Category Archives: companies

Google Phone – gPhone’s Android is landing?

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Google is *incredibly* good at keeping secrets, and the rumors of a new gPhone or Google Phone have been flying for some time.   However CNET’s Tom Krazit is reporting tonight that Google, on Monday, will unleash “Android”, an open source approach to mobile phones.     As they have with Open Social, Google will unveil an open source approach to development of mobile software.    How do you know it’s going to be good?    Google does not do bad software.   In fact the Apple iPhone’s most compelling feature – mapping – was driven by Google software.

As I noted before about  Google’s Phone ambitions this is another brilliant move which is clearly seeking to dominate the mobile advertising space rather than try to develop and market new hardware.   

Google’s mantra could not be clearer if it was listed on every home page on earth:  “Free software by anybody and for everybody.  Monetization by ….. Google.

The Social Network Reality Show: High stakes, big money, false rumors.

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The game is social networks.  The stakes are very high, and the news and rumors are flying fast, furiously, and inaccurately.   Here is the latest in the saga of Google’s Social Networking entry which, with Myspace’s participation, is the new Social Networking juggernaut (though it remains to be seen how all the participants will use it). 

More on the Open Social vs Facebook battle for the hearts and minds of developers and, far more importantly, users:

1)  After a 240,000,000 partnership with Microsoft the blogs (including here) lit up soon after suggesting that Facebook recieved another 500 million from two other private groups.   This was false.   It is very conspicuous in my view that the rumor rose and spread so fast, and that Facebook did nothing to quell that rumor.  This news is still shaking out over at TechCrunch which reported the rumor of the 500 million and now reports it was false.   Another example of how news at the speed of real time may not be news at all.

2) Google says Open Social is open to Facebook and all are welcome (I believe them).

3) Facebook says Google was not keeping them in the loop on Open Social (I believe that as well)

4) Facebook says they may join the Open Social movement, but suggest they have their own great stuff coming shortly.    I’m skeptical they can “out open” Google, though they probably could come up with some great new social networking applications quickly.  

However on balance I think Facebook really is in big trouble here.     Much of the recent hype – which was overdone anyway – assumed that Facebook would be the key beneficiary of the boom in social networking.   The reasoning suggested that although Myspace is  bigger than Facebook it was a “closed” environment, favored by a demographic that has far less value to advertisers.    Facebook, that thinking went, will continue to grow explosively, open up gradually, target advertising very directly, and become the dominant social networking platform. 

Then there was Facebook’s refusal to sell to Yahoo for a reported 1+ billion.  This was followed by big negotiations with many key players, culminating a (much overhyped) 240 million deal with Microsoft to cooperate, run MS Live searches, and drive some MS and Facebook advertising.    Then came the false rumor of 500,000,000 more in capital which for many seemed to solidify Facebook’s valuation of 15 billion – a somewhat sloppy projection of the Microsoft partnership price.

So, what is Facebook worth in an Open Social world where even Myspace is a Google partner?   No, the answer is not 15 billion.

Google as Social Network = THE killer application?

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Google’s acting social at the Googleplex and this could become an earthquake in the social network landscape.   TechCrunch reports that Maka Maka appears to be the Google codename for their social network integration, which may be a way to tie together existing Google stuff in a seamless and user friendly way.   For many of us Google aleady has a lot of info.   I use Gmail, Google Toolbar, and more.  If they simply say to me “click here and we’ll make it all work great” I’m going to do it.    If it works, I’ll keep it.  If I, and 50,000,000 other users keep it Google will be bigger than Facebook….almost overnight.  If they integrate it all with the upcoming Google Phone?   Wow.

TechCrunch:
The real killer app for Google is not to turn Orkut into a Facebook clone. It is to turn every Google app into a social application without you even noticing that you’ve joined yet another social network.

Hey Yahoo!   Why don’t you DO THIS!    Use Mash to get all Yahoo users going.  Don’t ask others to sign them up – simply have a  one click Mash page creation thing where YOU set up a page for all Yahoo users…..right NOW.    If people want to delete it, fine.  If not, rock on with the new largest social network, and populate it with people …. later.

Microsoft wins on matching employee donations – way to go MS!

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 This in from Mercury news.   Kudos to Microsoft for this level of generosity, and Google and Yahoo should do *at least* this much!    C’mon Google, you of all companies owe it to the world to help your peeps give back from those fat paychecks and options!

Mercury News Item:

Company giving Microsoft boasts that it provides up to $12,000 in matching funds for employee donations to charity – far surpassing Google, Adobe, Cisco Systems, Hewlett-Packard, Yahoo and eBay. It was the largest corporate giver to United Way Silicon Valley’s last campaign, with $1.2 million in employee and company matching gifts. About 60 percent of its employees donate, far surpassing the usual 20 percent of most valley companies, according to Mark Walker, president of United Way Silicon Valley.

San Jose Mercury News – A Cautionary Tale from Business Week

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There is a great summary at Business Week of the  remarkable rise and pending fall of Silicon Valley’s newspaper – the San Jose Mercury News.     They note that in many ways the Mercury News saw it all coming, but still failed to position itself to profit from the migration of offline info to online info.  

Although the article does not make this point, to me the failure supports the idea that paradigm shifts do not come from old systems evolving into new ones even when the old systems “get it”, rather they come from new folks thinking out of the old boxes and building the next generation of innovative solutions basically from scratch.  

Obviously new technology rests on the shoulders of old technology, but it seems reasonable to assume that the next big things are not going to come from the previous big things, they are going to spring up from the harsh, quirky, and shifting sands of technology and innovation.     I would suggest that IBM might be an exception to this notion but clearly Microsoft, then Yahoo and Google, now YouTube, Myspace and Facebook all fit this model of major changes coming more from scratch than from a slow simmering of existing ideas.     This also helps explain the challenges of Venture Capitalism in finding “the next big thing”, which may right now only be known by the glimmer in a college kid’s eye.

If so, who is next?

Facebook chalks up another $500,000,000 ::: UPDATE – NOT TRUE!

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 Update:  This story was FALSE.   Facebook had an MS deal but not additional capital

Facebook founders were still sipping champagne from their 240 million deal with Microsoft as they scooped up 500 million from two hedge funds yesterday.   I’m not clear yet if the valuation was the same but presumably this was all a related deal, and Facebook is now solidly valued at 15 billion.    WoW. 

That’s a lot of money, especially when you recognize that the value is all in people like …. me and you.   Facebook sold our eyeballs to advertisers for something like  $175  per user eyeball.   15 billion / 42 million users   Jeez – I think they are cheaper on Ebay!

[No, this really is not a legit metric – investors are placing huge value on Facebook’s team and future potential more than simply the users, though users are the key to any social network kingdom as the information serfs, and deserve more respect from the social network kings and queens and capitalists]

Marcus at PlentyofFish always has great insight about the relationship of ad revenues to success and to expenses.     Marcus notes that even with the  huge pageviews at Facebook he calculates the advertising to yield to be only  $0.10 per thousand views compared to the $15.00 per thousand Google expects to pull in at their site.     Marcus’ important point is that even as online advertising is exploding most of those revenues are going to the very top sites, most revenue comes from very low CPM advertising, and the number of sites dipping into the advertising pool goes up every …. second.    He doesn’t sound as optimistic as he used to, and that should be alarming for small time web publishing guys like … me.

Hmm – it would be interesting to calculate a theoretical upper limit to the total social online advertising market using:

Total number of online people x  hours spent online x pageviews per hour x  .10 CPM. 

Just off top of my head I get this for USA:

200 million x 2 hours online day x 30 views per hour = 12 billion pageviews per day
 x .10 CPM =   $1.2 million per day

Huh?   This is incredibly low, but I must be missing something here.    The .1 CPM is a fraction of what is normally negotiated so I’ll recheck that..

Microsoft loves Facebook

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Microsoft bought a 1.6% stake in Facebook today for $240,000,000.   Reported at NYT here.  This give a market value to Facebook of right about 15,000,000,000.   

WoW

I do think Microsoft is smart (and Facebook stupid) to make the cash outlay much smaller than most had thought, giving them an alliance and a powerful foothold without spending the “billions” that apparently would have been required to buy a big stake in the internet’s latest wonder site.

With *revenues* of about 150 million Facebook is now valued at …. wait for this ….. one hundred times revenues.    This is simply a spectacular and speculative valuation, even by internet standards where  even a Google is only valued at about fifty times earnings.   Note that if Google was valued at 100x their expected revenues over the next year their capitalization would be something in the neighborhood of 1.5 trillion dollars.    

Many will suggest that the value in keeping Facebook away from Google was so great that MS has won big, but I’d predict not much will come of this alliance.     Like many online regulars I’m already tiring of Facebook and looking for a completely open, portable social application.   To justify today’s value Facebook will need to grow pretty much like nobody’s ever grown before.    Sure, it’s possible, but I think this will go down with Google’s YouTube aquisition as good money after bad, because monetizing Facebook traffic will be far more problematic than Microsoft seems to think.

All that said, congratulations to the Facebook team who must be popping a few corks about now…. no champagne is good enough for this news.

Google v Microsoft over Facebook

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Henry Blodget over at Silicon Alley Insider has a thoughtful post today predicting that Google will beat out Microsoft in the Facebook sweepstakes, and that the real winner here is Facebook founder Zuckerberg who will walk away from any deal with a jaw dropping, market driven valuation of Facebook.     Blodget notes that even if Microsoft spends enough to win the Facebook bidding war Google wins again because Facebook will simply milk Microsoft’s cash cow leaving them with little in the way of a superior online MS environment.

I think this last point is particularly relevant, and poses one of the key threats to Microsoft’s long term viability.    Unlike Google and even Yahoo, new companies don’t appear to see a Microsoft aquisition as much more than a big payday.   It’s not clear to me that Google does any more for the companies it aquires than Microsoft does, but I do think the perception is that Google will inject innovation and enthusiasm where Microsoft will just absorb you into their failing online collective.    I don’t think these assumptions are, on balance, valid, but I think they are part of the equation when new companies and their generally young, inexperienced founders are courted by the big players.

Pearls before Twine

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update:  I think I was in a bad mood on this – not fair to be so hard on a new company without even trying it.   Sorry Twine, I hope you … ROCK! 

Twine is the new social network applications just “launched” at the Web 2.0 summit in Silicon Valley.   Like Paul Kedrowsky   I’m skeptical before I’ve even had a chance to test Twine.   (I will test it and review as soon as I get an invite…).

No, this is not fair but I’m getting sick of applications priming the buzz machine with hyperbole before they have even put out the application to enough people that you can figure out if it’s “Web 3.0” as Twine claims it is, or just another overhyped social application that needs widespread adoption to be useful.   

My favorite 2.0 observer, Tim O’Reilly, has a detailed review of the Twine demo after which he wonders if they’ve succeeded.    Note to Twine – if you can’t convince people in a demo that you are great you probably have some work to do, and you might even suck.

Now I really feel like an Assclown 2.0 to be so critical of what is clearly a thoughtful and potentially great application from Nova Spivak, a very clever Web 2.0 fellow. 

But I think I’m suffering from Web 2.0 stress syndrome where the hype, lies, and video clips are overwhelming me with irrelevant stuff while I try desparately to winnow out the good stuff from the bad.   We need an automated routine (aka ‘search agent’) that  does the preliminary winnowing of content and organization of other stuff and my stuff for us.  Now THAT would be web 3.0 and THAT would be worth my time as well as the time of all the moms, pops, and kids out there who are the backbone of the new web.   Silicon Valley often spills out silly companies and ideas as if the other 99.9% of the global population is clueless or irrelevant.   Theoretically Web 2.0 was to change that and make people, not computers, the center of the internet universe.   But sometimes I wonder if the Silicon folks have even paid any attention to that change.  

G Phone Musings

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David Berlind has a very insightful piece about the upcoming offering from Google in the cell phone space.   Usually this is called the “G Phone” (or maybe “gPhone”?  “gee, Phone!”), and it’s certainly coming soon to a handheld device near you.  

It is still not clear if Google will actually endorse the hardware as well as the mobile software they’ve been working on, but there will be a phone by next year (I still predict it’ll be out in time for Christmas), and it will feature rich integration with Google maps, search, and probably a bunch of other clever Googley applications developed for the explosive mobile market.

Berlind notes that we are all seeking technological “religious experiences” with our devices, and the current crop of phones, even including the iPhone, do not deliver enough of them.

David is harder on the Apple iPhone than I have been but I agree that the holy grail ain’t here yet, and also agree that Google, learning from iPhone’s mistakes and all the hype and feedback about that project, might hit the cellular nail on the head with the gPhone.      I predict a major Google phone innovation in using advertising to defray the cost of calling.   This could take many forms but I think a clever integration of highly targeted advertising during web browsing and text messaging could be fairly inoffensive to users but provide a decent portion of the revenues that the carrier would need.   Frankly all Google needs to do is reduce the cellular cost enough to the customer that they’ll switch over from other carriers like ATT and Sprint.     These companies have done little to create brand loyalty and a better system will have users leaving in droves.

But we may have to wait until 2008 to find out how good the gPhone is going to be.  

Unless they are out by Christmas, in which case I may actually do my Christmas shopping early this year.