Can Google make e-books work?

There have been plenty of attempts over the years to get e-books to go mainstream. Half a dozen companies have tried to sell electronic-book devices, and failed miserably. Sony has a new eReader available, but if it’s anything like its predecessors it will prove to be too bulky, too expensive and just too geeky for anyone but a few nerds to use with any regularity.

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But that’s a hardware issue. Books as software — software you can carry around with you — makes a huge amount of sense, whether you read them on your Palm or BlackBerry or an eReader. And according to a piece in the Sunday Times, our friend Google could give that phenomenon a big boost with the plans it is working on right now. The story says that:

The internet search giant is working on a system that would allow readers to download entire books to their computers in a format that they could read on screen or on mobile devices such as a Blackberry.

Jens Redmer, director of Google Book Search in Europe, said: “We are working on a platform that will let publishers give readers full access to a book online.”

The proposed service would be integrated with Google’s Book Search service, which allows surfers to see a sample of a book and find places to buy it (publishers involved include Penguin, HarperCollins and Simon & Schuster). I figure it should be as simple as a button that says “Click here to download this book,” but no doubt there are all kinds of DRM issues involved. Google’s Redmer said the project would likely become a reality “sooner rather than later”.

More on the topic from David Rothman at Tele-Read and the gang over at Slashdot — and Webomatica (who has worked for a couple of e-book providers) has some thoughts that are well worth reading as well.

Do we need a social press release?

Jeremiah Owyang, a web strategist with Podtech, has gotten a debate going on the idea of the “social media press release” or SMPR (you know when something becomes an acronym that all hope is lost), which is an idea that some PR types have been tossing around for awhile. I think the idea, which my PR friend Ed Lee has written about before is essentially to update the traditional press release with social-media links and content.

Edelman has tried to push this particular train forward by putting out something it calls Storycrafter, software that is supposed to help companies put together social-media releases. But not everyone is sold on the idea — and frankly, neither am I. Stowe Boyd makes some excellent points in his post here, about how the SMPR is still more about talking at people instead of engaging with them in some way, and to pimp out the press release with tags and Digg links doesn’t really solve that problem.

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Jeremiah has some similar questions, saying: “Why are we formalizing the word of mouth network into these clean nice buckets? Isn’t the point of conversations to have them flow nice and easily? Is this a way for Marketers to infiltrate “Social Media” communities with a few clicks and graphics? Where’s the relationship building? Where’s the humanity?” Steve Rubel responds that the SMPR is a sort of intermediate step, to get clients to dip their toes into social media.

I know when Ed asked me what I thought of the SMPR that High Road put together for Weblo, I said I thought it was a good step, and I still think that. A baby step, perhaps, but still a step. Not everyone is going to jump feet-first (or head-first) into blogging. But I would also agree with Stowe and Jeremiah — and Brian Oberkich here and Jeremy Toeman and Dominic Jones — that it does not go nearly far enough. And it looks like my friend Tony Hung agrees with me.

More on the subject from Brian Solis, Scott Karp at Publishing 2.0 (complete with Breakfast Club reference) and from Chris Heuer at SocialMediaRelease.org, who says Stowe took things that were said at the Third Thursday get-together out of context and is deliberately trying to stir up controversy — which, knowing Stowe a little, I find hard to believe.

Update:

Shel Holtz, who was part of the Third Tuesday panel, has a long and thoughtful post, and Stowe has responded to Chris and others as well. In the end, I would agree with my friend Mark Evans that there is a place for press releases — social or not, as well as for blogs and pretty much every other kind of social media. A place for everything, and everything in its place. And Dominic Jones has a persuasive argument for why any kind of press release, social or not, isn’t anywhere near as good as a blog.

(cross-posted from my media blog — be sure to check out the comment from Amanda “Strumpette” Chapel)

Jonathan Schwartz, up close and personal

I have to say right off the top that I haven’t really acquired the taste for Robert Scoble’s video-blogging or podcasting (or whatever we’re calling it now) over at Podtech.net. I liked reading his blog from time to time — in some cases for the comments — but I just haven’t gotten into the video stuff for whatever reason. But I watched his recent interview with Sun Microsystems’ CEO Jonathan Schwartz and I thought it was pretty good.

In part, it was good because Schwartz seemed comfortable talking with Scoble, and that’s a huge part of a successful interview (unless you’re doing an ambush, of course). What makes that happen? Obviously it helps if interviewer and subject know each other, but it also helps to be the kind of person that puts others at ease, which Scoble (love him or hate him) genuinely seems to be. And that’s when you get the good stuff.

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So after all the questions about Sun’s business, and the iPhone chat and some talk about other things, around 35 minutes in Scoble asks about Schwartz’s comment on his blog that a train accident in 1987 changed his life. And that’s when you start to see the human side of Jonathan Schwartz. Not that he wasn’t human before, but he was still pushing a corporate message. The stuff about almost dying was a lot more human than that, and therefore to me more interesting.

I also think it says a lot that Schwartz — a CEO, who could easily get someone to call Matt Mullenweg, or send him an email and get his problem with Sun’s Startup Essentials program sorted out — publicly admits that that company screwed up and offers to make it right. A PR gesture? Sure. But a great response nevertheless, and something that is likely to get a whole lot more attention than just fixing things behind the scenes.

Does Google need more fiber in its diet?

Rumours that Google has acquired large quantities of fiber (or fibre, as we Canadians call it) are not exactly new. I recall stories as far back as two years ago saying exactly the same thing. In fact, if you check the date on this particular story from CNet about Google buying up “dark” fiber, you’ll see that it was published two years — almost to the day — before this column by Robert X. Cringely, the pseudonymous tech columnist and blogger for PBS.

In the CNet story, the idea was put forward that Google was planning to set up its own telecommunications network, that maybe it would start a VoIP service based on Google Talk, and so on. There have been other stories too, including this one from ZDNet in 2005, which also mentioned the VoIP idea, and this one in 2006 — which proposed that Google was planning to use the bandwidth for something related to IPv6, or maybe VoIP, or maybe a grid computing network.

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Om Malik wrote a piece in 2005 for Business 2.0 about how Google could build its own backbone, which he called Googlenet, and then use that to cut the costs it was paying to ISPs for peering arrangements to carry its data — and could also offer its own Internet access by blanketing various centers with free Wi-Fi. He and Cynthia Brumfield at IPDemocracy both mentioned that Google was taking bids for a nationwide optical network.

Cringely’s idea is that Google wants to effectively become the world’s largest ISP, and that as video and other applications suck up bandwidth, smaller ISPs who are losing money will effectively sign over their businesses to Google. I think it is more likely that Om is right — and so is this guy over at Slashdot — and Google is simply engaged in hedging. In other words, it is expecting peering costs to rise (especially so if net neutrality rules are not adopted), and so it is buying up as much bandwidth as it can to keep its costs low.

Be careful what you Facebook

Facebook is a great service — my 17-year-old daughter and all her friends use it (I have an account too), and so does my cousin who is at McGill University in Montreal, where she engages in the typical sort of debauchery expected of second-year college students, and then posts pictures of said debauchery on her site for all her friends to see. I warn her about that from time to time, because you never know where those pictures are going to wind up.

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What got me thinking about that again was reading on Engtech’s blog about a couple of employees of Farm Boy in Ottawa who were fired as a result of some stories they posted on a Facebook group, one of which allegedly involved theft from the store. There are more details in the Sun story, but in any case, they were fired despite having what was reportedly a stellar record at the store.

They were also fired despite the fact that Facebook groups are private, and you have to be invited to get into one. Similarly, Facebook profiles and pictures are not viewable unless someone invites you. However, in what was probably a poor decision, they all used their real names — and, as Engtech points out, one of them was fairly distinctive. That made it pretty easy to track down who it was. This kind of thing has happened before and likely will again.

Update:

A story from the Globe about well-known weatherman Percy Saltzman, who passed away recently, shows that it’s not just teenaged bloggers that need to think about the impact of what they are writing — 91-year-old weathermen might want to think about it a bit too.

To vote for Mr. Obama, click here

Update:

And now Hillary Clinton has joined the club, with her own video clip posted on her website — on a Saturday morning. And it’s interesting to see how often she uses the theme of having a “conversation” with the American public, and at one point says she will have regular online Q & A sessions.

Original post:

We know the YouTube effect (or as I like to call it, the Lazy Sunday effect) is in the process of disrupting the network-television business in various ways, but it also seems to be well on its way to disrupting the business of politics as well — and the latest wave in that particular tsunami just rolled ashore with the video launch of Barack Obama’s campaign to become president.

We’ve already seen the effect that videos uploaded to YouTube and other sites can have on the political discourse in both Canada and the U.S., especially when those videos happen to be filmed by soldiers in Iraq and Afghanistan, or video clips of dictators being hanged, etc. That’s one aspect of it. And then there’s Senator John Edwards making his pitch using Rocketboom, and having Poptech video-blogger Robert Scoble tag along on his airplane.

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Where is all this going? Who the heck knows. But it could definitely get interesting. As usual, the Web disintermediates, or takes out the middleman, and in this case the middleman (or men) are the TV networks and veteran political reporters. In the past, Obama’s pitch — which Rachel Sklar writes about at Eat The Press and Liz Gannes notes at NewTeeVee — would have been filmed and handed to the networks, or done using a favoured anchor such as Tom Jennings. The networks would have made a lot of hay with either one.

Now, they show up on Obama’s website or on YouTube, or both. And as Beet.tv makes clear, this isn’t just a lark by Obama, to show that he “gets it.” The deal with Brightcove — which just announced a financing round of about $50-million — is part of an ongoing video strategy that will involve future campaign videos, an Obama “channel” and the ability for supporters to embed video in their pages. That is huge. And it’s interesting that it’s Brightcove and not Google Video and YouTube.

Who needs a TV network?

Interesting move by a local TV station called KZSW in Temecula, California (yeah, I’ve never heard of it either — look it up on Google Maps if you want). Marshall Kirkpatrick, who was briefly with TechCrunch and is now with Splashcast, says that the station there has started uploading its video to YouTube. And why not? If it’s good enough for NBC and clips like “My ** in a Box” from Saturday Night Live, then why not the local traffic report or cat-in-a-tree report from downtown Temecula?

Marshall links to a story from the local newspaper that discusses the station’s decision. The story says that since December 4, the station has posted about 50 local news and sports segments to YouTube, and nine segments have gotten more than 100 views, including “a ride-along with police in Menifee, snowboarding in Wrightwood and the opening of the new Temecula library.”

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Okay, it’s no Lonelygirl15 or Numa Numa dance, but hey — what does KZSW care? They get more viewership for their video virtually free of charge. It’s a no-brainer. As a couple of people have mentioned, both on the PaidContent post about it and the post by Jeff Jarvis at Buzzmachine, it’s difficult to see how this helps any advertisers the station might have, or brings in any extra money for KZSW.

But so what? Maybe it will drive viewers to the station — and if it doesn’t, no harm no foul. As Edward Fink, chairman of Cal State Fullerton’s Radio-TV-Film department, told the local paper: “YouTube is there and it’s free. If you’re trying to find an audience, why not use it?” Meanwhile, Tom Evslin says broadcast content will move to the web, and we’ll use broadcast towers for Internet access.

Is streaming Netflix TV good enough?

It shouldn’t really be that surprising to see a company like Netflix decide to get into the movie and TV-streaming business. Being intimately involved in the turmoil of the DVD rental business over the past two or three years — including regular beatings from a behemoth like Blockbuster — no doubt has a way of keeping you on your toes. But will streaming video to Netflix customers be enough to save the company from the dust heap of history?

Mike Arrington says he is taking back his recent criticisms of the company, and that the new service is “excellent” and “significant competition” for others in the same space. Colour me unconvinced. In fact, I would have to agree with Dave Winer (Ed: not again!) that it is lame.

The online video game is already crowded, and getting more so by the day. Google and YouTube are doing deals, and talking about others, with every major network on the planet. The Venice Project — the latest venture from Skype billionaires Janus Friis and Niklas Zennstrom, which has been renamed Joost — is trying to reinvent television online, as are Brightcove and others. And Apple and Amazon are already in the movie-downloading business.

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I suppose it’s worth mentioning that the major movie studios are also in the movie-downloading business, but services like CinemaNow are such non-entities that they’re barely even on the radar, and likely never will be. And of course there is the magical world of BitTorrent, Bram Cohen’s peer-to-peer delivery service, and other outlets of questionable legality — including several that use the often overlooked (but still viable) Usenet system.

Into that mix comes Netflix, which definitely has a large mind-share when it comes to brand name. And I suppose that streaming a movie or TV show is arguably similar to renting one and having to give it back. But with the proliferation of alternatives, are people likely to settle for only being able to stream rather than save a movie? I doubt it.

Netflix customers (who pay $18 a month) apparently get 18 hours of viewing, or about eight movies. They can stop them, and only get charged for the minutes they used, but as far as I can tell you can’t restart them or pause them. In other words, it’s already less useful than your regular TV with a DVR attached, where you can pause and restart or even record. Netflix seems like a step backwards rather than forwards.

Newspapers and local – who owns who?

(cross-posted from my media blog)

Don Dodge has some thoughts about newspapers and local content — like restaurant reviews, movie reviews, etc. — that got their start with a post from Greg Linden of Findory (which Greg said recently is shutting down, or at least going into hibernation) on the same topic. Greg’s post in turn was based on a very perceptive post by Rich Skrenta, CEO of Topix (a local news aggregator), about how newspapers generally suck at making their content available to search engines where they can become part of the “long tail.”

All of this drew some skeptical fire from my friend Rob Hyndman, who said in his post that newspapers shouldn’t own local search. His reasoning (expressed both in his post and in an email discussion with me): newspapers may have local content, but that doesn’t mean they can necessarily compete with other, better sources of content that are faster and more flexible than newspapers are — even assuming that papers can solve their archive and searchability issues.

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Needless to say, I think that newspapers have a slightly better chance than Rob does, but that’s not just because I work for one. I will agree that trying to convince local-content searchers to come to a newspaper site — which Rob also criticizes in his post — doesn’t make a whole heck of a lot of sense. But that doesn’t mean newspapers can’t make use of their content by making it easier for search engines and other aggregation mechanisms to find.

Maybe newspapers can’t compete with other local sources (like Yelp, which Mindy McAdam likes), either because they don’t have compelling enough content or because they don’t know what they are doing technology-wise, or because they are just clueless and handicapped in a variety of ways. But they can certainly do a heck of a lot better than they are now. Pramit Singh has some good suggestions at MediaVidea

Blog payola, round three (or four)

Looks like round three (or is it round four?) of the “blog payola” debate is upon us, something I expected we would see more of in 2007. Over at The Blog Herald, my friend Tony “I Never Sleep” Hung has the 411 on a new PayPerPost-style blog review service called SponsoredReviews, which is reportedly about to launch in beta.

Tony has the details, and Mike Arrington at TechCrunch brings the outrage, in a post that says the “blog payola virus is spreading.” In a response in the comments, someone says that services like PayPerPost fill a need, and Mike responds that drug dealers fill a need too. The bottom line, he says, is that such services mean “misled readers, search engine pollution and credibility questions around the entire blogosphere. All for a few dollars a post.”

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SponsoredReviews, like PayPerPost, appears to require disclosure — although it’s not clear yet whether that will be a general, site-wide disclosure like the one PPP allows, or whether compensation will have to be disclosed on each and every sponsored post, which is the way I think it should be done.

SponsoredReviews is also trying to carve out a variation on the model by allowing bloggers to set their own rates, with a bidding system determining the eventual payola level. And the service says that it will have a rating system, although it’s not clear what that will consist of.

I’ve got a great idea: How about instead of requiring disclosure, SponsoredReviews requires bloggers to post the details of the entire monetary transaction that led to the post in a small box next to the post — complete with all the various bids and the final price that was paid for the review. Transparency is good 🙂

Thanks be to Steve for locking us in

I wasn’t going to write any more about the Apple iPhone and its closed nature (great post by Tom Evslin here), but it’s been bugging me and I can’t help myself. I don’t want anyone to get the idea that I am an Apple-basher, because I like Apple products a lot (although I don’t use many of them on a day-to-day basis, for a variety of reasons). I also just finished writing a piece for the Globe and Mail about how Steve Jobs and the team at Apple should get credit for seeing the value of great design. They make great products, there’s no question.

But Nick Carr’s piece earlier this week, which praised Steve for being the antithesis of Web 2.0, really got me steamed up, as Nick’s pieces often do (and I know how much he enjoys that). In a nutshell, he said that Steve is a true genius who couldn’t care less about what people want, and who has no intention of making devices that can be modified or improved (because by definition, of course, they can’t be improved). Hell, you can’t even change the battery in an iPod — isn’t that great? Thank God for geniuses like Steve.

As I mentioned in my comment to Nick — and to Scott Karp, who sang a similar tune in a guest post at The Blog Herald — this kind of attitude makes it sound like Mr. Carr is more than happy to take whatever the great man gives him, all because Steve is such a visionary and totally, like, a genius. How could we question the decisions of a genius? We should be grateful he gives us the benefit of his creative vision at all (here’s a list of all the things the iPhone can’t do).

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I know I’m in some kind of bizarre alternate universe when I prefer to agree with Dave Winer, but DW makes some good points in his post on the topic here, in which he argues that — in addition to getting fawning treatment from the media — Apple is taking the wrong route by trying to lock users in with the iPhone. As Dave notes, millions of people would use Apple products without that kind of lock-in, simply because they are easy and enjoyable to use. Why the chains?

As Clint Ecker has pointed out on his blog at Ars Technica, Steve is also guilty of using a little Microsoft-style FUD (fear, uncertainty and doubt) to justify his decision to lock down the iPhone. He tells Newsweek that it’s because Cingular doesn’t want people using third-party apps and disrupting the network, but realistically there is virtually zero chance of that happening and Steve knows it.

He wants the iPhone locked because that’s the way he has always liked his products — locked, inviolable, pure. It was that way even with the first Mac, where Steve didn’t even want to allow users to open it and install anything. Yes, the iPod is a great device, but would it be any less great if we could change the frickin’ battery ourselves? No. Would it be any less great if we could install software to do cool things Apple never thought of? No. But Steve won’t let us.

Update:

Lots of sound and fury about this one pinging around the blogosphere (and in the comments here). So far, one of my favourites is from Ethan Kaplan at Blackrimglasses — great rant 🙂

Wikinomics pushes Web 2.0 mainstream

Along with Toronto blogosphere luminaries such as David Crow of Ambient Vector and DemoCamp fame, Mark Kuznicki of Remarkk, ex-Flockster Will Pate (soon to be a Torontonian, I hear), Eli Singer of CaseCamp and Tom Purves of firestoker, I attended the launch of Don Tapscott’s new book Wikinomics — subtitled “How Mass Collaboration Changes Everything” — on Thursday at U of T. My first thought? Bob Rae looks a bit like a Muppet character.

My second thought was that Web 2.0 must be crossing some kind of Rubicon, when a guy like Don can get that many corporate types into a room for the launch of a book about wikis and blogs and peer-to-peer collaboration. And he does it by making it clear that Web 2.0 principles can help traditional companies like gold miners and manufacturers, and that it’s not just feel-good claptrap tossed around by twenty-somethings with fake dreadlocks and Hello Kitty T-shirts.

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Will is right that Don, while not actually part of the Web 2.0 movement, makes a good “translator and diplomat” when it comes to explaining the benefits of Web interactivity to a skeptical, non-Webby crowd. If there’s one thing Don is good at, it is taking an emerging field or trend and giving an overview of why it’s important — pulling strands together, explaining them and packaging them in a way that is easily understandable for a novice. That is a valuable skill.

And Don is trying to walk the walk as well, with a wiki aimed at writing the last chapter of the book interactively, and a fledgling Wikinomics community powered by local social-networking platform PikSpot, which I am quietly (or not so quietly) proud to have known about before David.

Just one thing, Don: I couldn’t help but notice in your speech that you credited your daughter with introducing you to the wonderful social network known as “the Facebook” — better be careful, or you will be lumped in with George Bush, who recently referred to how much he liked using “the Google” 🙂

Vene, vidi, Venice — the TV killer

Update 2:

The Venice Project is now officially known as Joost. Why? Because.

Original post:

There’s one thing I still don’t get about The Venice Project, the secretive, TV 2.0, peer-to-peer project being put together by billionaire Skype founder Janus Friis and Niklas Zennstrom to revolutionize the boob tube (Om Malik has an in-depth look here). And that thing is this: Why is it called The Venice Project? Did they think of it in a cafe in Venice? Is the project almost under water? Do Venetians watch a lot of TV, in addition to having invented the Venetian blind? I’m not sure.

What I do know is that the player is very slick (yes, unlike my poor friend Mark Evans, I got an invite to the beta). The content, however, still leaves a bit to be desired. That’s not surprising, of course, but as Tony Hung pointed out awhile back, the bottom line is the content. A really nice interface, with lots of cool features and great useability, is only going to impress people for so long.

So far, the content consists of lots of HBO-type programs — a Green Day documentary, an interview with Nelson Mandela, episodes of The World’s Strongest Man, The World Poker Tour and (somewhat bizarrely) episodes of the old 1950’s television show Lassie. Some of the content comes in crystal clear, just like average quality television, while other programs are somewhat pixelated, like Web video often gets when your Internet speed is throttled.

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As Ars Technica has pointed out, Internet speeds are also an issue The Venice Project is going to have to confront, since plenty of places — including this particular corner of North America — don’t have unlimited fibre-optic connections, and so cable providers like Rogers provide an “asymetrical” connection, which means I get tons of download bandwidth but nowhere near as much upload bandwidth.

Many ISPs also have bandwidth “caps” or limits on how much you can download per month. For a peer-to-peer service like TVP, both of those things are the kiss of death. Ars Technica notes: “watching an hour’s worth of TV consumes an average of 320MB downloaded and 105MB uploaded traffic, due to the service’s P2P architecture.” Someone who watched a lot could use up their entire month’s allotment of bandwidth in no time at all.

Could Robert Cringely be right? In a recent column, he predicted that this year would be “the year the net crashed (in the USA). Video overwhelms the net and we all learn that the broadband ISPs have been selling us something they can’t really deliver.”

Update:

As Haydn mentions in the comments, there is a social aspect built in to The Venice Project that I forgot to mention — there are “widgets” built into the application (with more coming in the future), including RSS feed “crawlers” that run along the bottom of the screen and a see-through instant messenger window, where you can chat with friends about what you’re watching.

A Web 2.0 revolt against Yahoo management

As Mark Twain once said, everyone complains about the weather but no one ever does anything about it. Well, lots of people complain about Yahoo too — about how it is big and bloated and unfocused and is losing ground to Google, not to mention the fact that its peanut butter is spread too thin — but is anyone doing anything about it? Eric Jackson is trying to.

Eric, a Yahoo shareholder and management consultant who writes a blog called Breakout Performance, is like Peter Finch’s character from the movie Network. He’s mad as hell and he’s not going to take it any more. So Mr. Jackson wrote a post called Yahoo Plan B, complete with a video clip of himself describing said plan, and sent it out to various places, including YouTube.

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In a nutshell, Eric is trying to get a wave of shareholder support for change, in the same way that activist hedge funds and other prominent investors often do, except he’s starting with blogs and YouTube and wikis instead of a board seat and a couple of hundred million. He says:

Yahoo! is drifting; and its board and management have been too slow to act to this fundamental problem. As shareholders, we don’t have to sit by and watch this.

Activist Investing has principally been the domain of hedge funds — well, no longer. With the help of the web, blogs, and wikis, I’m asking all current and future retail investors in Yahoo! to join me in pushing for a change.

So far, Eric has gotten some favourable press at TheStreet, as well as from former trader David Neubert, and the Internet Outsider blog, written by former analyst and Bubble 1.0 cheerleader Henry Blodget.

Eric says he has received many emails of support, and now has shareholders with more than $1.7-million in Yahoo stock who are backing his campaign. Not exactly a hedge fund, but not a bad start. Good luck with the crusade, Eric.

Update:

Eric’s campaign now has a wiki as well, at Yahoo.Wikia.com.

With the iPhone, Apple again changes the rules of the game

In one of the worst-kept secrets in recent memory, Apple announced the iPhone — its combination cellphone and music player — at Macworld on Tuesday, to rapturous applause and adoring coverage from gadget lovers. Apple chief executive officer Steve Jobs did one of his trademark keynote speeches, filled with ultra-cool photos and an interactive demo with the new device, as well as celebrity walk-ons from Google CEO Eric Schmidt and Yahoo co-founder Jerry Yang. All of the gee-whiz adoration from Apple fans and gizmo-lovers aside, the key question is: Will the company’s newest venture disrupt the cellphone industry in the same way the iPod disrupted the digital music market?

At first glance, the answer seems to be yes. The main differentiating factor for Apple is not necessarily the functionality of the new device, but the design and usability — in other words, not so much what the iPhone does as how it does it. Unlike most cellular “smart phones,” which have all sorts of buttons, switches, tiny screens and cumbersome built-in keyboards, the Apple phone is an almost featureless expanse of screen, with only a single button at the bottom.

Numbers and letters can be typed with a virtual, on-screen touch keyboard, and images (and Web pages) can also be resized dynamically by “stretching” them using just two fingers on the iPhone’s touch-sensitive screen.

In a similar way, the iPod changed the nature of the MP3-player business overnight, by applying ease-of-use and aesthetic design principles to a market previously dominated by ugly and awkward devices. Apple took a business that was controlled largely by engineers and applied an artistic design sense, and it seems to have done the same with the iPhone. In other words, the Apple phone bears as much resemblance to a standard phone as a Maserati does to your neighbour’s Ford Focus.

Obviously, not everyone can afford a Maserati, and not everyone is going to want an iPhone either. At $499 (U.S.) for the version with four gigabytes of storage and $599 for the 8GB version, it’s not cheap — and that includes the discount that comes with a two-year contract from cellular provider Cingular.

The iPod, however, was also relatively expensive when it first appeared in 2001 ($399), and that didn’t stop millions of people from buying one. And iPod prices kept dropping as Apple’s economies of scale — in particular, lower component prices — kicked in. If the iPhone does likewise, it could make life uncomfortable for Palm, Nokia, Motorola and Research In Motion, which has been trying to broaden its reach into the consumer electronics market.

One potential hurdle for Apple is that millions of people already have cellphones, and a large proportion likely already have iPods too. When the iPod came out, the digital music market was still relatively small. In order to win a large share of the market for the iPhone, Apple will have to persuade people to dump the phones and iPods they already own and spend $500 on a new gadget (in addition to whatever monthly data charges they face from their provider).

Another factor that could hold back demand for the new device is that business users — who would be among the most likely to spend $600 on a new phone — will likely not be attracted to the idea of a virtual on-screen keyboard, after having gotten used to typing with their thumbs on the keypad of the BlackBerry or Palm’s Treo.

Corporate users are also likely to be unmoved by the offer of free “push” e-mail service from Yahoo, and the iPhone doesn’t include support for the Outlook Exchange mail servers used by most firms. Those quibbles aside, there is no question that the iPhone is a shot across the bow of the entire cellphone and PDA market. Just as it did with music, Apple has changed the rules of the game.