Month: January 2006

It’s always fun to see brokerage analysts one-up each other with price targets – all the while maintaining the illusion that the latest outrageous figure is ‘based on fundamentals,’ or represents a ‘pretty attractive multiple’ based on projected profits 10 years down the road. Mark Stahlman of Caris & Co. is the latest to play this game, with his $2,000 target for Google.

Of course, Mr. Stahlman – who is described in his bio as the man who helped bring America Online public – says $2,000 isn’t actually a target per se. He says it’s merely an extrapolation based on current revenue patterns, and involves applying a Microsoft-style multiple to the $100-billion worth of revenue that he says Google could have in the future.

In case you’re wondering, $100-billion would be more than twice the annual revenues that Microsoft currently has, and would put Google in the same league as IBM and General Electric – while applying a multiple befitting a company like Microsoft, which has profit margins of about 80 per cent. Does that sound realistic?

In the end, it doesn’t matter whether it’s realistic or not. It’s the same game that Henry Blodget played in 1998 with Amazon, when his $400 price target got the attention of Wall Street. As Paul Kedrosky notes, it’s all about making an extreme forecast – not about whether it makes any sense or not. Mark Evans says it’s nice to see analysts thinking outside of the box, but I think some could use a little more time inside the box.

Update:

It’s somehow fitting, in a karmic sort of way, that Henry Blodget has one of the most nuanced posts about Google and its share price. He makes 10 solid points about how to arrive at a fair value for a stock – most of which boil down to “no one really knows” – and of course, ends off with his standard (and legally obligated) disclaimer that none of his comments should be perceived as investment advice. Too bad more analysts don’t have the same disclaimer. Andrew Ross Sorkin has also written something for the Times about it.

Do regular users care about DRM — digital rights management — or is it just open-source fans, libertarians and other geeks? It will be interesting to see what kind of reaction Google gets to the super-duper, Google-rific DRM built into the search company’s new video store.

As more than one person has pointed out, the last thing we really need is another form of DRM, what with Sony installing rootkits and Apple handcuffing you three different ways when you shop at iTunes.com. Google founders Larry Page and Sergey Brin are famous for their mantra “Don’t be evil” — and yet, for many, DRM is synonymous with evil (some interesting comments on this Digg post).

If it is evil, is it a necessary evil? Can Google manage to convince everyone that its DRM is somehow the lesser of several evils? Sure, many of us — like Fred Wilson — are crying a little on the inside. But do most people just care about having the ability to download NBA games or that great Star Trek episode with the green dancing alien girl, at the right price, without giving a rat’s behind about the DRM?

In my constant quest for new plug-ins and gizmos for my blog, I try out just about everything I come across, including the Quimble survey creator, which I quite like. I came across one called TagCloud that has been around for awhile and decided to try it, in part because I think tag clouds are a handy way of seeing patterns in large amounts of information. Del.icio.us has them, and someone just set one up for Google News that is kind of cool, called Newzingo.

Mike Arrington wrote about TagCloud when it first came out, back in June, and said he liked the idea, but was concerned about how long it took to generate the tag clouds. His concern was prescient, because TagCloud is now taking days to update a cloud. I set one up almost a week ago and there is still no data in it.

When I sent an email to TagCloud, I got a response saying the company was having server issues, and pointing me to this comment by founder John Herren at a Yahoo group related to TagCloud, in which he says that “the size of our userbase has grown to the point that we have a backlog of feeds to analyze,” and that updating can take several days. He says the company is changing hosting providers and hopes things will be resolved soon.

All of this is fine, and understandable — and not surprising, given the issues that companies such as Typepad and Bloglines and even del.icio.us have suffered from in recent months — except for the fact that the TagCloud website still says it will take a few minutes to update a cloud, and there is no mention even in the news section about it taking days, or any of the server-related issues Mr. Herren mentions. I would suggest that that’s not a great way to get your new users, or potential new users, to cut you some slack.

Update:

As you can see if you read the comments, John has responded to my comments within a couple of hours of my posting them, and admitted that TagCloud has been remiss in not keeping people more informed about the problems they’re having, even though it is a beta service, which he said he has been working on as a side project. Thanks for the quick response, John, and best of luck at getting TagCloud up and running again.

Update 2:

As of December 11, still no data in the clouds I created, and no info in the “news” section of the website.

They’re at it again. As Om Malik reports, a story in the Wall Street Journal (which is now behind the pay wall), says the big U.S. telecom players are continuing their campaign for a multi-tiered Internet in which Google and Yahoo and Microsoft pay for their bits to get better treatment than someone else’s bits. Best quote: “During the hurricanes, Google didn’t pay to have the DSL restored,” said BellSouth spokesman Jeff Battcher. “We’re paying all that money.”

What are the big telecom companies smoking? They charge people $40 a month or so for high-speed Internet service, then put caps and download limits on them, or use “traffic shaping” to give some services priority over others — or even prevent some online applications from working at all — and then argue that Google and other companies should pay extra. Russ Shaw calls it a “shakedown.”

As John Battelle points out, this is all something that Internet users are already paying for, something Vonage CEO Jeffrey Citron also mentions in the WSJ article. Former Wall Street brokerage analyst Henry Blodgett says he wonders what all the fuss is about, but to me it is clear: the telecos want protection money from the big Net companies. I think Jeff Jarvis is right to call them “robber barons,” and of course the inimitable Doc Searls has written a treatise on the subject as well. Fred calls it a simple matter of jealousy.

Update:

Larry Page of Google and the chairman of the FCC both comment on the disturbing trend towards a tiered Internet in this Register story. And I also came across an excellent (and long) discussion of the issue by Mitch Shapiro over at IP Democracy.

I don’t like to think of myself as being a stupid guy, and the billions of dollars that Larry Page and Sergey Brin have would indicate that they aren’t stupid either, but I have to admit that I share Paul Kedrosky’s puzzlement about the rumoured Google Pack that Larry is supposed to be announcing at CES — at least according to the Wall Street Journal.

What the heck is the point of bundling all that software and branding it as the Google Pack? Sure, Firefox is great — I use it all the time, even though it still has a memory leak problem that drives me nuts. Trillian is another favourite of mine, and I recommend Ad-Aware to everyone I know. The pack will also have Google Earth, Google Talk, Desktop etc.

But why Adobe’s PDF Reader? A nice tool, many people will likely never need it, unless Google has some other plans I don’t know about. And Real Player from Real Networks is a bloated piece of cling-ware that loads so much crap that I wouldn’t install it if Larry and Sergey paid me to. As for Norton Anti-Virus, it used to be a great tool but has become an intrusive irritant for many people I know.

I’m at a loss to explain what Google hopes to gain. The idea that this bundle is somehow a competitive blow against Microsoft is almost laughable (InsideGoogle is also bemused). If all you looked at was Google’s RSS Reader, Orkut, Froogle and even Google Talk (although it’s still early), you would be right to wonder — as Paul does in his poll — whether the search giant has “jumped the shark.”

There’s been a mountain of chatter on the Web about rumours that Google might announce a Google PC – rumours that got a new lease on life from a recent piece in the Los Angeles Times, although they have been around for a while. Those rumours, which have been tracked by CNet, have now been denied by a spokesman for the search giant, and by Wal-Mart, which was supposed to be the company’s partner (along with Wyse Technologies).

It’s a tempting rumour in part because people seem to lust for a strong competitor for Microsoft – and what better competitor than a cash-rich company with a great brand and a market value that is bigger than Coca-Cola and Cisco Systems, and just behind IBM? A little Google cube with a version of Linux on it and some Web-based office software sounds so great, doesn’t it?

The only downside is that it seems like a pretty stupid idea in a lot of ways, as Carlo at TechDirt and John Battelle have both noted. Why should Google bother selling such a system, when it can just avoid all the cost and hassle by distributing software that does the same thing on other people’s computers? I just don’t see the point. Neither does Alec Saunders, (who invokes the ghost of Michael Cowpland).

Blogging is more than just something that geeks with a lot of time on their hands do for fun. In countries like China, blogs are one of the few ways dissidents can try to exercise a little freedom of speech — something we in the West take for granted. In that sense, they are a little like the “samizdat” newsletters that were photocopied and handed around in the USSR under Stalin.

That’s why it’s so depressing to see a company like Microsoft’s MSN censoring a dissident blogger in China, as described by Rebecca MacKinnon, a research fellow at Harvard’s Berkman Center who specializes in international media, and in particular Internet usage in China. She describes how the blog of a noted dissident named Zhao Jing — also known as Michael Anti — was taken down by MSN.

Robert Scoble of Microsoft says he too is upset by his company acting as a “state-run thug” in cases such as this, and that he has raised it with a senior MSN executive. Others have also said they will be raising the issue. No offence to the Scobleizer, who seems like a nice guy, but I can’t say I’m optimistic about such efforts having any real effect.

Microsoft isn’t the only one to engage in this kind of thing — Yahoo has already helped identify a dissident to the Chinese government and Google has been accused of filtering its search results in China to avoid dissident material. Everybody wants to do business in China, and no doubt they justify their government-friendly attitudes as being better than having no Internet at all, but that doesn’t make MSN’s behaviour right.

Vongo, the newly-announced downloadable video service from Starz Entertainment (a unit of John Malone’s Liberty Media), sounds like a pretty cool idea — it would let you download Hollywood movies, concerts, TV shows and other content to various devices, including portable video players (although maybe not iPods, according to the New York Times).

There’s just one problem — at least for someone like me, who happens to live in the Great White North (i.e., Canada). Vongo is restricted to U.S. residents. Here’s what I got when I went to the webpage: “You need to be in the United States to view this site.” On a somewhat redundant note, under the heading of Minimum System Requirements, the only requirement is that you be “located in the U.S.”

I know there are probably all kinds of perfectly reasonable legal requirements for that kind of thing, but I have to confess that it still pisses me off — or maybe it’s just the suggestion that living anywhere other than the U.S. constitutes a “geographic failure.”

Update:

As you can see if you read the comments, someone from Starz responded to this post within about an hour of it going up, which I have to say is pretty good, considering I don’t get a lot of traffic. Alesya Holick said the U.S.-only requirement is necessary because the company only has the U.S. distribution rights for the content it will be distributing (which is pretty much what I figured), and that Starz would change the description on the website to make that more clear — and remove that nasty “geographic failure” part.

Nice to see a company responding so quickly to a post by a puny little Canadian blogger like me.

Update 2:

Rafat over at PaidContent notes that the Vongo terms of service carry a number of restrictions — which makes Thomas Hawk wonder why anyone would want to use it instead of just recording or torrenting whatever they want to watch. A fair point.

Update 3:

As the latest comment on this item shows, Vongo hasn’t changed the page that first comes up when you hit the site, so top marks for quick response to my blog, but subtract all those and more for not doing anything about it.

I don’t fly to Boston much, but I’m still interested in the fight going on between Logan airport and Continental Airlines over public Wi-Fi. The airport — which is run by the Massachusetts Port Authority — shut down Continental’s wireless network last fall, and the airline has asked Congress to intervene.

Massport says it wants to avoid interference from a bunch of competing wireless signals, but the airlines (including American Airlines) argue that what it really wants is a monopoly on Wi-Fi, for which it charges $8 an hour. I’m with Fred Wilson (and others) on this: Wi-Fi should be a form of public infrastructure, like roads or bridges.

I also like an analogy I first saw in a Wired article by Paul Boutin: Wi-Fi is a condiment, like sugar or cream, or salt and pepper. Providing it is a service that you hope will make people want to come back to your establishment. Hardly anyone charges for the use of their washrooms either — not even airports.

There’s more discussion at WSJ writer Jeremy Wagstaff’s blog and at WiFi Networking News. Dana Blankenhorn at ZDNet has also posted on it, as has my friend Rob Hyndman.

Okay, maybe the first day of the new year is a little early to be calling someone the year’s biggest loser, but I’d like to start the bidding early by nominating Coldplay’s record label, which as far as I can tell is EMI (the record company the Sex Pistols made infamous).

A note inserted in the band’s latest CD — a label you can’t see until you buy the disc — has a laundry list of places you probably won’t be able to play the new CD you paid so dearly for, a list that includes many portable music players, most computers, CD players in cars, and other incredibly common places for playing music. Arif in Hyderabad found the note after buying the disc.

What is a company thinking when they do this? It might not be as bad as the comically inept DRM exploit that Sony tried to foist on an unsuspecting public, but it’s still a ridiculous way to approach your market or your customers. Assume that they are thieves, and tie their hands in every way imaginable so that they can’t enjoy their music as they wish — after they’ve already paid money for your product. Nice.

I’d like to hope that we could chip away at that kind of dinosaur thinking this year, but I’m not optimistic.