Dell Computer, one of those “success” case studies repeated to me ad nauseum in business school, is seeing a dive in market share after so many years earlier during this decade spent taking share away from competitors in a stagnant market. Now PC sales are up again, but somehow Dell is losing market share to HP and Acer.
Having a “mass customization” system for largely look-alike and work-alike PCs isn’t the magic formula so many believed it was.
But that’s not all. One thing people may not have noticed about that “E” logo that Dell often uses for their brand is that it bears an eerie resemblence to the old Enron symbol.
Now this Texas company is being investigated by the SEC, and it still hasn’t turned in audited 2006 results.
This accounting scandal may largely blow over–or it may reveal enormous financial shenanigans that prove that even Dell’s amazing growth years ago was the product of falsified reports.
Michael Dell was quoted in April as saying that “The Direct Model has been a revolution, but is not a religion.” Maybe it’s not a revolution either but a racket–and about to get busted up.
Tag: business
The file sharing feature is what could matter for Pownce
All sorts of reviews of Pownce, a new service that has been compared to Twitter and Jaiku, have delved into the technical arguments about the Adobe AIR client, and how doesn’t Gmail send 20MB files (to Pownce’s 10MB?), and what does a pro account get you, like no ads (what ads anyway?) and 100MB file sending instead, and usually a review can’t end without an assessment of the clausterphobic world of web2.0 personalites. So I can’t compete with that here but let me add my views on the service:
(1) The single most interesting thing about Pownce is the transparent but almost intangible similarity in feel to Flickr, not a coincidence as Yahoo’s photo service is the de rigeur photo site in the web 2.0 bubble (though still not quite the most popular compared to old Photobucket in what Bob Dylan called “America”). Well the similarity in “pro accounts” stands out of course, (I think $20 to Flickr’s $25–but don’t hold me to that I don’t have a pro account now in either service) but use the web site part of Pownce for a while and see if you don’t also sense a vague similarity in look and feel.
(2) Okay, I will wade a bit into the overall debate–Pownce really is sort of a tumbleblog, but it’s not bad but not amazing, at least so far, and could work a bit like Twitter for some peoeple, and some people could use it more like AOL IM, but it really needs to be able to accept incoming feeds (the way Jaiku or Tumblr can) and have external widgets to give updates from the service on your blog. Also they need to serve up a timeline of public updates. You have to click around to find interesting pages–navigation should be done from more angles. (For now, check lead developer Leah Culver’s page for updates about the service because some of these features or others may be added–it’s in invite-only beta right now and the Adobe AIR desktop client is still in alpha.)
(3) Key among the services mentioned is the file sharing feature. I don’t have to run through the history of P2P networks like Hotline, Napster, IRC, Gnutella, Kazaa and BitTorrent here, but some of their varied histories show the vagaries of both popularity and legality of sharing files on certain networks. Pownce, on the other hand, is a new service that may offer a good deal of privacy because it works off a centralized network. Or it may not. But if it attracts a user base that makes frequent use of the file sharing feature (perhaps even files that are legal to share–if that’s even at all possible under the DMCA–I’m not a lawyer) Pownce could differentiate itself from current crop of both short messaging services and P2P networks.
The iPhone and the telecom revival
Telecom as an industry suffered one of the largest slumps any industry has ever seen between 2000 and 2003, and really has only recently emerged from the massive over-investment of the 1990s.
Those that are now fond of claiming that somehow this enormous buildout was somehow worth it in the end, on balance, are wrong. The loss of financial investment is a sign that the market is not working (in this case it was quite overheated by 1999), not a sign that it is. Massive, inefficient allocation of resources is not worthwhile given the opportunity cost. Though an enormous amount of available long-haul capacity was built, it was just a minor side effect of some $1 trillion of financial losses, best exemplified by the bankrupt WorldCom and Global Crossing.
Recently the industry has seen a revival in fortunes. As Businessweek noted last month:
‘Over the past year, however, the telecom industry has roared back to life. Credit a steady rise in appetite for broadband Internet connections, which enable easy consumption of watch-my-cat video clips, iPod music files, and such Web-inspired services as free Internet phoning. Indeed, this year broadband adoption among U.S. adults is expected to cross the important threshold of 50%. Capital spending is on the rise as companies invest to build high-speed networks. Private equity players are placing enormous bets on the industry, such as the $8.2 billion that Silver Lake Partners and the Texas Pacific Group agreed to pay for networking gearmaker Avaya on June 5. And the glut in broadband communications capacity is all but gone.‘
But as much as the increase in dealmaking is a good augur, the iPhone’s cultural effect is probably even greater. Somehow, telecom has become very, very cool, and having the sleek, powerful iPhone has become an instant guarantor of status and attention.
Apple is really changing the telecom game, but not only by offering a much more open, web browser-based platform for applications than most cell phones along with the new design and materials including the shiny color touchscreen.
Building a device that has “Phone” in the name that does a lot of other useful tasks other than connect calls is a boon for telecom’s image. Apple is moving their platform, with all its cool, from unconnected or sometimes-connected devices like iPods or computers to the always-connected iPhone. Others will follow, and the network will continue to grow. It’s just hard to predict how long it will take. Welcome to the new connectedness.
[Read my and N. Rapp’s report on Apple from 2003.]
Twitter and Jaiku–which one, and where to now?
I found an interesting article on a PBS blog about the short message service blogs. Basically the writer focuses on Twitter and gives an overall outline.
I think he may have given short shrift to Jaiku, Twitter’s nearest competitor. It is a very cool service as well and actually is a close number two right now in my opinion, with potential to overtake based on how they develop.
I’ve used both services. Check out my pages on the sites:
pacificpelican.jaiku.com
twitter.com/pacificpelican
Since my text messaging on my phone doesn’t usually send out for whatever reason, I like being able to use Twitter for messaging–people that add you as a friend can receive your tweets over their cell phone. So lately I’ve had a lot of fun using Twitter to text message my girlfriend. Twitter also allows updating from a variety of online services like Netvibes and Facebook, and GoogleTalk or AOL IM. I have been using the Twitter Tools WordPress plug-in to cross-post all of my tweets (Twitter messages) on my front page as well as generating “new blog post” when I write a new Diary entry.
Both of these services have been prone to going down or having drops in service levels on either posting public timeline updates and feed updates or in receiving messages from one or more messaging systems. But overall the quality of service has been improving.
Both services allow customized photo backgrounds on user pages, 140 word updates and rss feeds. They both offer “badges,” which are widgets in JavaScript or Flash code that can be put on your Blogger or WordPress or or your Myspace page or wherever you can place code, even your Pageflakes homepage. Don’t make your URL links too long in your messages on Twitter and Jaiku, and don’t use any HTML tags–the former will become a “tinyurl.com” address, which will work but has limitations (like being replaced with a later link you send in another message) and the latter will just appear as ungainly code text on your Twitter page.
Jaiku is a more Euro-centered version, and they are second to Twitter right now I think but they seem to better understand the pure telecom angle in this–getting large numbers of people using either or both of these services could really drive text messaging revenue for telecoms. It’s not surprising that Jaiku is selling a specialized Nokia phone, the S60.
For keeping tabs on what people are saying on the services, you can watch Twittervision 3D and Jaikuvision among many others. Another service in a similar field that I have been using is Tumblr–it’s more of a short blog (“tumbleblog”) than online short message service, which can take a single link or photo as well as a short blog (showing how photos certainly have a place as well in this geo-tagging online mapping/short messages craze–as does the very fascinating Flickrvision)–here’s my page, which mainly uses feeds to track most or all of what I post online:
pacificpelican.tumblr.com
Could these and all the other new messaging platforms all manage carve out their own niche? Twitter is known as the “What are you doing” update service and has a techier feel (for example, reply is done in a “comment on this” blog kind of style on Jaiku whereas it is done by making the @-sign and then the username being responded to the initial word of the tweet) while Jaiku has a slightly better overall web 2.0 feel on the home page. I have no clear preference, but I guess I might start preferring one more than the other depending on who’s using them or which one is more convenient at the moment–for a while I really liked Jaiku, kind of thought I had done the “switch” to it, but lately the range of tools available with Twitter has pulled me back in that direction.
So what is next for the short messaging services? Well here’s one theory. Just as blogs used to be a way for one person to write simple, off the cuff messages to a handful of interested listeners and they have grown into the enormous multi-user data-base-driven CMS-included software packages of today like WordPress, B2evolution and Movable Type, the short message services will expand enormously as they look for ways to grow by incorporating a little feature here and a small one there. What would these changes look like? Well, how about more explicit group setups, allowing people to host their own Jiaku or Twitter powered page (maybe by allowing C-name record based site like Blogger.com and livejournal.com), messaging from more IM platforms (or any in Jaiku’s case), more depth to the home pages in terms of search, features and original content, tagging, and of course, at least one of them should open their source code, or maybe a really cool open source project could be built along those lines. Well, maybe I can get Qwittr out there as one of the attempts.
Google: "We may take actions that our stockholders do not view as beneficial"
A rather strange aspect of Google is the two-tier share system that ensures that mere investors are to be kept at bay lest they get in the way of Brin, Page and Schmidt’s plans. The company’s own 2005 10-K report notes:
“Our Class B common stock has ten votes per share and our Class A common stock
has one vote per share. As of December 31, 2005 our founders, executive
officers and directors (and their affiliates) together owned shares of Class A
common stock and Class B common stock representing approximately 78% of the
voting power of our outstanding capital stock. In particular, as of December
31, 2005, our two founders and our CEO, Larry, Sergey and Eric, controlled
approximately 84% of our outstanding Class B common stock, representing
approximately 69% of the voting power of our outstanding capital stock. Larry,
Sergey and Eric therefore have significant influence over management and
affairs and over all matters requiring stockholder approval, including the
election of directors and significant corporate transactions, such as a merger
or other sale of our company or its assets, for the foreseeable future. In
addition, because of this dual class structure, our founders, directors,
executives and employees will continue to be able to control all matters
submitted to our stockholders for approval even if they come to own less than
50% of the outstanding shares of our common stock. This concentrated control
limits your ability to influence corporate matters and, as a result, we may
take actions that our stockholders do not view as beneficial. As a result, the
market price of our Class A common stock could be adversely affected.”
So they warn ominously of future clashes between shareholders and the Google brain trust, but overall the news is good: Google has announced very high earnings in their latest quarter, as marketwatch.com reported:
“Google Inc. […] shares rallied 7.4% to $457.50 in pre-market trades Friday as Wall Street analysts cheered its latest earnings report. Goldman Sachs, Stifel Nicolaus, Merrill Lynch, RBC and ThnkEquity Partners were among the brokers to increase their price targets for the Internet firm. Stifel Nicolas said Google’s revenue of $2.69 billion beat its $2.61 billion estimate. Cash earnings of $2.62 a share came in above Stifel’s $2.34 a share target.”
Has Google seen such enormous growth in share price that its future growth will be slow, as in the case of Microsoft, or will it continue to grow? Online advertising and search technology are industries that Google is easily number one in, while services like Google Earth, Gmail and Google Video/YouTube do not seem like highly profitable businesses by themselves and it seems that enormous future growth, if it comes, will probably issue from those two key bases of ads and search technology.