Paul Lopez Unwired

Google has introduced their long awaited web browser, Chrome. It's receiving mixed reviews so far.  Microsoft Internet Explorer has 72% market share, followed by Firefox at 19.7% and Safari 6.3%. It took 3 years for Mozilla to go from zero to 20%. My prediction is Google will have 10% market share within one year. Browsers are the operating system of the Internet. Google wants to make your overall Internet experience better. They only want to get more people to use Google. They make no money distributing this software. This does nothing for their bottom line. How does this gain more market share for Google? This is a defensive move from Google. They want to promote more Google Applications but you still need operating systems to run browsers (at least for now).

It appears to run fast, has better memory management, but it will actually use more memory than IE. You can tear off the tabs, but you could already do that on Safari, speaking of which there isn't a version for the MAC. Some users have reported missing their Firefox plug-ins, problems scrolling on Dell touchpads and it doesn't run adblock. It has an Omnibox that combines the search box and the address URL box, which begs the question what happens when you get unresolved URI's? Will it redirect to the ISP's search page or Google? It's worth downloading and comparing to IE 8.0. As with other Google Apps, it's still in "beta."

Google's presentation at the Enterprise 2.0 show in Boston pushed out more sound bites regarding cloud computing. They made the statement that innovation in enterprise applications during the next 10 years will happen on the Internet (in the cloud).  Certainly, company spokespeople like to put forth the vision at these conferences, but I doubt we will see the obsolescence of Microsoft, Oracle, SAP or other on-premise software during that same 10 year period. The capabilities of the cloud have from most analysts viewpoints, caught up with what you can do on the edge. The question is not about technology however, it's about who carries the asset on their books and how it is managed. There are many companies with rather significant investments in "legacy" systems. What may come to a surprise to this generation is much of that legacy business logic drives corporate differentiation and value creation. It can certainly be ported to new technologies (e.g., SOA hype), but why bother when most of these systems are already depreciated and continue to work? There are still those users who want to "see" the systems running on site, especially if they are communication systems or data centers. It's up to the business leaders to make the case for a change from the status quo. Lasting innovation is driven by market forces, not from the innovation itself.

HTML5 is an optimistic standards effort designed to bring all browsers, markup languages and plug-in APIs under one common industry framework. There has been an accelerated effort in technologies designed to make SaaS more robust by making web applications "behave" more like fat desktop applications. Concerns about connectivity, web response time and user experience have tapered the widespread adoption of these applications in the enterprise. Most success has occurred in the consumer/social web space. One promising development is the proliferation storage APIs. This facility creates a small database that is installed on the end user's client machine to enable access to application features normally operated while connected to the Internet. The one year old Google Gears is making some headway. MySpace has integrated Gears into its messaging application. Yahoo has introduced BrowserPlus in an effort to challenge both Google and Adobe Air. The idea is to have a web application accessible from the user's desktop much like a tray application or a native OS-based executable. One Yahoo demo allows users to edit photos on a desktop with Flickr before uploading to the web thereby increasing the speed and performance of such an operation. Most RIA APIs provide three things: a local database ("SQL Light"), a local object caching mechanism for images or web pages and thread pools to allow asynchronous tasks to occur in the background. These are the integral components of the architecture that enables a rich user experience. Go check out Buzzword.com for an Adobe example of a word processor written entirely in Flex. This brings us back to HTML5. Microsoft, Adobe and others (like CURL) are pushing ahead using some of the storage APIs from HTML5 but leaving other parts of the standard on the shelf. Apple has supported the Webkit open source project with Safari and has re-engineered their own site (removed Adobe Flash & PDFs) by using Ajax instead of proprietary alternatives. It will become increasingly difficult to try to adopt some kind of standard; HTML4 was probably the most successful. Innovation is very impatient with the standards process altogether I'm afraid. Being locked in to a proprietary approach may continue to inhibit the adoption in the enterprise. Most IT shops will choose to utilize a best of breed approach for specific RIA implementations in the short term.

The Facebook Open Platform is finally available a year after they announced it to developers. Back then, it was heralded as "Anti-MySpace" by opening up APIs to third party developers where MySpace had been closed.  Opening up any platform to a multitude of application developers is a two-edged sword. Many users' affection for the novel applications wear off and they begin to tire of the excessive spam associated with their promotion. Facebook says more than 24,000 applications have been built by over 400,000 developers. Google's OpenSocial took a different track by not requiring a special markup language (Facebook uses FBML) and that makes development much easier. Key partners for OpenSocial are AOL, Yahoo, Myspace, LinkedIN, Orkut, Salesforce.com, Plaxo and many others. The New York Times even uses it to allow users the ability to share articles with friends in their social graph.

 As mentioned here before, the key to success with social networking "openness" will be the ability to federate user privacy, profiles, preferences and the whole dimension of data and application portability. A new twist on social networking and a company thinking a little different is SkyDeck. They allow you to turn your phone bill into a map of your social network. The APIs utilize OAuth for secure API authentication and they've come out of the gate with a developer kit even though they are in closed beta. Is everyone racing for the bottom yet?

There's been much hype around FriendFeed recently as users get frustrated with constant outages from Twitter. According to Compete.com; Twitter is getting over a million users per month compared with Friendfeed with less than 150,000. Sites like Friendfeed have potential and gain early interest because they offer data portability. You can migrate easy access to your other accounts such as YouTube, flickr, twitter and yelp for example. Some early complaints about distributed identity and social sphere openness have been addressed by some of the newer sites. What's not understood very well is that fact that these sites perform very well when they are small. When their user base grows up to over a million or more, they start running into infrastructure brick walls. These sites are not designed for scalability up front and have to cross the chasm in terms of monetizing their assets so they can invest in real data center and web performance capabilities. Everyone wants to have Amazon or Google class performance but that's not something that can grow from a second bedroom server farm. Outages and service interruptions are becoming more commonplace, even with larger operations such as Google YouTube or Blackberry networks. Microsoft Live has suffered outages too. This is the only business where you can be the victim of your own success.

Jellyfish, an online shopping cash-back service purchased by Microsoft last year forms the foundation of a new search engine advertising model the company is expected to announce at its Advance08 conference this week. The new MS LIVE platform, called "Live Search Cashback," will enable allow users to get cash back from purchases made by participating advertisers on a variety of merchandise. In contrast to Google's virtual monopoly on the pay-per-click model, Microsoft will share part of the fee collected from the advertisers to incent users to move forward with a purchase. Conceptually, this is no different than a manufacturer offering rebates at the retail point-of-sale level through the channel and to the end customer. Microsoft takes the risk of running the ad by changing the model to CPA (cost-per-action) from CPC (cost-per-click, aka PPC, pay-per-click). Microsoft's recent re-engagement with Yahoo, specifically its search business, potentially provides advertisers enough inventory to make this a viable service. Maybe these "stimulus checks" from Microsoft will keep our economy going this year!

Carl Ichan is moving ahead with a Yahoo proxy battle and a new slate of 10 board seats including Mark Cuban.  He's shaken up things at Motorola and Time Warner so he's not the person you'd want to come knocking at your investor relations door. He picked up 50 million shares last week and has said he will buy up more shares ($ billion + shareholder already). All he needs to Gordon Crawford (with Capital Research & Management) and Bill Miller with Legg Mason who owns 80 million Yahoo shares and is the company's second largest shareholder to pull this off. He does not have Microsoft's commitment, but with a new board and willingness to accept the last offer, the deal may go through. Yang will have trouble blocking the Power Play shots on goal as Ballmer, Ichan and Cuban crash the net and head for the onion bag.

This acquisition is HP's largest since its $19 billion purchase of Compaq in 2002. Combining market share of both EDS and HP in the computer services segment pegs them at 5.2% versus 7.2% for IBM according to Gartner. Still, they will be much smaller than IBM with its $54 billion in services last year versus $38 billion for HP/EDS. There may be some potential channel conflicts as some of HP's competitors such as Xerox, Dell and Sun sell products through EDS. This hurts Dell the most since now HP will have a much larger channel to sell its servers and desktops. Plans are to keep the EDS headquarters in Plano, Texas. That's great because now HP can use the cool executive briefing center that Ross Perot disliked so much known as the "God Pod." It's located in that center section spanning the two buildings. It has a cutout in the floor that reminds you of the Ghost Bar on the 55th floor of the Palms Casino in Las Vegas. Don't stomp on it too hard!

Sprint is merging its WiMax Xohm business with Clearwire in a $3.2 billion investment backed by Google, Comcast, Intel, Time Warner Cable and others in a move to save the technology in the U.S. The deal originally fell apart last November but we thought some investors would come forward. Craig McCaw is bringing together some of his early day pioneers such as John Stanton (from Western Wireless, later became VoiceStream, then T-Mobile) and Dan Hesse of Sprint. So far Sprint has only shown it can lose money and faces rapid extinction to Verizon and AT&T. WiMax has already lost momentum to spectrally efficient LTE (4G), I'm still not sure they can gain market traction.  The real winner is Clearwire and a small pay day for McCaw. Google wants to ensure it has a home for Android handsets and put up $500 million. That's plenty of Zeros for the venture, but I don't think they'll win.

Back in February I warned to stay out of technology stocks for a while. Last week we saw the unwinding of the commodities trade and the rotation move into tech and financials. The four horsemen have traditionally been referred to as Apple (AAPL), Google (GOOG), Research in Motion (RIMM) and Amazon (AMZN). I personally think we can replace Amazon for another strong big-cap tech name. While I'm not wandering into financials at the moment, I still like Goldman Sachs (GS) and have enjoyed the run-up in Visa (V) and MasterCard (MA). The Nasdaq has found nice support above 2400 and the S&P has closed consistently over 1400. At this stage, I'm calling the bottom here but expect to see more volatility in retail, financial and energy sectors. We were thinking last week the Agricultural (Potash POT, Monsanto MON and others) were done but not quite so fast. The world still needs food and as long as we burn corn for ethanol, this sector still looks good. Don't forget to mix in some Natural Gas plays and the oil drillers (CHK, XTO, APA). Good Cisco earnings would signal the official "all-clear" and tech should do fine into the summer months. Watch for resistance at 2550 for the Nasdaq and a bump on the S&P around 1440. Next stop will be 1500 (along with Google over 630 and Apple over 200).

Meanwhile, Microsoft made the right call walking away from Yahoo. The Yahoo shareholders are going to be coming out in full force like the animals who through Horton in a cage in "Horton hears a Who." Maybe Jerry Yang's heard something no one else has but Ballmer glibly said, "Talk to the hand" this weekend. Ballmer's public letter should make it open season for the Yahoo shareholders to either unseat the board or get them to back to the emerald city. Meanwhile, the Yahoo employees must be thinking "Hoo will save us?"