Category Archives: microsoft

Zune Video

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Robert Scoble’s got the Zune Scoop direct from Microsoft in the video over at Scobleizer.

Assuming that the Zune is as good or somewhat better than the IPOD, as appears to be the case, this is shaping up to be a very interesting test of whether Microsoft can overcome the branding “momentum” of Apple and IPOD, nothing short of a spectacular success.

I’d think timing will matter a lot.  If Zunes, coming out November 14, sweep into the Christmas scene with a bang and lots of positive press it’ll bode  well for the long term prospects.

If the Zune song sharing  feature takes off it could signal a turning point in how the big players change the way they integrate the consumer into the process of selling to other people.   I predict that the company that most effectively integrates user content and user revenue sharing will be the big winner this decade, and that it’s still anybody’s game.

Zune song sharing can be summed up in two words. Brilliant, and Finally!

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Rumor has it that Zune will encourage song sharing with revenue share to the “user song promoter” who sends a song to friends to listen to free and then gets some money if they buy it. MS certainly would be wise to cut the users in on the profits.

As I recently noted it’s surprising how users still don’t demand more of a piece of the action, though not surprising how Google, YouTube, Myspace, Yahoo, MSN, and other user content collection points, the key beneficiaries of this arrangement, have not done much to innovate in that direction.

Good for MS to break that ice. Users, collectively, hold all the *future* revenue streams in their wallets. Therefore they could hold most of the power. It’s about time they used it.

More at CrunchGear

The Gadget Revolution. Gadgets of the world, UNITE!

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A nice ZDnet interview with Google’s Adam Sah suggests the increasing importance gadgets will play in the online landscape. I met a brilliantly enthusiastic Adam at Mashup Camp back in February when all this was just starting to take off and it’s great to see Google is now allowing the gadgets to be used on any website.

In March, at Microsoft’s MIX06, the innovative LIVE team was also very bullish on their LIVE Gadgets which clearly are destined to become a major focus over there as well.

Gadgets create some very interesting complications in terms of website stats and monetization. Google has not focused on monetizing this environment yet and it will be interesting to see how they approach that, though it’s easy to predict they’ll create some revenue share with the gadget publisher to keep everybody happy.

The legal fun may come from compatibility issues with IE7 and Vista. Microsoft would have some incentive to prefer their own sidebar gadgets, which will run on the Vista Desktop, to whatever Google gadgets are developed for that same niche. Yet Google as always is ahead of the marketing curve. Pushing gadgets to be compatible with websites, and not just those with Google desktop installed, may diminish what would have been a big MS advantage with Vista.

Hey – that’s a bit too cynical on my part – I think as they often have done Google is just expanding on a great concept that happens to be a good marketing route as well.

Google Gorg replacing Microsoft Borg? Don’t be P/E vil?

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Chris “Factory Joe” Messina of Flock has a provocative post about how Google is …. continuing to take over the internet world.

Although I’m more concerned about the virtual monopoly on search rather than Google’s assualt on Microsoft’s virtual monopoly on operating systems and office applications, everybody is well served to start thinking, as Voltaire sort of suggested hundreds of years ago “Is an all-Google world the best of all possible worlds?”

The answer, of course, is NO. Google’s brought great stuff and should keep on bringing great stuff. Google’s been rewarded with almost unimaginable riches and that’s fine. It may even be true that the Google juggernaut has some juggernauting to do before it needs to be brought in check. Sometimes it’s great to let super clever people just run with things until they run out of steam.

But like Chris I think it’s now clear that stock prices and commercial considerations have considerable influence on Google and their decisions and operations. You don’t have to think Google is running around intentionally doing monopolistic things to worry that if the going gets tougher and they no longer have so much of the search market and are fighting to maintain the stock Price Earnings ratios and options values the “don’t be evil” mantra may be interpreted more as “don’t be P/Evil-keep Google on top”! Wait. I think that Mantra change is already under way.

Google is a great company, but as Chris suggests that doesn’t mean we should stop keeping our eyes on them.

Disclaimer: I’m hardly a market mover but should say I do have stock in Google competitor Yahoo and puts on Google because I thought it was overpriced.

Prediction: Google will buy Facebook for about 1.1 billion

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Irrational exuberance in the dot com shopping aisles?

No, it’s a chess game and Google’s winning….again.

I’m really starting to understand what seems like irrational exuberance on the part of Google and the major players. A Google aquisition of Facebook would be consistent with what Robert Scoble suggested is happening: Google is building a moat around it’s advertising business.

Steve Ballmer also suggested this notion in his recent BusinessWeek interview, ironically fretting that Google could monopolize the media business. Yikes, Steve would really run out of chairs then?

I can almost hear Ballmer to Schmidt:
“Hey Cowboy, there’s only enough room in this here internet for ONE monopoly you, you, you dirty monopolistic sonofabitch BASTARDS!”

Schmidt to Ballmer:
“HEY! DROP that chair and step AWAY from the Vista Browser!”

Google, with tons of cash to burn and a staggering market cap, has far less to lose in the high stakes internet poker game than Yahoo, Ebay, or even Microsoft. Microsoft is bigger than Google and theoretically richer, but unlike Google Microsoft has yet to figure out good ways to monetize their (improving) search services and (not improving) content services.

Ballmer’s juggling how to preserve his big ticket MS Office and Vista projects. Yahoo’s worried about plunging valuations and people leaving and the fact that a billion represents a lot more to them than it does to Google.   This is almost certainly complicating the Yahoo Facebook negotiations right now.  Ebay’s pretty fat and happy where they are. Meanwhile, Google can focus in laser-like fashion on keeping Google in the driver’s seat with it’s superb contextual advertising monetization.

The best defense is a good offense, so they are buying up properties to increase their control over the advertising space and keep those hundreds of millions of eyeballs out of the hands of MS and Yahoo.

Will this work? I say probably not for similar reasons it was stupid for Yahoo to buy Broadcast.com years ago. Video is junky and won’t monetize well. It’ll be more of an encumbrance to Google’s core competencies than an asset. But … things change, and in the meantime it’s fun to watch this high stakes game of chess unfold.

It’s a show you won’t see on YouTube.

Facebook worth more than YouTube? Don says “yes”

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Don Dodge over at Microsoft has a great little thumbnail analysis of the business prospects of YouTube and Facebook, and concludes both are way overpriced at current valuations and Facebook is more valuable at 700 million. He cites Scoble’s latest thinking on the topic as well though it seems to me Robert seems too supportive of buying anything that even smells like Web 2.0 and is still feeling a bit hostile toward his ex employer.   I don’t blame him for that since he was way ahead on the new web and blogging and Microsoft’s failure to “get it” must have been really frustrating.

He’s not doing an extensive analysis but this is the best actual math I’ve seen regarding these deals, which as Don indicates with his little summary, appear to be valued more like Granny’s china than businesses. Given the uncertainties I think he’s generous to go 20x expected earnings. The landscape is changing daily and it’s not clear people will stick to favorite sites the way they stick to favorite brands (I predict we the people will not show much in the way of online brand loyalty, and this will shake it all up a lot in the coming years).

Ballmer on YouTube Google “transferring the wealth out of the hands of rights holders into Google”

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This is a great interview by Business Week of Microsoft’s CEO Steve Ballmer on Web 2.0 valuations and the competitive landscape up at the top of the heap, where Ballmer suggests only companies like MS, Google, Yahoo, and EBAY can even afford to think about doing the billion dollar deals. It’s a key point often lost on those who like to see valuations based more on financials and profits. Ballmer is noting that the competitive landscape can change these values.

But most interesting is this assertion:

The truth is what Google is doing now is transferring the wealth out of the hands of rights holders into Google. So media companies around the world are all threatened by Google. Why? Because basically Google is telling you how much of your ad revenue you get to keep.They better get some competition. Us. Yahoo!. Somebody better break through or you can short all media stocks right now. As long as there are two, you can hold onto media stocks. Google understands that. And that’s one reason why they’re willing to lose money up front.

Fascinating. He’s saying that Google’s trying to *monopolize* the media market. I certainly think there is some truth to this though we are way past the good old days where barriers to entry could let a big, rich, clever company – let’s say Microsoft – really do a good monopoly play on things everybody needed to use with computers. Part of the Google advantage he’s leaving out is that they really do intend to share most of the revenues with the producers and they have become so good at monetizing that, Google could argue reasonably, you’ll make more sharing revenues with Google than building your own advertising networks. My experiences comparing adsense returns to “roll your own ads” are fairly extensive and I can say that it’s very hard to beat adsense returns by creating your own advertising streams *even excluding the potentially huge cost of a sales staff*.

I think the main exception to Adsense as the best choice is what we see at super targeted niche sites like TechCrunch.com where they can charge about 10k monthly for a modest sized graphical advertisment.    Battelle’s Federated Media is hoping to bring this targeting advantage to a broader network of sites but I remain guarded in my optimism that Google’s highly automated and calibrated approaches won’t do a better job than humans do in most advertising spaces.

So, I think Ballmer’s right that competition will help publishers, but Yahoo and MSN sure better strap on the thinking caps and get their contextual advertising networks working much better than they currently work at providing revenue to all of us hard working internet small time publishing people out here.

Also, and this advice to MS and Yahoo is free and will knock Google out of the driver’s seat in a few months:  Launch your contextual ad networks with a 100% revenue share as an incentive for publishers to switch over.    At 43% of Google’s revenue Adsense is a huge factor at Google.

Mark Cuban to Google – you are crazy! JoeDuck to Google – just show me some money!

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Mark Cuban, no stranger to online video having made about a billion in that field, challenges Google’s sanity in the YouTube deal here.

It seems to me Cuban’s been the most insightful of those reviewing this deal and my first reaction is “brilliant stuff from an insider”, but I also respect how clever Google is and will continue to be at re-railing the online train.

Big producers will do big deals with Google as they are right now.   The growing community of small time content producers (e.g me) is a lot more willing to share and forget about copyright encumbrances *as long as you cut me in on the action*.

If Google can monetize my stuff better or close to as much as I can then more power to Google.   I’m rooting for Yahoo! winning the monetizing battle though because …. I like them better and have stock.   But there’s room for both, and I think we’ll see in the coming years that the rising tide of online ads will lift most of the ships.

I’m confident I’m speaking for 80%, and probably 98%, of the long tail when I say that the long tail, especially in video, is going to attach to the entity that can best monetize their work be it professional full length movies or stupid cat trick clips.

Can the other 2% of content people sue them?  Sure, but not painfully enough to stop the online video train o’ progress, a train that’s sure to bring us the most garish, irrelevant, superficial, and poorly produced video yet seen on earth and then find a way to turn a few bucks on showing it off to people.    God bless America!

Google and Youtube

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Deals with Youtube and Google are flourishing today in the fertile ground of a 1.6 billion dollar aquistion of the online video leader* by the online money and search leader. The announcement is expected this afternoon or evening that Google’s bought Youtube for 1.6 billion. If Yahoo picks up Facebook (rumored but I think unlikely) it’ll signal an interesting consolidation of key Web 2.0 sites by the more established huge players. This consolidation seems to support the idea that the big guys see it as cheaper to wait until the rich and creamy high traffic sites rise to the top and then buy them up (Microsoft made an early and successful habit of doing that as well).

However at these billion+ valuations I’m skeptical the strategy can work as effectively as buying smaller companies to consolidate niche traffic. ie Flickr=good deal for Yahoo, Facebook=bad deal.

CORRECTION:  Really, Yahoo is the online Video leader, Myspace second and Youtube third.  Google video added to Youtube will probably push them to number one, but as usual Yahoo!’s doing it right but not getting credit for their leadership.

Google Gadgetry and Yahoo Hackery. Welcome to the new WorldWideWebery

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It’s great to see Adam Sah’s Google Gadgetry project move ahead with today’s announcement that Gadgets can be created to work on any website.    Adam was at both Mashup Camp 1 and Mashup Camp 2 and it was neat to see how a little project had become a big project over a period of only 4 months.    It’s likely now to become a gigantic project as Yahoo, Google, and MSN vie to maximize their online presence on, within, and interacting with other websites.

This announcement suggests to me even more strongly that the browser and desktop are going to move in the direction of becoming a place populated by many different gadgets – basically mini applications – and users will organize their offline and online experience using them.

This bodes significant changes in our typical website model as people slice and dice their sites and gadgets in the coming web 2.0 world where information flows freely and according to the needs, demands, the stupid and the smart whims of the users.