Entries tagged with “google” from Paul Lopez Unwired

Sprint's core postpaid business has been gradually shrinking as seen by a net loss of approximately 3 million customers during the first nine months of 2009. They have increasingly been focused on the prepaid market with recent success in their $50 monthly unlimited prepaid rate plan. Their subsidiary, Boost Mobile offers prepaid services to nearly 6 million customers in the United States. Their recent acquisition of Virgin Mobile this summer for $483 million provides Sprint another 5 million prepaid customers. Let's not forget their other 48 million subscribers. Sprint has about $20 billion in debt, 2.8 billion shares outstanding and with the recent price of $4.00/share; Google could pick up the company for a 25% premium. This would only be about $14 billion in Google stock with Google assuming their debt. At Google's share price, that's only 7% of their outstanding shares. (See Exxon's recent acquisition of XTO, all stock deal of $31 billion). Google would have the spectrum, WiMax/4G, and access to Sprint's R&D. This is the fastest way they can become a carrier. The open Android OS would still be available to other handset manufacturers and market acceptance would be a result of who creates the better user experience.

In 2009, Google made great strides with Android with key cell phone makers such as HTC, Motorola and Samsung and high-volume Asian OEMs and ODMs. Because the OS only supports a limited number of processors and does not support the native C language, tool makers such as Mentor Graphics have begun to port Android to a variety of chip sets in an effort to overcome these limitations. This opens up a larger market beyond smartphones. Contract manufacturers supporting ARM or MIPS processor designs have a tremendous opportunity if Android penetrates consumer electronics. If this happens,  we could see Google Android powered large-screen TVs, Set-tops, GPS handhelds, automotive gadgets and MP3 players. Japan's Open Embedded Software Foundation already has 50 participating companies. If you know anything about "embedded" devices you know that market is several orders of magnitude larger the computer and communication device market.

The Apache Hadoop Core is an open source platform enabling developers to write and run applications across clusters of commodity computers and process vast amounts of data. As a primary investor and developer of Hadoop, today Yahoo released their own tested distribution of the code that powers their search engines, ad systems and webmail services. There is a growing move toward design patterns that leverage the parallelism inherent in distributed systems such as Hadoop and Google's MapReduce. Applications can be developed on single servers then deployed on massively distributed cloud infrastructure without knowing the details of such distribution. Once these applications are deployed they can act as their own service provider to other systems. Indeed we see that scenario with Amazon's EC2 (with native Hadoop support), IBM's Blue Cloud Initiative and Google today. This type of database is not a relational engine like Oracle or SQL Server. Hadoop enables large scale data mining for useful applications such as fraud detection and rich media indexing. I think this release is significant because it allows developers to take advantage of all the work put in to improve Hadoop over the years. Yahoo's change log file has over 8,400 lines and contains a wealth of knowledge gained by real production experience. Can Yahoo gain cloud credibility by giving it away? I think so; it gives everyone a living benchmark.

I find it comical that there were users writing in on Google message boards during the 2 hour outage with pleas like: "Get this going; I have a deadline to meet." At least one company mentioned in a WSJ article said they were unable to fill orders during the down time. It's hard to tell if the outage affected paid users of the Google application suite. Presumably, when you pay, you get a service level agreement. I doubt they have server farms sectioned off for business users, especially for such a huge application like Gmail.  Google also suffered a phishing scam this week with Gmail chat where a link to a site called "ViddyHo" asked them for their logins and passwords. This is why federated social authentication scares people. Sometimes when corporate email goes down, the sysadmin goes down too. For Gmail, there is no throat to choke and no face to ask when the outage would be resolved. They introduced an application dashboard today to help us feel better. Since Gmail is still in "beta" maybe users will continue cut them some slack. 

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.

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?"

In a deal with Yahoo, Jajah will be providing its payment processing, telephony infrastructure and customer care to Yahoo Messenger users who want to receive and make calls to the PSTN. The $28M startup from Mountain View reportedly has 10 million users of its VOIP since its inception in 2005. This kind of reminds me of the billions eBay wrote off with Skype. Google added its new Chatback widget that allows you to put a button on your website and when you are seen available, random people can start IM'ing you (for some people, this can be annoying). Google recently bought GrandCentral that allows "one phone number for all your phones." We can see the convergence of single number reachability over the web and for public VOIP services. Business users can receive calls, text or instant messages over the network straight to their device of choice. Gtalk and Gmail have certainly reached some critical mass with recent moves from universities and enterprises seeking to outsource their email to Google and bypassing Exchange or Notes altogether. Google will need some serious enterprise business development and support to attract major companies to its SaaS platforms. The value proposition and cost models are attractive but still some companies are uncomfortable about outsourcing some as mission critical as their voice service. Google blew away comScore and their forecast with their recent earnings and shot up 83 points after hours. We might be close to "off-to-the-races" with tech soon. Tech is usually better into the summer months so stay tuned. Apple and RIM did not disappoint either. Buy the dips and sell the rips! At least until we are solidly above 1500 on the S&P.

Beyond advertising, Software as a Service (Saas) may be the next big opportunity for both companies. A combination of free and fee-based services will ultimately replace software licensing as we know it today. But not very soon. Bob Warfield, with SmoothSpan, has a good quick analysis of why Microsoft would want to go to a SaaS model now that Vista and Office 2007 are released. So far Ray Ozzie's been careful to say, "Software Plus Service."  Microsoft's acquisition of Yahoo can benefit both their advertising push (AdCenter) and SaaS as these intersect in their Online Services Group (MSN and MS Live). The question is what happens when you try to merge them together? You don't want a MSN-Yahoo-Live mashup; there has already been some user confusion between MSN and Live. We are still at an early stage of this evolution. Neither company has a fully mature, corporate-ready application service provider solution on the scale of a Salesforce.com. For an enterprise customer dealing with a multi-vendor, multi-application environment, one size does not fit all with regards to SaaS "in the cloud." What hasn't been addressed very well is the uptime and SLA's that corporate customers need. Just look at some recent outages from "the cloud." We have RIM Blackberry (3 hours, second one this year), Salesforce.com (7 hours in February, no one's immune), MS Hotmail/MS Live (6 hours) and let's not forget the BGP injection that brought YouTube down for 2 hours. If I'm an SMB or an enterprise customer relying on these services for anything mission critical, I've introduced another layer of risk to my business. Are outages going to be the norm? Do you really want to put everything in the cloud?

A recent comScore report showed a decline in the number of consumer clicks on Google search ads during January. They released data showing a 7% decline in the times U.S. consumers clicked on ads appearing with Google search results in January vs. December. There was a 7% decline in December 07 vs. November 07. Part of this might be attributed to January being a slow consumer spending month after the holidays. Nevertheless, Google's stock took a hit on the report (hint - don't take the bait!). The article tries to draw a correlation between the number of ad-clicks and overall consumer behavior. I do not believe the much ballyhooed "consumer slowdown" has contributed to the decrease in click-throughs. This is very simple in my opinion. People are tuning out these search result ads. Good search engine marketing (SEM) stems from having a good balance between paid SEM and organic search engine optimization. In SEO terms, the Golden Triangle is the top left area of search engine results that is considered by usability experts to have the highest click-heat where over 45% of real clicks occur. New players are emerging that will lower the value of traditional online advertising too. Companies like Phorm, Frontporch, NebuAd, Adzilla and Project Rialto are selling new tools to ISP's that will enable them to track users and push them context-specific ads. This approach (behavioral targeting - ever heard of cookies?) undercuts traditional online publishers. Now, the ISPs can sell advertisers direct access to the same users via a private unique user identifier that protects their identity. Come to think of it, the definition of ISPs will change too as the FCC opens up more competition over the Internet from incumbent service providers. Facebook's Beacon service and sites like Dopplr where you can log your travel plans will become more prevalent. Facebook has proven users want more granularity of control, not less. In your face billboards will become less effective over time I'm afraid.

Since Google has launched the much anticipated Android mobile developer SDK, many programmers have expressed disappointment with the completeness of the development tools. Poor documentation, and more importantly, the lack of a public software bug tracking system will limit the ability to accelerate the availability of real implementations that are market ready. No one will deliver polished mobile applications with this first generation toolkit. Many companies are far ahead of Google with supporting a voracious developer community. It takes many years to develop this type of ecosystem - companies with best practices include Microsoft's MSDN, Sun's Java Developer Network (JDN) and IBM's developerWorks. It is surprising that Google with all its resources would put out software developer program that is way inferior to what is currently in use.

An update on the Google bid for the prime 700 MHz auction is that they intend to go it alone. With cash and short term investment of over $13 billion, there's no reason to upset their partner circle by choosing one over another. They can buy the spectrum and spend the additional $3 billion to build the network, of course they would need to find someone who knows how to do it. Google has been operating a network using a test license from the FCC and is currently running Android devices over it. It is thought that they are experimenting with pricing models that include a one-time licensing fee with no monthly access charges. The handsets would be subsidized by advertising. A single 700 MHz tower can cover 20 miles so expect to see an explosion in rural mobile Internet no matter who wins. Google has indicated they are using game theorist to help with their auction strategy. There is some good information on Google's public policy website.

If you read and study the way the auction works, Google has to bid but they don't have to win to give consumers a 2/3 chance to win. By not bidding however, they cannot get the auction to include open devices & applications, which is what they've been pushing for. If they back out, the FCC would put up a new auction at the $4.6 billion reserve with no open requirements. The FCC could also raise the reserve to $4.7 billion and see how green Google's money is. If they squawk and pull out, then a 3^rd auction can be made with no restrictions at the $4.6B reserve. This is why they need game theory specialists. My prediction is they will bid but will not be extorted to overpay. If the requirement gets in, they can still influence the wireless business and continue to cause disruption, that's a good thing. I've speculated on other activities of Google possibly working with Apple. They could also wait for additional shakeout in the space and make a run for Sprint. The big telcos, AT&T and Verizon, want that spectrum for mobile TV. The traditional carriers know how to play this game, Google is the newbie. A Google spokesperson said "Our goal is to make sure that American consumers have more choices in an open and competitive wireless world." Next thing we'll see is Eric Schmidt kissing a few babies. They are only doing all this for us.

The Wall Street Journal reported today that Sprint-Nextel and Clearwire are abandoning their plans for a nationwide WiMax network that would have reached 100 million people by the end of 2008. The departure of Sprint's CEO, Gary Forsee presumably complicated the closing of the transaction. This is a real blow to the burgeoning ecosystem being created around WiMax. There were great expectations from the recent WiMax Forum with regards to Sprint's Xohm service that was expected to be available in mid-2008. Perhaps Sprint's investors want to see them improve their overall revenue picture before launching down a $3 billion+ CAPEX road. This is a major setback to Craig McCaw's Clearwire. One option under consideration was a spinoff of Sprint's WiMax business and merging it with Clearwire. I'm not sure Clearwire can make it on its own because estimates of infrastructure build out costs continue to increase (from $600M to over $1 billion). Sprint also has been working to get things going with Google, although nothing has been launched. Sprint is without a leader and clearly that affects their ability to get strategic deals completed. Don't be surprised if other companies in the supply chain come with investment money to help Clearwire survive - Intel, Motorola and Samsung to name a few. The shakeup of the weak WiMax players is well underway.

Microsoft beat out Google for a stake in the growing social networking company. The investment represents a $15 billion valuation which Greenspan would certainly think exemplifies "irrational exuberance."  With more advertising spend moving to the web, this opportunity represents a way to specifically target users based on their hobbies, favorite music, location, age and gender - just to name a few. According to eMarketing, the U.S. advertising market for social networking sites is forecasted to exceed $900 million this year. The deal for Microsoft is access to international expansion by Facebook where they will be able to influence more of how the model develops. According to ComScore Media Metrix, Facebook experienced over 129% growth in unique visitors year over year compared with only 23% on MySpace. Microsoft has struggled with their online investments over the last four years and this represents a way to energize that group. Here's where the social networking sites have changed the traditional (if we can call it traditional now) online advertising model. Typically, users are presented banner and rich media ads depending on what they are doing on a web page or results from a search query.

Google adwords have led the charge and this is a very profitable business model today. Customers search for things, ads are presented, click-through happens and the online cash register rings. On social networking sites the user's purchase decision has nothing to do with search. It has to do with what their affinity group is doing, what their friends are recommending and other online discussion about the goods and services being consumed by their social network. Both Google and Microsoft are at a strategic disadvantage here. I will analyze this more thoroughly later. This investment is also overshadowed by a competitive war between Google and Microsoft. Google has stepped up its investment and expansion in office productivity applications offered as a service and Microsoft has stepped up their online advertising business. Ballmer was asked about this at the Gartner conference. They are going after each other's core business. The companies in the middle, like Facebook, will not be collateral damage - they will change the way marketers think about online advertising.

There has been quite a bit of activity of video copyright protection as several media and Internet companies will announce a new set of guidelines today. Last week, Google announced the YouTube Video Identification system, which aims to block copyrighted clips as they are uploaded to YouTube. This system cannot prevent the content from being posted initially, it is flagged and it has to be removed. Presumably they would notify the content owners of the infringement and provide a tool to remove it. Google will terminate accounts for repeat infringers. CBS, Dailymotion, Microsoft and News Corp (MySpace) are expected to publish a set of guidelines today, most likely coinciding with the Web 2.0 conference in San Francisco. Earlier this year Viacom sued Google for $1 billion in damages "alleging willfull copyright infringement by YouTube." Google hasn't joined the group yet - given the set of members they've been notably absent.

NEW YORK (Reuters) - Google is reported in early talks to join a group looking to lay a high-speed, trans- Pacific undersea cable that could potentially lead to the Internet company becoming an investor in the project, according to the Wall Street Journal. This could make sense for Google but we still have not seen the how they plan to become a carrier. While there has been widespread "leaks" and news about bidding on wireless spectrum, developing gPhones, municipal WiFi networks, fiber networks and IPv6 addresses, they have yet to deliver a real business plan. The disruption of Internet service last year in China due to earthquakes has prompted other major carriers such as Verizon and AT&T to start new trans-Pacific builds. The bandwidth could be used to provide more reliable Internet VOIP service, video and online office applications. Hey we were just talking about subterranean blues!

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Google announced today that they are launching AdSense for Mobile joining a number of other players such as Yahoo, Microsoft, Nokia and Time Warner who have launched similar services. Most industry observers believe there is a strong market for advertising on mobile handsets given the growth in the number of devices in the world. The article references several research firms with market estimates forecasting aggressive growth rates for both mobile search and display advertising. Here is where I have the problem. The success of AdSense depends on search, that's how it works. On a mobile device you do a search and you see AdSense ads come up - presumably in a browser if your PDA or device is so configured. The web experience on Blackberries, RAZRs and other handsets with homegrown Internet browsers are extremely cumbersome to deal with. These devices represent 80% of the market, not the 20% comprised of full feature-rich PDAs like iPhones, BlackJacks and other handsets will full operating systems & browsers. The other option that might be more interesting is getting AdSense to work without mobile search. This might be accomplished by utilizing the back-channels in the spectrum to push content to devices that are in idle mode or just connected to the towers. In 2005 we began seeing carriers opening up their handset portals to Google and Yahoo thereby moving aware from their wall-garden approach for Internet access.  The old approach to mobile search was a convoluted connection of WAP, third party mobile portals, search engines, carriers and handset cooperation that resulted in a very poor user experience. You could pull pieces of the ecosystem out to separate the supply chain for a white box solution but there were still too many connections that needed to be made. The other big problem I see here is the revenue model. Mobile Internet searches are not optimized for content buying or advertising because most of the results are informative rather than point-of-sale oriented. Today on the web, you click-through on the AdWord link, that's how people get paid. Ideally you want real mobile commerce where you would buy something with your device and your charge would show up on your carrier bill. Don't get me started with carrier billing systems - they are brobdingnagian complexity of how to extract revenue from the traditional mobile world.

Yahoo announced yesterday it is acquiring Zimbra for $350 million, some industry observers think Zoho may be next. We have seen an uptick in the drive toward integrated collaboration applications among the big players either organically or through acquisitions. Zimbra supports MS Exchange and Apple Mail clients and servers. They also have mail support for Blackberry and Windows Mobile. Google Gmail already has many of the features that make Zimbra interesting for Yahoo. For example, Gmail can enable users to retrieve package tracking data; all using AJAX popups and rich-client UI's sans postbacks. Many Web 2.0 features already present in Google, for example Maps, have just appeared in Yahoo platforms. Even Apple is gearing up iWork 2008 for the enterprise, I have seen an increase in Apple within the enterprise lately. IBM announced today they will offer free open-source programs for word processing, spreadsheets and presentations based on Symphony and OpenOffice.org.  All of these applications are geared toward sharing and collaboration. Using standards such as XML, and direct-drive publishing to social networking sites using web services provides formidable competition to Microsoft Office 2007. Microsoft notes (no pun intended for Lotus Notes!) they have 500 million users of Office worldwide. Last count, Zimbra had about 6 million paid mailboxes. There is still a big market and most users have more than one email client in use. Microsoft has not been successful in establishing Office Open XML as a standard with the International Organization for Standards (Geneva). IBM, Google and Sun support the OpenDocument format based also on XML and has been approved as an international standard. Use of AJAX and even VOIP is nothing new here but Zimbra has done a good job briefing key analysts and showing how their applications are used in a corporate setting. They have a good customer base and group of loyal users, especially in higher education. Their offline tools and mashups are particularly useful in a corporate environment for distributed teams. Yahoo in most people's minds is still focused on the consumer and this makes sense for home and personal use.

The financial backing of Yahoo should help Zimbra drive further into commercial environments. Most enterprises have their own well-established email, contacts and calendaring infrastructure. Now IT has to contend with business users demanding richer collaboration tools with better web user interfaces and performance. Interoperability among email platforms is becoming more essential to widespread adoption of newer web-based, client-side enhanced applications such as Zimbra. Document conversion is not completely error prone either which forces some level of standardization among major enterprises.