Value add

Intel is talking about thin and light PCs, again.
http://www.businessweek.com/news/2011-05-31/intel-seeks-to-challenge-apple-s-ipad-with-new-ultrabook-pcs.html
http://www.zdnet.com/blog/computers/computex-2011-intel-unveils-ultrabook-talks-medfield-tablets/6004

Since 2007, there were Ultra Mobile PC, netbooks, and OLPC (my blogs on UMPC). It was clearly the writing on the wall for the system vendors that the mass market was ready for easy-to-use computing devices. But to Intel and Microsoft, it was just a series of protection measures to delay and deter. Intel gave up StrongARM and kept its low-end CPUs one or two steps behind what the market needed them. Microsoft tried to put a limit on netbooks to under 9-inches upon its OS licensees. Maybe it was important to protect the margin of company's bread-and-butter products. But to end users, those decisions did not add any value to them. In the end, competitors step in and eat their lunch. Companies tried to protect their profit margins by preventing new product categories from happening ended up losing more.

All those decisions must have gone through a lot of deliberation, market data analysis and signatures from layers of directors and VPs in both companies. In the end, the defense looked like being built more along departmental business lines than to the battle front line. If Intel and Microsoft had worked with the trend and all their partners, the market might have been filled with different kind of interesting products than just overwhelming Apple iPad and upcoming Google Android tablets, neither uses Intel processors nor Microsoft OS.

Speaking of surprised development and different revenue sources. A Citi analyst said Microsoft makes five times more income from Android than from Windows Phones, thanks to patent licensing fees.

http://gizmodo.com/5806227/did-you-know-microsoft-makes-five-times-more-money-from-android-than-from-windows-phone

Of course, this is not a development Microsoft would like to see. After all, no company is operating and competing in a vacuum. Market cannibalization is not a complicated concept, but can be so hard to get it right for a big company.

Google mobile payment and PayPal

Google just announced it is entering the mobile payment market and PayPal responded with a lawsuit alleging Google misappropriated its trade secrets through hiring its former employee.

http://www.cellular-news.com/story/49343.php
http://www.cellular-news.com/story/49351.php

I just blogged my idea that eBay should spend the proceeds from selling Skype's stake on mobile payment solution for its PayPal division. I believe money and brand name are very important for this emerging product. PayPal's suing Google seems to indicate that PayPal thinks the same way. There are a lot of mobile payment start-ups. I just did a quick search, and within 5 minutes, I got company names like Square, Corduro, Boku, Billing Revolution, Mobillcash, and Zong. But PayPal did not go after any one of them. Instead, PayPal cared about what Google is doing so much that it went to court to prove a point.

There is a quote in Bloomberg's report on this lawsuit:
“Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, an idea recognized by both California law and public policy,” Aaron Zamost, a Google spokesman. In a way, the series of events is a norm in the Valley between companies, employers and employees. I hope this lawsuit is a PR stunt by PayPal. Tomorrow, it can be Yahoo, Facebook, or Microsoft buying a mobile payment company to compete with everyone else. PayPal has so far enjoyed a perception of providing credit card/banking services without being regulated as a bank in the US. The benefit to its users, individuals and merchants, is that the money stays in PayPal's domain to lower cost. Otherwise, it is like a money transmitter business which has other costs associated with its products when the money has to go in and out. A segmented market will not provide such cost benefits and PayPal probably understands that.

春聯與對聯

我的第四個 iPhone 軟體, 春聯與對聯 (Chinese Couplets), 今天進了App Store.
http://itunes.apple.com/us/app/chinese-couplets/id438346456?mt=8

就像前三個產品一樣, 書的內容都需要經過一番校對和整理。我常用網際網路上的內容來和我的資料比較。但是這次的經驗, 倒是非常獨特。或許春聯和對聯不是太冷門的題目, 許多網站都有相關的內容。但是這些內容的抄襲率太高, 而且錯誤百出。我有時只是為了搜尋一個特定的詞句, 可以找到十多個有相同內容的網頁。而當中的錯誤也都十分相似, 甚至雷同。古人印書, 因為交通及通訊的不便, 校對是件難事。所以一篇文章或是詩詞常有兩三種版本。今天的電子刊物也能有類似的現象, 也讓人開了眼界。

Monster US Employment Index April 2011

It just occurred to me that it is time to revisit Monster US Employment index to wrap up my experiment since early 2007.

According to US National Bureau of Economic Research (NBER), the last recession started from December 2007 and ended in June 2009. (http://www.nber.org/cycles.html) The recession lasted for 18 months and is having a slow recovery. The diagram based on Monster US Employment index seems to demonstrate something we all are aware now. But back in 2007 and early 2008, it hinted a recession that NBER did not announce until late 2008. This chart also echos another known fact, a slow recovery with job creation lagging the economy recovery.



I wanted to revisit Monster US Employment Index because of my last blog on LinkedIn. Usually, one single company's revenue is hardly any indication of US economy. However, LinkedIn's revenue source was so tightly related to employment and recruiting activities in US. It would be interesting to compare its revenue trend to US economy, like the way I used Monster's employment index. But no hurry. The indices from the first two years of Monster's publication were not that useful as Monster did not have enough market coverage and history. Give it another year, I'd like to compare LinkedIn's revenue growth alongside with Monster Employment Index. Maybe it will just give me a set of economic indices of my own.

LinkedIn IPO and job market

LinkedIn IPO hit a high note on the first day of IPO, $94.25. The price range of the first trading day was between $80 and $122.70, far above the proposed price, $45.

There are many blogs and articles on this topic already, sour grapes, sweet lemons and covetousness alike. I am not an analyst and I am not here to offer my prediction of LinkedIn's stock performance. What I care is whether LinkedIn's going public is any indication of Silicon Valley's job market and next step in the World Wide Web Industry. One article I came across presented a rosy picture, claiming LinkedIn will be a $25 billion company by 2015.
http://www.minyanville.com/businessmarkets/articles/linkedin-ipo-new-ipo-linkedin-revenue/5/19/2011/id/34648
It said in the article, "Let's say LinkedIn grows revenues at 95% in 2011, 75% in 2012, 60% in 2013, 45% in 2014, and 35% in 2015. That would put 2015 revenues at $2.6 billion. Doesn't seem crazy." Note that the majority of LinkedIn's revenue comes from corporate employment and human resource activities. (see LinkedIn S-1 amendment filing, http://www.sec.gov/Archives/edgar/data/1271024/000119312511064249/ds1a.htm) If the projected revenue comes true, it is indeed a pretty good picture for the job market. Furthermore, half of the active users of LinkedIn are in US and the majority of LinkedIn users are in the western world. For LinkedIn to grow by leaps and bounds, it will depend a lot on the health of US and Western Europe's economies.

What if LinkedIn can grow independent of US economy? That is even better. To me, that means the social media model works and more jobs will be created in this domain. Well, that is too rosy even for a dreamer like me. I was tracking Monster's US employment index in 2007 and 2008, before Fed acknowledged recession in late 2008. Although employment index is not a formal economic indicator, it was an hair-raising experience to observe the close correlation between the employment activities and the livelihood of US economy during that period.

The Economist believes that Silicon Valley has another Internet bubble. (http://www.economist.com/node/18681576) If I count the first Internet boom from 1998 to 2000, Web 2.0 hype from 2006 to 2007, and this new bubble of 2011, I see tides, not bubbles. If LinkedIn can keep up a decent rate of growth, we will see more such bubbles in the future. Or high tides, if I may.

曰線月線 不如內線

這應該是美國近年來, 最大的內線交易案.
http://www.economist.com/blogs/schumpeter/2011/05/galleon_trial_0

我有個在臺灣的朋友, 認為美國與臺灣股票巿場的潔淨透明程度, 半斤八兩. 如今看來, 這看法也有它的論點. 但是以追查內線交易的努力而言, 美國仍是略勝數籌.

如果今天有個上中學的孩子跟我聊起這個案子, 我要用什麼角度來提供我的看法? 這些涉案的主角, 在利用提供內線的高階主管之餘, 不忘訕笑 "都是人渣". ("Everybody is a scumbag", see economist's article) 可見 Mr. Rajaratnam 也有是非之識. 只是利害權衡之後, 依舊挺而走險.

聖人有云, "及其老也, 血氣既衰, 戒之在得". 如果這麼好戒, 也無庸聖人贅言. 美國的杜會福利基金, 到2036年就要用完了. 對於沒有內線的大多數人, 也只能 "血氣雖衰, 勉力為得".

Microsoft to acquire Skype

Microsoft agreed to buy Skype for 8.5 billion dollars.
http://online.wsj.com/article/SB10001424052748703730804576314854222820260.html (The Wall Street Journal)
http://www.zdnet.com/blog/microsoft/microsoft-buys-skype-for-85-billion-creates-new-business-division/9406

I don't understand why Microsoft needs to buy Skype. Mr. Ballmer said "this deal will let Microsoft be more ambitious, do more things". Some columnist said it is all about advertising revenue, and some analysts said it is about acquiring access to the 650 million Skype users worldwide. According to the article by WSJ, there are 170 million people logging in to Skype every month. MSN had near 500 million monthly users by end of 2007, when Bing was not even part of the MSN family. Hotmail has at least 360 million users and MSN Live Messenger already has 330 million users in 2009. Skype is popular on PC as a video/audio communication application, and 90-plus percent of PC's on earth use Microsoft Windows operating system which is pre-loaded with Messenger and Internet Explorer pointing back to MSN family of services. It means that 90-plus percent of Skype users are either already Microsoft users or accessible to Microsoft. I don't see what Skype can do for Microsoft in terms of advertisement revenue and access to user base that Microsoft cannot do with its MSN service. It is neither more ambitious nor doing more things. The number does not add up.

This purchase is not for VoIP (Voice over IP) technology as Microsoft has that technology already, and VoIP is not worth that much money. I wonder Microsoft will actively promote Skype on Windows Mobile. Mobile telecom operators are already antagonized by Skype. Skype loaded Windows Mobile will automatically take itself out of the A-list from many mobile operators. In the office, users who use Skype are probably not paying customers, though most of them pay for other Microsoft products. At home, there may be some opportunity for Microsoft. I hope Microsoft will keep the application simple. Product integration based on the buzz word "synergy" will only bring confusion to end users. Will MSN Messenger be on the chop board? I hope not yet fear so.

Skype's shareholders are big winners. Among them, EBay owns thirty percent of Skype, and can finally conclude its chapter on Skype. I would like to see Microsoft spend that kind of money on mobile payment solutions. It is the place Microsoft's brand name and technology can play a role. By the same token, I would like to see EBay use the proceeds to beef up its Paypal for mobile payment. It is a battle ground where money and brand name make a difference.

I am a Skype user. Lately I am experimenting with Apple's Facetime on iPod and iPad. End users don't have a say in a big acquisition like this. We vote with our daily usage and, ultimately, our buying power. It is good to have alternatives for an end user like me. And I like the alternatives I have seen so far.

Developers, Phones, and Applications

I recently read two articles that underlined my long-time viewpoint on applications, devices and developers.

http://www.cellular-news.com/story/48888.php
http://www.computerworld.com/s/article/9215832/Developers_not_phones_driving_mobile_banking_apps_

A lot of factors come in to the decision of whether to develop for a platform. It can be the accessibility to programming interface and talent poll, platform capability, application characteristics, cost and overhead, etc. Nevertheless, the dominant criterion is the volume of shipment. If a platform is sold like hot cakes, it is definitely worth taking a look. But the usefulness of this rule of thumb decreases dramatically from this point. The mystery lies within the percentage of addressable and target demographics among the user base of a particular platform.

As volume shows itself as an absolute number, yet it is a relative term. Look at this article from more than three years ago.
http://www.engadget.com/2008/02/11/whats-an-iphone-14-3m-windows-mobile-phones-sold-in-the-past-s/
I knew it had a wrong argument when I saw it three years ago. But I did not realize how wrong it was. In 2008, Windows Mobile shipped more than 16 million units of smartphones, roughly a quarter of what Nokia had shipped for the same category. Windows Mobile had more developers than iPhone OS or any other smartphone OS at that time. Microsoft was the number two smartphone OS provider and Windows Mobile was the number three smartphone platform. The number however did not carry it further. BlackBerry caught up from behind in 2008 and stood firm as number two smartphone platform (23M units in 2008 and 34M in 2009). It, too, lost momentum.

Many users of BlackBerry and Window Mobile phones are in for the access of corporate email. When the user population is so fixated on getting one thing, how can any application developer add any value to the platform? I had a colleague who said he could not get used to the touch screen of iPhone. He missed the qwerty keyboard of his old phone. When I asked what kind of applications he used on his phone most of the time. Unsurprisingly, it was the email. Being an application developer myself, I would not poll his opinion on user experience of a small device. Such a consumer is not among my target audience. This fact pretty much cut the majority of Microsoft's 16 million or BlackBerry's 23 million of 2008 out of the equation. After that, it hardly represented a volume of interest.

HP/Palm's WebOS would serve as a contrast. It has, in my opinion, an equally capable platform as any other OS, and a set of elegantly designed programming interface. But, alas, it has no volume.