Wednesday, May 31, 2006
Yahoo and Video Uploading Service
The video phenomenon started with YouTube--with a tagline Broadcast Yourself. Then Google Video followed suit. Now, Yahoo is joining the race.
WSJ reported that: "Video-sharing start-up YouTube Inc. says consumers watch more than 50 million videos a day on its site and upload more than 50,000 videos to YouTube daily." the same article also noted that: "Americans are increasing the amount of video they watch on the Web. Consumers viewed 3.7 billion Web video streams in March, with each viewer watching around 100 minutes of video content on average, according to research firm comScore Networks Inc."
Apple itunes allows video sharing (video streaming) to a local network. MySpace allows videos to be uploaded as well. Clearly, there are other sites. If you want a quick comparison of the top ten sites by one reviewer, you can go here.
For a creative rendering of video related to a product (ipod), see here.
So, will Yahoo's new service be different? or just one more of the same? Worth watching.
Monetizing Social Networks Thanks to Google
What's changed? Google AdSense API. According to Google:
Blogger. I wonder how MySpace and Yahoo/360 will react? What about all the user-generated content in other sites?
The AdSense API is ideal for developers whose users create their own web content through web hosting, web publishing, blogging, and social networking applications.
Now individual bloggers or contributors to a community network can receive fair royalties. If you like to read more about it, the first case study--not surprisingly-- is
Interesting issues to ponder.
Google sees more partnerships, not major mergers
By Eric Auchard May 31, 2006
SAN FRANCISCO (Reuters) - Google Inc.
"M&A (mergers and acquisitions) as a method to acquire traffic has not historically worked," Chief Executive Eric Schmidt told Wall Street analysts on a conference call but added: "Again, we would never rule something like that out."
"It (M&A) is a bad business strategy ... and it is not consistent with Google's values and culture anyway," Schmidt said of Google's preference to build markets itself rather than buy its way into them. He was responding to an analyst's question.
His comments follow recent speculation on Wall Street that the Internet industry is poised for consolidation among some of the biggest players in response to slowing growth rates and the in-roads Google's success in Web advertising have made.
Google had $8.43 billion in cash at the end of March, which could be used to fund acquisitions. However, to date, it has been reserving most of its cash for investments in computers and datacenters to handle a growing number of services.
Partnerships with AOL LLC on advertising, Japanese mobile phone company KDDI Corp. in mobile phones and Dell Inc. on computers remain the preferred method for expansion beyond its own internal efforts, Schmidt said.
"The answer is partnerships," he declared.
Executives of the Mountain View, California-based company declined to comment when grilled by analysts on whether partnership deals would always add to Google's cash holdings within one year of an agreement.
In particular, Google officials had no comment on the pricing structure of the partnership announced last week with computer maker, Dell, which analysts have speculated involves Google making big-upfront payments to Dell to win prominent placement for its Web search and other services on Dell PCs.
"It's better if we don't comment on any of the rumors about pricing," Schmidt said. He repeatedly said that Google's agreement was covered by confidentiality agreement.
The deal could mark a milestone for Google, which historically has incurred little upfront cost to attract customers to its services. Instead, it has shared a portion of advertising revenue with partners who drive traffic its way.
Google Chief Financial Officer George Reyes promised the Dell deal would prove cash-positive over the course of the multiyear transaction, but declined to answer a point-blank question about its first-year impact on Google finances.
"Clearly the terms of Dell deal span out over several years," Reyes said. "It will certainly be cash-positive over the course of the transaction," he said.
The conference call with analysts is part of a new push by Google to improve relations with Wall Street, which has been irritated by Google's steadfast refusal to comment on its financial outlook, in contrast to many high-growth companies.
Joga in Action
As the FIFA Worldcup 2006 gets underway, the Joga Community is also gearing up.
See if you find a good summary comparison of official versus unofficial community networks in action. Will Google + Nike (unofficial community) beat Yahoo + FIFA (official community) in terms of the fan buzz and interactions?
Sunday, May 28, 2006
Emergent Ecosystems in Practice: ipod + Yahoo Local
One of the distinguishing characteristics of the network era is emergent ecosystems: linkages formed as third party use APIs from one or more entities to create new innovations without any formal governance mechanisms. This is different from designed ecosystems through formal alliances, cross-equity linkages and agreements.
Here's an example of emergent ecosystem in action using Apple ipod and Yahoo local. This allows you to get directions on your ipod based on Yahoo Local (Maps).
How it works?
The website www.ipod-directions.com is very simple to use. Just like using Yahoo Maps, you would enter your starting and destination address in the corresponding online form. Once you have entered your start and destination information, simply click on “Verify Directions” to make sure that you’ll be given correct and accurate driving directions. Your very last step is to click on the button “Get Directions” and the website will prompt you to download a ZIP* file that contains your driving directions. All that’s left to do is to make sure you extract the ZIP file to your iTunes Photo Folder, connect your iPod to your computer, sync your iPod and then you’re ready to roll!
This program is easy to use for any event when you are in the need for driving directions to any location in the US or Canada, and best of all, it’s FREE!
The ipod+Nike announcement earlier was about designed ecosystem with both parties joining together in a common press release. Here, the website clearly states that "Yahoo! Maps and Apple iPod are in no way affiliated with this service."
I am confident that it will be just a matter of days before we see this functionality emerge using Google Maps. This is the power of innovation in emergent ecosystems.
The management message: In addition to mapping your designed ecosystems, understand the pattern of emergent ecosystems.
Goolge preinstalled on Dell computers
The new partnership shows again new possibilities of partnering across layers and strategic decisions against competitors!
Friday, May 26, 2006
Tracking The High Definition DVD Wars
Now you can track the impact of network effects based on sales at Amazon using this website. Clearly, the generalizability is limited because the data comes from one source (Amazon). See if you find other sites and data sources that can be used to develop a more comprehensive understanding of the standards war.
Unlike the VCR war, we now have the functionality to track the winner-vs-loser in near real time. This is the Network Era!
Yahoo + Ebay + Skype
Skype will also be involved in the cooperation, but no details have been announced yet. But in my opinion, it would be a great feature, if VoIP is integrated in search result (e.g. if with search results a "call-button" would be displayed)
Wednesday, May 24, 2006
Nike + ipod
Another example of convergence announced today as Nike and Apple launched a new kind of integration between athletic footwear and ipod. I think it is an exciting partnership between two creative companies.
The new Nike+ Air Zoom Moire is the first footwear designed to talk to iPod. Nike plans to make many of its leading footwear styles Nike+ ready, connecting millions of consumers to the Nike+iPod experience. With the Nike+ footwear connected to iPod nano through the Nike+iPod Sport Kit, information on time, distance, calories burned and pace is stored on iPod and displayed on the screen; real-time audible feedback also is provided through headphones. The kit includes an in-shoe sensor and a receiver that attaches to iPod. A new Nike Sport Music section on the iTunes® Music Store and a new nikeplus.com personal service site help maximize the Nike+iPod experienceFor those interested in knowin gmore details, I suggest that you take a look at the detailed patent application that has been made public now.
ipod integration with automobile started with BMW and many cars now have ipod integration.
Watch for reactions from Reebok/Adidas and Sony. It's natural that we will see imitative initiatives as we get more connected and networked.
Tuesday, May 23, 2006
Motorola Unveils Q Smartphone
By a WALL STREET JOURNAL Staff ReporterMay 23, 2006; Page D2
Motorola Inc. yesterday unveiled its Q smartphone, an ultrathin, Bluetooth-enabled device that includes a phone, a music-and-video player, email and desktop functions.
The Q enters a crowded field dominated by Research In Motion Ltd.'s Blackberry and Palm Inc.'s Treo smartphones. Samsung Corp. and Nokia Corp. have similar devices, which target the lucrative corporate market.
Motorola said the Q, which runs Microsoft Corp.'s Windows Mobile 5.0 software, will be available May 31 for customers of Verizon Wireless, a joint venture of Verizon Communications Inc. and Britain's Vodafone Group PLC.
A version running on technology compatible with Cingular Wireless will be available at the end of the year, although Motorola didn't specifically name the carrier. Cingular Wireless is a joint venture of AT&T Inc. and BellSouth Corp.
WALL STREET JOURNAL VIDEO
Motorola CEO Ed Zander1 talks about the future of mobile Internet and his company's new Q smartphone.
While the Q will initially target corporate customers, Motorola Chief Executive Ed Zander sees more potential for the device.
The Schaumburg, Ill., mobile-phone and wireless-communications company has spent roughly two years developing the device, which was expected earlier in the year.
Monday, May 22, 2006
Google: Is it over diversifying?
One of the lessons that we learn from looking at conglomerates in the industrial era is over diversification--going far away from the core business. It has been called by many different names--conglomerate diversification, unrelated diversification and so on. Academic studies have documented the pitfalls of conglomerate diversification that stray far away from a firm's core competence.
I was stuck by the breakdown of Google's hits posted by Richard MacManus from hitwise. Google (mainpage) has 80% of share of Google properties. If you add Gmail and Google Image search (which account for 15%), you get to about 95%. The remaining 5% is made up of 17 subdomains within Google.
This raises a question: should Google even bother with the other 17 subdomains? The answer is yes--because it is in the best spirit of ambidexterity: working to maximize current operations while creating future capabilities. Successful companies fail not because they do not execute well. They fail because they are trapped into thinking that their success will prevail over time. They succumb to their competency traps.
We can not (and should not) look at Google Lans with 0.01% share of Google properties as anything but the fact that few care to even visit Google Labs and have an early peek into the product/service pipeline.
More important is the fact that these are all somehow related (at least to me) to Google's core business. It is not like the unrelated conglomerate diversification that we saw in the 1970s and 1980s. I posted earlier about Google's ambidexierity. This chart simply reinforces their underlying focus on balancing today and tomorrow.
Understanding diversification in the post-industrial age is an interesting and useful challenge. This table should be interpreted in a way beyond share of visitors to Google properties.
Hub start-up will back up data files for $5 a month
By Hiawatha Bray, Globe Staff May 20, 2006
Everybody knows they're supposed to make backup copies of their computer files; hardly anybody does it. ''If you ask them why, the answer is simple," said Boston entrepreneur David Friend. ''If it was cheap and simple I'd do it."
Problem solved, claims Friend. His new company, Carbonite Inc., will back up any Internet-connected computer in the world for $5 a month, no matter how much information is stored on the machine's hard drive.
Friend and his colleagues have developed a small, simple piece of software that sits on the user's computer and uploads files to a remote storage facility in New York. Even people with little knowledge of computers can set up a Carbonite account in a few minutes. ''We're decidedly not a techie solution," said Friend, who compared the system's simplicity to that of Apple Computer Inc's iPod music players. ''We think of ourselves as the iPod of backup."
Once installed, it may take days for the Carbonite software to complete the initial data backup. That's because with most home Internet connections, dial-up or broadband, data upload speed is much slower than download speed. But all future updates are much faster, because the software will only transmit new or modified files. All files are encrypted to protect customer privacy.
Internet-based file backup is nothing new, but other companies charge higher prices for larger backup capacity. Friend, an engineer who previously founded Sonexis Inc., a Tewksbury maker of teleconferencing gear, said that with today's cheap data storage, Carbonite can afford to offer flat-rate pricing.
He estimated that the average user will back up about eight gigabytes of data. Friend doesn't worry about the inevitable users who'll upload hundreds of gigabytes of data. ''We'll make money on 98 percent of the users and lose money on 2 percent," he said. Besides, he added, ''storage costs are dropping like a stone, so a guy who's an unprofitable customer now will be OK next year."
Michael Cai, director of broadband and gaming research at Parks Associates, a research firm in Dallas, said that Carbonite doesn't face much competition. ''Right now the online storage and backup market is still nascent," he said. ''There aren't that many subscribers yet."
But Cai said Carbonite won't stand much of a chance if major Internet providers like Verizon Communications Inc. offer online backups to their subscribers.
That prospect doesn't faze Friend, who said he has talked to Internet providers about offering Carbonite subscriptions to their customers as a premium upgrade.
Saturday, May 20, 2006
Google Dreams (well.. Dreamlines using Google Images)
What is this site? According to the designers..
Dreamlines is a non-linear, interactive visual experience. The user enters
one or more words that define the subject of a dream he would like to dream. The
system looks in the Web for images related to those words, and takes them as
input to generate an ambiguous painting, in perpetual change, where elements
fuse into one another, in a process analogous to memory and free association.
The system has been developed in Java and PHP. First, a PHP script makes a
Google image search of the words entered by the user. Then, the Java applet
retrieves the images one by one, and uses them as input to generate an
The pictures are never actually shown. The drawing
itself is produced by 1500 autonomous particles in perpetual movement. The last
image loaded serves as a sort of virtual terrain for them. The direction and
speed of each particle is given, at each step, by the color values of the pixel
they are stepping on. Different sets of formulas translate the hue, saturation
and brightness of the pixel in angle and velocity values for the particle. The
path of each particle is traced to the screen, and this forms the output seen by
Thus, the work is at the same time a study on population dynamics,
or on the emergent behavior of a multitude of very simple autonomous agents.
Who is dreaming? The user, or the Internet itself? In a certain way, both.
The program generates a personal moving picture, unique, unpredictable, and
forever gone when it is finished, just like dreams. But that dream is made out
of pieces taken form the subconscious of the whole net, gathered by some words
of the user and the obscure logic of searching algorithms.
Is this simply another way to mash-up Google images? How can this be refined? What other uses and applications do you see?
Google Talk and Nokia
What happen if Google now offers a UMTS (3G) mobile flatrate? Do we need telecommunication providers anymore and will the industry change as seen with fixed line market?
Friday, May 19, 2006
a video on Google (in dutch; English subtitles)
Cross-functional Innovation and Implementation at Google
Here's a post about how one Googler used his 20% time in practice. While we cannot (and should not) generalize from this one case, there are useful lessons here.
Thursday, May 18, 2006
Wal-Mart Growth Patterns (VIsualization)
If you find other visualizations pertaining to the network era, post them on the blog. Thanks.
Dell to use AMD Chips
These two moves further reinforce that the competitive battleground is shifting away from the lower levels of the stack. Here, we will find that there will be further consolidation and fewer exclusive linkages as companies go for efficiency.
VeriSign Buys GeoTrust - We predicted this!
Relationships are forming right now!
VeriSign Inc. agreed to buy closely held GeoTrust Inc., a supplier of tools used to secure online transactions, for $125 million in cash. Needham, Mass.-based GeoTrust provides digital certificates used for e-commerce transactions and identity verification. Verisign, which also sells digital certificates, said GeoTrust's 9,000 direct resellers will bolster its business. VeriSign said it expects to close the deal in the second half of the year.
-Wall Street Journal Online
Saturday, May 13, 2006
Here's a snapshot of comparison of searches involving Yankees and Redsox. (see the spike during 2004 World Series frenzy). Now, try with different brands (example: Coke versus Pepsi). Does this search-related buzz imply anything? How could it be monetized?
TV Ads: Watch it? Skip it? Interact With it?
We have gone from an era of watching TV ads (without choice) to an era of skipping ads (thanks to Tivo and DVRs). Now it looks like, we are entering an era of interacting with the TV ad much like we do with a computer. This is inevitable given the convergence underway.
Tivo has unveiled its first interactive TV ad. According to Techweb..The application, called the Lexus Car Configuration Tool, will be available on a broadband-connected TiVo Series2 digital video recorder. TiVo and Lexus are hoping that people interested in luxury cars will take a break from their TV watching and play with the tool that allows them to customize a 2007 Lexus ES 350. In addition, the ad provides information on the model, a slideshow and the option to find a local dealer and schedule a test drive.
I think this is an experiment worth tracking because this also has implications for improved precision in the measurement of the impact of advertisements.
Will MSN, Yahoo and Google be far behind as they jockey to show superiority of IP Television.
Thomas Pink and ipod
Thomas Pink is a high-end shirtmaker (owned by LVMH). You may wonder why this firm is relevant for the network era. It's simply because it's latest product is the commuter shirt. According to Thomas Pink:
The Commuter shirt has a special concealed pocket for mp3 player and hidden casing for headphone wires as well as a clever cuff pocket for credit or travel
When high-end shirts recognize the pervasive use of gadgets, the network era has arrived...
Friday, May 12, 2006
Google, Nokia to Launch Internet Browsing Device
Google, Nokia to LaunchInternet Browsing Device
By CASSELL BRYAN-LOWMay 12, 2006 11:53 a.m.
Google Inc. is teaming up with handset maker Nokia Corp., in a move that could help propel the Internet company into mobile communications.
The companies plan to launch a version of Nokia's hand-held Internet browsing device ready loaded with Google's Google Talk service, which enables users to have voice conversations and exchange instant messages, according to a person familiar with the plans. The device, which relies on short-range technology known as Wi-Fi rather than cellphone networks, isn't a cellphone.
The companies, which plan to announce the partnership on Tuesday, expect the device to go on sale globally and cost about €300, or about $390, the person said. Nokia also is talking to other companies about incorporating their Internet communication software onto the device.
The device is an upgrade to a product Nokia first launched in September called the Nokia 770 Internet Tablet. The device was the Espoo, Finland, company's first mobile device that isn't also a cellphone. Slightly larger than most personal organizers, it has a wide, high-resolution screen intended for easy Web-page browsing. It also plays video and music.
Write to Cassell Bryan-Low at firstname.lastname@example.org
Thursday, May 11, 2006
Google has announced that it will launch Google Notebook as a personal browser tool that lets you clip text, images, and links from the pages you're searching, save clippings to an online notebook, and then selectively share notebooks with others.
I see it is an important building block for exchanging information and idea. Google hinted at this functionality earlier with Google News (that can be personalized) and shared (see my Google newspage as an example). Google has already made it easy to link calendars within a community.
Notebook could emerge as a useful mechanism for sharing what we search (web pages) and how we utilize search (clipped text and images). Worth taking a look at the functionality when it is actually launched in a week or so.
Early peek into the screenshots are located here . This screenshot is interesting if you notice what you can search on the search toolbar: search your notebook or all public notebooks. Soon, I expect the functionality of searching notebooks of my friends (or even specialized categorizations). .
Welcome to Google Community!
Visualization of Data to Understand Network Evolution
But I started wondering if there is a possibility of adapting it to visualize networks of the kinds that we explored in class--especially if we get a collaborative initiative with some of the data providers.
Love to hear what others think after you have had a chance to take a look at it.
Wednesday, May 10, 2006
Jonathan Schwartz Blog and the MS-MBA Program
The customer made an interesting point - his job was getting more technical.
A change from a few years ago, when his priority was big web traffic deals and
traditional business development. The customer was a technologist to start,
so he was in his comfort zone, but it had become increasingly obvious that
the next generation of differentiation on the web was going to come from technology innovation - not just good BD or branding. (bold mine)
This is yet another observation about the importance of our MS-MBA program on the growing interconnection between business and IT. Read the blog and see the arguments in favor of systems architecture as an important part of shaping business architecture.
Now, if only there are more CEOs that agree with Jonathan Schwartz.... I am sure that it will happen soon.
The Battle of the Boxes
I'm also surprised that Sony actually allowed Microsoft to get a year's lead (= 10 million users) on this! Microsoft, on the other hand, seems to have a good plan in place to maintain the lead, with its typical but intelligent strategy of employing network effects in its favor: it plans to link gaming to Windows PCs and mobile phones. It would be interesting to see which way these "boxes" are headed.
Monday, May 08, 2006
Apple beats Apple Corps
It will be interesting to see if the Beatles put their catalog on Itunes. One would think they would be foolish not to. Itunes has established themselves as a strong hub in the network. They currently control the majority of the product and the deepest list of customers.
Disney's promotion agreement with McDonald's ends
Disney's promotion agreement with McDonald's ends
By Los Angeles Times May 8, 2006
For 10 years, Walt Disney Co. and McDonald's appeared to have the perfect marriage. Happy Meals bore little figurines of Nemo, Mr. Incredible, and 101 Dalmatians.
But no more. This is one relationship that's ending because of the children.
Disney is not renewing its cross-promotional pact with the fast-food giant, which comes to a close with this summer's release of ''Cars" and ''Pirates of the Caribbean: Dead Man's Chest." The reason in part, say multiple high-ranking sources within Disney, is that the company that prides itself on being family friendly wants to distance itself from fast food -- and its links to the epidemic of childhood obesity.
Disney's not the only studio that thinks french fries loaded with trans fats may be too hot to handle.
DreamWorks is working with McDonald's to promote ''Shrek 3," due out in 2007. But according to one top-level source inside the studio, there is internal debate about whether the lovable green ogre should steer clear of Chicken McNuggets and Big Macs in favor of the healthier fare on McDonald's menu, such as salads. (Shrek is, after all, overweight.)
The end of the Happy Meal partnership comes at a time when the processed- and fast-food industries are under fire on a number of fronts because of growing concerns about expanding waistlines, particularly among youngsters. Just last week, former President Clinton succeeded in yanking sugary sodas from elementary school campuses.
But some say the more discreet actions of the entertainment industry ultimately could have a greater influence, especially if other corporate giants follow suit.
''I think it would have impact in contributing to the cultural change that is necessary," said Dr. J. Michael McGinnis, chairman of a National Academy of Science panel that just released a study showing how food marketing adversely affects children's diets. ''The committee thought it was important for the use of cartoon characters that appeal to children only to be used in the marketing of healthy products."
One of the industry's most prominent critics, ''Fast Food Nation" author Eric Schlosser, said it will be ''hugely significant" if Hollywood walks away from Happy Meals. ''It will put more pressure on McDonald's to change what they sell in Happy Meals. The obesity issue would be irrelevant if the food in the Happy Meals was healthy."
Sources on both sides of the agreement say the parting of the ways was mutual. And it's not a complete divorce, either. McDonald's fare will continue to be a staple in Disney's theme parks. Disney also is leaving open the possibility of McDonald's promotions geared toward adults.
Disney released a statement praising its decadeslong relationship with McDonald's, adding: ''While our contract with them will expire at the end of the year, we look forward to a more flexible, nonexclusive relationship where we will be working with them on a case by case basis."
Dean Barrett, senior vice president of global marketing for McDonald's, agreed. ''Our relationship was ongoing before the agreement and will continue after. We've had great success. There's great entertainment value with us and Disney, and I would think that would continue for years to come."
Barrett said that the only factor that really has changed is the exclusivity of the relationship -- McDonald's is now free to partner with other studios. Hence McDonald's new, two-year agreement with DreamWorks, beginning with ''Shrek 3." DreamWorks declined to comment.
Disney has not signed any new deals with fast-food providers.
Industry analysts say the breakup will force both Disney and McDonald's to find new promotional outlets.
Restaurant analysts don't believe McDonald's bottom line will suffer if other studios and toy companies pick up where Disney left off. Kids might not even notice.
IF KIDS DON'T NOTICE WHAT WAS THE RELATIONSHIP WORTH IN THE FIRST PLACE?
McDonald's and Disney
The interesting angle for our class is to look how this changes the layers. Disney has ended their exclusive relationship with McDonalds but has suggested that they will engage on a case by case basis. The risk here is that McDonalds finds another partner and locks Disney out. However, given the hot potato obesity issue it is likely that this will not happen (unless McDonalds surprises everyone and totally revamps their menu).
Disney gains power in this deal because they are no longer tied into a contract with the fading McDonalds. McDonalds may have once been a hub, but the social pressures are changing the layers. I am not sure that Disney has that many other options so they were forced to leave the door open for a possible return. I wonder if there will be any measurable effect on the sale of Happy Meals.
Friday, May 05, 2006
TiVo in the Network Era
TiVo currently operates in both hardware and software layers of the media and entertainment stack. Creator of the now ubiquitous digital video recorder, TiVo initially targeted consumers with the value proposition of “taking back control of your television.” Specifically they focused on the DVR’s unique functionality which allows users to pause and rewind and fast-forward recorded television as well as skip advertisements with the touch of a button.
TiVo initially partnered with subscription-based satellite TV provider DirectTV to bring advanced functionality to the service. On the other hand, cable providers refused to bundle Tivo with their service in reaction to TiVo’s positioning as a “ad skipping device.” At the same time TiVo’s direct competitor ReplayTV automatically removed commercials from recorded programs using a feature called “Adskip.” ReplayTV was sued by the networks, bankrupting its parent corporation Sonicblue. TiVo, by indirectly letting users skip commercials, was seen as a threat to their business model though no legal action was taken. Cable operators would later break ranks with the networks and change their opinion on DVRs.
Competition in the hardware layer
Echostar, owned by DirecTV rival Dish Network, developed an OEM digital video recorder and licensed this technology to other hardware OEMs. These OEMs were contracted by the local cable operators to develop PVRs for customer use. Cable companies began offering PVRs to customers for an additional monthly fee (~$15) and no upfront payment. TiVo sold its hardware in electronics retailers for upwards of $250. There was serious danger of TiVo’s hardware market becoming commoditized. Users of TiVo, however, remained loyal proponents of its user interface and information sorting/program recommending features which were lacking in the “hardware-only” PVRs offered by cable operator OEMs.
TiVo reacted to threats in the harware layer in several ways. First, it sued Echostar and recently won damages of over $75 million. Secondly, it partnered with online movie distributors Netflix and Blockbuster to provide its software and information frontend. Third, it adjusted its sales model by moving customer costs from up-front hardware sales to a more expensive subscription model with free hardware. This parallels the market realities as TiVo’s hardware position is untenable and the real value it offers is in its proprietary software. TiVo just recently penned a deal with longtime rival Comcast to offer branded PVRs to Comcast customers.
TiVo will ultimately have to leave the hardware layer – too many competitors have found ways around the TiVo patents. The concept of DVR/PVR is not unique, any personal computer with a TV input can perform the same task and, in fact, Microsoft is moving into this space with its
Competition from other “value-added data aggregators” such as Google and AOL in the software layer will be fierce in the future. With its advanced software, TiVo is ahead of the demand curve – mainstream
Thursday, May 04, 2006
Visitors to Our Website
Microsoft Chases Online Ad Revenue With AdCenter
Microsoft Chases Online Ad Revenue With AdCenter
Wednesday, May 03, 2006
apple locks in the $0.99
Tuesday, May 02, 2006
Winning in the Network Era for WaMu
Financial Services is the largest industry in the world in terms of earning and market capitalization, accounting for 20.3% of the S & P Index; it is comprised of some of the most profitable companies in the world. While the industry is composed of hundreds of companies representing numerous sectors of financial services, the larger companies have historically grown through mergers and acquisitions, thus creating an extremely vertically integrated industry as depicted in the stack below:
Company Profile: Established in 1889, Washington Mutual plays in every layer of the stack. WaMu conducts its business operations through two divisions: Consumer and Commercial Group.
The Consumer Group offers products and services to consumers and is comprised of two business divisions:
Retail and Financial Services:
-Offers deposit and other banking products and services to consumers and middle market businesses
-Manages and services home equity and consumer loan portfolios
-Provides investment advisory and brokerage services with over 600 financial consultants
-Offers home loan products
-Offers insurance products to complement the mortgage loan process
The Commercial Group offers financing to developers, investors, mortgage bankers and homebuilders for acquisition or construction of multifamily dwellings, commercial properties and new homes. Additionally the Commercial Group originates, sells and services multi-family and other commercial real estate loans
WaMu is the 6th largest retail bank providing financial services for consumers and middle market businesses. Including its subsidiaries, "The Company" has a stong distribution channel with almost 2000 retail banking stores, 341 retail mortgage offices, 40 multi-family lending office and online banking. As the nation's leading multi-family lender, WaMu is also a top tier mortgage lender with a strong track record of credit risk management. (Source: www.datamonitor.com)
As the Network Era becomes more apparent in the financial services industry, the focus on Payment Processing is changing the competitive landscape:
While all financial service institutions are adjusting to the influences of technology and the Internet, WaMu has a history of being an early innovator. In 1962, WaMu installed the first advanced computer system in a bank on the west coast. In the 70's, WaMu established the first shared cash machine network in the nation and helped establish the first Pay-by-Phone telephone banking program.
WaMu has integrated online banking capabilities into their consumer and business divisions. Providing full banking functionality through the web includes accessing account information, performing virtual transactions and providing other banking services. As the Network Era will continue to influence the financial services industry in the future, WaMu must establish and maintain strategic relationships and alliances with new players in the stack for the transition towards emerging payment processing mechanisms.
Web Services/Software Development: Creating an integrated relationship with the players in this level are critical for WaMu, as direct client interaction with web services and software influence customer satisfaction. Applications which provide intuitive, efficient and user-friendly solutions must also serve a dual purpose of streamlining data integrity, data gathering and information processing operations. WaMu utilizes iPlanet software, a company resulting from the Sun Microsystems-Netscape alliance. iPlanet software provides Washington Mutual with an organizational and architectural model to connect its internal legacy systems with its many e-commerce initiatives.
IT Security: With the emergence of online banking, financial service institutions have had to extend their privacy and security capabilities. WaMu's enhanced online security, to protect and secure their customer's accounts with cutting edge technology, is achieved with eSphinx, a product from RSA Cyota Consumer Solutions, a division of RSA Security Inc. Maintaining a relationship with Cyota will ensure WaMu's different portfolio of customers and transactions have the strongest multi-facted authentication measures while providing minimal impact to the user experience.
Online Payment Processors: WaMu has recently extended its contract with First Data and STAR Network for providing authorization and payment processing. First Data and STAR's Internet commerce solutions are extending WaMu's online capabilities. While new, emerging players such as PayPal dominate the online payment processing space, WaMu is happy to sit back and let it's strategic partners compete.
In conclusion, WaMu has taken steps to sustain it's position in the competitive landscape of the financial services industry. Further, in the Network Era, the organization's commitment to strategic relationships in web services, software development, IT security and online payment processing will allow WaMu to compete in the online playing field.
As the mobile television industry emerges, there are several big questions that will make or break startups trying to catch a piece of the next big trend.
Will users pay to watch television on mobile devices? On one hand, research indicates that there will be 125 million mobile TV subscribers by 2010. But on the other hand, catchy mobile technologies have been attracting attention for years without gaining traction with the customers.
Furthermore, given a customer base, how will mobile television be commercialized, in terms of business model, content and technology?
Lastly, can a standardized business model be reached and who will carve up the proceeds? Since broadcasters own the content and mobile operators own the devices and usually the customer relation, is it possible to wrestle a significant revenue share away from these powerful entities, and still enable everyone to work together?
If the first question is favorable for the industry, MobiTV has a great first mover advantage on the second question. Yet, in order to win in this networking era, MobiTV must continue to position itself with the best partnerships, and must make sure that when the industry emerges, MobiTV is the delivery standard of choice. Otherwise, there will be no leveraging point with which to battle the operators and opposing technologies or business models will wipe the company out. Already, competitive technologies, splintering operators, and powerful broadcasters all threaten to squash the startup before it reaches the big time. However, as the only company with a significant mobile television customer base, MobiTV is currently in a favorable position.
MobiTV is the only company that provides mobile television and radio service worldwide over cellular, WiFi, and broadband. Founded in 1999 and launched in 2003, they recently reached over 1 million paying subscribers, a number which has doubled in the last six months. Furthermore, they are the only mobile television service in the
While I do not believe MobiTV has reached profitability yet (they are private so financial information is hard to come by), their revenues are growing quickly. 2005 reached $20M in revenue, which is twice that of 2004. With an estimated average of about 300,000 subscribers throughout 2005, and a $10/month subscription fee, I am assuming that MobiTV relies almost exclusively on subscription fee for revenue and not on any advertising revenue.
In the words of CEO Dr. Phillip Alvelda: “our vision is to deliver the best possible live television experience to consumers, across a range of devices and networks." Thus, MobiTV’s service is basically the market leader as a content aggregator. They offer many premium channels (ESPN, NBC, ABC, Fox News, etc.) over a wide range of devices. The service is not proprietary to any device or mobile operator, however, only certain service providers offer MobiTV. For instance, Sprint customers and Cingular customers in the
The content MobiTV provides is a range of live television including sports, weather, and news, in addition to static content such as cartoon episodes, movie trailers, and music videos. The company also offers a radio service.
As it stands now, advanced mobile technologies are failing to offer mobile operators significant incomes. With 2 billion paying mobile phone customers, finding the killer application is a huge question. Television could be the answer (for
Yet to achieve this idealistic picture, the industry needs to actually grow up. Currently there are competing standards and a range of business models, any of which could win and significantly change the entire industry. Thus, there is no “industry shift” to be aware of, but rather an unknown tidal wave, that could go any which direction should the mobile television industry become established.
Here’s how the process works:
- Digital video signals are compressed and formatted to fit the small screens by MobiTV
- The user requests and accesses the MobiTV servers over the public Internet (through a mobile phone application or desktop application) to obtain access to the mobile TV content
- The compressed video is sent in IP packets over the public Internet directly to the user’s handset, using the mobile's carrier network for the "last leg" (or AT&T WiFi access points)
- The mobile user communicates directly with the MobiTV servers, no additional hardware or software is required on the networks of the mobile carriers to offer the service
- The mobile TV access and delivery processes are essentially the same as the video streaming technology that has been in use for many years over wireline Internet connections. Essentially, the role of the mobile carrier’s network in delivering mobile TV services is similar to the role played by an Internet Service Provider (ISP) network in a typical Internet application such as video streaming.
Thus, the first major influence on the winner is the chosen technology standard to deliver content.
Current Delivery System Technologies for Broadcasting:
1) DMB has been adopted in
2) Digital Video Broadcast (DVB) favored in
3) MediaFlo from Qualcom is being rolled out in the
MobiTV has opted to act agnostic in this arena, and therefore can operate on any broadcasting technology. Since the company only obtains, packages, and then distributes the content, the actually delivery is done by the operator on whatever technology is available. This is a favorable position for MobiTV to be in, not having to bet on a single technology to emerge as the worldwide standard or risk a disruptive technology to ruin the process. On the other hand, it likely introduces complexities in maintaining compatibility across the different delivery systems. However, I am guessing that the complexity may be completely absorbed by the data networks of carriers, since they are responsible for ultimately sending the TV programming.
However, where MobiTV has already picked a side is on the desktop arena. By partnering with Microsoft this month, MobiTV has committed to the Microsoft digital rights management package. This move allows MobiTV to offer its mobile television content to all Windows XP computers, as well as Windows Mobile devices.
"By combining MobiTV's premium content lineup with the Windows Mobile and Windows Media platforms, consumers will be able to easily access rich television-viewing experiences on their Windows XP-based PCs or Windows Mobile-powered devices."
While mobile device users with Palm OS or Windows Mobile can both use MobiTV, only Microsoft XP users have access in the laptop industry. This alignment and support for the Windows digital rights management package could be caused by Apple’s iTunes and video iPod being viewed as a major threat. More on this in the partnership section.
Within the industry, competing business and delivery models highlight a power struggle and lack of clarity as to which way the industry should go. According to experts there are three main ways to delivery TV to mobile users:
1) "Push & Store" with local playback
· As with music on iPods, the idea behind Push & Store technology is that users can download their own content from the Internet over home broadband connections for free, or for a small fee, and then load this, via USB links, onto mobile video devices.
· Apple is working with broadcasters to increase the range of shows available
· One major advantage is that shows stored on an iPod can be watched on an underground train or in regions with patchy network coverage
· In addition, TiVo is working on enabling download from your TV to a portable device
· Typically commercialized by selling the content per piece ($2 per episode) and giving most revenue to the content provider
· Another revenue model based on providing the content for free and instead charging for traditional advertising, or skip-resistant advertising.
2) Streaming over 3G mobile data networks
· Mobile TV services delivered via 3G streaming are similar to media-file download services (like ring tones) offered by all operators today, apart from the fact that the TV feed is in real time
· At the moment, mobile TV is mostly streamed over 3G networks. But sending an individual data stream to each viewer is inefficient and will be unsustainable in the long run if mobile TV takes off.
· Mobile operators could form a consortium and build a shared network to provide mobile television using advanced mobile technologies
· In addition, existing television broadcasters could build such networks and cut out mobile operators
· Typically commercialized via the traditional advertising technique with spots inside the streaming content, and most of the revenues split between the content provider and the mobile operator. In addition, subscribers pay a $10/month fee to use the service that would otherwise be part of their cable television package.
· MobiTV also provides additional revenue potential with commercial only channels that allow interaction and are linked to other channels
3) Dedicated mobile broadcast networks.
· In addition, there is also serious interest in dedicated, terrestrial mobile TV broadcast networks, with several operators around the world now involved in small-scale trials.
· This could also be offered through satellite, much like satellite radio
· Some mobile operators are already buying broadcasters to trial this offering
· Commercialization technique still emerging
Interestingly enough, a study of the current television industry (earlier in the blog) indicated a trend toward anytime television as opposed to appointment television, which would favor the “push & store” method. However, the streaming over 3G is the mobile method of choice at the moment. A quick analysis shows that the streaming content is the only way for live or appointment television to be shown. Thus, it should not be surprising that MobiTV’s premium channels specialize in this live content with minimal sitcom type providers of content. On the other hand, Apple recently partnered with ABC/Disney to provide popular shows not restricted by appointments that suit with their strong push & store capabilities.
MobiTV can compete in either arena, steaming or push & store, but obviously their strong suit is streaming because such functionality is not available to iPods (yet). The last alternative, dedicated mobile broadcast networks, would very much work against MobiTV in that broadcasters would no longer require MobiTV to package and deliver their content. In this scenario, mobile television would very much look like the days of pre-cable TV when anyone can tune into any of the major networks. It is possible MobiTV could still win in this world by positioning itself as the aggregator of all other content, meaning content not popular enough to warrant its own broadcast or financial backed to enable broadcasting. Thus, MobiTV could become the “cable provider” for mobile television era. More on this in the partnerships section.
According to CMO of MobiTV: There will be room for some time for both unicast mobile TV, which is what MobiTV provides, as well as broadcast TV to mobile phones. Eventually, he says, there will be a synergy between the two so that carrier networks could handoff unicast shows to a broadcast network if there were capacity issues. MobiTV's technology could use either a cellular network or a digital video broadcast-handheld (DVB-H) network.
Obviously a big threat despite using a different methodology for the moment. It is possible that iTunes could capture the market for non-streaming video, leaving only live and interactive TV for players like MobiTV. Furthermore, Apple could become an MVNO and enter the streaming market as well, and enter it with force wielding a large library of content and brand name.
Re-broadcast recorded DVR/Tivo/PC content to your mobile device:
As a rising star, Sling Media has popularized re-broadcasting your DVR content to your computer or any other internet location. But now, the startup is introducing a mobile application that allows your DVR content to be transferred to mobile phones and PDAs. This is just another push & store alternative, but having already paid for the content with a cable television subscription, it makes financial sense for the user, as opposed to paying for a cable subscription for home and a mobile subscription as well.
Re-broadcast any PC stored content (pictures, videos, etc) to your phone. Mobile television enabled with a media center such that your television programs are stored to your PC. (FREE)
Alternatives to MobiTV’s content
Sprint TV, Verizon VCast, and Cingular + REAL Networks are the mobile operators trying to own this space and cut out content aggregators like MobiTV (however Sprint offers MobiTV as well). If mobile operators can obtain and repackage the content, then there is no space for MobiTV to play in. Each offering is different, but primarily the mobile operator either includes the TV service with enhanced data plans, or charges a subscription fee like MobiTV and then adds on extra fees for premium content like HBO.
Other startups such as GoTV, PacketVideo and SmartVideo are bringing limited video content to phones.
San Diego-based Qualcomm, which makes chips for phones, and Houston-based Crown Castle International, which has 12,000 broadcast towers, are testing systems to send TV signals from towers right to cell phones.
MobiTV enjoys a first mover advantage over the competition, but could be a victim of committing too early to technology. Newer technologies such as those offered by Sprint TV enable quicker transfers, less congestion for the mobile operators, less data loss for the customers. I am guessing that is part of the reason why Sprint was able to offer Sprint TV having already introduced MobiTV to Sprint users.
Partnerships – To Keep a Piece of the Pie
The threats to MobiTV are very real and substantial. It is possible that users will be slow to adopt, or might not ever significantly adopt television on limiting mobile devices. If they are open to the idea, are they willing to pay enough for it that there is still a piece of the pie after mobile operators and broadcasters take their share?
MobiTV currently holds the only significant mobile television consumer base, and if they can maintain that advantage then they can leverage it for more power when negotiating with the operators and the broadcasters. However, the key is maintaining customers and I see that through 1 of 3 options. Either they are the ultimate source for premium content, the only source for long tale content, or they are the best provider of anytime-anywhere.
If MobiTV can be the best content aggregator, then customers will be drawn to them when looking to fulfill mobile television needs. However, to get to this spot MobiTV needs to work closely with the broadcasters which means they begin to lose some of the power they are trying to build. Instead, MobiTV could take the approach that satellite radio stations have done and skip the broadcasters (or the stations) and go straight to the content providers. For streaming television the premium content is then NFL, MLB, FIFA, Connie Cheung, Regis and Kathy, etc. Partnering as the exclusive provider of full major league baseball coverage could be a huge leverage point for MobiTV. But it goes back to the question would users actually watch an entire baseball game on a mobile device, or would they rather an ESPN broadcast. This suggests the ESPN partnership is more valuable, and I agree, but it doesn’t help the power struggle when ESPN decides to take the majority share of the revenue. Or even worse, if broadcasters are the reason why MobiTV has a user base in the first place, then when they all decide to move to broadcasting straight to mobile devices and bypass the middleman, MobiTV fails.
The second option is to become the long tale provider of content, in that MobiTV aggregates so much content that users are attracted because they have it all. This would give them power over the broadcasters and the mobile operators because then MobiTV has users and content that are otherwise unavailable. To get to this position, MobiTV might look to partner with Google, the internet masters of this space. Already Google Video is aggregating a large library, and they have the resources to continue. If MobiTV can arrange a partnership and thus multiple its library content immensely, that could be very valuable. Yet this library of content is push & store content not the streaming content that makes MobiTV standout. So the partnership and strategy is not ideal, and furthermore MobiTV needs to evaluate exactly what it is providing to Google to see how important the relationship with MobiTV is to Google. As a company that can repackage, and has relationships with many mobile operators for delivery, MobiTV provides some valuable service. Thus, this is one possibility.
However, my advice is to look towards the third strategy, being the best at anytime-anywhere. MobiTV is already the only company offering television on cellular, WiFi, and broadband. Users pay for easy access, and if MobiTV can establish itself as the best provider of television no matter where you are, then users will sign-up for the reduced hassle of having to worry about a player for the laptop, a player for phone, a player when your in the bar/stadium/airport or a different one for at home. Ideally, MobiTV would also be your traditional television subscription, such that you only sign-up for one. Thus, a partnership with Comcast or TimeWarner is my strongest recommendation. Users would be much more likely to pay an extra $5-$10 on top of their current cable subscription to take a subset of their channels with them on the move, then having to deal with yet another television provider. In addition, if MobiTV can get dual-branded service then they will be building an even better customer base that can be leveraged when negotiating the business model with mobile operators and broadcasters. And if MobiTV is in your house, then that will be a huge claim when the industry starts to shake out and choose which delivery model and technology is the winner. A similar partnership could be done with DIRECTV, yet they are probably looking to the satellite broadcasting to mobile delivery methodology, and may not want to lock in a partnership that skips broadcasting.
Partnerships – To
Streaming content to mobile devices offers interactive options that are not available with the push & store methodology. It is these options that really hold the future for mobile television. Quiz shows, upload-able content, voting, viewed influenced content or results, all are possibilities with live streaming content that don’t have the same impact with static downloaded content. Positioning MobiTV to be a leader within this space is the challenge. Two of my thoughts are gaming companies and reality content producers. I believe Mark Brunett is considered the master of the reality TV content space. Perhaps MobiTV teaming up with him could help produce an innovative show tailored to the strengths of unicast streaming to user’s mobile devices. Another alternative is a partnership with EA. Electronic Arts is a master of interactive sports gaming and has rights to sports characters. Combining interactive sports with actual sports casts on a mobile device could produce content attractive of both the television fan base and the gaming community.
Increasing the popularity of live and interactive television shows is the best competitive strategy against push & store threats. Alternatively, MobiTV could accept the delivery mechanism even more, and partner with Apple competition. They have already started doing this with the Microsoft partnership, accepting the Microsoft digital rights management as opposed to iTunes. They could go even further and partner with TiVo, becoming the repacking agent and distribution arm for TiVo to push user content to mobile devices. Apple requires users to identify, purchase, and then download content. A TiVo + MobiTV solution would utilizes the user’s existing cable service for the content, TiVo’s “season pass” service which automatically records and downloads your content, and MobiTV to get it to your mobile device. This partnership could be a direct move against Apple’s methodology.
In all, MobiTV has some serious hurdles to overcome and is playing in space with very powerful entities. Any mistakes or slowdowns will likely mean the industry, the technology, and the user base will all pass the company. However, if they can continue a market leadership position with the biggest customer base, then they are positioned for great success.
Monday, May 01, 2006
google and miscrosoft: tussle over new IE browser
In Firefox, the search box in question allows the user to easily choose a search provider. I quess the microsoft one (in typical microsoft fashion) makes it a little more difficult to change.
I am not sure how I feel about Goggle's complaint. On one hand I think that it wouldn't matter so much if Microsoft didn't control the OS (and by default most of the browsers). But on the other hand I ask why would it matter? Google is trying to play the same game by paying Dell to put a Google bar on every Dell pc.
They both know that the easier it is to use something (and the easier it is to get to it), they more likley it is that someone will use it. Since Google's website really has little value beyond search (playing devil's advocate here) they must realize that a web user will not find it a destination site and if they can skip going there, they will. Hence the battle over search bars in the browser. Microsoft owns the property and would like to landscape it they way they want. Google wants them to give them a little bit so the user can have some choice.
It is an interesting battle. If Firefox could take over the market we wouldn't need to worry about it anymore. Maybe there is the secret, beat Microsoft at the product game. Make a better product and work out deals with the pc makers to have it installed by default. Fight Microsoft on their own turf rather than complaining when they lock you out (And I realize that I just inferred that Firefox and Google are the same, which isn't true but maybe it should be).