo comnbined. Google is now worth more than Cisco. Microsoft must be cringing more than ever.

Fri - HP getting back in shape

Mr Hurd does it again. 4th quarter revenues and earnings are up. Revenues are up 7% on last year at $22.9bn and earnings less a $1.1bn charge are up at $1.7bn. And costs cuts are ahead of plan with 15,300 job cuts as opposed to the plan of 14,500.

It seems as though Mr Hurds focus on operational excellence is paying off. It is interesting how HP's fortunes are now improving just as Dell's are not. Oh, the tech business, always full of swings and roundabouts.

The future for HP looks bright too. The test of Hurd and his board will be what to do with HP going forward. Should it sell some pieces off? Should it focus more heavily on corporates at the expense of its consumer products and should it get more into services. Well, time will tell. But at least they are doing a good job for now of executing largely on Fironia's vision.

Fri - Telecom leaders apologise to shareholders

Both the CEO's of mobile giant Vodafone and leading French operator France Telecom have publically apologised to their investors. Both of their share prices continued to tank.

Both CEO's have had to face the ultimate humility and agree that they had perhaps not comunicated bad news in the best possible way. I'm not entirely sure how you communicate bad news nicely, but bear with me.

The real reason that they're aplogising is because their businesses are stalling a little. Vodafone is finding competition across Europe intense and the price of switching customers over to 3G expensive. Plus their Japanese business remains perenially in the toilet. France Telecom is struggling with similar issues bar of course the Japanese part. France Telecom has the added pain of being an incumbent fixed line operator and we all know how painful that is.

Plus, their is one other piece I feel. I think everyone underestimated the success of 3. 3 is kicking rear end after all. They have a great brand, they are seen as cool and innovative and they were the first to grab early mover 3G customers. 3 now have over 10M customers worldwide and growing. And their data services revenues are impressive.

Vodafone and Orange have not yet really seen that much of a hike in ARPU. But they will. It will just take a little longer and cost them more than they thought.

So, why are they apologising? Because it's all the rage right now to bend over for investors - just look at VNU etc. If I was Mr Sarun I would worry less about aplogies and more about how to get Vodafone quickly and successfully through the 3G wave, how to fight off growing global and regional competition, and how to face the new challenges of Wi-Fi and MVNO's. Oh, I'm sorry, I'm sure you are worrying about that. Silly me. At least I'm apologising as well. It must be catching.

Oh, and could you do more with Vodafone Live? It's a bit limp isn't it? Or maybe that's just me.

Thursday, November 17, 2005

Thurs - blogging becomes increasingly mainstream

Yesterday Yahoo agreed a deal to publish 5 blogsites from Gawker Media in a move that further solidifies the maturing art of blogging and develops it as one that is increasingly merging and converging with mainstream media.

The last six months or so has seen blogging emerge from the cyber underground. First was News Corps bold acquisition of MySpace, then AOL bought Weblogs Inc for $25M and recently Time Magazine agreed to publish Andrew Sullivan's blog.

Everyone is talking about blogging and companies around the globe are desperately trying to figure out how they can become good blogging citizens. Perhaps by leaving it alone! So, what's going to happen to Huffington Post? I wonder...

Thurs - Google launches web listings service

Google has now launched Google Base, a new web site that allows users to post information such as classified advertisments, job listings and recipes in a move that put's it in direct competition with Ebay, online job sites and Yellow Pages directories.

Google Base at lets internet users submit information about a wide range of personal items, free of charge, to a publicly searchable database maintained by Google.

The current version is in beta testing, but can be used to search for almost anything. Current search examples on the site included classified ads for cars, academic courses and Indian recipes.

As Google diversifies away from its core search engine, it finds itself increasingly in competition with Ebay, which has invested heavily in its own search function.

It's well worth trying out. And its easy to use. The question with such a broad listing service as this is which categories of products and services will benefit from the free listing. At this point no-one knows. You'll just have to try it out and see. But, it's another smart move by Google.

Google said that the site has been designed for people who have information they want to share with others but do not know how to gain an audience. Google will host the content but allow the user to add labels with more specific information to attract attention. If the item is highly relevent, Google said it may be included in its main searches or on Froogle or Google Local. Let's see. We'll keep monitoring.

Thurs - US retains control of the internet - for now

The US will keep control of the internet worldwide for the forseeable future, under a hard fought deal reached with international negotiators only hours before Tunis' World Summit on the information society, which opened yesterday.

The EU and other governments had called for an end to the exclusive authority of the US Commerce Department to authorise changes in the master directory of internet addresses worldwide, which is operated by Icann.

The deal leaves the status quo untouched but does commit the US to start the process of increasing cooperation with other countries on a more equal footing.

This leaves the management of the internet to Icann and is a good thing. They have proved to be responsible and efficient and the US Commerce Department doesn't seem to meddle. Moving the internet to becoming managed by an international committee could be a disaster and slow progress considerably.

Thurs - $100 laptops coming

Nicolas Negroponte, founder and Chairman of the legendary Massachusetts Institute of Technology Media Lab has for years been trumpeting the importance of finding ways to reduce the digital divide between technology have's and have nots and particularly between the developing and developed nations.

Now, finally, comes the answer. Negroponte with sponsors including Google, AMD and Murdoch have just launched a $100 laptop for the poor in developing nations such as Africa and Latin America.

The laptop's features include a tough screen that can switch form colour to black and white to make it easier to view in bright sunlight. The laptops are incased in rubber and they have a hand crank which provides power when there is no electricity.

The software has been stripped to the basic and the laptops have a 500MHz AMD processor (no wonder they're sponsors) and runs on free linux software. It connects to the internet through wi-fi.

They cannot store much data as they have no hard drive. Instead they use flash memory like a digital camera or mobile phone.

Negroponte's group haven't sold any of these computers yet, but are apparently making progress with numerous governments and Brazil and Thailand in particular. They want to sell them through their education ministries. Negropente announced that production would start at the end of next year, with up to 10M shipping in 2007.

This is a fabulous idea. Lets hope its a success. This could finally bring computing and the internet to children all over the world.

Monday, November 14, 2005

Mon - Google launches free web analytics

Google is shaking up the web analysis market and strengthening its key advertising business today with the launch of a free service that measures the effectiveness of websites and online marketing campaigns.

Google Analytics has been developed from software acquired when Google bought Urchin, a web analysis company, in March. Urchin was charging $199 a month for an on-demand version of its product and offered enterprise installations for Fortune 500 companies such as Procter & Gamble.

This announcement strengthens Google's advertising solution even further against the other portals (as if they needed the help!). Plus, yet another example of software for free over the internet. This is good news for users of Google's Adsense.

Mon - Microsoft lobbying for help in EU anti-trust

Microsoft's behavior just keeps changing. First they tell us that the future is software over the internet and that they're shifting their entire business model to take account for it. Then they leak an internal memo and as a result tell the world that they have been left behind and risk being left behind for good if they do not embrace a new era of change and stop missing opportunities such as RSS, Skype, Blackberry, etc etc etc. And it looks like Ray Ozzie is increasingly setting product and technology direction - not Billie.

Now we hear that Microsoft is trying to lobby for the US government and US companies to help them fight the anti-trust hearings that went against them in Europe last year! Microsoft needing help from the US establishment? That's a first.

All of these tremors coming out of Seattle are the signs of a company that is running scared and confused. Microsoft is being attacked on so many fronts that they seem to be struggling to keep their balance. They need to take a collective sigh and focus on the new direction. It will be scary for them as in the world of software as internet service where it is often free, they are laggards and running from far behind the pack.

It may take Microsoft two years to stop the rot and change direction for real. By then, Google, Nokia,, Linux, SUN, etc etc etc will be even further ahead. They have to stay the course. And will need to go through many more iterations before Microsoft can make anything of it. Good luck guys.

Thursday, November 10, 2005

Thurs - Ex Microsoft and Oracle CFO becomes CEO at Liberty Media

John Malone has persuaded Greg Maffei, up until recently CFO at Oracle to join Liberty Media as CEO.

Liberty Media is a loosish collection of investements in Cable and media assets. Liberty Media owns QVC, Starz Encore and a controversial 19% ownership in News Corp. John Malone believes passionately that media companies need to change in the face of the broadband internet in particular.

Maffei seems a good match, having experience in the tech sector, in cable and in telecomms and a staunch M&A deal guy. This must mean that Liberty will soon be back on the acquisition path and could be bad news for Murdoch at News Corp?!

Wednesday, November 09, 2005

Wed - Microsoft's memos show fear of being left behind

Today the press is awash with leaks of Microsoft internal memo's showing that they are in fact etxremely concerned about the threat that the software services revolution could have on their business.

The software services revolution, they now recognize, has two terrifying potential implications for Microsofts current modus operandi. 1. Software is bought and used oiver the internet, not via CD's. 2. The software is often free - its the service that makes the money. Google of course are often cited as the almost perfect example. None of us pay to use Google's search software, or email service etc etc. They make money from the adverts they show us.

If you take software as services to its utlimate natural conclusion - which of course may never happen - then one could argue that all software will one day be free and either delivered by cyber software philanthropists and an open source style movement or bundled with a service.

And the software services revoltion is gathering intense momentum and creating huge franchises for at least Google and Yahoo. Microsoft's late to the game and will have to do a lot better than '!!' But Billie seems serious and Microsoft has little choice.

And Microsoft seems to be changing. One interesting development is that Ray Ozzie, a techie guru only brought into Microsoft recently and a big believer in online services (he invented Lotus Notes) is increasingly the voice of technology change and even strategy at Microsoft. So, can he with Billie and Stevie turn the Microsoft ship around fast enough? Probably, if they all push in the same direction and go like hell.

Either way, the software industry is in for one massive new change. We must at least thank Google and even Mr Ozzie for that.

Wed - Cable & Wireless a private equity target?

Private equity groups seem to be extremely busy running their rulers over European telco assets. After all the industry is ripe for consolidation as we keep stating here at TechBoard. But, today we had an interesting jab from Cable & Wirelss stating that because of their lack lustre share price over the last few months, they believe that they must now be a private equity target.

It seems that their management might even be happier running C&W as a private company rather than having to put up with the vagaries of the market - have they ever worked with private equity outfits?

And perhaps they are dodging the real issue which is that even though C&W has made real progress under Caio and Lapthorne, it is still largely a fixed line voice company that is a little behind the broadband curve. I'm not sure that the acquisition of Energis really changes this. And investors have gone more sour on fixed line only telco's.

The part of the business that really makes money is their Carribean franchise. Which is nice if you like the sun, but probably a little far removed for their investors to get too excited about.

So where should C&W go? Well, its probably a little too late for them to try and get into the faster growing mobile game - so their only option other than getting bought out now is to batter down the hatchets, ignore their share price and keep focusing on being a strong broadband provider in their markets as well as providing corporate telco services.

This doesn't sound very sexy and its going to be tough hanging in their while they wait to upgrade their networks, but broadband is the future and they have a sensible balance sheet. Plus, the list of companies leaving the UK voice market just keeps growing. They could thrive just by being a survivor. At least their a stronger number 2 to BT again?! Oh, and both BT and C&W must be kicking themselves for not having any real mobile assets today. Wi-Fi's their only hope now.

Wed - Pixar flying with profits surge

Pixar Animation sprang a surprise for their investors and the market as they announced 3rd quarter profits about double the level film studio said they were expecting. I guess that means this was a surprise to Pixar as well?

Pixar released no new films for the quarter, but did well from home video/DVD sales of library movies, particularly Finding Nemo and Toy Story.

Pixar has had a bit of a tough run recently, so some good news has to be welcome and indeed their stock price shot up 10% last night. Mind you, things need to get better, as their revenues and earnings for the last quarter were broadly flat on the same quarter last year.

Is Mr Jobs too focused on Apple? I mean, its not like animation is no longer the rage. Maybe there's just more competition.

Tuesday, November 08, 2005

Tues - Microsoft targets server growth and launches SQL 5

So five years later Microsoft finally launches SQL Server 5. I mean, how many tech companies could genuinely survive a 5 year major product development cycle that looks around 2 years late? Well, it seems Microsoft can. For, infact, the Server division, responsible for SQL Server and other products and tools is thriving.

Microsoft's server division has become its most significant source of growth. It has contributed more than any other part of the group to Microsoft's overall growth over the last 4 years. This has accelerated over the last few quarters, with the division accounting for 40% of grwoth in its last fiscal year to end June, and 49% in the most recent quarter.

With revenues set to grow above $10bn this year, the server division has become Microsofts first truly successful venture beyond the desktop. This should make Oracle more than a little concerned and make sense of their attempts to diversify their business more and more into applications.

Mind you, its not all rosy at Microsoft's server division. They have to get future release cycles down to 2 years and still pack enough features to compete effectively. They also have to stave off the ever growing threat from open source products (Apache in particular) and they heve to keep the anti-trust folks at bay. But, hey - its Microsoft - no problemo!

Tues - Wind another consolidator in European Telecoms?

Wind, seems to be on the mend and making noises about buying other European telco assets. After all, Wind, the phone and internet company Egyptian financier Naguib Sawiris bought from Italian utility Enel in August had a 3rd quarter profit from a year ago loss as it added customers.

The aptly named Weather Investments, Mr Sawiri's buy-out vehicle, bought Wind in a bid valuing the business at nearly $15bn. He plans to use Wind to expand wireless operations into Europe. He certainly has a brand there - even though the Brits may have a few baked beans jokes for it!

Given that Sawiri is also Chairman of Orascom Telecom which runs wireless networks in 7 Middle Eastern countries, he could be on the verge of building a pan European and Middle Eastern regional powerhouse. So, it looks like Europe may get yet another telco consilidator. They surely can't all win(d)?!

Tues - KPN denies its a takeover target??

KPN, the Dutch telco, yesterday rebutted suggestions that it had become vulnerable to a takeover as consolidation gathered pace across Europe with Telefonica, the spanish group taking over O2 of the UK.

The fun part about this statement is that only recently KPN looked like a bidder for O2 themselves, only to be outgunned by the Spanish. So what is KPN on about? Well, their statement is really corporate mumbo jombo for "we're keeping our options open and our price high".

Ther fact that they're cutting costs, including R&D, and increasing earnings and positive cashflow smell to me like their both trying to increase their short term worth in case of a bid whilst also increasing their cash incase they want to buy something - TDC? Who knows. But I'm not sure that standing still is the best outcome for small regional operators such as KPN - either get merging or get merged!

Monday, November 07, 2005

Mon - Microsoft launches database and apps

Microsoft today officially launches SQL Server 2005, delayed several times as engineers sought to make the software more reliable and secure.

Apart from databases, both Microsoft and Oracle are investing in business software, which allows companies to track customer accounts, manage payroll, finances and human resources.

Along with SQL Server, Microsoft is also launching Visual Studio 2005, a software tools program used to create applications, and said it would launch a program for tracking business processes, called BizTalk Server 2006, next year.

In order to promote the use of SQL Server and Visual Studio, Microsoft also said that it would offer free versions of the two programs for personal use so that individuals can create their own databases, Web sites and software programs.

For me the interesting part is that last announcement. Microsoft is finally giving in to two key trends: free software, thanks to the open source movement, and server based software, thanks to their announcement last week vis a vis 'live'.

Microsoft really must be afraid of both Google and Linux!

Mon - Deutsche Telekom to focus on US market?

After Deutsche Telekom decided not to challenge Telefonica's bid for the UK and German mobile operator, O2, industry pundits are now focussed on where Deutsche Telekom is likely to aim their sights. After all, it seems that Deutsche could get away with spending around $25bn on acquisitions given their sucess in reducing debt and restructuring their balance sheet over the last few years.

Well, it looks as though a transformational mobile phone acquisition is not the most likely outcome, which will of course depress the hell out of all those M&A bankers. It looks like Deutsche may instead focus on expanding T-Mobile agressively in the US.

T-Mobile today is the 4th largest mobile phone operator in the US, with particular traction on the east coast. But they're a distant 4th. And there isn't really anyone left for them to merge with given that AT&T Mobile got swallowed by Cingular and Nextel merged with Sprint.

So instead Deutsche Telekom is going to try and grow the T-Mobile franchise organically and invest $5-10bn over the next few years in upgrading their network to mobile broadband. Mind you, given that is what all the other leading US operators will be doing I'm not quite sure how this differentiates them. Maybe its because T-Mobile know about doing mobile broadband because they've already done it in Europe??

Given that T-Mobile has failed in building a truly pan-European mobile network to take on Vodafone and perhaps Orange, and given that they are a weak 4th in the US market, I can't help feeling that Deutsche Telekom will need to do more with their $25bn if they want to be a world leader in mobile telecoms.

Sunday, November 06, 2005

Sun - SAP to attack banking sector

SAP's CEO has announced that they want to get more aggressive in the banking sector, particularly in the US and Asia. This seems to be a direct shot at Oracle who has particular strength in the banking niche.

The war between SAP and Oracle just gets louder and louder and even SAP admits that competition is fierce and as a result margins are getting tighter. SAP has the edge at the moment, but if Oracle can get it together, they'll have to move hard and fast to keep gaining market share.

Oh, and seeing as Microsoft has gone and gotten al religious about on demand software - when will Oracle and SAP throw their hats in too?!

Friday, November 04, 2005

Fri - Another big announcement just in from Autonomy

Autonomy has just agreed to buy U.S. peer Verity Inc for $500M in cash to gain a dominant position in the information handling software market and boost earnings.

Autonomy said it was raising 153 million pounds via a fully-underwritten rights issue to help pay for Sunnyvale, California-based Verity which supplies search and process management software to 15,000 customers worldwide.

This is a strong move by Autonomy and one that should allow them to keep extending their lead in the market for corporate search software.

Fri - OK so Microsoft are definitely trying to become Google

This has been an extraordinary week for Microsoft. First they tell us that they are planning to become the on demand software company of the future, beating back current leader Google. Today they tell us that they're going to beat Google at making a bunch more library books available over the internet.

Given that Microsoft are a little legally jaded after numerous settlements and fines over the last bunch of years we can't help feeling that they may keep their efforts focussed on books they can legally scan - i.e. probably pre 1923 and considered to be in the public domain.

Mind you, not wishing to be out Microsofted, Amazon today announced that they're planning to sell single pages of books over the internet. This is presumably the book worlds equivalent of iTunes - instead we now have iPages...or whatever. Quite why you'd want to read/buy/whatever one page of a book over the web I can't quite figure out - but I'm sure I'm missing something - I normally do!

Fri - Search all the rage as Autonomy out-performs

Autonomy, the UK provider of search software tools more than doubled their profits in the first 9 months as an increasing number of companies adopted their technology to search and manage unstructured data. Revenues also rose 21% year on year.

The interesting opportunity facing Autonomy is whether they can drive home technology recently developed which allows TV and video clips to be searched and catalogued. This allows bradcasters, content owners and mobile telephone companies to offer on-demand content services over the internet. And boy do they need the help.

Apparently Autonomy recently signed a deal with a European broadcaster. Getting this piece right is not only imperative for Autonomy, but could really help take IP content to the next level. Let,s hope.

Fri - Oracle keeps losing CFO's

Oracle has just lost their second CFO this year. This time, the ex-Microsoft CFO, Greg Maffel, only at Oracle since June has suddenly departed. His predecessor, Harry You had only been at the company for a year.

The rumours seem to state that Maffei lost a political battle with Oracle President Safra Catz. Ms Catz will now assume the CFO responsibilities as well as being in charge of global operations.

These shenanigans seem a little inapropriate for a company the size of Oracle and a dangerous distraction given all the challenges they have in integrating their various acquisitions. Oracle seems to be a little prone to shoot themselves in the foot and are allowing SAP an easier ride than they might.

Not surprisingly Oracles stock price has been punished.

Thursday, November 03, 2005

Thurs - Nokia getting big on multimedia converged handsets

Nokia is about to launch a bunch of multimedia handsets that they hope will allow them to steal a march on the market as they anticipate a merger of the telco industry with information technology, consumer electronics and broadcasting.

Their new N series handsets will allow users to watch and record live TV and exchange content like music and photos with electronic equipment in the home. They are also introducing a new internet browsing tool which will enhance the internet experience on a small display.

Their new N series for corporates will allow email users to send attachments on mobil phones more securely and easily. This could be bad news for Blackberry.

Nokia believes that the market for such multimedia or smartphone devices will double to 100M next year. This is becoming a major niche in the overall mobile landscape. I can't help feeling Nokia is really onto something. Oh, so when will they announce something with Google - everyone else is!

Thurs - leading US cable groups to offer wireless services

Four leading US cable companies, including Comcast and Time Warner Cable have entered the fast growing wireless arena in a joint venture with Sprint Nextel.

This looks like a smart move on both sides. The four cable companies get to take the triple play of TV, telephony and internet access to the next level with the quadruple play including wireless also.

This will help them compete better against the big Telco players such as Verizon and SBC now AT&T. Both of these monster telco companies are about to launch their own pay-TV services and therefore have an automatic quadruple play.

For Sprint this gives them instant access to all the cable companies customers. It should be good for consumers too as services will become more integrated and prices will keep coming down.

Thurs - Swisscom circling Eircom?

Rumours seem to be circling that Swisscom may be approaching Eircom about a potential bid that could be worth around $4.5bn.

The leading Swiss telco buying the leading Irish telco looks interesting but not as strategically compelling as Swisscom buying TDC. TDC after all gives them access to multiple European markets whereas Eircom just the Irish market.

I can't help feeling that Swisscom may do better to spend their $12bn acquisition cash pile on trying to become at least a mid size player in a few relevant European countries than just a player in Switzerland and Ireland.

Maybe they're thinking buying Eircom and another player?? We'll see soon.

Wednesday, November 02, 2005

Wed - Time Warner extends stock buy back

Time Warner, the world’s largest media group, today lifted its share buyback programme by $7.5bn as it reported an 80% rise in 3rd quarter net profits.

The company said it now planned to repurchase $12.5bn of stock over the next 21 months rather than the $5bn originally announced in August.

I guess Mr Icahn is getting his way after all. Or, is this just a technique to keep him at bay while Time Warner makes their own decisions on what to do with their cable business and with AOL. We should find out very soon.

And with Microsoft's latest announcements and their launch of what's really going on with their discussions about merging MSN and AOL? It either looks more likely to happen - or just more stupid. And, of course, Parsons must never underestimate Microsoft!

Wed - ivillage up for sale?

It seems that ivillage, the pioneering womens web content business that includes and, is likely to get sold. They have apparently decided that they should take advantage of increased interest in internet businesses by both media companies and web portals.

It seems as though ivillage has asked JPMorgan to consider a sale. It looks like they may go for a price tab nearing $700M. Not bad for a company that had revenues last year of $70M and around $2.5M in profits. If they can achieve such a valuation then good on them, particularly as today their worth around $550M.

Wed - Deutshe Telekom will not bid for O2 - announces lay-offs instead

Deutsche Telekom today announced that they will not bid for O2, the UK and German mobile phone operator, so leaving the deal to Telefonica of Spain to complete.

Instead Deutsche Telekom announced that their fixed line business is increasinlgy challenged by competition and regulatory pressures, to the point where they will have to lay-off 19,000 employees.

It seems as though both their traditional fixed line voice business and their emerging broadband business are struggling. This is negative for the German incumbant. Struggling in fixed line voice is no surprise, but also struggling in broadband adoption is concerning. Oh dear, yet another blow to Germany!

Tuesday, November 01, 2005

Tues - Sprint challenges Apples iTunes

Sprint today announced the launch of their direct-to-mobile music download service to rival Apple's iTunes and Motorla's ROKR.

The Sprint Music Store will enable Sprint Nextel subscribers to choose from 250,000 songs from all 4 major music labels and download them for $2.50. This is more expensive than iTunes 99c's, but you get two copies of each song - one direct to your mobile and one to your PC.

Currently Apple's iTunes is only downloadable to your PC or music player. The Motorola ROKR downloads songs from the PC, not from their mobile network. Srpint Nextel is launching devices made by Sanyo and Samsung which will enable the service.

This looks to me like the first truly meaningful challenge to iTunes. The idea of a mobile phone becoming as powerful as a music player in both downloading and storing songs is compelling. Expect other carriers to come out with similar services soon, putting even more pressure on Apple.

Tues - Sky in mobile TV deal with Vodafone

Sky and Vodafone are launching a 3G mobile television service that will include Sky News, Sky Sports News, and entertainment channels including Living TV, Bravo and MTV.

The service will be available to all Vodafone 3G subscribers in the UK from Tuesday. Mobile phone operators are preparing for a 3G marketing push this Christmas. Vodafone is hoping to increase its base of 250,000 3G by the end of the year.

Look for 3G handsets and data/media deals such as this one to drive the European and US markets for this Xmas season. Sprints announcement today that they're taking on iTunes with their direct-to-mobile music download service is another example.

Everyone has been predicting for a while that Xmas 2005 will see that real coming of 3G on mobile phones. They will not be wrong. Finally. Oh, and where's my nearest Vodafone store - this deal I like!

Tues - Online travel bookings up 25% on last year

JupiterResearch has just brought out a report that shows that online travel, the largest e-commerce category, went up 35% last year. They predict that online travel will account for a third of all US travel sales by 2010, a big ouch for travel agents.

They cite both greater numbers of online consumers and an increase in travel products as key reasons for the increase. It also looks like the web sites of suppliers, from airlines to hotel groups, will increase their share of online travel, at the expense of the Travelocities and Expedias of this world.

Flights will continue to be by far the largest sector of online travel. The US market is a key indicator of where international markets are heading as well, all be it that the international markets are a few years behind.