Wednesday, May 31, 2006

Yahoo takes on Google with user generated video service

Yahoo is taking on Google and start-up YouTube with a service that allows users to upload and share their videos.

Yahoo Video, which will apparently maunch tomorrow (ooh, this could almost be a scoop!), will compete directly with Google Video but will initially earn revenues only from ads placed on its pages.

We'll update tomorrow - but ad based online video is the future. Finally!

New Sun CEO Schwartz makes his first major move - cost reductions!

Sun Microsystems new CEO Jonathan Schwartz today made his first major move following a month long review of the company. He will lay off 4,000 to 5,000 employees -11% to 13% of Sun's workforce - over the next six months to help the computer maker return to consistent profitability.

Wall Street has for a while been pushing Sun to reduce costs in recognition of the lower growth that they can achieve since the dot com days, but it took founder Scott McNealy moving aside for it to happen.

Given Sun's reorganisation and refocusing toward software and storage as well as more commoditised servers, the cost alignment is probably sensible to do. And with Sun's new product line-up - they may even be able to get back to profitable growth going forwards. Now that would make investaors smile!

Google announces they will not build browser to compete with Microsoft's Explorer

According to Reuters Google has no plans to build its own Web browser software to compete with rival Microsoft, Chief Executive Eric Schmidt stated today.

During a conference call with Wall Street analysts, Schmidt dismissed speculation that the company aimed to tie together its Web search and other services to compete with Microsoft's Internet Explorer, the world's dominant Web browser.

Der, of course not - they'll just buy Firefox instead!

AMD takes on Intel with media-center strategy

AMD has just gone 'live' with their media-center chip strategy to take on Inel's Viiv! And PC's running AMD Live will ship in the coming days from HP. AMD's product strategy is aimed at creating a media-center PC that will help people organize, distribute and share their content.

And they are also launching a suite of applications and services meant to assist people in designing and operating digital entertainment systems.

The Live Entertainment Suite will offer a bunch of interesting features. One, called AMD Live On Demand, is designed to offer a service, via Orb Networks, to stream live or prerecorded television shows, photos, music and movies to devices connected to the Internet. The suite will also include an application tool that aims to compress recorded TV shows, allowing more shows to be stored on a PC. It will also offer 25GB of free storage via AMD's Live Media Vault and a service to set up and manage a home network.

AMD is planning to expand its Live product line later in the year with the capability to show Internet content on a user's television screen - which is the way to go, cos people want TV's in their living rooms and not PC's whatever Microsoft say.

And talking of Microsoft - how do they feel about AMD's 'Live' branding which clearly clashes with their software as services play similarly named 'Live'.

Either way, AMD's move is another step toward media centric PC's becoming mass market.

Let the PC price war continue!

Lenovo, the world's third-largest PC maker, said that profit growth will not be a priority this year and that it is ready to cut prices to keep up with rivals, as it focuses on expanding market share.

"For this year, the goal is revenue growth. And we hope profits will improve, but that's not our primary objective," Chairman Yang Yuanqing told Reuters. "This year's profit won't be worse than last year's."

Bingo - let the PC price war begin! Dell, HP and Lenovo are going to go full at eachother this year and they're gonna have to pile the features in as well, cos Wi-Fi, 3G, video, conference calling and music playing are all must haves going forwards.

They all need to watch the left field, because Apple could become the wild card in the space.

Oh, and the ultimate battle may actually be over dominance of the laptop market. That could even bode well for Lenovo.

Disney to sell movies over the Web through CinemaNow

Walt Disney is the latest Hollywood studio to offer movies for sale via the Internet by providing films like recent thriller "Flightplan" to CinemaNow.

CinemaNow, which is based in Santa Monica, Calif., said Disney's home video division, Buena Vista Home Entertainment, will offer movies on a download-to-own basis for PCs and portable devices on the same day they are available on DVD, starting June 6th.

Two web destinations seem to be inking all the key deals in the online world right now, CinemaNow and long time rival Movielink.

And like the standards wars for video and DVD formats the studios are backing two horses. Universal Pictures, Sony Pictures Entertainment, Warner Bros., Metro-Goldwyn-Mayer and Paramount Pictures offer download-to-own films via Movielink. While CinemaNow offers movies from Sony, MGM and LionsGate Entertainment.

But it won't be long before the big boys Yahoo, Google, Amazon and Apple will be breathing down their necks.

The US' ADC to buy Andrews in the continued consolidation of network equipment market

US Network equipment maker ADC has agreed to buy smaller rival Andrew Corp for about $2 billion in stock to meet rising customer demand for high-speed data and video services.

ADC Telecommunications Inc.'s wireline technology and Andrew's wireless infrastructure products would bolster the combined company's position amid the convergence of wireless, high-speed Internet, video, data and voice services.

The consolidation of the telco and network equipment market continues unabated. Expect more deals in the not too distant future and expect the Chinese network equipment guys to start getting more agressive internationally.

Tuesday, May 30, 2006

US Internet advertising soars in 1st quarter

US Internet advertising surged 38% to a record $3.9 billion in the first quarter as marketers moved additional dollars to the Web. It was even up 6% on the seasonally whopping Q4 of last year.

The Interactive Advertising Bureau and PricewaterhouseCoopers surveyed leading companies that sell advertising space online, including Yahoo and Google, which are benefiting as consumers spend more of their media and purchasing time on the Internet.

I guess we can expect good results from both companies going forwards - surprise, surprise!! And with Google getting into video ads and Yahoo getting better at search based ads expect both companies too keep growing their market share through this year.

And what a growth market it has been, growing to a $12.5 billion industry last year from less than $1 billion in 1997! I guess TechBoard should advertise more - what do you all think?!

Monday, May 29, 2006

AMD to boost chip production and invest in Germany!

Advanced Micro Devices (AMD), the No. 2 maker of microchips for PC's, announced today that they will spend an additional $2.5 billion to upgrade and expand their two factories in Germany.

AMD is both boosting production and upgrading chip production methods as they continue to take market share from Intel and prepare to saitsfy Dell's orders for high end servers.

This is also a most welcome boost for Germany and the 420 odd new workers that will be hired a rare kicker for local employment challenges.

Sunday, May 28, 2006

The iPod and mobile phone finally take PDA's to the masses!

Apple put out a press release a couple of days ago that got me thinking. It announced Apple selling PowerSchool, their student information systems division, to Pearson. And on the back of it Apple have agreed a ground breaking agreement with Pearson whereby they will develop educational content for teachers and students compatible with iPod. Given that Pearson are one of the largest educational publishers in the world, this is no small achievement.

And what it really proves is that the iPod is fast going way beyond its roots as a music player and is now becoming a powerful handheld computer, which will soon carry a plethora of applications, only one of which will be iTunes. The iPod will take off where the Newton collapsed - as the first truly mass market PDA!

When Personal Digital Assistants (PDA's) hit the market around 25 years ago everyone thought that the killer application which would take the PDA mass market would be the digital diary/agenda. How wrong they proved to be. The diary/agenda PDA managed sales of no more than around 11M per year at its peak.

No, the killer applications for the mass market PDA will prove to be music and mobile communications and the devices that will deliver the promise will be the iPod and mobile smartphones. Both are now selling in the tens of millions.

So to go full circle back to Apple's iPod, they just need launch an iPod Smartphone and they could have it all. If they do not - Nokia, Motorola, Samsung and Sony Ericsson will one day eat their lunch.

Friday, May 26, 2006

Vonage's catch 22

CNET wrote an interesting piece today on 'Vonage future looks troubled'. Indeed poor old Vonage could not have had much worse a debut as a public company. On the first day their shares slumped 13% which is the worse first day performance of any company for 2 years. But then to make matters worse, on their second day (yesterday) they fell another 10% odd.

And the pundits are now betting that their stock will continue to fall into the single digits over the next few days. And more and more people are asking why Vonage went public at all. After all, they have huge losses, they are still a young company and the stock markets in general are in a mess right now.

Having been there myself and having pulled two IPO's of company's I was running at the time, I think I understand the Vonage catch 22. For the reality is that they had little choice but to go public, alomst whatever the circumstances. For the private markets would probably not sustain another offering large enough (they have already raised plenty of private money) and they need the money to keep dominating the market (and now fighting off increased competition).

For even though the timing may be bad from a stock market perepsctive, the timing is correct from a VOIP market perspective. The US VOIP market is taking off big time right now - and the market share battles will probably be won or lost this year and next. So Vonage have to raise the money now or risk losing considerable market share to Verizon, Time Warner, Comcast or Skype.

And if Vonage can only pull the stops out and execute superbly this year then they may even look cheap at the current prices. Some might argue that if Vonage do hit the single digits then that is the time to buy them. Could that include AT&T snapping them up? Let's see.

Murdoch's UK Times newspaper to launch in US

The Times, Rupert Murdoch's London-based newspaper, is launching a US edition next month that will be printed at facilities owned by its News Corp sibling the New York Post. The move apparently comes following the recent popularity of its international online version in the US.

This is indeed an interesting if somewhat strange move at a time when most newspapers are retrenching/struggling following reductions in readership and print ad dollars/pounds/euoro's/whatever!

But it does mark an interesting milestone as the move has been led by the success of its online version. Indeed it could be that online newspapers will increasingly become testbeds for international markets and are certainly a lot cheaper than a full blown print tests.

The questions is who will read the US version of the Times? I guess initially British expats who recognize and value(?) the brand. Mind you, given that they have chosen to launch it as the World Cup soccer commences - no prizes for guessing what content they'll be focussing on to attract new readers.

Oh and it'll cost $1 which will at least make it cheaper than the US version of the Financial Times!! Tough luck America, you're about to experience a daily dose of UK style broadsheet journalism.

Thursday, May 25, 2006

Google software to come pre-shipped on Dell computers

Google has beaten out Microsoft and Yahoo in a deal which could see their software come pre-installed on up to 100M Dell computers over the next few years. This is a major victory for Google, but probably also an expensive one.

Under a 3 year pact, Google, will pay Dell to have its desktop software for searching the content of a user's hard drive and emails, and a Web browser search toolbar installed on their computers. Dell will also set the default search engine for users to Google's offering. Buyers of Dell PCs will have their browser home page set to a co-branded Dell and Google site.

Industry analysts have apparently proven that software that comes pre-packaged is more likely to be used. Der yeah! So Google can finally take a slice from Microsoft's play-sheet. Expect more such agreements with other PC manufacturers as well as mobile phone operators.

Yahoo and Ebay announce far reaching alliance - what's it really about?

Yahoo and Ebay have just announced a far reaching and not so surprising alliance. It's design is primarily for the web portal king (Yahoo der!) and the e-commerce queen (Ebay with less der!) to get together and initially generate more revenues - Ebay runs text and banner ads for the first time and Yahoo gets a new ad partner/customer. But that's just the short term stuff.

Longer term this partnership is designed to leverage the unique assets that both companies have to keep them strong versus the expanding power of Google and MySpace. For both have cracked a model which allows them to deliver a broad set of ad based and commerce based services. So both Yahoo and Ebay fear that their businesses will suffer increasingly at the hands of the other two.

And yet, neither Yahoo nor Ebay want to (or can afford to) go it alone and fight on both portal and commerce lines. If they join together and cross promote to each other's communities they can focus on their strengths while still undermining Google and MySpace future attempts to bury them both.

So Yahoo will promote Ebay more and more to their users as well as integrating PayPal for Yahoo users to pay for Yahoo goods and services. Yahoo will also likely integrate Skype more closely with Yahoo Messenger - with Ebay "click to call" a good starting point.

But down the line we could see Yahoo and Ebay offering joint products leveraging eachother's core strengths to further hurt their core competitors. Ebay may offer a content marketplace for Yahoo Music and Video etc.

While the partnership is a positive move for both parties it probably will not affect Google or MySpace too much - in fact it may make them compete with Yahoo and Ebay even more as they need not worry about being nice to them any longer.

The competitor that is worse affected by this announcement is Microsoft's MSN for they hoped to partner with both Yahoo and Ebay. Oh well, back to the partner drawing board for Microsoft.

Wednesday, May 24, 2006

XM Satellite Radio growth slowing?

XM Satellite Radio, the US satellite radio leader, has just lowered its forecast for new subscribers this year, citing regulatory and legal challenges. And their share price slumped 5% on the back of it.

Could it be that satellite radio subscriber growth is slowing? Or is XM losing the battle to upstart Sirius? I am sure that we will find numerous answers to these questions as more statistics come out over the next few days, BUT, I can't help feeling that satellite radio growth is not only slowing but may peak out earlier than most expect.

Given all the competing media and communications bills we pay today, including cable bills, telephone bills, hi-speed Internet bills, Wi-Fi access fees and mobile phone bills, I can't help wondering whether a satellite radio bill on top of all the other near essentials will cap users at the wealthier few?? Let's see!

China Mobile to acquire Millicom

China Mobile, the worlds largest mobile operator by number of subscribers, is near a $5.3 billion agreement to acquire Millicom International Cellular SA of Luxembourg, operator of mobile-telephone services in many of the world's poorest nations, in what would be the biggest-ever overseas acquisition by any Chinese company.

First it was Lenovo buying IBM's PC business, now it's China Mobiles turn. This is the beginning of a trend towards Chinese (and other Asian) technology and communications companies gearing up for international success.

And on China Mobiles coat tails will follow their mainly Chinese suppliers, such as telecom-equipment maker Huawei Technologies of Shenzhen, in addition to handset makers, engineers and others.

This is a strong and sensible move by China Mobile. Look out Vodafone, Orange, Telefonica, T-Mobile, Cingular etc!

Ooops, Vonage shares dip in first day as public company

I wrote a piece last night on Vonages's IPO today on Nasdaq. Guess I was wrong about the bit where they should have a solid debut as their short term prospects looked good!

Shares in Vonage, were down 7% in early trading on the New York Stock Exchange to $15.80 today following the company’s IPO, priced at $17. Ooops!

Let's hope for them that this is just a short term dip reflecting the general negative mood on Wall Street. For if they sustain such weakness they will struggle to raise follow on money that they are bound to need to fund the huge marketing costs necessary to remain an independent company.

Or maybe someone will come along and buy them sooner - and at a cheaper price!?

Tuesday, May 23, 2006

Vonage set to go public tomorrow - what's in store for them?

Vonage is set to go public tomorrow on NYSE raising around $500M. They should price later tonight. It is abold move by the leading US VOIP provider given the negative state of the US equity markets.

But, thanks to the size of the deal and the rise in popularity in Internet telephony, they should do fine tomorrow. Indeed Vonage should be OK for a while as the US VOIP market takes off and as their existing customer base of over 1.6M displays such low churn rates (around 2%).

Plus, Vonage today has over 60% of US VOIP users, which is a strong hold on a growth market that is set to top 15M users over the next few years. So short term prospects for Vonage look good, assuming you are OK with the amount of marketing money they need to spend and their continued losses.

It is beyond the next couple of years that concerns us more. For as VOIP becomes increasingly mainstream and competition hots up, I can't help feeling that Vonage will struggle if they are still an independent player, for the name of the game across all communications services will be bundling.

The leading telco's, cable companies and Internet companies will package VOIP with other services and discount it so heavily that Vonage may struggle. Probably the best option for them will be to sell out as international VOIP leader Skype have already. With Vonage's hold on their customer base some telco or cable outfit should get interested in them.

The question will be at what price - tomorrow will tell a great deal.

Nike shoes to talk to iPod and display distance run and more!

Nike and Apple have just announced a new system to be launched soon that will enable certain Nike shoes to talk to an iPod and have it display distance information and much more.

Using a Nike+iPod Sports Kit, expected to retail for about $29, consumers will be able to access distance, time, pace and calories burned on the screen of a nano version of the iPod via a sensor inside the shoes that communicates with the digital music player.

The kit will be available in stores within two months and other products will follow.

This is wild! And evidence of just how pervasive and compelling the iPod is becoming. Also, note how the iPod is now as much a computing platform for a plethora of future applications as it is a music/video player.

Expect your iPod to also become a remote control, a phone, a dictaphone and much more within the next couple of years. This Nike partnership is just the beginning of a whole new world for iPod users.

Google launches video ads and takes first steps toward TV advertising

Google is taking its first steps to go after the huge market for television advertising this week with a new service that will place video commercials on the many Web sites where it sells advertising.

Google will not yet run video ads on their own sites, but will offer them across the hundreds of thousands of web sites that run their ad system. In the future, Gooogle is likely to branch into offering such video ads on their own sites as well as on TV!

The ads will be offered through the same auction system for existing text and image ads, and they will resemble an image ad until the user clicks on it - then a video will kick in.

Google is clearly making the first tentative foray into the banner ad world as well stepping lightly toward colourful image and video ads on their own sites. Plus, these video ads will allow Google to beat a straight path toward their advertising system enveloping PC's, TV, radio and mobile phones.

Within a couple of years from now Google will offfer one of the most comprehensive ad networks on the planet, both in terms of types of ads as well as a broad range of devices. Of course the Yahoo's and MSN's of this world will not be far behind.

Video is fast becoming the killer app for so many aspects of the broadband Internet and as a result, moves such as this and AOL's acquisition of Lighteningcast last week, will see TV style free programming spread across the web with video ads inserted. And this development more than any other will enable Internet TV and video to go mainstream.

Monday, May 22, 2006

Google's share of search market continues to grow

Google's share of the US Web search market continues to edge beyond Yahoo and Microsoft, according to the latest monthly numbers released by analysis firm ComScore Networks.

Google's increased to 43.1%, whereas Yahoo's stood still and MSN and AOL saw further slumps, proving how challenged both companies are in trying to keep up with the one two of Google and Yahoo.

Perhaps most interesting is the new kid on the block, for MySpace got on the list for the first time ever at 6th place. Even though their share was paltry at half a percent, the arrival of social networking is marked.

And so too, the reality that MySpace will be one of the portal's of tomorrow. The only trend I feel strongly about is that MySpace is here to stay and that their share of the US search market is destined to go up and not down.

Microsoft announces cheap 'pay as you go' PC's

Microsoft today announced the latest drive in an attempt to sell cheap PC's to emerging markets with the 'pay as you go' PC. The program is called FlexGo and will allow users to basically rent the core software inside a PC using a scratch card to tally and automatically charge every time they use it, instead of paying for the entire bundle up front.

This will allow a normally $600 PC to be sold out of the box for around $300 with FlexGo. The PC will recognize the scratch card you buy and take untis of money off it every time you use the PC - I guess until the point when you have repaid the $300?

The principle works similarly to that of pre-paid mobile phones, where the hardware and software costs are sold cheap, with the user paying the device off over time by using it for calls etc.

I just wonder whether Micrisift is going far enough. Surely it would be better to sell the PC for $300 and then rent the software to the user for free, subsidized by adverstising revenues rather than a prepaid scratch card. Now that would truly revolutionize the PC market.

Or maybe Google should do it in partnership with Dell. Dell could sure use the boost right now.

Friday, May 19, 2006

AT&T looks back on plan with Internet TV rollout - can they ultimately win the digital TV race?

AT&T has announced that they are on plan to offer television service in 15 to 20 US markets by the end of the year, a sign that the company may be overcoming the hurdles imposed by its decision to use a new Internet technology to deliver TV signals.

AT&T decided to go with Internet TV technology running along existing phone lines rather than upgrade their entire network as Verizon have opted at considerably greater expense. That puts Verizon ahead of the game with their rollout of fibre optic TV-on-demand, but AT&T are sticking to their objective of spending $4.6 billion to make TV available to 19 million homes in 41 markets by the end of 2008.

That means that in 2007 the real acid test for telco TV will start. Many a scpetic is wondering whether telco's can realistically compete with cable and satellite companies. Mind you there was a time when people were sceptical of cable companies successfully selling phone services - they were wrong about that one!

By 2010 digital TV-on-demand will be mainstream with a critical mass of users and the providers will be fiercely competing for eachothers customers. The challenge today is to figure out who will be the ultimate winners from cable/satellite providers, telco's and Internet portals such as Yahoo, Google, MSN, AOL and MySpace.

The answer may lie in who is the first to merge rather than the first to roll out or gain the greatest share of viewers. It also puts Time Warner and News Corps in strong positions, because they are the only players today who own both cable/satellite assets as well as Internet portals. So, right now my money would have to be on one of them.

Should Comcast merge or partner very tightly with Google, my view could change.

Thursday, May 18, 2006

Dell has finally decided to use AMD chips!

Dell has finally decided to use AMD chips as well as Intel chips. This is a major kick in the pants to troubled Intel and a sign of the growing power and competitiveness of AMD.

Dell has had to change tack from it's long time Intel only strategy as it has lost revenues and market share to a highly rejuvinated HP who has managed to beat Dell at their own game by installing cheaper componets and so offering lower price computers without losing margin.

Dell just announced their latest quarterly results in which net income slipped 18% as revenue rose 6% to $14.22 billion, in line with the company's lowered forecast. Analysts will not be surprised but will continue to be concerned about Dell's future.

Could IBM, Microsoft or Google buy SAP?

Reuters has just reported that a SAP co-founder and major shareholder said that only three US companies are capable of buying the world's biggest maker of software applications for businesses, Financial Times Deutschland reported in an article due to be published tomorrow (Oooh, this is almost a scoop!).

And those companies are: (da, da, da da, da ta, ta, ta - that's a fanfare silly) IBM, Microsoft (OK, so no surprises so far) AND Google! What???? Yep, Google...

The SAP co-founder, Hasso Plattner, hastily added that nothing is going on - which is corporate voodoo mumbo jumbo for "come and buy us guys." And strategically this is probably as good a time as any for SAP investors to sell out - for their stock price may have peaked (it has gone up a huge amount in the last couple of years) and competition will soon hot up as Oracle gets their act together post their monster acquisition spree.

But I still don't quite get the Google thingy other than the fact that everyone thinks Google is cool right now. Merging with IBM or Microsoft would be a no brainer, approvals aside, but Google...???!!!

Or maybe Mr Plattner is smarter than at first meets the ear (after all he has made $5bn plus from his ownership in SAP) maybe SAP and Google together could instantly create a global software juggernaut to take on both IBM and Microsoft and ignite SAP/business apps-on-demand and corporate search.

Mmmm, I ike it. Ot maybe Google should just buy - it would sure cost them a load less.

Google goes after Asian cellphone users in a big way!

Google has made two announcements today take them a few strides forwards in offering their services to Asian cellphone users in both Japan and China. And strategically the two markets are vital, because Japan has one of the most advanced mobile phone markets in the world and China has the largest number of users.

Google today said that they are working with KDDI, Japans 2nd largest mobile-service provider after NTT DoCoMo, to provide search service for mobile phone users in the Japanese market as of July. KDDI has more than 22 million mobile phone users, less than half of DoCoMo's, but its service is more popular among young Japanese because of services like music downloads.

Google has also announced that they are in talks to launch a search engine for cellular phone services in China with China Mobile, the nation's largest cellular provider with more than 260 million subscribers.

Google is and has struck a number of key deals with leading mobile phone operators around the world, inlcuding the largest Vodafone, that between them all have nearly 500M users. Google announced earlier in the year that the mobile sector was a critical next step for the company and they are now moving aggressively.

Mobile phone operators need Google badly, to provide search (which should prove a killer application on mobile phones) as well as helping them deliver content and adverts to mobile users. And boy do the operators need help from the Internet leaders to help them understand better how to make mobile data services and the mobile Internet a reality.

Phase 1 of the mobile Internet was about the mobile operators trying their own peoprietary, walled garden version (which failed!) and phase 2 is about acceptiong that this will not work and moving to adopt Internet open standards and Internet companies as their partners - for they cannot do it alone!

Wednesday, May 17, 2006

Apple to open flagship store on 5th Avenue

Apple is toasting the huge success of their retail therapy stores with the opening of a massive new flagship outfit on 5th Avenue - yep right opposite the Plaza and just down the road from FAO Schwartz. Now I finally get what all that scaffolding was hiding.

So, if its tea at the Plaza, goodies at Schwartz or the Disney Store, then a geekfest at the Apple Store your after, get on down to the upper east side of the Big ol' Apple this Friday.

And this store's gonna be open 24 hours a day, 7 days a week. The fact that they will pretty much be the only show on that side of town open through the night should not put off sleep depraved Apple geekoids.

Apple will be showcasing their usual Mac's, iPods, iTunes, iLife, iWord etc etc etc (sadly no iEspesso's!) and the Genius Bar and conference center will be wide open for Mac tune ups and general digital fests. But, hey don't knock it cos Apple have opened nearly 150 stores since 2001 and they're going down like an Aussie after a few drinks - damn well!

In the Xmas quarter alone Apple turned over more than $1bn from Apple Stores. Now that's smokin. And Steve Jobs apparently part designed them himself - proving that he does have some fun left in him after all.

Yahoo's globe trotting conflict reporter a huge success - what next?

Yahoo's dedicated conflict reporter Kevin Sites seems to be having a huge amount of success and Yahoo's first real attempt at generating their own original content is clearly working. For Yahoo's "Kevin Sites in the Hot Zone" is apparently one of the key reasons why Yahoo's news site is number 1 one the web.

So no extra brownies for figuring out what that means - yep, Yahoo will soon be launching a bunch of other "hotzone" style channels with vagrant/nomadic reporters stumbling across the world with a back pack stuffed full of video and blogging gear (it could be a great product placement/sponsorship ad for Apple!) ready to insta-info us webaholics.

So get ready, next up could be "gadgetzone" covering global gizmo shows and launches, or "gossipzone", covering Prince William of course and finally, how about 'antitrustzone" obviously covering Microsoft - der!

Oh and don't be surprised if you catch me hitch-hiking across the planet to leading corporate head offices for "buszone" - yep, catch businessuncut ripping live into ever more bus stories. Where's that plane ticket to Houston for those good ol' Enron boys?!

Google Video makes it easier for users to upload clips - Mmmm!

Google plans to announce today changes to its Google Video service that will make it easier for people to submit video.

Now people who want to post their video clips can do so through a Web-based system without having to use special software. They also can view the clips instantly.

That's nice. I guess there's two ways to look at this. One is that Google is taking yet another step forwards in the democratisation of video on demand. The other is that we will now get even more home movie moron clips cluttering the already abused ether.

Take your pick!

Tuesday, May 16, 2006

HP's profits shoot up!

Hewlett Packards quarterly earnings jumped 51%, buoyed by cost cuts and improvements in its PC business and printing division.

They reported earnings of $1.46 billion, or 51 cents a share, for the three months ended April 30. A year earlier, they had a profit of $966 million, or 33 cents a share.

Mark Hurd, HP's new CEO is developing quite a reputation, for he has beaten analyst expectations for the last three quarters. And it looks like he is exactly the right guy to turn ex-CEO Fiorina's strategy into reality.

For it was her daring bid to merge HP with Compaq and challenge Dell for the number 1 PC maker slot that is driving their performance. The PC, server and laptop businesses are gaining ground and market share against Dell and the gap between the two companies is narrowing sharply.

HP is benefitting from lower producer prices and so can attack Dell and other's on price. Dell may well now be forced to finally rethink their Intel only strategy.

HP's Hurd has proven that he and his team can be superb at execution, soon he will also have to prove that he can be strategic, for HP should continue along its natural path as a consolidator of the tech industry and they are weak in both software and services.

Merging with Sun Microsystems or SAP could prove the kind of audacious moves that might finally vault HP back to the world leader status it once enjoyed.

Apple completes their shift to Intel computers

Apple today completed their shift to Intel based computers as they launched the 13-inch MacBook which replaces both the i-Book and the 12-inch PowerBook.

This is a strategically important milestone for Apple as they now have Intel based computers covering the low end and high end of the laptop and PC market. And with data showing that last year, the average desktop with a display sold for $744 in the US, (according to IDC), while the average laptop sold for $1,070, both the MacMini, starting at $599 (without display) and MacBook, starting at $1,099, look priced to go.

Now Apple just need ensure that their new prime time ads do the job (no pun intended) and their piddly 3+% of the world PC market may be in for a major boost. 2006 could prove a decisive year for them. Let's see!

Creative Technologies tries to stop iPod sales in US - but yesterday's Supreme Court ruling should help!

Creative Technology has just filed a cease and desist order against Apple's iPod - trying to halt its sales for apparently infringing patents they have related to music player menus that the iPod adopts.

Fortunately for Apple, yesterday's ruling by the US Supreme Court, means that a cease and decist threat will be much harder to carry out. If Apple has infringed, a settlement will be the most likely conclusion.

And Singapore's creative could sure do with the cash as they have nose dived in the digital music player market (largely thanks to the succes of Apple's iPod) and recently reported a record quarterly loss of $114m. So I guess a legal attack on Apple is as good a way as any to chase ambulances - er, I mean revenues.

Monday, May 15, 2006

The most Urge-nt competitor to Apple's iTunes to launch this week!

On Wednesday Apple's iTunes will get their most severe challenger as MTV launches Urge, their online music service designed to compete with iTunes, in partnership with Microsoft. Microsoft will this week also launch the latest version of Media Player.

With the marketing muscle and brand awarenes that MTV has in the music market, plus the TV and media clout of MTV owner Viacom, and the new features in Media Player, Apple should be nervous, for this is their first truly serious threat in the non-iPod music player market.

And the makers of non-iPod players, including heavyweights such as Samsung, will also have a direct vested interest in making Urge a success, which could add even more marketing muscle. And they may well discount their players to gain traction against Apple's iPod.

At launch Urge users will able able to choose buying songs at 99c like with iTunes, but uniquely their users will also be able to buy all you can eat subscriptions that will cost $9.95 a month or $14.95 if subscribers want to load the music onto a portable player. iTunes does not offer a subscription service, although this launch may change that.

At launch, Urge will have more than 2M music tracks from 110,000 artists, 500 playlists, 130 streaming radio stations and more than 20 specialist ‘blogs’. Which is one heck of a start.

Mind you Apple has a massive head start and a larger playlist, with 3M music tracks. Apple has sold over 50M iPods and has created a popular brand name and a highly desirable product. They also have nearly 70% of all legal music sales, with the next competitor, Napster taking just over 4%!

But Apple must now take extreme care that they do not throw the digital music market away as they did with the PC. To defend their position they should lower iPod prices, launch an iTunes subscription service, offer more video content, particularly films and chuck a boatload more money at marketing.

If not, they may regret Urge's launch this week even more than they have already been made to regret the launch of Microsoft's Windows back in the eighties.

US Supreme Court weighs on the side of tech companies against "patent trolls"

The US Supreme Court has weighed in on the side of tech companies today as they voted to support a motion by Ebay to change the rulings on certain patent-infringement cases brought against tech companies by so called "patent trolls".

For, until now, courts almost always issue an injunction to force companies to change the design of their products, once they have been found to have infringed a patent.

Today the justices ruled unanimously that there should be another option: courts should have discretion whether to allow companies to continue making their product, and compensate for the infringement with money damages, rather than forcing them always to design around the infringed patent.

This should reward the owners who have been unfairly infringed as well as maintain rapid product development cycles that are so essential to the innovation cycle in tech products. And it should also remove some of the theats hanging over tech companies and their users by overly aggressive "patent trolls".

I wonder how this ruling might have altered the high profile case of NTP versus RIM's Blackberry had it been in place last year. RIM may actually have ended up settling for less.

Skype goes after market share in the US with free US calls!

Skype, the world's leading provider of Internet telephony owned by Ebay, has just fired the opening salvo in what looks like being an aggressive price war by leading VOIP providers in the US. For Skype users in the US can now make calls to land lines and mobile phones for free.

US and Canadian-based Skype customers can make free calls to traditional phone numbers within their borders using its SkypeOut service, until the end of this year.

Skype has over 100M users, but less than 15% of them are in the US. And now is the time to grab market share, for the competition is heating up. Yahoo, MSN and AOL are or have all just launched similar services and Vonage, the US leader, is soon to go public.

I would expect Skype's competitors to repsond in kind, for the war for Internet telephony users has only just begun and it could get even hotter than the war for free email users!

Friday, May 12, 2006

US Justice Department to extend oversight of Microsoft's business practices

The Wall Street Journal has just reported that "The Justice Department said it wants to extend oversight of some of Microsoft's business practices until at least November 2009, citing lapses under a landmark antitrust settlement."

Oops - Microsoft seems to have stretched their practices again. Let's see if this becomes a thorn in their side as the EU case is proving. Microsoft just continues to put themselves under the legal/political spotlight. Shame.

Nokia to launch updated tablet device with Google Talk

Nokia is about to announce launching a tablet device (a little larger than a PDA) with Google Talk pre-loaded into it so that the Wi-Fi device can easily perform Internet calls and messaging.

Users of the new Google-Talk-enabled Nokia device will be able to make calls - either by talking directly into the device like a wireless handset or by attaching a headset - to other users with the Google Talk software on their personal computers or handheld devices. Users won't, however, be able to make calls to regular phones.

The device will prove to sell in small numbers to tech lovers - but may represent a significant step in a gradual shift towards Wi-Fi enabled mobile phones using Internet telephony and Internet Protocols to give us many of the communications, browsing and media functions we are getting used to on broadband PC's.

Mobile phone operators should watch out and open up their mobile data services rapidly for mass market adoption - which also means discounting data services heavily on mobile phones to ramp up useage - before Wi-Fi/WiMax enabled devices do it instead.

Apple and Softbank to launch iPod mobile phones?

According to Reuters, Nikkei has just announced that Apple and Softbank are working together on developing and launching an iPod mobile phone with iTunes inside.

If this is true - bring it on! Apple has still got two clear gaps in their product range to fill and fill fast - an iPod mobile phone (could this be it?) and a home entertainment center a little more powerful than the Mac Mini with Front Row!

But I suspect we may be disappointed and instead see Softbank launch a Motorola Rokr type device that plugs into iTunes but looks nothing like an iPod with mobile phone capabilities. One day I guess Apple will deliver the real deal - just not today!

The French senate passes amended bill to open music stores up - what will Apple do?

The French Senate has made changes to a controversial copyright bill that threatens Apple Computer's grip on the online music market by making it open its iTunes store to portable music players other than iPods.

Under the recently amended version of the bill, a company that agrees to provide these codes will receive a license fee as compensation along with guarantees that the transfer of information will not weaken its copyright protection measures.

Which is really just a load of bureaucratic and legalistic mumbo jumbo designed to stop Apple from packing up iTunes up and leaving France for good or until they repeal the law.

The reality is that France is trying to take control away from any technology company's particular approach to digital rights management (DRM). While this may seem a noble cause for the lowly citizen of the Rebublique, it is a disincentive for the developers of DRM to operate in France and will therefore merely serve to provide the French with less technology choices than before.

And the iPod and iTunes are so popular that you may just find the French moving abroad in droves so that they can still look chic a la Apple - dood! But then again that would solve another bunch of problems for the politicians of France - for without any citizens to represent their life would be a lot easier!

France has probably yet again misunderstood and disincentivised global tech leaders who are unlikely to undermine their vital DRM strategies just to operate in little old France. And they will probably face the embarrassment of losing iTunes in anycase - for their bill creates too many dangerous legal precedents for Apple.

Maybe Chirac should just do what he normally does - which is scrap the bill and about face.

Microsoft wants to grab a bigger slice of the online advertising market within 5 years!

Steve Balmer has just been quoted at a Silicon Valley business lunch saying that he wants within 5 years to gain a bigger slice of the lucrative online advertising market currently dominated by Google and Yahoo.

No wonder Google and Yahoo are getting back to basics and re-focusing on search and advertising!

Microsoft is not only chucking billions at playing catch up in online advertising based software and services both via MSN and Windows Live! but they are also betting the strategic shop and careers of their senior folk on winning this race most likely by 2010.

And this is one massive role of the dice. And when Microsoft make such huge rolls - they generally squash those in front of them. And they will leverage every single piece of synergy they can from their Redmond colossus - including the ever contentious Windows franchise.

But, this time round they will need to roll big time - for they have never had to come from so far behind and re-invent themselves to such a great degree. And the current leaders of the space, Google and Yahoo are massive and powerful organisations with huge influence and clout.

The one that should be most concerned of course is the number 2 Yahoo, but they should also not make the mistake of getting too intimidated by the usual Microsoft press bluster. Google and Yahoo both have enough of a head start and enough resoyurces that if they are truly nimble, innovative and smart they can prevail. Which is why Balmer has given his time 5 years just to grab more market share and not dominate the space.

But Google and Yahoo will also need to take the fight to Microsoft and not just defend their turf. Both of them should hit Microsoft where it hurts most and go after their consumer applications software franchise and MS Office in particular. Office software on-demand is the way to go. They should not wait too long to launch.

To be a successful fighter one has to attack and defend in near equal proportions (preferably attacking a little more than defending). Microsoft is a master at it - Google and Yahoo need to learn a little more about the attacking part I feel - which includes hitting below the belt every so often!

If not Balmer will in another year or so be predicting when Microsoft will be dominating the space - ahead of Google and Yahoo!

Thursday, May 11, 2006

BlackBerry to hit the Chinese market

Research In Motion today announced it will soon roll out its BlackBerry wireless e-mail service in mainland China with China Mobile Ltd which has two-thirds of the Chinese market and is the world's biggest mobile carrier by number of subscribers.

RIM expects to launch the service by the Autumn on a couple of devices, but does not give details about a wide-scale launch across China. Initially they will be hooking up the backlog of corporate customers in China who have requested the service.

BlackBerry is coming from behind in this market, where China Unicom, another huge state owned mobile telco has already launched it's version called the "RedBerry"!!! Of course there's no brand conflict there is there!

BlackBerry will also have to face up to China Mobile's own launch of email services on standard mobile phones. But to date this technology does not seem to affect BlackBerry too much in the corporate space.

At least its nice to see RIM put out a positive announcement given all the negative press they have and continue to enjoy over legal spats.

WiMax a reality as leader Clearwire plans $400M IPO on Nasdaq

The WiMax market is officially born and here to expand as one of it's leading service providers, Clearwire, has announced an IPO on Nasdaq in which they hope to raise $400M.

WiMax is the next generation wirelesss data technology that behaves like a supercharged Wi-Fi and can blanket cover cities. And Clearwire, founded by US telco entrepreneur Craig McCaw, offers broadband service in more than 200 cities and towns in the US, Ireland, Belgium, Denmark and Mexico.

Dozens of additional cities and towns across five continents have access to wireless broadband services through networks built by Clearwire’s wholly owned subsidiary, NextNet Wireless.

This should prove a popular IPO as Wi-Fi and WiMax are clearly industry changing technologies and networks that can in the future even challenge mobile phone operators.

Search wars spark media outreach by Google, Yahoo and MSN

The search wars have truly begun! Today both Schmidt, CEO at Google and Semel, head of Yahoo have announced that their focus is back on search as Microsoft attacks them head on.

Google are saying that folllowing a review of development processes they recognize that they need to re-proritize search and Yahoo has stated that Microsoft has not discussed trying to buy them and that they would never do an ownershipo based deal with them on search or advertising.

Yahoo also stated that Microsoft will not be able to catch up with the search leaders and that the market is set. Which is corporate mumbo jumbo for them being really quite nervous about Microsoft's moves. And so they should be for now it is open warfare between Google, Yahoo and the boys from Seattle (MSN).

And the only thing that seems impossible to imagine is that Microsoft's share will not grow - particularly as they start from such a low base. Google and Yahoo will need to move the search bar - and innovate like crazy with advanced algorithms, niche searching and Knowledge search, as they call it in Korea, or social search, as yahoo call it, which has seen considerable popularity recently.

The search wars may just have shifted into a new gear and as a result we can expect the second coming of the search market and considerable change to the dynamics and applications over the ensuing years.

Viacom desperately needs to fix Paramount

Viacom reported a nearly 10% drop in 1st quarter earnings due to higher interest expenses, continued weakness at its Hollywood movie studio and a fall in advertising in its German cable business.

But it's core challenge is getting it's movie studio, Paramount, delivering again. For Viacom's cable properties, including MTV, Comedy Central and Nickelodeon are performing strongly (other than a short term blip in their German unit).

It is Paramount that continues to drag overall performance down. And now that Viacom themselves say that the integration of recently acquired DreamWorks is complete - they have no more excuses. They have to get movies out that can really deliver and the recently launched Mission Impossible 3 does not look like it will cut the mustard.

Viacom say they have a healthy roster of new releases coming out - let's hope they perform or investors may get jittery about the solidity and reason behind the company's recent split from CBS!

Deutsche Telecom weakens as European giant sees weak domestic demand and slump in fixed telephony

Deutsche Telekom, Europe’s largest telecommunications carrier, today held firm on its annual forecasts as strong first-quarter growth at its US mobile arm masked a weak domestic performance and slump in fixed line revenues.

It's achilles heal is weakness in Germany and a fast fading fixed telephony business (like every other major fixed line telco) which is eroding faster than broadband revenues are growing.

Duetsche seems to be going through a period of disappointment with analysts and investors which may be covering up their considerable progress in cellular. For T-Mobile is growing in the slower growth European markets as well as the higher growth US. And holding ground to the likes of Cingular and Verizon is indeed impressive.

The challenge for all telecom conglomerates with substantial fixed line operations is getting hi-speed out their quick enough and driving a triple or quadruple play against increasingly agggressive cable operators and start-up telco outfits. Deutsche needs to move faster.

Wednesday, May 10, 2006

Yahoo and Telemondo merge and all the leading Internet portals will one day be media companies!

Yahoo and NBC Universal Television's Telemundo have just announced that they will merge their Web properties targeted at the US Hispanic market into a joint Internet business, Yahoo! Telemundo.

Yahoo is developing a model whereby their international operations are merging with leading media groups. They have already done this in Australia and Japan. This is the closest such move to home. It is also yet another step in the convergence of the Internet and media and takes Yahoo one step closer to calling themselves a media company as Microsoft is now doing.

All the leading Internet portals will be media companies one day. It is just a matter of time. AOL is already there, Yahoo is half there and MSN wants to get there. That just leaves Google. Maybe they should try and merge with Apple and turn iTunes into their media cornerstone. Mmm!

US cable leaders consider bidding for their own mobile phone license

The leading US cable companies are considering bidding for their own mobile telephone license to compete with mobile operators and allow them to launch a quadruple play of cable TV, hi-speed Internet, Internet telephony and mobile telecomms. They would be following similar moves made by the UK's NTL who recently bought Virgin mobile and are seen as leaders in the quadruple play.

Time Warner Cable, Comcast, Cox Communications and Advance/Newhouse Communications are already linked in the wireless realm via a joint mobile partnership with Sprint Nextel. But are clearly looking at taking this to the next level.

Leading telco's such as AT&T and Verizon should be concerned, for the cable companies are experiencing considerable succes with their triple plays and a quadruple one makes just as much sense - with one bill and one service provider for all your cable and telco needs.

Tuesday, May 09, 2006

Cisco hits the ball out of the park!

Cisco Systems put in stellar results even though profit was mostly flat as stock-compensation expenses and costs tied to its acquisition of Scientific-Atlanta offset an 18% jump in sales. Their share price jumped in after hours trading.

Revenue rose 18% to $7.32 billion from $6.19 billion a year earlier. Part of the boost in sales came from their February acquisition of set-top box maker Scientific-Atlanta, which Cisco said contributed $407 million in sales.

Cisco also benefited from steady strength in its basic businesses. The world's largest maker of networking gear said its router sales increased to $1.5 billion, up 5% from the prior quarter. Sales of switching equipment grew an unexpectedly strong 13% from the prior quarter to $2.69 billion.

Cisco's acquisition of Scientific Atlanta is looking like a superb bet as has been their transition towards the consumer sector with Linksys etc. Cisco has retained a positive outlook and expects revenues to climb 18% to 21% in their next quarter from a year ago, to $7.8 billion to $7.95 billion. Excluding revenue from Scientific-Atlanta, sales should rise 10% to 12.5% over a year ago.

Cisco is also benefitting from a strong corporate order book and with the continued proliferation of broadband, Cisco's networking gear will benefit from a rising tide for a while to come. Dell should study Cisco's strategy as a solid case study in how to change direction from selling only to corporates to successfully transitioning to the consumer sector as well.

Microsoft launches Windows Live Messanger to public in Beta

Microsoft has launched a public beta of Windows Live Messenger, an instant-messaging program that features international PC-to-telephone calls with video capability.

As part of the beta, Uniden and Royal Philips Electronics will sell cordless phones that work with the service, allowing people to make both Messenger-based and landline phone calls from the handset.

The current telecoms partner is Verizon and the service is available across the US and Europe. This is another key step in Windows Live! and Microsoft's response to Google. By the end of this year most Windows Live services will be pretty much fully operational.

Dell slows again! What's really going at the No1 PC maker?

Dell, the world's largest computer maker, warned it would miss its fiscal-first-quarter earnings and sales forecasts, blaming the slip on pricing actions taken to revive sales growth.

Dell said it would earn 33 cents a share for its fiscal first quarter ended May 5, down from its original forecast of 36 to 38 cents a share. It also revised its revenue to $14.2 billion, down from a range of $14.2 billion to $14.6 billion. It pinpointed the second half of the first quarter as the time when it got aggressive on pricing in a bid to increase sales.

Dell seems to be making a habit of missing forecasts and also seems in a dangerous spiral when it comes to losing market share.

So what's really going on at Dell? The challenge seems to be two fold for the company:

1. They face increased competition in the corporate sector thanks to a rejuvenated HP and a much stronger Lenovo post their merger with IBM's PC business. Apple may become a more formidable competitor as well now that they have moved their computers to Intel chips.

2. The consumer market for PC's has taken off thanks to the PC becoming an essential family electronics device to drive the Internet as well as home entertainment. Unfortunately Dell is weak in the consumer market as they have always focused on the corporate market.

Dell's challenges feel to me like Nokia's about four years ago when they started losing market share and missing forecasts thanks to stronger competition and shifting consumer trends. It took Nokia a couple of major reorganizations, a change in strategy and a raft of new product launches before they got back to growth mode a few years later.

It will probably prove the same for Dell. They need to accept that the PC market has changed and split for ever between corporate PC's/laptops and consumer PC's/laptops. Consumer PC's need to be about entertainment and corporate PC's/laptops about price and performance.

Dell need to go after the consumer market with a raft of new higher end computers and they need to make their producst more value added and sexy. Dell also need to move up the corporate chain and dominate in servers and get into services.

They may need to reorganize into market facing divisions and learn a whole load from the likes of Acer and Apple. They should also consider a transformational merger - Sun Microsystems could be an interesting candidate.

It may well take a while, but Dell can get back to growth mode. But they will need to be bold and willing to throw out conventional thinking and assumptions.

Fox starts selling programs on iTunes too!

Apple Computer's iTunes has started to sell episodes of shows from News Corp.'s Fox television network, the latest major US TV network to reach a deal with Apple's Internet download service.

Shows including "24" and "Prison Break," as well as FX Network shows such as "The Shield," were available on the download service on Tuesday morning, at $1.99 per episode. Older shows will also be included.

All four networks are now making their online TV strategy clearer - they will release programs for general distribution to independent services such as iTunes (targetting shows to site demographics) and they will also air shows (probably backed by online advertising) on their own sites.

By the end of this year you will be able to access most US TV shows over the Internet in one site or another. Thank you broadband!

Monday, May 08, 2006

Apple versus the Beatle's - this time Apple win!

Apple Computer today emerged victorious from its latest legal battle with the Beatles’ record company, Apple Corps, when a High Court judge in London ruled that the former’s iTunes music store had not breached a trademark agreement between the two groups and could continue using the Apple Computer logo when promoting the iTunes store.

The last time Apple Computer had a legal tussle with the Bealte's Apple Corp they ended up losing and shelling out tens of millions of dollars. Now Apple Corp will do the shelling out as they pay all the legal bills for the latest battle.

Vodafone to slash the cost of calls while abroad!

The threat of EU legislation has spurred Vodafone into slashing the cost of using a mobile phone abroad as the world’s largest mobile phone operator has confirmed that it plans to reduce roaming charges in Europe by 40%.

The changes will not come into effect until April next year!! Which gives O2/Telefonica, T-Mobile and Orange (the leading pan-European operators) the opportunity to reduce their roaming tarriffs a year earlier and steal a march on Vodafone and maybe even some of their customers.

No wonder Vodafone's share price went down (again) today. Poor old Vodafone - they can't seem to get anything right at present.

Vonage to offer shares to their customers at IPO

Vonage has announced that they plan to offer a chunk of their shares to customers when they IPO later in the year. That's nice!

Apparently 15% of their planned IPO will be set aside in a move designed to support small investors as Google did with the use of a novel auction system when they went public.

Anyone who opened a Vonage account on or before December 15 will be eligible to buy shares at the IPO price. Which will be great news for customers so long as Vonage's share price bounces up and a customer service nightmare if it does not!

Yahoo announces new search marketing system

Yahoo today announced the details of their new search marketing system designed to help them fight back against Google and stave off growing competition form Microsoft's new adCenter.

The system is designed to make it easier for advertisers to run sophisticated keyword ad campaigns, judge their effectiveness and to improve them. It also is built to, eventually, carry Yahoo's keyword ads beyond personal computers to mobile devices and television and to allow the addition of graphics, video content and click-to-call capability in its ads.

Today Yahoo released API's and technical specs for the development community and customers. They go fully live with the system late in the summer. Yahoo will also soon release new technology for determining what positions ads get on a Web page, which incorporate a basket of factors including price and popularity.

Users of the new system are enthusiastic and the move toward greater effectiveness and measurability of online ads is essential for it's continued growth. The real promise of digital advertising is it's ability to be vastly more precise and measurable than traditional advertising - now it's time for the ad systems to deliver on this promise. Yahoo's new stystem is a step in the right direction.

Going, going gone...Silicon Graphics enters Chapter 11

Silicon Graphics, the once hot competitor to Sun Microsystems in the market for web servers, has finally bit the dust and declared Chapter 11 bankruptcy. Dennis P. McKenna, the recently appointed chairman and chief executive, has announced that this will help finally turn Silicon Graphics around, but you have to wonder 'what for?'.

I can well see the company and what's left of it's management pulling off a financial turnaround by largely swapping debt for equity - but cannot for the life of me see how they can grow significantly out the other end. For the trend to commoditised servers and web software that buried them in the first place has only got stronger. Even Sun Microsystems is reeling from it.

And with a mere $500M annual revenue run rate left in the company and it's products all that remains is an extremely niche provider of systems to Hollywood. This in itself is not a market to sneer at - but one that others can deliver for increasingly (with cheaper and more open systems), Apple in particular.

I feel sorry for their 1,800 employees, customers and shareholders. I guess the only hope they have for the future is to sell out to someone who at least wants to get hold of their customer relationships. And with digitization of video and rapid deployment of broadband, the film industry is a good one to deliver systems for.

Saturday, May 06, 2006

Time Warner hires Citigroup to find partner for AOL Europe - what should they do?

Time Warner has hired Citigroup to find a partner for AOL Europe. And it could even ultimately lead to a sale or merger of the unit. It also makes me wonder whether Time Warner may be cleaning up AOL for a full demerger of the Internet unit.

AOL Europe has always struggled and since it demerged from a joint venture with Bertlesmann has gone nowhere. AOL Europe had 5.9 million subscribers across the UK, Germany and France as of March 31, down 452,000 compared with the year-earlier quarter.

And each of these countries have powerful incumbant telecom operators with near monopoly ISP operations - particularly France Telecom and Deutsche Telekom. AOL Europe should probably look at spinning their dial-up ISP customers off to a leading ISP such as Orange or Tiscali and then focus exclusively on the free AOL portal.

Take it a step further and Time Warner should consider selling or merging the free AOL portal with Google or MSN. They may be a lot better off having a minority stake in one of the Internet leaders than owning 100% of a stand alone AOL without significant resources or scale.

Is Ebay slowing up?

The FT today wrote a superb article on whether or not Ebay is slowing up. Ebay has spent the last few days working like mad to persuade an increasingly sceptical investor communty that they can reignite growth and are not at the mercy of slowing ecommerce markets.

For one they argue that the US ecommerce market may be maturing a little, but Europe and Asia still present huge opportunity for growth. OK - we'll grant them that.

Ebay then argue that they are less dependent than ever on auction sales as they rev up fixed sales through Ebay Express, local sales through their acquisition of kijiji (what a name!), listings services (they are leaders in 21 different countries, attracting 19m unique monthly visitors) and diversified product categories. These initiatives all seem solid and should help fuel growth - even though it takes Ebay into direct competition with the likes of Amazon and Google!!

Finally Ebay argue that there is a ton of room for growth left in both PayPal and Skype. And the three brands are three out of the five most powerful brands on the web. I guess Google and Yahoo are the other two. And not Amazon??!!

Apparently PayPal now has loads more members than American Express and we need say nothing more about Skype for they have been written about far too much as it is. (Sorry guys, nothing personal).

So, Ebay have some powerful arguments for why they should keep growing at the speed of light (even if a more geriatric light speed). But the markets yet again didn't buy it again. My gut is that it has nothing to do with Ebay - it all has to do with Google, Yahoo and MSN. For ultimately the markets think that the web will be owned by the three of them and they will compete and commoditise what Ebay does.

It makes me wonder whether our recent advice that Ebay should merge with Amazon might be more relevant than ever.

Friday, May 05, 2006

Warner Music makes a loss - but beats analysts expectations and makes digital waves

Warner Music just announced a loss for their latest quarter, but it was lower than most analsysts expected and was coupled with better revenues than expected and a strong performance in digital music sales.

Revenue rose to $796 million from $767 million a year earlier. In the fast-growing digital segment, the company posted revenue of $90 million, nearly triple a year earlier and representing 11 percent of quarterly revenue.

Warner Music is becoming the standard for digital music and are proving the the future really is digital. All in all this was a decent showing by Warner and one which proves they are back on a growth path (finally).

These results should see EMI improve their offer to buy Warner Music. The combination of the two would create a powerful industry leader and specialist.

CBS launches new broadband TV network

CBS has today launched a new broadband TV network available free over the Internet. They will make money through ads. It seems that the scramble for advertisers to reach the huge and growing broadband Internet audience has started.

The new network is called Innertube, and it will offer streaming video of programmes developed specifically for the internet, programmes that serve as companions to existing CBS shows, as well as material from the media group’s vast library.

CBS is fast becoming the media leader and innovator in Internet content. Quite right, they had better move fast before the new emerging media giants of the C21 emerge: Microsoft, Google and Yahoo!

Thursday, May 04, 2006

DirecTV slipping?

DirecTV just announced their latest set of results and displayed a split performance as earnings were improved thanks to good ol' News Corp style tight cost management, while new subscriber numbers fell below the psychologically important 1M level.

So, from a perspective of existing customers, DirecTV continues to do well as they reduce the cost of operations and increase average revenues per customer. But, from a new subscriber perspective it looks like DirecTV is suffering from not having a triple play to compete effectively with the cable companies.

News Corp need to get a leading edge hi-speed Internet service alongside Internet telephony for DirecTV to fight back with. If not, I fear they will continue to lose the battle for new subscribers - leaving the spoils to the cable guys.

Microsoft gets mobile boost as they announce deal with Qualcomm

Microsoft has struck a deal to enable its Windows Mobile operating system to work with Qualcomm's mobile phone chips, helping Microsoft expand in wireless.

The move allows Qualcomm's customers to develop "smart phones" that run Microsoft's mobile operating system and offer computer-like functions such as e-mail, mobile TV, and word processing, the companies said.

This is a much needed boost to Microsoft's weakish mobile phone penetration and one that should see a more rapid proliferation of Windows Mobile across wireless devices. And given that mobile phone subscribers should top 3 billion (!!) next year, it is vital that Microsoft make much more rapid headway.

But 2006 may prove to be a turning poinnt for Windows Mobile and as a result the "smart phone" category as a whole. Next year will see mobile TV finally start to become a reality as well.

Microsoft unveils more details about AdCenter and how they plan to battle Google

Microsoft today unveils more details about AdCenter, their new targeted ad system, and how they plan to battle Google in the war for online advertising dollars. And it looks like one of their core differentiators will be inserting the targeted advertising generated by the AdCenter system into a range of digital services beyond internet search.

So AdCenter will drive online ads across PC's, games consoles (the Xbox) and mobile phones presumably carrrying Windows Mobile. This could prove a canny differentiator even though ad revenues on devices other than PC's is paltry and Google should be able to follow suit reasonably soon.

But, Microsoft have now got their Google me-too infrastructure in place. They have the portal (MSN), they have Live!'s search technolgy which is performing well and spreading fast and now they have their advertising system called AdCenter.

And all of them are being stress tested and show cased at MSN. Lets now see what Microsoft can do with their Google copycat infrastructure, but if I was Google or Yahoo I would move like lightning to both innovate ahead of Microsoft and take them on at their own game - i.e. launch consumer software which is free, ad suppported and challenges Microsoft's core franchises such as Office and Outlook.

Let's see, but the battle for search, online advertising and portals has just got another mean player. And we all know what happens when Micrisoft enters a market in a big way (the EU tries to stuff them! - na, just kidding!). Beware everyone!

Orange UK to shed 2,000 staff as they merge ISP and mobile phone units

Orange UK, the leading telco group owned by France Telecom, has just announced that they will bbe shedding 2,000 employees and restructuring as they merge their mobile phone unit and their ISP, called Wanadoo. Both will now be branded Orange.

This may seem to many of you to be the most uninteresting piece of business news so far this year (unless of course you work for Orange), but it points yet again to telco's driving convergence amongst their various units and packaging triple plays that consumers are eating up.

And in the UK they need to for they have one of the most advanced triple and quadruple play markets in the world thanks to early moves from BT and NTL/Virgin. And with BSkyB launching theirs in a couple of months it is little surprise that Orange need to restructure and launch their consumer packages aggressively.

You never know, "the future looks bright" and the future may even be Orange's - and clearly not Wanadoo's!

Apple's new ads for the Mac - featured at TechBoard

OK, so check out Apple's new ads for their Intel Macs! Apple is finally pushing their Macs again after nearly a year when ther have had to relegate computer advertising in favour of their iPods while the Mac range was switching to Intel processors.

Well, the switch has clearly gone smoothly, so Apple are now back with a new national TV campaign for the US market. And clearly their strategy is to take advantage of Microsoft's delay in launching Vista as well as known performance and security issues in Windows.

Let's see if Apple can finally increase their market share from a perenially paultry 3% odd. It may be now or never!

Wednesday, May 03, 2006

Qwest finally turning around?

Qwest, the US' 4th largest telco group has just announced an increase in revenues, which they have not managed to do for a very long time. And it loooks as though their focus on hi-speed Internet access is paying off - which is a good thing for fixed line customers keep diminishing as they defect to VOIP provisders such as Vonage and Comcast.

Qwests net income increased to $88m, or 5 cents a share, from $57m, or 3 cents a share, a year earlier on revenues which edged up to $3.48bn from $3.45bn. Now that Qwest is back on firmer footing they should look at an acquisition. How about buying Vonage?

Verizon cuts VOIP costs to combat Vonage

Verizon has cut the cost of its VoiceWing broadband VoIP (voice over Internet Protocol) service which includes unlimited local and long distance calling by $5 to $24.95 a month – the same price as rival Vonage Holdings, the VoIP pioneer that recently filed for an IPO.

Vonage, Skype and the cable companies success with Internet telephony take-up amongst their customers has clearly rattled Verizon and it is time for them to strike back before too many of their prospective customers defect.

And now is the time to get more aggressive - before Vonage go public - for Vonage have a large share of the US consumer VOIP market.

Time Warner rejects EMI bid - should they?

Warner Music, the world's 4th largest music company, has rejected a $4.2 billion takeover approach from its larger rival EMI Group, the latest move in a long-running quest to combine the companies (EMI have bid for Warner Music 4 times in the recent past).

Given the article just written in sister channel businessuncut daily - it looks to us like it might be time for Time Warner to spin their music division off. But then again EMI will probably come back with a higher bid, so they may well do it.

Wal-Mart to offer build-your-own-computers

Wal-Mart is about to dive into build-your-own-computers in a big way. And for price sensitive consumers this could prove a big hit for the US' largest retailer. And they have been testing the idea for over a year.

Wal-Mart currently offers only prepackaged bundles of personal computers and accessories in most of its stores. With the build-your-own-computer counters, shoppers can choose between several different components.

Such components include central processing units -- the brain of the computer that powers its basic functions -- as well as monitors, keyboards and mice that customers can combine to create customized packages they can load in a shopping cart and take home right away.

The retailer began testing build-your-own computer counters in about 20 locations last year, and is now introducing them in 1,200 of its 3,200 U.S. discount stores,

Wal-Mart currently offers only prepackaged bundles of personal computers and accessories in most of its stores. With the build-your-own-computer counters, shoppers can choose between several different components.

Such components include central processing units as well as monitors, keyboards and mice that customers can combine to create customized packages they can load in a shopping cart and take home right away.

The retailer began testing build-your-own computer counters in about 20 locations last year, and is now introducing them in 1,200 of its 3,200 U.S. discount stores. They could prove a real threat to BestBuy and over time maybe even Dell and HP. But for consumers they could help continue to drive down the prices of lower end PC's and laptops.

Microsoft to merge MSN with Yahoo? - and where would that leave Google?

The Wall Street Journal today produced a fascinating article on the likelihood of Microsoft teaming up/merging MSN with Yahoo. The combination could well make a lot of sense and could even assuage Microsoft's currently depressed shareholders (after all their share price has hardly moved these last few years).

Yahoo's portal, content approach, brand and user base would justify and leverage Microsoft's huge investments and bets on search technology and ad networks. And both Microsoft and Yahoo are losing their respective battles with Google, while Google just seems to get mightier.

Of course, should MSN and Yahoo get together in some way shape or form then it may put pressure on Google and AOL to do some kind of deal. AOL certainly seems to be struggling under the stewardship of Time Warner.

And while we're on the topic of merging Internet giants - how about combining Ebay with Amazon. Just think about it for a while - really, the idea may even grow on you.

Tuesday, May 02, 2006

Microsoft and SAP launch partnership

Microsoft and SAP have just announced a partnership whereby SAP corporate users will be able to access relevant event based data in Outlook and later in Microsoft Word and Excel. So a project manager could get notified of a task coming out of SAP into his Outlook calendar and a reminder automatically sent to his Outlook email.

Now this may all seem unbelievably boring but it is an important development and partnership for both parties. Microsoft and SAP looked at merging a couple of years ago (which just proves how vital the corporate sector is to Microsoft going forwards) and this is a way for the two players to strengthen their positions vis a vis IBM and Oracle.

Microsoft gets more integrated into SAP users lives and SAP gets more exposure to the huge number of Microsoft users both in the corporate sector as well as amongst SME's. Now Oracle needs to look at tying up with Google/Sun?! Mmm, now there's an idea!

MTN to buy Investcom and create Middle East and Africa mobile operator powerhouse

MTN will pay $5.53bn to buy Investcom in a deal destined to create the biggest mobile telecoms operator in Africa and the Middle East.

Investcom is the dominant player in Africa alongside Vodafone's Vodacom and MTN is the leader in the Middle East. The merged company's enterprise value will be just short of $25bn.

MTN is now one of the most interesting independent mobile operator assets in the world - and every mobile phone group with international apsirations is keen to develop new businesses in developing markets. What better than the Middle East and Africa where mobile phone penetration is less than 10%.

MTN could provide a fascinating acquisition for the likes of Telefonica or maybe even a SingTel.

Amazon switches from Google to Microsoft for their search engine - what does it mean for the search space?

Google has just experienced the first major defection from their search technology to Micrsosoft's new search capabalities to be found at For Amazon has just switched their search technology at their search site A9 and at to Microsoft.

Amazon’s search engine, A9, breaks down searches into various categories, such as Web searches, book searches, and blog searches. It is a stand-alone search site,, as well as the search technology used on the Amazon Web site.

While A9 currently presents no real threat to Google or Yahoo from a market share perspective - Amazon's switch is a key milestone in Microsoft's search strategy and technology development. Microsoft's search technology should now be ready to be deployed by them widely across the Internet and in Vista as well as at other commercial sites.

And we all know what happens when Microsoft finally has competitive technology - they have a strange knack of slowly strangling the competition. Gooogle must fight back and attack Microsoft on their own turf, by hugging other partner sites such as Ebay hard, as well as dominating the "software as services" space.

Come on Google! Launch Google Office that takes Microsoft Office head on but offers the software free and over the Internet. The only way Google can avoid going the way of Netscape or Real Networks is to ensure Microsoft do not box them in and then drown them - they have to go after Microsoft's turf as well as defending their own!

Monday, May 01, 2006

Apple persuades music labels to keep price of iTunes songs at 99c

Steve Jobs has just pulled off another major coup by persuading the worlds four leading music labels to keep the price of songs sold at the iTunes music store to 99c. This is a key milestone for Apple, consumers and the online music industry as a whole.

99c is a price at which consumers are clearly happy to keep buying digital tunes at a record pace - and that should be boosted, not curtailed through onerous new pricing mechanisms - to ensure that the inevitable hockey stick in legal online music sales continues.

The music labels wanted to introduce variable pricing and charge consumers more for the latest tunes, which could have stifled legal digital music sales. Ultimately though they made the right decision (which has not always been the case when it comes to online music) and iTunes users can breath a sigh of relief.

For now Apple holds the power in the digital music space and fortunately they felt confident enough to use it.

Blackberry maker RIM gets sued again!

Poor old RIM. They have just emerged from a long and painful patent dispute with NTP which cost them a whopping $612M to settle and now they are being sued again - this time by US rival Visto.

Visto are currently feeling somewhat pleased with themselves as they have just successfully sued another rival Seven Networks and on Friday a Texas jury found that Seven had willfully infringed on three separate Visto wireless e-mail patents and awarded Visto about $3.6m in damages. Nice if you can get it. Seven will appeal etc etc.

But, this has given them the hutspa to go after leader of the mobile email space RIM. So now we can all look forward to another mind bogglingly dull and painful patent battle in the coporate mobile email space.

It makes you wonder whether the whole system for patent infringement cases should be reviewed, as innovators of new technologies seem to make/lose more money and time from sitting in court than serving their customers.

Yahoo launches Yahoo Tech! to help the world's consumer tech morons choose and use their gadgets!

Yahoo has just launched their first new content site in 5 years called Yahoo Tech, which, surprise surprise is designed to assist any tech moron on the planet (i.e. most of us!) to choose and use the huge number of necessary consumer gadgest available on the market today - from PC's to TV's to networks and cell phones.

It is a pretty user friendly site and one that focuses heavily on user top rated (at least top 5) gadgets. So, if it's a PC you're after then apparently the one's adored by Yahoo (?) users are Apple's and Sony Vaio's (poor old Dell). If it's laptops your after then it's Apple and Sony Vaio's also (?!) (yep, Dell and HP just can't catch a Yahoo Tech break).

If it's MP3 music players your after then the hottest is a Samsung - not an iPod!!!!! And on the cellphone side it's Motorola's and Sony Ericsson's all the way.

But on a more serious note (sorry to do this) Yahoo looks to be onto something with this new content site - and they are filling a useful gap. The world's average consumer needs a trusted site to tell them which are the leading devices to focus on when buying gadgets. Utlimately it will all come down to trust - i.e. are their reviews and favorites really the 'best'.

And the fact that this is not just another tech news site is massively relieving - there are far too many around today! Yahoo carries no tech news (at least not at Yahoo Tech) and the content all comes from leading gadget publications. The only original content comes from Yahoo users and their blogs.

Expact Yahoo to launch similar format consumer content sites in other subjest categories. See if you can guess which ones? Ha ha, we can whack up user generated content of our own Yahoo!! Check it out.

Comverse dump their management team over options scandal

Comverse, the leading telecom software and systems company, has decided to ditch their founder, Chairman and CEO, Kobi Alexander, as well as their CFO and General Council over the alleged abuse of stock option grants.

It looks like the guys leading Comverse may have got a bit cute over granting otions (mainly to themselves) which were backdated or granted ahead of favorable news to give recipients a better chance of profiting from exercising the options. Oops!

And (as if this were not bad enough) as a result of the fiasco Comverse is struggling to file their accounts for last year and may get delisted from Nasdaq! No wonder the guys resigned. What a mess!

And a mess that unwhitting independent (?) board members will have to clean up as they step into the running of the company on an interim basis. Let's hope they can sort things out, at the very least for the employees, customers and shareholders.

Level 3 snaps up another network infrastructure company

Level 3 Coomunications announced today the purchase of closely held TelCove Inc. for about $1 billion and demonstrated another step in their roll-up of the telecomms network industry.

In purchasing TelCove, of Canonsburg, Pa., Level 3 will gain access to new infrastructure on the East Coast, including 22,000 miles of data-transmission lines serving 70 markets. Combined, the new Level 3, will provide ever more competition to network infrastructure leaders AT&T and Verizon.

And how things have changed. Only a few years ago there was a glut of telecom capacity the size of a butter mountain. Now, thanks to broadband and data hungry video transmission - the demand for network capacity is soaring again.

And video over digital networks has only just begun it's hockey stick growth - so given that a rising tide lifts all ships, Level 3 looks back on the up even though profits seem to keep alluding them. But, that shouldn't last much longer.