Archive for the ‘Business’ Category

Twitter halts SMS updates in the UK

Thursday, August 14th, 2008

On the company’s blog today, Twitter announced that they would be ceasing all SMS updates in the UK. As usual, TechCrunch UK was hot off the mark with a report, and I’m sure that plenty of other opinions will fly around the Web over the next few days.

Quite frankly though, I’m amazed that the service has lasted this long. Twitter appears to lack a viable business model, and each time you update your status it could be sending that out, via SMS, to tens, hundreds or even thousands of recipients. Even if Twitter received a small amount for each incoming SMS, this would be dwarfed by the number of outgoing messages. The more popular Twitter gets, the more they will lose. The sensible option would be to charge users for receiving texts—which is fairly simple to do—but it looks like the site is run by a bunch of techies who have been blinded into thinking that providing a service which costs money to run without a long-term source of revenue is somehow a good idea. Then again, they’re running a Web 2.0 site, where having basic accountancy skills on your CV will ensure that you never get hired.

From a personal perspective, I’m actually quite pleased to see this happening. Over the past couple of years, I’ve seen companies pour millions of dollars into these web 2.0 companies, which have produced virtually no returns and are an appalling waste of capital which could be put to far better use elsewhere. Perhaps now investors will look again at opportunities to “invest” in companies like Twitter, Facebook et al and see them for what they really are—a highly speculative bet on the success of a company with no assets, no business model and virtually no revenue.

Boo.com to make a return?

Saturday, November 25th, 2006

Boo.com may be revving up to make a return to our screens, if the latest message on its website is to be believed. Previously an Internet shopping site that burnt through an unbelievable amount of funding in just a few months (the exact amount is uncertain, but the lowest estimate I’ve seen is £50 million and most sources put it more in the £100+ million area), it was a symbol of the dot-com boom and bust of the late 1990s/early 2000.

Personally, I am somewhat sceptical about Boo.com’s relaunch because I think that the generic online shopping market (clothes, books, DVDs etc) is more or less sewn up and that any new business will have to look for a niche market in order to be successful (unless it already has an established brand name behind it, but I wouldn’t place Boo.com in that category). I don’t know what its unique selling point is or why I should buy from Boo.com instead of another company, although to be fair I imagine those details won’t come out until the site is launched properly.

For the full story about the original collapse of Boo.com, check out Boo Hoo: A Dot Com Story, a book detailing the rise and fall of the Internet company.

Further reading

Google to provide search for MySpace

Tuesday, August 8th, 2006

The news all over the web today (apart from the Apple announcements, which I’ll get to later today I hope) is that Fox Interactive and Google have signed a $900 million deal for the provision of search and advertising technologies across most of Fox’s sites, including of course the hideous but popular MySpace.

The question is, how good a deal is this for News Corporation and Google? From Murdoch’s perspective, it gives him a large injection of cash, possibly enough to buy up another web property such as YouTube. Speculation over such an acquisition have been doing the rounds for some time, but the sticking point appeared to be how to finance the deal—now Murdoch has the money to potentially buy up a few more sites using cash rather than shares.

From Google’s point of view, they must obviously think that there is more than $900 million of advertising revenue in the deal. The other possible reason is to convert MySpace users from MSN or Yahoo—after all, if a site you visit every day uses one search engine are you really going to bother using another one for your other web searches? Overall, however, I think this is a better deal for News Corp than it is for Google, as I believe the latter will struggle to generate advertising revenues from MySpace where I suspect click-through rates are rather low. On the other hand, it would appear from some of the reports that the deal is based on revenue sharing, so perhaps it’s not quite as big a gamble for Google as it would first appear.

Further coverage

Google Finance

Tuesday, March 21st, 2006

Google launches personal finance site via Niall Kennedy

In their neverending release of new sites, Google has launched Google Finance, which is basically a search engine for financial information. There’s some pretty impressive graphs of previous stock prices that you can rollover to get more information at any given point, plus lots of core data on the company that you’re interested in. It’s not just limited to public companies as well, you can also view information about companies such as Transitive, although obviously their accounts aren’t public so there’s less data for Google to display. Alongside each company profile are links to news stories about the business and also any blog posts which might be related.

The main let down with Google Finance is that it will only display graphs for companies listed on US stock exchanges (such as the NYSE, but I imagine there will be other national versions available at some point. There also isn’t any new information available – it’s just a way of viewing several features that already existed in Google before, albeit with a bit more jazz and a clean layout. Smaller companies are missing too – I couldn’t find any details on the places I’ve worked in the past.

Further coverage

Google admits growth rate downturn

Wednesday, March 1st, 2006

After failing to meet analysts’ expectations of quarterly results a couple of weeks ago, Google has faced further damage to its share price after the company’s Chief Financial Officer, George Reyes, admitted that growth at the company was slowing. The main reason given was the company’s reliance on online advertising and the lack of other revenue sources to be exploited.

To be honest, this news doesn’t come as much of a surprise to me. I don’t think the current price of Google’s shares is an accurate representation of what the company is worth, even when you take into account future growth prospects. Compared to other companies of similar value, Google is relatively small and immature, although neither of those factors are necessarily disadvantages for the company.

I also think that Google have put all their eggs into one basket to an extent, because over 90% of their revenue is derived from online advertising. I’ve no doubt that Google are currently the market leaders in that area, but what happens when Yahoo and MSN launch their new advertising products, both expected later this year? Google might be a big player, but Yahoo has been around longer and still has a lot of clout in the search engine market. Also, let us not forget how deep Microsoft’s pockets are – they can afford to throw a lot of money at trying to beat Google at its own game.

Although I think Google should probably try to diversify its current offerings slightly and grow organically, I suspect that with their $6 billion stockpile of cash the company will almost certainly continue to grow through acquisitions. I’m somewhat curious as to how they will do this, or more specifically which companies they will buy – at a guess I think Google is most likely to try and sew up one area of the market at a time (at least that would be the most sensible direction), e.g. by buying up syndication services such as FeedBurner.

Of course I’m not a qualified economist, and none of this should be taken as advice on whether to invest your hard earned money in Google or another company. :)

Media coverage

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Wifi spreads across UK cities

Thursday, January 5th, 2006

City-wide wi-fi rolls out in UK via BBC News – Technology

Wireless communications company The Cloud is planning to launch wireless broadband services in nine cities across the UK this spring, including Manchester, Birmingham and London. Unfortunately though the networks will only be open to users of BT Openzone, O2, SkypeZones and Nintendo WiFi, which is a bit of a shame, although hopefully other service providers will express an interest in joining. The existing offerings are also ridiculously overpriced, most of them don’t offer unlimited plans (unlike wired broadband provided over your telephone line) and o2’s rate of £6 for 60 minutes is extortionate. It’s a real shame that wireless providers seem to want to charge so much for using their networks, because if there was a reasonable plan with unlimited usage (I refuse to pay per minute/hour, the days of dial up when you had to do that are over) that didn’t cost too much then I’d sign up without hesitation. At the moment the lack of such a scheme doesn’t bother me, because I still have access to the University of Manchester campus wireless LAN, but six months from now I won’t be able to use that and at the moment there isn’t a commercial scheme available that would provide the same service for a reasonable cost.

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Business Logs 2006 predictions

Monday, December 26th, 2005

One of the sites that I read on a regular basis, Business Logs, has just posted a list of predictions for 2006. Here’s my commentary on what I think of the predictions and what I believe will be happening in 2006.

Apple comes out with widescreen & Intel-powered iBooks in Q1, Mac minis and Powerbooks in Q2, and Powermacs (named G5 still) in Q3.

Whilst it’s fairly obvious that Apple is planning on moving its product lines to Intel processors instead of the IBM-supplied Power PC ones, I think Mike’s timescale here is a little optimistic. I don’t think we’ll see any Intel-powered Apple devices until the spring at the earliest, as I don’t think Apple will have got to the stage where the new offerings are ready for general release, although having said that I am wondering if they’ve been working behind the scenes in order to get something ready for Macworld in January. Perhaps we’ll see a new iBook model then, but personally I doubt it will have a widescreen – that feature will be left to the Powerbooks.

Pricing for iTunes Music Store songs will change based on the popularity of the song.

I’m not entirely sure about this one, as the $0.99 model for iTunes seems to have worked very well for Apple so far, and it’s much easier to charge one price for every song than to start varying based on popularity – it makes the payment system that bit more complicated and a lot of iTunes customers will be used to the “one price fits all” model by now. I suspect that if Apple does change its pricing policy, it will probably be more down to pressure from the music industry, who really are pushing for variable pricing, than a independent decision by the iTunes management.

The major purchaser of budding companies will be C|Net, and they will make a purchase of a 1-2 well-known “web 2.0” companies prior to the start of Q3.

I’ve never been quite sure what to make of C|Net over the past few years, as they haven’t really made much of a name for themselves. I think they’ve been largely overshadowed by the likes of Google and Yahoo, but also when I look at their sites with large Flash ads, lots of nested tables interleaved with absolute positioning using CSS and the sheer amount of material on their home page, I feel that they haven’t really kept up with the way things are going on the web. Looking at their past press releases, they don’t seem to be buying everyone in sight like Yahoo has been doing, and they haven’t made any big name acquisitions recently. I can’t see them buying any “web 2.0” (I hate that phrase) sites in the near future, unless they feel compelled to in order to remain competitive with other large portal/search sites.

Digg will be purchased by C|Net for $5-8M.

As I’ve already explained, I don’t expect C|Net to make any major purchases in the next year, and $5-8 million seems a rather large price tag for Digg. On the other hand, if C|Net turns out to be in the acquistion market then I can see Digg being fairly high on its hit list. I’m not quite sure how it would integrate with the rest of C|Net’s news and services though.

Meebo will not be purchased by anyone this year

I think I agree with Mike and Om on this one – I honestly don’t see Meebo being bought out any time soon. For starters, it brings together the services of four of the biggest web companies (Google, Yahoo, AOL and Microsoft/MSN), and none of those are likely to want to buy a site that promotes their competitors as much as it does them. Not only that, but if one of the big four was to purchase Meebo, the others could easily block users from connecting to their services via the site, rendering it useless. Meebo has also received a fair amount of venture capital recently, so it looks like the site owners are looking to develop and expand rather than aim for a quick sell.

37signals will come out with 3-4 new web applications, effectively doubling their current revenues but only expanding their user base by 25% since current 37s customers are more likely to use future 37s products.

I think 37signals will certainly have another killer web application for us in 2006, although I don’t believe they’ll release 3-4 brand new applications. My prediction is that there will be one genuinely new and innovative application, and an abundance of new features for the existing applications, with perhaps a better version of Writeboard that requires a subscription.

A brand-new web publishing application will launch, take on MovableType and Wordpress, and will be successful. Wordpress will continue its rise, and will eventually be used on all major weblogs that used to use MovableType.

Given that the vast majority of blogs run either MT or WP, and there’s already Textpattern creeping up behind both of those, I can’t see another brand-new application arriving and being successful. It would have to offer features that the existing ones don’t, and an easy method of converting all your comments, posts etc. otherwise who is going to switch to using it? With regards to the rise of Wordpress, I think it will continue to do well and take market share from MovableType, especially if version 2 (which I expect to see some time in the new year) lives up to expectations. I don’t think it will necessarily be used on all major weblogs that currently use MT - that might be a little bit too optimistic – but I expect several of the well known ones to convert at some point in 2006.

Skype’s popularity doesn’t grow as sharply as in 2005, the user base graph flattens off. eBay uses Skype to introduce new auction and community-based services to connect buyers to sellers.

Given how the fuss and publicity surrounding Skype has died down over the past couple of months, I suspect that growth in 2006 won’t be quite as rosy as it has been this year. A lot of people who want Skype accounts now have one, and I imagine that this will mean a much slower rate of signups over the next twelve months.

Skype’s continuing growth also depends in part on how well the new Jabber VoIP(Voice over IP) protocol is received. Google Talk already has support for this protocol, and Google has already released some source code to enable third party clients to interact with users of their software. I suspect that this will encourage a lot of developers (hopefully including the people working on Gaim) to add such functionality to their software and, depending on how hard Google pushes this and how fast take up grows at, this could provide a large base of competition to Skype.

A new weblog advertising model and platform is introduced, but not by any of the current players (WIN, FM Pub, Gawker, etc.). It will take on BlogAds and AdBrite and beat both at their own game.

I suspect, but don’t know for sure, that this is perhaps a plan for 9rules in 2006. If so, I expect Mike to talk it up somewhat, as he’s obviously got a vested interest in its success. I don’t know about beating existing competitors, but if 9rules did launch some form of advertising model/platform for blogs then I suspect it would do well, especially as it would probably have a “cool” factor associated with it. Personally I’ve never really gone in for that sort of stuff (I run Adsense on some of my blogs but don’t make much from it) and I’m not really a believer in what’s cool, hip and happening in the “blogosphere” (I hate that phrase as well). I’ll be keeping a close eye on how things develop in that area though, because even if I don’t jump into all the new stuff at the deep end I do like to keep my finger on the pulse.

1Gb Apple Shuffles sell out

Saturday, December 24th, 2005

Apple Sells Out of 1GB iPod Shuffle via Beta News

Apple’s stock of 1Gb iPod Shuffles has sold out just before Christmas, including at third party resellers and stores such as Amazon. At first this might not seem too unusual, after all such products make popular Christmas presents and I’m sure Apple shareholders will be happy to see them flying off the shelves so quickly. However, it appears that no extra 1Gb shuffles will be available until January, which just happens to coincide with the Macworld show in San Francisco. Apple generally uses Macworld to make new product announcements, amongst other things, and for the last couple of years the headline grabber has been something new to do with iPods. Could it be that there is another variation of the best selling MP3 player just around the corner?

Personally I’m not too sure whether this shortage in supply is a good indicator that an iPod product announcement is imminent. It’s not uncommon for popular electronic goods to sell out in the run up to Christmas, and there’s rarely time to manufacture and ship more if demand happens to exceed supply. In many ways, it’s often in the interests of businesses for product supply to fall a bit short of demand, because that generates a lot of hype about the product and also, in theory at least, creates a rise in price (I knew that A level in Economics would come in handy some day). The fact that Macworld happens to be around the corner might not be as significant as the Apple fans would like to make out – most industries supplying consumer products suffer a quiet period in January and February, so Macworld could be just a way of keeping customers interested when they find themselves with empty wallets after Christmas.

On the other hand, it does seem a bit too much of a coincidence that the two events will be occurring within such a short space of time. It’s a year since the iPod Shuffle was released and in terms of age it’s the model that’s gone the longest without a product refresh (in the meantime we’ve had the Video iPod and the Nano), so perhaps Apple has something new in the works. As with any potential Apple product release/update, there are a lot of rumours doing the rounds, but the only ones that I see as having any substance are the option of different colours for the shuffle (presumably this wouldn’t be too hard to implement on the manufacturing side) or a reduction in the form factor to produce an even smaller iPod. I can’t see the capacity being increased, because that would mean the shuffle was competing with the 2Gb nano.

Macworld 2006 is going to be held on the 9th-13th of January, so we shall see then what Steve Jobs has in store for us. Unfortunately I can’t afford to go to San Francisco to watch the event, nor do I qualify as a media analyst for the purposes of getting in that way, so I’ll probably be watching the live webcast with most other people.

Single letter domains could be available for registration

Sunday, December 18th, 2005

A.com, B.com, C.com on the way? via Forever Geek

Back in December 1993, IANA decided to reserve all one letter domains in the .com/.net/.org top level domain systems for “infrastructure purposes to help ensure stable operation of the Internet.” However, ICANN (IANA’s ruling body), has recently indicated that single letter domains may soon become available, though how they would be distributed remains to be seen. The best way in terms of generating windfall revenue for ICANN would be to auction the names to the highest bidder, which would almost certainly generate several million dollars in one fell swoop.

Some domains, such as x.com (which now redirects to PayPal), were registered before the restriction came into effect and are therefore still available regardless of whether the registration restrictions are lifted or not.

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Google Opens Manchester Sales Office

Wednesday, November 2nd, 2005

Google opening Manchester office via BBC News

I never thought about working for Google as a possible career option because I didn’t want to move to London or Dublin, but now they have an office in Manchester perhaps I should give them a closer look. Admittedly it’s only a sales office at the moment so I doubt any development will be going on, but it’s a potential first rung on the ladder of one of the more interesting companies around.