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Archive for: October, 2008
October 31st, 2008
Should Facebook be tapping users for cash?
It hasn’t even been a month since Facebook founder Mark Zuckerberg told a German blog that growth, not monetization, was the priority for the social networking site. In fact, he even went so far as to say that he didn’t see a revenue plan coming into play for three more years.
But now, as TechCrunch digs up info on Facebook’s financials, it appears that Facebook may not even make it to 2011 unless they can drum up more cash - either through an accelerated revenue model or more investment dollars before the entire global economy erodes further. In response, Facebook basically responds by telling VentureBeat that it’s doing just fine - thank you very much - while other sources say that something must be wrong with the Techcrunch calculator.
Recognizing that advertising on Facebook has offered “dismal” returns, some bloggers (Techmeme) are suggesting that maybe a subscription model - nothing too crazy, mind you - might be in order. At least one has said that the only thing holding Facebook back from imposing fees is a lack of guts.
Also see: Madison Avenue to Facebook: you’ll never be the next Google
That got me to thinking about what I, as a user, would be willing to pay for on Facebook. After all, I’m pretty invested already - a large network of personal and business contacts, an always-expanding photo album, a forum to post my own blog posts or share interesting news items with a defined reader base. I can’t imagine that, at this point, I’d just be willing to walk away from Facebook.
So, what would I be willing to pay for?
- General access: Well, for those invested already, Facebook might be worth a couple of bucks every month. If the price were right, I’d probably pay. Given the number of users - estimated at 161 million unique visitors monthly, up 118 percent from a year ago - even a $5 monthly subscription would bring in a pretty penny. But consider this: there would be plenty of people who would just stop visiting Facebook rather than pay - so you can’t really count on that 161 million figure. And, there would also be a number of people who would choose to never even register, so there goes that 118 percent figure, as well.
- Premium Services: Years ago, I broke down and started paying $20 a year for Yahoo’s premium mail service, which had a mail forwarding feature I really wanted but also threw in an ad-free interface. Notice that I “broke down,” meaning I resisted for a long time. Sure, the $20 is painless now, but actually coughing up the credit card number to get the ball rolling was a whole different story. If Facebook can develop new features that aren’t already being created by outside developers, that might be worth a small annual fee for a percentage of customers.
- Ad-free environment: For some, this alone might be worth its own fee - though the ads on Facebook right now really aren’t so bothersome.
- A la carte premium services: Would you pay extra to customize the look and feel of your FB page - colors, bling and so on? Yeah, I know, that could make it feel too MySpace-like (read: juvenile) - because sending good karma or buying someone a can of Whoop-Ass doesn’t do that already. There was some outrage when Facebook recently redesigned the site. For a couple of bucks, maybe Facebook would let you reconfigure the page’s elements to meet your personal needs.
- Domain mapping: It would be cool if I could host my Facebook profile under my own domain name. Or maybe my Facebook photo album, posted items or personal notes. I bet a lot of businesses would be willing to pay to get their Facebook fan pages as a page on their own Web sites - as a way of showcasing the page to non-FB members, who might just end up being paying customers down the road.
I’m really not big on the idea of coughing up any money for something like Facebook. With that said, I have been known to drop a few coins for a premium service here and there. Subscriptions and fees may not be the right path for Facebook in the long-term, but if the company is really testing the waters on revenue sources while staying focused on growth, one of my random ideas to help bring in a few extra bucks just might be worth considering.
Anyone have better ideas?
October 31st, 2008
Tech Busts, Two: 2008 Worse For Blue Chips Than 2000
The prevailing theory is that this time the bubble that burst was that in the housing market. But the wreckage in the last three months has been just as bad in tech as when the dotcom bubble burst eight years ago. Or worse, for blue chip tech stocks.
Let’s go to the numbers.
Last time around, the tech-heavy NASDAQ Composite Index lost 25.7% of its value over the 90 days after its peak on March 10, 2000. This time around, the NASDAQ Composite Index has lost 25.5% of its value, in the 90 days that ended Friday.
So the carnage is the same, overall. But last time around, it was Internet startups that took the biggest hits. Investors started to run away from dotcoms that had only ideas, not profits or 1,800 year price-to-earnings multiples.
Some blue chips, like Oracle, HP and Intel, actually gained ground, as the tech-led swoon went through its early throes.
This time around, the blue chips, across the board, have lost ground. Ten of ten tracked here, with Intel taking a 27.8% hit and Dell losing half its value.
Can it get worse?
For sure. In the last go-round, the first 25 percent drop was only the beginning. The adjusted closing price of the NASDAQ Composite Index went as far down as 1,423.19, more than a year later on Sept. 21, 2001.
That works out to 72.2 percent off the peak of 5,123.52 on March 10, the prior year.
October 31st, 2008
Cloud computing: Will the financial geeks give it a boost?
The advantages of cloud computing are commonly known: You don’t need upfront infrastructure investment; scaling up is relatively easy; and the service provider is likely to be more efficient than your company.
But your friendly neighborhood chief financial officer may not get those arguments. Luckily a recent Forrester Research report provides a translation tool to get cloud computing projects done.
Forrester analyst Ted Schadler notes that companies still have to get stuff done in a downturn. And that stuff may increasingly be collaboration applications, email overhauls and Web conferencing (companies are squeezing travel budgets hard).
Also see: Microsoft’s Azure cloud platform: A guide for the perplexed
The cloud–whether it’s Amazon.com’s, Cisco’s, Google’s, IBM’s, HP’s or someone else’s–could be used for many of these projects. The hard part is pitching your CFO. Here are a few tips to get that cloud computing project approved via Forrester:
October 31st, 2008
Akamai: Weathering a price war; economic slowdown
Akamai, the leader in content delivery networks–services that speed up video and Web pages on the Internet, posted solid third quarter results, but cut the outlook for the fourth quarter. The economy was cited for the lower guidance but some analysts say that price competition may be more worrisome.
Competitors like Level 3 and Limelight are trying to grab market share at the expense of price. Piper Jaffray analyst Michael Olson calls the pricing “irrational,” but reckons that Akamai will be under pressure for the next two or three quarters. That take could be optimistic. Content delivery networks (CDNs) are being commoditized and it won’t be surprising if telecom players (Qwest, Verizon and AT&T) start bundling these services. On the bright side, Akamai would be a nice pickup for one of these larger players. In the meantime, Akamai is moving upstream to offer more advanced traffic management services.
On a conference call, Akamai CEO Paul Sagan noted the aggressive pricing:
October 31st, 2008
IBM sues brainiac looking to leap to Apple; Download the docs
IBM is suing executive Mark Papermaster, vice president of the company’s blade server development unit, to prevent his move to Apple. In a complaint, Big Blue says Papermaster “is in possession of significant and highly-confidential IBM trade secrets and know-how, as well as highly sensitive information regarding business strategy and long-term opportunities.”
The company says that Papermaster signed a non-compete agreement in 2006 (
PDF download) and needs to stick with it. IBM says it will suffer irreparable harm if Papermaster goes to Apple. In the complaint (PDF) , IBM lays out Papermaster’s history, which includes 26 years at Big Blue, extensive knowledge of semiconductors and strategic planning.
Indeed, Papermaster is named on a few patents and is credited in numerous white papers on everything from chip architecture to caching to synthetic workloads (other examples).
IBM says:
Papermaster is IBM’s top expert in “Power” architecture and technology, and he is privy to a whole host of trade secrets and confidences belonging to IBM that the company uses to design, develop and manufacture its products.
The big question here is what Papermaster will do with his microprocessor knowledge at Apple (Techmeme). CNET News’ Tom Krazit speculates that Papermaster’s hiring may indicate Apple is serious about its Xserve enterprise lineup. However, that theory may be a stretch. More likely is Papermaster’s blade knowledge will be used to support Apple’s nascent cloud services (it could use the help on MobileMe). I seriously doubt that one hire is going to turn Apple into an enterprise technology player.
IBM’s biggest worry is that Papermaster is part of a select group of executives that has access to the company’s “substantial investment in research and innovation.” Simply put, IBM has a huge research arm that cooks up all kinds of neat gadgets that it will never take to market. That kind of know-how coupled with Apple’s design and marketing heft could be dangerous.
What’s unclear is whether a judge will view Papermaster’s non-compete clause as iron-clad or reckon that IBM is a jilted employer. IBM said on Oct. 20 it offered Papermaster “a substantial increase in his total compensation package” to keep him. IBM also agreed to pay Papermaster a one-year salary if he’s refrain from working for a competitor for a year. Papermaster resigned Oct. 21 and that he’d begin work with Apple in November.
IBM is seeking an injunction to keep Papermaster from breaching his noncompete agreement, attorney fees and other damages the court sees fit.
October 31st, 2008
Mission accomplished: Google's ad deal with Yahoo has already worked
Google and Yahoo are reportedly close to walking away from their search ad deal after meetings with the Department of Justice.
According to the Wall Street Journal:
The two companies met Thursday with the Justice Department, part of a series of meetings to address the concerns of regulators. While the parties may agree to continue the talks — or they could reach a resolution — there are signs they are unwilling to make compromises to address the Justice Department’s objections.
Is this story (Techmeme), which Kara Swisher notes is hedged out the wazoo, on target or some game of Google chicken?
The answer is probably a little of both, but there’s another reason this Google-Yahoo search ad affair is toast: Google has already accomplished its mission. Remember back a few months ago when Google became the alleged savior of Yahoo? Why did that happen? Microsoft was trying to buy Yahoo. Google–and Yahoo for that matter–wanted to derail Steve Ballmer & Co. and the search giant was happy to oblige. And Yahoo in arguably the dumbest move in recent business history turned down Microsoft’s $33 a share offer. For Yahoo shares that blunder was $20 ago.
Also see: Yahoo: What happens if Google deal doesn’t go through?
Bottom line: Google has already cast enough doubt about Yahoo, which appears to need its biggest rival now more than ever. Microsoft is out of the picture (but never say never). Yahoo is fumbling around with AOL in a prospective marriage based on the theory that two turds can become an apple pie. And Google doesn’t need this Yahoo deal anyway.
In the end you’re left with this question: Why wouldn’t Google walk away? There’s no need to taunt the DOJ. The Yahoo deal won’t materially affect Google’s earnings and revenue. And Google’s search rivals–Microsoft and Yahoo–are both weaker today than they were a few months ago. Google’s job is done. Back away from the Yahoo deal gracefully.
October 31st, 2008
Dumb business decisions that can take down your company [video]
Big egos and a lack of foresight kill lots of companies — both small and large. However, IT leaders can learn from their misguided decisions and glean a some important lessons to keep their IT departments — and ultimately their companies — from suffering the same fate. This episode of Jason Hiner’s Sanity Savers for IT executives discusses some of the most common bad decisions that can hurt good companies. See Jason’s blog on TechRepublic.
October 31st, 2008
News to know: Internet worm's 20th birthday; Windows 7; Apple patents; Ubuntu
Here are today’s notable headlines. You can get News To Know via email alert and RSS daily:
Mary Jo Foley: Windows 7 to scale to 256 processors
Adam O’Donnell: Happy 20th birthday, internet worm!
- Ryan Naraine: Opera sings the security blues
- Adobe nukes ‘critical’ Pagemaker flaws
- Cyberattacks target UK national infrastructure
- Dancho Danchev: Phishers apply quality assurance, start validing credit card numbers
Mary Jo Foley: Microsoft drops more new codenames, including another ‘Mojave’
- Dana Gardner: Microsoft’s cloud push: Too little too late on purpose?
Adrian Kingsley-Hughes: Ubuntu 8.10 Intrepid Ibex is out
- Images: Ubuntu’s Intrepid Ibex on the loose (right)
- TechRepublic: How often do you switch OSes or distributions?
October 30th, 2008
Patent ruling: Good or bad for tech innovation?
A rejection of a patent application by a U.S. appeals court today is expected to send shockwaves through some industries, notably the software industry, as it will likely put an end to the patenting of “business methods” considered to be more entrepreneurial than innovative. Meanwhile, some say the ruling is a victory for innovation and exactly what’s been needed to bring an end to patent hoarding practices and frivolous patent lawsuits.
The rejected application involved a method that could be used to manage the business risks created by sudden movements in the energy costs. The court argued that the application “was not tied to a machine and did not result in a transformation, both standards set by the U.S. Supreme Court for patentability,” according to Reuters. The ruling is widely expected to be appealed to the Supreme Court, something that the appeals court recognized in its opinion.
One of the examples used in news coverage of today’s ruling is Amazon’s one-click payment patent - which takes existing technologies of e-commerce and Web links and incorporates them into a new process.
Some of the best coverage I’ve seen on this ruling and general topic has been posted by Mike Masnick, who blogs about legal issues for Techdirt. If you’re really engaged in the topic. check out some of the links in his post. Here’s an excerpt:
The summary is that the court has said that there’s a two-pronged test to determine whether a software of business method process patent is valid: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing. In other words, pure software or business method patents that are neither tied to a specific machine nor change something into a different state are not patentable. That means a significant number of software and business method patents are about to disappear, freeing up many industries to be much more innovative — at a time when that’s desperately needed…
Companies that rely on such patents (such as patent hoarding companies) may have just found out their current business model is about to go away. An awful lot of patents are now about to be invalidated, and a lot of patent lawsuits may get thrown out as the patents do not meet the criteria set forth in this decision… So, while this is a huge victory for freeing up the ability to innovate, those who have used bogus patents to profit for years cannot be expected to go along quietly.
October 30th, 2008
The Green Enterprise: Getting green with Cisco's 'footprint' tool [video]
At the Green Legal Strategy panel in San Francisco, John Hailey, Cisco’s senior manager of sustainable development, shows off the company’s “Environmental Data” tool available for free on the company’s Web site. He says Cisco is committed to reducing its own footprint by 25 percent by 2012, taking into account growth, which may mean up to a 50 percent reduction of its greenhouse gases.
October 30th, 2008
Sun posts $1.67 billion loss on write-off
updated: Sun Microsystems reported a loss for the first quarter of its fiscal 2009 year of $1.67 billion, or $2.24 per share, on revenue for $2.99 billion, down from $3.22 billion for the first quarter of 2008 (statement). The loss was largely attributed to the write off of a $1.44 billion non-cash charge for goodwill impairment and $63 million in restructuring charges. Excluding charges, the loss per share was 9 cents, compared to earnings of 32 cents for the year-ago quarter.
Analysts had been expecting a loss of 8 cents a share excluding charges on sales of $3.14 billion. Total gross margin as a percent of revenues was 40.2 percent, down 8.3 percent from the first quarter of 2008. The company warned Wall Street earlier this month that it would miss its targets, attributing the performance to a combination of factors, including current economic conditions and a sustained decline it its market valuation.
“The economic downturn continued to weigh on our customers, especially those that contribute to our traditional high-end businesses.” CEO Jonathan Schwartz said in a statement.
On a call with analysts, Schwartz noted that there had been a softness in demand in North America, Europe and Asia Pacific markets. Customers are feeling a consistent anxiety about economic conditions, he said, and are pushing off large-scale purchases. He also reminded analysts that he’s noted in the past that Sun’s traditional exposure to high-end enterprise systems has made it more vulnerable than peers with a more diverse portfolio. While the company is working to diversify its offerings, those initiatives don’t change things overnight, he said.
“All in all, it was a tough quarter,” Schwartz said.
CFO Mike Lehman added that the company is “not at all satisfied” with the financial performance of the quarter and said it is taking steps to restore the company to previous performance levels. He also noted that, given the economic environment, the company would not be offering guidance for, or answering questions about, its full year performance.
Shares of the company were up more than 9 percent in regular trading, closing at $5.29.
In its release, the company noted a few first-quarter highlights:
- Sun reported 83 percent year-over-year billings growth in its Solaris-based Chip Multi-Threading systems as customers continued to demand the nearly 10,000 applications available for Solaris 10, while enjoying integrated virtualization and exceptional power efficiency.
- Sun’s Solaris-based Open Storage product line continued to see aggressive growth during the quarter as the adoption of ZFS - the most advanced file system available in the open source community – and open systems continue to be ever more critical for addressing customer pain points in today’s challenging economic environment.
- Sun reported 12 percent year-over-year revenue growth in the Emerging Markets region, with India, Latin America and a combined Russia, Middle East and Africa geography growing double digits year-over-year.
- Sun announced a new version of Sun xVM VirtualBox as well as xVM VirtualBox Software Enterprise Subscription, offering 24/7 premium support for enterprise users. Sun xVM VirtualBox also surpassed 6.5 million downloads worldwide and 15,000 downloads per day.
- Sun partnered with Fujitsu on a new enhanced line of SPARC Enterprise servers that deliver a virtualization and consolidation platform with up to 80 percent better performance on commercial applications and 2x better performance on HPC workloads and using 44 percent less energy per core.
October 30th, 2008
Ghost Story: Fear of Microsoft Fades
As Halloween fast approaches, Apple is producing more good-natured fun, poking fun at Microsoft’s decision to end the use of Vista as the name of its Windows operating system for PCs. It probably didn’t cost much to produce the latest three commercials in its “Mac vs. PC” series. But their effect appears to be much greater, across the Web at least, than what Microsoft is able to generate in its $300 million campaign about Life Without Walls .
It’s not surprising, really. Microsoft is not known, even yet, for pulling off memorable videos, no matter how much it spends. Jerry Seinfeld, the $10 million pitchman, was given two weeks, then retired.
In fact, it’s exactly 10 years ago this week, that a live audience of Microsoft watchers was trying to crowd into Judge Thomas Penfield Jackson’s court room in Washington, D.C., so grab a glimpse of Chairman Bill Gates’ video deposition on whether Microsoft had used the monopoly power of its operating system to drive Netscape and its Navigator browser out of business. Here’s an excerpt of that testimony, called non-responsive by the judge, and whose action came mainly from Gates’ tendency to rock back-and-forth in his chair.
The intervening time has given way to a slow fade of Microsoft power and the fear of it. Gates’ “Internet Tidal Wave” memo in fact came in 1995 and the company has basically worked its way toward a point of irrelevance on the Web. The company’s browser still dominates, but the open alternative, Firefox, is gaining ground and Google, unknown a decade ago, is now trying to accomplish what Netscape failed to do, by making a commercial success of its alternative browser, Chrome. Microsoft has talked about “software as a service” for years, but has failed to come up with a way to provide versions of its Word, PowerPoint and Excel office products online, in an effective manner. In the meantime, effective alternatives are springing up, albeit gaining ground slowly.
Sure, Microsoft will be powerful and profitable for another decade, at least. It has a market worth of $210 billion, even after all the turmoil of this year. That’s basically equivalent to the worth of Google and Apple, combined.
But there’s the rub. Microsoft can’t rely on fear or forced loyalty any longer.
Google just got founded 10 years ago. Now, through search and text ads, it’s worth half as much as Microsoft. And there is not enough fear to stop it from launching its own online office suite or its own browser. In the intervening time, the most significant new Microsoft product, you could argue, came in hardware: the Xbox video game machine.
Apple was basically presumed to be either on its way to slow death or at best in limbo, 10 years ago. Now, it’s worth almost $100 billion — even after losing about that much in value in the stock swoon this year. Even with that, its stock — pushed by the iPod, the iPhone and improved products across the board — has gone from $10 to $110. Microsoft’s has dropped from $30 to under $24.
Even its operating system supremacy doesn’t seem so intimidating, any longer. For ease of use and overall quality, Apple’s Leopard operating system gets the blessing of The Wall Street Journal’s Walter Mossberg. And, he even gives a nod to Linux, the openly produced operating system, which is favored by the same kind of folks who liked the command line interface of the original PC approach, the Quick and Dirty Operating System, redubbed the Microsoft Disk Operating System.
Microsoft will still produce prodigious cash flow, for years to come. But all its money cannot bring back its ability to dictate how computing will evolve, by tying features in Vista or Windows 7 or Azure or whatever operating system(s) it develops next.
That’s why you likely will see Microsoft trying, successfully or not, to put more of its money into marketing what it’s already got. Whether it gets the same bang for its bucks as Apple. Or not.
October 30th, 2008
Motorola: Handset unit spin-off delayed; No Android 'til next Christmas; Layoffs on tap
Motorola’s sick patient–its handset business–is too sick to spin off right now and it’s unlikely that a big bet on Google’s Android operating system is going to save it. Meanwhile, Motorola won’t deliver Android smartphones until this time next year give or take a few days.
The company said it is postponing the spin-off of its handset business. Motorola’s plan was to quarantine the unit so its enterprise mobility and home networks unit could shine. Update: The Wall Street Journal is reporting that Motorola will layoff 3,000 employees, with the bulk of them residing in the handset unit.
Also see: Motorola picks Android in mobile phone shakeup. Ammunition for smartphone war?
Motorola on Thursday said the handset unit wouldn’t be spun off until after 2009. Its previous target was the third quarter of 2009 for the handset business spin-off. In a statement (Techmeme), new CEO of Motorola’s Mobile Devices business Sanjay Jha said:
While our strategic intent to separate the company remains intact, we are no longer targeting the third quarter of 2009, primarily due to the macro-economic environment, stresses in the financial markets and the changes underway in Mobile Devices.
The news isn’t that surprising given the turbulence in the stock market, but there’s another wrinkle: The mobility unit needs to revamp before it goes out on its own or it will fail quickly. For instance, is Motorola’s handset business going to bet on Android? Does it have a hit design? Can it compete in smartphones? Those unresolved questions need to be answered before the handset business goes free.
Jha said on a conference call (see Silicon Alley Insider’s live notes) that Motorola will focus on three mobile platforms–Android for mid- and high-end phones, Windows Mobile for some smartphones and a proprietary OS for low-end phones. The big takeaway: Motorola will launch Android phones in time for next Christmas. Motorola will also cancel a bunch of phones based on Symbian or Linux and Java operating systems.
Meanwhile, Motorola reported a weak third quarter. The company reported a loss from continuing operations of $397 million, or 18 cents a share, on revenue of $7.5 billion. Wall Street was expecting Motorola to report earnings of 2 cents a share on revenue of $7.82 billion. Motorola’s earnings did include a bevy of charges:
If you exclude all of those charges, Motorola topped estimates on disappointing sales.
But the big picture is this: Motorola continues to be a tale of two companies–the home networks and enterprise units and the sickly handset business. For instance, Motorola’s mobile devices unit had an operating loss of $840 million on sales of $3.1 billion, down 31 percent from a year ago. Motorola shipped 25.4 million handsets, but lacks a big hit. In fact, Wall Street was expecting Motorola to ship 27.4 million handsets. Perhaps the Motorola KRAVE ZN4 will fit the bill.
Jha said the handset business is way too complicated with 20 combinations of software, chips and user interfaces. In other words, Motorola’s handset business is a rat’s nest of product plans. Jha’s job is to prune. This slide tells the tale of Motorola’s mess of handsets:
Motorola calls that mess a portfolio. I’d call it a lack of focus. Judging from Jha’s comments, Motorola isn’t going to sweat its declining market share so it can focus on the financials.
Meanwhile, Motorola is set for a rough first half of 2009. Credit Suisse analyst Matthew Hoffman wrote:
Handset shipments of 25.4MM were lighter than expected; Motorola is now the world’s #4 global handset OEM (behind Sony Ericsson). ASPs were the bright spot in the quarter, coming in at $123, up 3% from $119 in 2Q08. Based upon Motorola’s results, we now believe 3Q08 global handset sell-in will be sized at ~317MM, up 4% q/q, lower than our initial 326MM estimate as sell-in slowed at the end of 3Q08. In addition, global handset market share is shifting to smartphone OEMs (e.g. Apple, RIM, HTC, etc.), and away from the traditional OEMs. We expect the traditional Big 5, led by Nokia, to continue to debut new smartphone models over then next twelve months. The combination of a weak economy and shifting preferences will keep pressure on those with weak line-ups.
The handset unit looks even worse relative to its sister divisions.
- The home and networks mobility division had operating earnings of $263 million on sales of $2.4 billion. The big story here: Motorola’s operating earnings were up 65 percent on sales that were down 1 percent from a year ago.
- The enterprise mobility group had operating earnings of $403 million, up 23 percent from a year ago. Sales for this unit were $2 billion, up 4 percent from a year ago.
Add it up and you have two good businesses and a disaster. Motorola’s outlook was also lacking.
Motorola projected earnings from continuing operations of 2 cents a share to 4 cents a share in the fourth quarter compared to Wall Street estimates of 7 cents a share. For the year, Motorola sees earnings of 5 cents a share to 7 cents a share roughly in line with expectations.
October 30th, 2008
A tough decision: Grab an iPhone or wait for the Storm?
Verizon Wireless and Research in Motion should be thanking one particular customer service rep for stopping at least one customer - me - from defecting to AT&T and the iPhone this week. I had called in to find out about altering my existing family plan and porting my phone over to AT&T when she asked me if I’d heard of the Blackberry Storm. Of course, I had - but I let her go through her pitch as to why I should wait for its arrival before making a decision.
The Blackberry Storm, you see, is supposed to be a real contender for the iPhone, she said. And though a date hasn’t been announced for the release of the Storm, the customer service reps are expecting it to become available anytime now. Nothing is official, of course -Verizon is being quiet about details of the release. But my rep, a veteran who has seen excitement around new phones in the past, said that when the advertising and marketing campaigns kick into high gear and when details about some of the phone’s features start trickling down to the agents, the launch date is getting close.
The launch isn’t getting as much attention as the iPhone did - but there’s clearly a lot at stake here for both Verizon - which is starting to feel the iPhone churn - and Research in Motion, which was outsold by Apple this most recent quarter. Earlier this week, Verizon Wireless said it wasn’t worried about churn, but customer service folks, who seem to have a ready script to keep customers from jumping to AT&T and the iPhone, telegraph a different story. Editor-in-Chief Larry Dignan, senior editor David Grober and I called placed calls to Verizon - not as journalists but as legitimate customers - to dig up some details on the Storm.
My Verizon rep’s best guess on the availability of the Storm was maybe 2-3 weeks, she said. Pushing further, I asked if early 2009 was a more realistic target. Her quick answer: “very unlikely.” I even asked: “If you were a gambling type of gal, would you bet that it would be before Thanksgiving?” After a pause, she said yes.
David’s rep gave a pretty clear “I have no idea,” but added that it couldn’t be soon enough. His rep offered to take down his name and number and call when the Storm becomes available. (You can also sign up for e-mail alerts.)
Larry’s rep, on the other hand, wasn’t making any promises or offering much hope of an upcoming announcement. “We don’t have a date but it may not be available until Christmas,” she said. She also noted Verizon’s LG Voyager experience last year, which seemed to slip. The rep remembered the Voyager rollout because a lot of folks ordered them for Christmas.
Of the three of us, he’s the only one serious about staying with Verizon and getting the Storm (he’s done with the Motorola Q, he said.) His contract is up in November so he would be free to pick another carrier - but he has no interest in an iPhone or an account with AT&T.
As for me, I’m even more undecided now than I was before. If you have strong thoughts on the iPhone, the Blackberry, AT&T or Verizon, I’d love to hear your reasons. Please take a minute to vote in this poll and maybe even share some of your thoughts in the Talkbacks.
Loading ...October 30th, 2008
Netflix distribution grab continues: Hooks up with Tivo
Update: Netflix on Thursday snared its latest distribution coup: A long-overdue partnership with TiVo in what amounts to a Netflix everywhere strategy.
Under a four-year deal, Netflix will stream its movie and TV episode library on TiVo’s digital recorders starting in December. The deal, reported at various outlets (Techmeme), gives Netflix another distribution outlet and provides TiVo with a way to differentiate itself from other DVRs. Netflix, which will be embedded on Samsung Blu-ray players shortly, also offers its own player in partnership with Roku and distributes its service via Microsoft’s Xbox platform. Netflix also has an electronics deal with LG Electronics. In addition, Netflix streams movie rentals online to subscribers.
Netflix on TiVo will be available in December.
Update: Tivo and Netflix said in a statement:
The two companies said they are initiating a test of the new capability today in several thousand U.S. households and expect it to be broadly available in early December, in time for the holidays. The ability to instantly watch content from Netflix on the TV via TiVo DVRs will be offered at no additional charge to customers who subscribe to both services.
The two had tried to collaborate in 2004 to deliver movies over the Internet, but the stars–actually the licensing of movies–didn’t quite line up. TiVo has 3.6 million subscribers and Netflix has 8.7 million. It’s unclear what the customer overlap is, but given the subscriber tally Netflix may be a bigger help to TiVo than the other way around.
Netflix recently reported earnings and cut its outlook for the fourth quarter amid weak consumer spending. TiVo reported its fiscal second quarter results in August and has been profitable for two consecutive quarters, but projected a net loss for the third quarter. However, TiVo won a lawsuit against Echostar and was awarded $104.6 million in damages that will bolster the company’s coffers.
October 30th, 2008
GE's SaaS launch validates Aravo, a salesforce.com for supply chain
Think for a minute about the third-party vendors who service your company - the folks who run the cafeteria, deliver office paper, clean the restrooms or provide security services, just to name a few. Now, think about a company the size of General Electric, an international conglomerate with more than 325,000 employees working on everything from the set of Saturday Night Live to a parts facility for GE Aviation.
Keeping track of the vendors that service GE - all 500,000 of them - is no easy task. Some offer bulk pricing while others are required to provide proof of licensing or special insurance. And with so many different divisions within a company like GE, who’s the say the Joe the Vendor isn’t providing one company under the GE umbrella with one price and another company under the same umbrella with a different price. That doesn’t sound very efficient, does it?
This week, General Electric announced the official launch of a Web-based Software-as-a-Service platform from Aravo Solutions, a San Francisco company that’s hoping to do for vendor management what salesforce.com did for customer relationship management. Since March, GE has been rolling out Aravo SIM (Supplier Information Management) as a way of increasing efficiency and reducing costs throughout the company.
Through the Internet, GE vendors can access the system outside the company’s firewall to do things like upload insurance policies or change unit prices. Inside the firewall, GE divisions that need to access the database - from facilities to accounts payable to HR - will get a broader look at information about that vendor, which, in turn, will help streamline operations and expenses.
But as much as this is an innovative effort for General Electric, it also serves as a validation of SaaS as a legitimate way of doing business and of Aravo itself, which proudly boasts that, if their services can work for a company the size of GE, they can work for any company. Aravo believes the GE rollout, which will eventually include 500,000 suppliers doing business in 10 countries and six languages, could be the largest SaaS deployment in the industry.
October 30th, 2008
Apple rewrote MobileMe; Should 'just work better'
Apple updated a knowledge base article and noted that it basically rewrote MobileMe’s underpinnings in a late September update.
The article, which carries an Oct. 29 date, outlines the following:
Apple is always working to improve MobileMe. Since MobileMe is primarily a server-side, or “cloud”-based, service, the MobileMe team can make improvements and push updates to MobileMe without any action being required of MobileMe customers. Since server-side updates are a bit more innocuous than a standard software update to Mac OS X or Microsoft Windows, it’s easy not to notice that updates are occurring. Usually the only hint of these updates is that things just “work better”.
AppleInsider notes this is a silent update, but if you follow the security side of the equation stealth updates and fixes are sort of the norm in the industry. Apple’s QuickTime 
patches–rewrites–are epic. But across most software firms a lot of things get done quietly behind the scenes in updates.
In this specific update, Apple’s list indicates to me that it basically called a do-over with MobileMe (all resources). For all services, Apple improved localization for MobileMe web applications and membername suggestions when attempting to sign up for a membername that is already taken.
For MobileMe Mail Apple fixed (Apple prefers “improved):
October 30th, 2008
CIO Sessions: Technorati VP of engineering: Dorion Carroll
In this episode of CIO Sessions, Dorion Carroll, vice president of engineering for Technorati, talks to ZDNet correspondent Sumi Das about the challenges with scaling operations as the blogosphere continues to grow. He also discusses how they’re able to index millions of blog posts in near real time, surviving the economic downturn and what differentiates the company from its biggest competitor, Google.
2 minute Video Shorts
Short on time? Check out our summary shorts of the interview.
October 30th, 2008
News to know: Windows 7; OpenOffice flaws; Cybercrime; Apple
Here are today’s notable headlines. You can get News To Know via email alert and RSS daily:
Ed Bott: You’ve got Windows 7 questions, I’ve got answers
Sam Diaz: Real vows fight for RealDVD, adjusts outlook
Ryan Naraine: Code execution flaws haunt OpenOffice
- ‘End of life’ beckons for Firefox 2
- Dancho Danchev: CardCops: Stolen credit card details getting cheaper
- Cybercrime friendly EstDomains loses ICANN registrar accreditation
Ed Burnette: Top 10 Android apps for 10/29/2008
Apple: MobileMe: About the Late-September 2008 MobileMe update
Paula Rooney: Alfresco 3.0 delivers collaboration, Sharepoint support
Mary Jo Foley: Ozzie responds: Is Microsoft Azure just ‘Hailstorm’ revisited?
- Microsoft’s Live Framework: A (revised) picture is worth a thousand words
- Microsoft PDC attendees get ‘the goods’
- Liveblogging Microsoft PDC keynote day three: Robotics and research
- Adrian Kingsley-Hughes: Windows 7 Aero to take advantage of DirectX 10.1 … where will this leave NVIDIA
Jason Perlow: Kill the data loss monster once and for all
Matthew Miller: T-Mobile G1 data stopped working? Free trial is over and new data rates are coming
October 29th, 2008
Real vows fight for RealDVD, adjusts outlook
Like everyone else, Real Networks is bracing for an uncertain economic future. But CEO Rob Glaser sees two potential bright spots that could help the company ride the storm. On an earnings call with analysts, Glaser said that the company’s latest product, the controversial RealDVD, which allows users to import DVD movies into a computer hard drive, is a product worth fighting for. 
A lawsuit by the Hollywood studios has prompted a temporary restraining order on the product but Glaser said the legal fees will be worth it and that RealDVD is product worthy of more investment, especially given the favorable reviews. “We’re excited about this category,” Glaser said. The case’s next hearing is scheduled for January.
Secondly, he believes that big-ticket items will be harder hit by the economy, compared to smaller-sale items, such as individual music tracks or subscription services like the recently-launched partnership with Verizon Wireless, called VCast Music with Rhapsody. That monthly subscription is billed through Verizon Wireless.
On Wednesday, the company reported a third quarter loss of $4.5 million, or 3 cents per share, on revenue of $152.0 million. In the same quarter a year ago, Real Networks reported earnings of $4.3 million, or 3 cents, on revenue of $145.million. Gross margin was 59% in the third quarter of 2008, compared with 61% a year earlier. Analysts surveyed by Thomson Reuters had predicted a loss of 3 cents per share on revenue of $153.5 million.
The company also adjusted its guidance for the fourth quarter and full year. For the quarter, it expects a loss of 4 cents to 1 cent on revenue of $150 million to $157 million. For the year, it expects a loss of 6 cents to 3 cents on revenue of $602 million to $609 million.
RealNetworks said its fourth quarter outlook will be hurt by the stronger dollar - a common theme among companies with international operations. A strong dollar minimized international growth when revenue is converted back to the greenback. Conversely, a weak dollar boosts sales overseas. The company said 20 percent to 25 percent of its revenue is international–primarily the euro and Korean Won. While the currency fluctuations aren’t the entire story - RealNetworks expects online advertising and consumer spending to slow - they play a role.
Sam Diaz is a senior editor at ZDNet. See his full profile and disclosure of his industry affiliations.
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