Today will prove a milestone for the VOIP market and may well domonstrate that Internet telephony has gone comfortably beyond the tipping point. For Vonage looks set to offer up to 31.25 million shares priced at $16 to $18 each in an initial public offering, according to a regulatory filing today - and Skype has just announced that they now have over 100M users.
Vonage's IPO would value them at $2.6bn will be led by Citigroup, Deutsche and UBS. They have 1.8M customers almost entirely in the US. All of their customers are paying - whereas the majority of Skype's customers are free. Interestingly the valuation of Vonage would be similar to the up front payment Ebay made for Skype.
But, when Ebay bought Skype they had just over 50M customers - and they have nearly doubled them over the last 6 months. Which proves the value of their more international approach, for Vonage site that analysts believe that the US consumer market will reach around 15M by end 2007.
Vonage expects to have the lion share of them - but will face increasingly tough competition from the cable operators offering VOIP, including Comcast, Time Warner and Cablevision.
Mind you, if Internet phone users reaches 500M by 2010 - which we believe could even happen - then there's room for all of them. Vonage should do well - even though they will have to spend hard to stay ahead.
Friday, April 28, 2006
Thursday, April 27, 2006
Comcast gets a boost from their triple play package - finally!
Comcast shares bounced up 5% today as they announced some pretty impressive numbers for their latest quarter on the back of their hi-riding new triple play package of TV, hi-speed Internet access and telephony (Internet based and dead cheap).
The results echo similar strong performance by smaller operators, such as Cablevision, and suggest that customers are keen to sign up for bundled telephone, internet and video packages. Der, I wonder why?!
So now you have the real national battle for triple and then quadruple play ready to rock and roll. And this battle will drive down the price of TV, Internet access and telephony even further, as Comcast and Time Warner Cable slug it out with AT&T and Verizon. Expect DirecTV to sit somewhere in the middle and try to differentiate on price and content while waiting for their own satellite triple play to launch next year.
The real question for investors is who will win the triple/quadruple play battle - cable operators or telco's. Well, for now I would say that they'll will. In the US top 5 expect a couple of cable leaders and a couple of telco's.
So Comcast is well positioned as the US' largest cable company - even though they are late to the table on their triple play. But now that they have it out, they are raking in the customers and it is improving their core cable TV franchise as well.
No wonder their shares bounced up. They will really deserve a further bounce when Comcast proves that they can convert most of their 22M odd cable customers to the triple play and not just the early adopters.
Intel predicts PC market will slow and announces major restructuring
Industry analysts have for a while been pushing for Intel to reinvent itself after recent market share losses to AMD and poor operating performances. They have even questioned whether CEO Otellini should remain. Well, today Intel responded.
They have announced that they expect the PC market to slow this year and only experience single digit growth (which is below most analyst expectations - ooh, I wonder why!). They then stated that their revenues would shrink this year (now I know why they predict such low PC growth numbers...), which is a stellar stuff up for the generally fast growing Silicon Valley icon.
Otellini then stated that Intel would imbark on the most gargantuan review over the next 90 days (too right!) and that the answer was not as simple as just dumping a bunch of their 100,000 employees in the name of cost cutting.
BUT, they do promise a $1bn reduction in costs this year and a $300m cut in capital spending. Which means they will of course shed a bunch of staff after all.
And boy do they need to do something radical for Intel expects sales to fall 3% in 2006 after three years of double-digit growth and at a time when the rest of the industry is performing strongly. Its stock has fallen more than 20% so far this year to become the worst performer on the Dow Jones Industrial Average.
Shame if you're an Intel shareholder - which is most investors on the planet. But, on the plus side Otellini seems serious this time and his job is on the line which is always a great motivator when it comes to doing something radical - and Intel is finally launching their whacky dual core chips in the 2nd half.
So, good luck Intel and boy must AMD be licking their lips - for they have never had a better chance to extend their recent market share gains while Intel attempts the highly distracting corporate reinvention management thingy.
They have announced that they expect the PC market to slow this year and only experience single digit growth (which is below most analyst expectations - ooh, I wonder why!). They then stated that their revenues would shrink this year (now I know why they predict such low PC growth numbers...), which is a stellar stuff up for the generally fast growing Silicon Valley icon.
Otellini then stated that Intel would imbark on the most gargantuan review over the next 90 days (too right!) and that the answer was not as simple as just dumping a bunch of their 100,000 employees in the name of cost cutting.
BUT, they do promise a $1bn reduction in costs this year and a $300m cut in capital spending. Which means they will of course shed a bunch of staff after all.
And boy do they need to do something radical for Intel expects sales to fall 3% in 2006 after three years of double-digit growth and at a time when the rest of the industry is performing strongly. Its stock has fallen more than 20% so far this year to become the worst performer on the Dow Jones Industrial Average.
Shame if you're an Intel shareholder - which is most investors on the planet. But, on the plus side Otellini seems serious this time and his job is on the line which is always a great motivator when it comes to doing something radical - and Intel is finally launching their whacky dual core chips in the 2nd half.
So, good luck Intel and boy must AMD be licking their lips - for they have never had a better chance to extend their recent market share gains while Intel attempts the highly distracting corporate reinvention management thingy.
Wednesday, April 26, 2006
Sprint fails to impress
SprintNextel's latest quarterly results were disappointing. Their earnings were lower on higher integration costs and their subscriber numbers looked weak compared to the competition.
Sprint said it added 1.3 million customers in the quarter, compared with average analysts’ estimates of about 1.4 million, according to five analysts contacted by Reuters. And this was considerable below Cingular Wireless addition of 1.7M customers.
And even their industry leading average revenues per customer (ARPU) slipped.
SprintNextel had better look out, for keeping up with Cingular and Verizon will get harder and harder and Deutsche Telekom continues to pour money into T-Mobile.
Sprint said it added 1.3 million customers in the quarter, compared with average analysts’ estimates of about 1.4 million, according to five analysts contacted by Reuters. And this was considerable below Cingular Wireless addition of 1.7M customers.
And even their industry leading average revenues per customer (ARPU) slipped.
SprintNextel had better look out, for keeping up with Cingular and Verizon will get harder and harder and Deutsche Telekom continues to pour money into T-Mobile.
Microsoft buys company that sells ads on videogames
Microsoft has just announced buying Massive Inc, a private company that places ads on videogames. New York based Massive employs around 80 employees and boasts advertisers such as Coca-Cola and Honda. They generally offer a kind of digital/virtual product placement service. So, you could find yourself driving a Honda in that next car racing game.
I guess Super Mario could turn into Bono and sing the latest U2 song while flying a Bombadier private jet!
But, gaming seems at be all the rage for tech and media companies right now. And Microsoft's planned purchase highlights a belief among game-industry executives that videogames could become a large new medium for advertising.
Major media companies have also begun to increase their investments in game-related media to ensure they stay abreast of consumers' tastes. This week, Viacom paid $102 million to acquire Xfire Inc., a start-up that operates an instant-messaging service that connects gamers over the Internet. Last September, News Corp agreed to pay $650 million to acquire IGN Entertainment Inc., a company that operates a collection of Web sites for game enthusiasts.
I am just left wondering whether Microsoft's purchase of Massive may prove even more industry changing than revealed thus far. I wonder whether one day gamers will get their video games for free as the cost will get subsidised by an ever increasing ad pot.
I guess Super Mario could turn into Bono and sing the latest U2 song while flying a Bombadier private jet!
But, gaming seems at be all the rage for tech and media companies right now. And Microsoft's planned purchase highlights a belief among game-industry executives that videogames could become a large new medium for advertising.
Major media companies have also begun to increase their investments in game-related media to ensure they stay abreast of consumers' tastes. This week, Viacom paid $102 million to acquire Xfire Inc., a start-up that operates an instant-messaging service that connects gamers over the Internet. Last September, News Corp agreed to pay $650 million to acquire IGN Entertainment Inc., a company that operates a collection of Web sites for game enthusiasts.
I am just left wondering whether Microsoft's purchase of Massive may prove even more industry changing than revealed thus far. I wonder whether one day gamers will get their video games for free as the cost will get subsidised by an ever increasing ad pot.
Amazon looking pretty good after all
Amazon.com shares were little changed today after the online retailer upped its annual revenue forecast to around $10bn and said it plans to dial back spending growth in the latter half of the year.
The Seattle-based retailer gave its outlook when it reported quarterly profit that fell 35%, hurt by the cost of employee stock options and higher operating expenses, even as sales surged 20%.
And it looks like their product diversification strategy as well as international operations are helping drive the sales growth. And Amazon is soon to launch their digital content services as they offer an online music service to rival iTunes and their video on demand service to rival Google Video as well as e-books.
All in all I would say that Amazon looks pretty well set as they go in to their seasonally quieter summer months.
And it looks like their product diversification strategy as well as international operations are helping drive the sales growth. And Amazon is soon to launch their digital content services as they offer an online music service to rival iTunes and their video on demand service to rival Google Video as well as e-books.
All in all I would say that Amazon looks pretty well set as they go in to their seasonally quieter summer months.
BBC to embrace blogging and user-generated Web content
The BBC, the UK's leading web property, has decided that it's time for them to throw aside their somewhat stuffy veneer and embrace Web 2.0 - which means blogging, podcasting and all manner of user generated content in a massive relaunch of their sites.
The announcement comes a day after rival Channel 4 made a similar decision as they extended their reach into community-led offline offerings by launching a user-generated comedy channel which follows the earlier launch of a channel that allows audiences to post their own documentaries.
The BBC has also stated thast they want to become the premier destination for unsigned bands through broadband, podcasting and mobile phone services.
And it looks like this newfound desire to embrace the latest Internet trends is designed to make the BBC more appealing to youngsters. Yep, that'll work as long as the BBC and others create the right content and brand for the younger tech-savvy audience as well as getting users involved.
For the future is not about re-creating MySpace functionality alone - the future is truly understanding what converged media is all about for it is not only the convergence of media, tech and tellecomms that is at stake here, but is also about the convergence of user generated content as well as media company content - and that's gonna take a lot of thinking about.
And the more distant future lies in digital content marketplaces as explained by sister channel BigTrends. Let's see who wins this war. But competition will come from all sides - the traditional media companies such as the BBC as well as Internet giants, telcos and new start-ups. Let's see how the BBC manages the next phase of Web 2.0 and the digital content marketplace!
The announcement comes a day after rival Channel 4 made a similar decision as they extended their reach into community-led offline offerings by launching a user-generated comedy channel which follows the earlier launch of a channel that allows audiences to post their own documentaries.
The BBC has also stated thast they want to become the premier destination for unsigned bands through broadband, podcasting and mobile phone services.
And it looks like this newfound desire to embrace the latest Internet trends is designed to make the BBC more appealing to youngsters. Yep, that'll work as long as the BBC and others create the right content and brand for the younger tech-savvy audience as well as getting users involved.
For the future is not about re-creating MySpace functionality alone - the future is truly understanding what converged media is all about for it is not only the convergence of media, tech and tellecomms that is at stake here, but is also about the convergence of user generated content as well as media company content - and that's gonna take a lot of thinking about.
And the more distant future lies in digital content marketplaces as explained by sister channel BigTrends. Let's see who wins this war. But competition will come from all sides - the traditional media companies such as the BBC as well as Internet giants, telcos and new start-ups. Let's see how the BBC manages the next phase of Web 2.0 and the digital content marketplace!
Tuesday, April 25, 2006
Scott McNealy steps aside as CEO of Sun
Scott McNealy the founder and CEO of Sun Microsystems is to step aside and become Chairman. He handed the reigns over to Jonathan Schwartz, currently the President and COO.
This is a historic move for the once leading Silicon Valley tech giant. McNeally was one of 5 that founded Sun and was reluctantly persuaded to become CEO as they went to raise their seed money (from one of my ex-investors).
And he had one mean task ahead of him given that Sun was the 17th workstation company to launch. But he did it, and led them to victory in the workstation space and then to glory and fame in the Internet server space.
Even though Sun have struggled since the dotcom collapse, McNeally now hands over a solid franchise. And with their recent acquisitions, their new software strategy (centred around open source), Java and their all new Galaxy range of servers, Sun could be on the up again.
I just can't help feeling that if they could pull off a transformative merger then they could get back on top. Maybe McNeally should focus on that while Schwartz runs the shop. And with their share price gains this year (up over 20%) - they almost have the currency as well.
This is a historic move for the once leading Silicon Valley tech giant. McNeally was one of 5 that founded Sun and was reluctantly persuaded to become CEO as they went to raise their seed money (from one of my ex-investors).
And he had one mean task ahead of him given that Sun was the 17th workstation company to launch. But he did it, and led them to victory in the workstation space and then to glory and fame in the Internet server space.
Even though Sun have struggled since the dotcom collapse, McNeally now hands over a solid franchise. And with their recent acquisitions, their new software strategy (centred around open source), Java and their all new Galaxy range of servers, Sun could be on the up again.
I just can't help feeling that if they could pull off a transformative merger then they could get back on top. Maybe McNeally should focus on that while Schwartz runs the shop. And with their share price gains this year (up over 20%) - they almost have the currency as well.
Monday, April 24, 2006
Sun Microsystems back on the growth path
Sun Microsystems has just delivered their latest quarterly results. And they show that Sun is finally back on the growth path. Earnings were better than expected on a small loss (largely thanks to acquisition charges) and revenues were up nicely. Sun's share price followed the upwards trend.
Sun said it had a net loss of $217 million, or 6 cents per share, for its fiscal 3rd quarter ended March 26, compared with a year-ago net loss of $28 million, or 1 cent per share. Revenue rose 21% to $3.18 billion.
It looks Sun's their acquisitions are paying off. And their open source software strategy looks timely. Next up will be their new line of Galaxy servers. If they do well, as they should, 2006 could prove a dicisive year for Sun.
Sun said it had a net loss of $217 million, or 6 cents per share, for its fiscal 3rd quarter ended March 26, compared with a year-ago net loss of $28 million, or 1 cent per share. Revenue rose 21% to $3.18 billion.
It looks Sun's their acquisitions are paying off. And their open source software strategy looks timely. Next up will be their new line of Galaxy servers. If they do well, as they should, 2006 could prove a dicisive year for Sun.
Amazon comes up with service to deliver movies on both HD-DVD formats
Just as we all tremble in fear of the latest video format war a la VHS versus Betamax, Amazon are charging to the rescue of innocent consumers by offering a service for content owners to be able to deliver hi-definition movies in either format.
And they will publish these DVD's on-demand (i.e. made to order) so there is little of risk of being left with a bunch of inventory from whoever loses the battle that Toshiba and Sony are about to wage.
Amazon are trying to place themselves front and centre in the new digital media space. They will soon launch both their music and video download services.
Amazon, Google, Yahoo, Apple, AOL and MSN are driving digital content delivery systems worldwide. By 2010, digital content will be king and one of them will have to be it's queen.
I wonder who will win that battle? It's still wide open - but the prize will be massive.
And they will publish these DVD's on-demand (i.e. made to order) so there is little of risk of being left with a bunch of inventory from whoever loses the battle that Toshiba and Sony are about to wage.
Amazon are trying to place themselves front and centre in the new digital media space. They will soon launch both their music and video download services.
Amazon, Google, Yahoo, Apple, AOL and MSN are driving digital content delivery systems worldwide. By 2010, digital content will be king and one of them will have to be it's queen.
I wonder who will win that battle? It's still wide open - but the prize will be massive.
Intel launches 'vPro' - for businesses.
Intel has just launched another brand and another platform. Alongside Centrino for laptops and Viiv for entertainment devices, Ingtel has just launched the latest wheez/brand/platformy thing called vPro.
You can't help wondering whether this proliferation of platforms and brands will help Intel or confuse us all so much that we resort to good ol' single chip branded PC's with AMD on them.
In the mean time though Intel assure us that their platform strategy is better for users and PC makers (I wish I knew why?). And VPro will make the management and security of corporate PC's more straight forward. Sounds good so far.
Intel said vPro includes an updated version of a feature called Intel Active Management Technology that can perform management tasks remotely, such as helping a PC recover from a so-called "blue-screen" system crash. Another feature is Intel Virtualization Technology, which partitions a computer into secure zones and user-controlled sections.
You can't help wondering whether this proliferation of platforms and brands will help Intel or confuse us all so much that we resort to good ol' single chip branded PC's with AMD on them.
In the mean time though Intel assure us that their platform strategy is better for users and PC makers (I wish I knew why?). And VPro will make the management and security of corporate PC's more straight forward. Sounds good so far.
Intel said vPro includes an updated version of a feature called Intel Active Management Technology that can perform management tasks remotely, such as helping a PC recover from a so-called "blue-screen" system crash. Another feature is Intel Virtualization Technology, which partitions a computer into secure zones and user-controlled sections.
Intel plans to work with software vendors, including Symantec, to load special protection programs into the chip that can filter out packets of data that have been corrupted by viruses.
Sounds good for Symantec, Intel and the corporate help desk, but maybe less good for Microsoft who are trying to bake PC management and security into Vista - presuming that they launch it some time soon.
Computer Associates ex-CEO set to plead guilty to fraud charges
Sanjay Kumar, ex-CEO of Computer Associates (CA) looks set to plead guilty to fraud charges brought against him and a colleague at a Court in Brooklyn later today. Just when you thought all the hot corporate stuff was going on solely at Enron's trial!
The CA executives were indicted in September 2004 on financial fraud charges in connection with allegedly back-dated contracts that allowed the business software giant to appear to meet financial goals by continuing to book revenue even after a quarter ended.
Apparently they specialised in 35 day months. Hey, that's original. If proven guilty Kumar could be put away for a very long time. Let's hope cases like this send a message to future fraudulant executives severe enough that they behave as they should - protecting investors, customers and employees - not ripping them off.
The CA executives were indicted in September 2004 on financial fraud charges in connection with allegedly back-dated contracts that allowed the business software giant to appear to meet financial goals by continuing to book revenue even after a quarter ended.
Apparently they specialised in 35 day months. Hey, that's original. If proven guilty Kumar could be put away for a very long time. Let's hope cases like this send a message to future fraudulant executives severe enough that they behave as they should - protecting investors, customers and employees - not ripping them off.
Blackstone invest chunk of money in Deutsche Telekom
Blackstone, the US private equity outfit, has just decided to invest a chunk of change in Deutsche Telekom. And it makes you wonder why? After all the German ex PTT has hardly been performing very well the last couple of years.
But, Deutsche has the where with all to become the Verizon or AT&T of Europe and is well positioned to be a leader in the quadruple play - video on demand, hi-speed Internet access, fixed and mobile telephony.
And it isn't cool to be a single play operator any longer a la Vodafone. Convergence is the future. I guess Blackstone also like Deutsche's strategy of growing their mobile business in the US while also investing in Eastern Europe and driving integrated, converged services elsewhere.
Plus, Deutsche has been restructuring and laying folk off so hard that their share price is probably due for a technical bounce.
But, Deutsche has the where with all to become the Verizon or AT&T of Europe and is well positioned to be a leader in the quadruple play - video on demand, hi-speed Internet access, fixed and mobile telephony.
And it isn't cool to be a single play operator any longer a la Vodafone. Convergence is the future. I guess Blackstone also like Deutsche's strategy of growing their mobile business in the US while also investing in Eastern Europe and driving integrated, converged services elsewhere.
Plus, Deutsche has been restructuring and laying folk off so hard that their share price is probably due for a technical bounce.
Friday, April 21, 2006
Microsoft hires head of ask.com to run MSN - what should he do ?
Microsoft has taken the unprecedented move of hiring the head of a major competitor to run one of their most critical business units - MSN. Which may reveal more than anything just how stuffed the online division is.
For the Wall Street Journal have announced that Microsoft is about to announce that Steve Berkowitz, ex-head of Ask.com and one of the most senior executives at Barry Diller's IAC/InterActiveCorp, is to take over the running of MSN.
Berkowitz is credited with the recent success at Ask.com. He sure needs the practice for MSN - which looks to need a serious dose of improvement. First up will be figuring out where MSN should go and how they can compete vis a vis Google, Yahoo et al.
Given that MSN is and likely always will be owned by Microsoft - I would have thought that their USP should be "the portal for advanced and comprehensive software services". If I want to I should be able to manage my diary, my life, my data and even my office applications from MSN.
The new MSN should have the most advanced email service and they should tightly integrate everything with MS Mobile. Then they should deliver the most functional and value adding search engine a la Ask.com. Maybe they should even buy Ask.com?!
Content should be secondary, comprehensive, but secondary. MSN should be my online alternative to a PC's hard drive. Then MSN can differentiate versus the other giant portals and search engines - and maybe even get a great deal more attention and respect within Microsoft.
And if they do not do it - Google or Yahoo probably will. Then Microsoft will have thrown away their Internet legacy and one of the most valuable franchises on the Web going fowards.
For the Wall Street Journal have announced that Microsoft is about to announce that Steve Berkowitz, ex-head of Ask.com and one of the most senior executives at Barry Diller's IAC/InterActiveCorp, is to take over the running of MSN.
Berkowitz is credited with the recent success at Ask.com. He sure needs the practice for MSN - which looks to need a serious dose of improvement. First up will be figuring out where MSN should go and how they can compete vis a vis Google, Yahoo et al.
Given that MSN is and likely always will be owned by Microsoft - I would have thought that their USP should be "the portal for advanced and comprehensive software services". If I want to I should be able to manage my diary, my life, my data and even my office applications from MSN.
The new MSN should have the most advanced email service and they should tightly integrate everything with MS Mobile. Then they should deliver the most functional and value adding search engine a la Ask.com. Maybe they should even buy Ask.com?!
Content should be secondary, comprehensive, but secondary. MSN should be my online alternative to a PC's hard drive. Then MSN can differentiate versus the other giant portals and search engines - and maybe even get a great deal more attention and respect within Microsoft.
And if they do not do it - Google or Yahoo probably will. Then Microsoft will have thrown away their Internet legacy and one of the most valuable franchises on the Web going fowards.
Ericsson proves that scale is key in telecom networks delivery
Ericsson announced the results for their latest quarter today and delivered weaker earnings and margins, due to the integration of Marconi, but revealed a solid bounce in revenues over a year ago (nearly 20%).
Ericsson and Alcatel/Lucent look set to drive the telecom network equipment market going forwards - for they have the focus and the scale. And they will need it to compete in a world where their customers will get larger and larger through competition and aggressive new Chinese compettors will take share and drive margins down (further).
It makes you wonder when Nortel will consider an acquisition/sale and when Nokia and Motorola will spin out their network divisions.
In the mean time - the future looks bright for Ericsson and the mobile industry in general and Ericsson remind us that “The evolution to mobile broadband is accelerating. This new powerful HSPA technology dramatically improves the consumer experience of new multimedia services such as mobile office, music and mobile TV,” said Mr Svanberg. “We have a clear lead and are rolling out HSPA networks in four continents.”
Ericsson and Alcatel/Lucent look set to drive the telecom network equipment market going forwards - for they have the focus and the scale. And they will need it to compete in a world where their customers will get larger and larger through competition and aggressive new Chinese compettors will take share and drive margins down (further).
It makes you wonder when Nortel will consider an acquisition/sale and when Nokia and Motorola will spin out their network divisions.
In the mean time - the future looks bright for Ericsson and the mobile industry in general and Ericsson remind us that “The evolution to mobile broadband is accelerating. This new powerful HSPA technology dramatically improves the consumer experience of new multimedia services such as mobile office, music and mobile TV,” said Mr Svanberg. “We have a clear lead and are rolling out HSPA networks in four continents.”
Two more WCDMA networks were launched during the first quarter, bringing the total number across the world to 93, 50 of which are supplied by Ericsson.
Ericsson said that long-term industry growth drivers “remain solid” and the number of mobile subscriptions continued to grow, primarily driven by emerging markets. They also said the global number of mobile subscriptions was expected to pass the 3bn mark in 2007.
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