SBC to Internet: We own you

Ed Whitacre, CEO of SBC Telecommunications, tells Businessweek magazine that as far as he’s concerned, telecoms and cable companies get to control the Internet:

“Q. How concerned are you about Internet upstarts like Google, MSN, Vonage, and others?

A. How do you think they’re going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it. So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes? The Internet can’t be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!”

That’s a nice try, Ed. You may not be the only one to try that kind of thing, but let’s see you try to block access to Skype or Gmail unless someone pays up. And don’t large bandwidth users pay for traffic carried on a cable or telecom network already? SBC’s new business model sounds a little bit like extortion to me. Former Release 1.0 editor Kevin Werbach says we should be afraid. More discussion on the Interesting People list.

Update: The Washington Post has a story criticizing Ed, in which an SBC spokesman does some serious backpedalling on the whole arging-chay for andwidth-bay thing.

Debate over Google Print

Cory over at points to a great discussion of Google’s library book-scanning project that was conducted on computing guru David Farber’s invitation-only “interesting people” mailing list. Tim O’Reilly, who took part in the discussion, has a description on O’Reilly Radar. For example, Sid Karin notes that lost a lawsuit launched by the record industry after the company set up a CD library that would let you listen to streaming digital music files, provided you could prove you owned the original CD they came from. The suit was fought in part on the principle that was violating copyright simply by making digital copies of the CDs, much as publishers are arguing that Google is infringing on their copyright simply by scanning books, even though it will not be making the full text available online. Also on the list, Seth Finkelstein points to a wide-ranging discussion about the subject over at the Scrivener’s Error blog.

Revenge of the blog-o-sphere

If Forbes magazine was looking for some attention from the Internet, they certainly got what they were asking for. Unfortunately, it isn’t coming because of some fine-quality, well-written journalism, but because of what bloggers are taking as a drive-by-shooting style rant about how bloggers are dirty, rotten, lying scumbags. The piece by Daniel Lyons is more or less about a battle between one man whose company and stock were hammered by a blogger who pretended to be someone else, but along the way Lyons casts some aspersions against bloggers as a whole. Reaction (not surprisingly) has come from far and wide, including Dan Gillmor at Bayosphere, Steve Rubel at MicroPersuasion, the guys over at We Break Stuff and Paul Kedrosky at Infectious Greed. Is it a deliberate attempt by Forbes to get some coverage in the blog-o-sphere — even if it’s negative? Perhaps. Or it could just be that publisher Malcolm Forbes got a bee in his bonnet about blogs for some reason. Meanwhile, Chris Pirillo notes sarcastically that magazines also suffer from some of the same problems. But Om Malik (who used to work for the magazine before he moved to Business 2.0, says he is reserving judgment for the moment.

Update: In a great piece for, Michael Malone — former editor of Forbes’ ASAP technology magazine and long-time Silicon Valley observer — talks about blogs and notes that the business magazine is the “one of the best technology counter-indicators I know.”

Column: Best of luck, Jerry…

Here’s a column I just posted to the website, about Jerry Zucker’s $1-billion bid for Hudson’s Bay Co.: “To U.S. investor Jerry Zucker, who has just launched a takeover bid for the oldest company in North America — The Governor and Company of Adventurers of England Trading Into Hudson’s Bay, otherwise known as Hudson’s Bay Co. — we have just one thing to say: Best of luck.

Way back when, this legendary company may have controlled more than a third of what is now Canada, and part of the northern United States, but here in 2005 it barely controls anything. HBC may be the largest remaining department store retailer in Canada, but it has achieved that title mostly by default, since Simpson’s went out of business decades ago, Eaton’s went bankrupt (not once but twice) and eventually ceased to exist, and Sears has shrunk to a shadow of its former self and is on life support.”

Continue reading “Column: Best of luck, Jerry…”

Let the Web 2.0 pile-on begin

Whether it’s fear of a new bubble or just a desire to be contrary, the backlash against Web 2.0 continues to grow — or at least, a backlash against the hordes of companies that have emerged offering a variety of Web-based services using Ajax and other interactive technologies, and against some of the acquisitions and valuations that have been tossed around in the wake of deals for companies such as Jason Calcanis’s Weblogs Inc. The latter got a lot of people doing some back of the envelope calculations , to see how much their blogs or sites might be worth. Meanwhile, others such as Nicholas Carr at Rough Type have been protesting some of the assumptions that seem to underly the Web 2.0 movement, including the worship of sites such as One of the latest to add his reasonably well-argued criticisms to the fray is tech blogger Russell Beattie, who dismisses most of the existing Web 2.0 companies as scrapers, mashers or lame copycats of Flickr.

Alpha is the new beta, dude

Is it just me, or is alpha the new beta? Looking around at all the Web 2.0 apps that keep popping up like mushrooms after a rain shower, the number of companies doing alpha or “invitation only” beta tests seems to be increasing exponentially. It’s not just me, because others have noticed too. Of course, Google is probably to blame for some of this, since it continues to keep products in beta mode long after most companies (cough… Microsoft… cough) would have released them, including Gmail. There’s no doubt that the kind of attention Gmail got when it first appeared probably led to a few companies deciding to try the same exclusivity approach. Why not soft-launch in invitation-only mode, and let the buzz do the rest? Hence the proliferation of “submit your email and we’ll see if you make the grade” offerings from companies such as Riya and Wink. Of course, there is a downside to riding the buzz train, which is that the buzz could overtake the reality and lead to a mini-backlash against the product, as the developers of the Flock browser found recently.

All your base are…

The latest secret project to trickle out of the Google search labs is something called “Google Base,” which several people — including Tony Roscoe — discovered while snooping around on the Internet. Apart from being a great excuse to revive the old “all your base are belong to us” gag from a few years ago, it appears to be an open database of some kind that Google intends to launch — which many observers have speculated could become a kind of on-line classified section, much like the popular Craigslist, which eBay now owns part of. Others, including Forrester Researcher staffer Charlene Li, think it could be more than that. Some believe that it could be part of Google’s big move into real estate listings, and could coincide with the launch of another rumoured Google offering, a payment scheme dubbed Google Wallet. For its part, the search giant — in typical fashion — is staying pretty mum on the subject.

Wikipedia backlash continues

Perhaps it’s a sign that the Web is maturing, but there’s been a growing chorus of criticism (like this one from Nicholas Carr) about the mighty Wikipedia, the “open source” encyclopedia that anyone can contribute to or edit entries in. One of the more recent pieces to take on the topic — in a somewhat balanced way (although the compliments seem to be trotted out mostly so it doesn’t look too one-sided) — comes from Robert McHenry, former editor-in-chief of the Encyclopedia Brittanica. Of course, Mr. McHenry is hardly a disinterested observer, since the EB is one of those that has likely suffered thanks to the popularity of the Wikipedia, and the Britannica also comes in for some criticism of its own errors, which have their own entry in the Wikipedia. In any case, even Wikipedia founder Jimmy Wales has admitted that the project is still in development and that it does have some obvious flaws.

Column: So long, Mr. Greenspan…

Here’s a column I just finished posting at about departing Federal Reserve Board chairman Alan Greenspan:

“During the U.S. presidential election campaign in 2000, Senator John McCain was asked what he would do if something were to happen to Federal Reserve Board chairman Alan Greenspan. The Senator replied: “God forbid, I would do like they did in the movie ‘Weekend at Bernie’s.’ I would prop him up and put a pair of dark glasses on him.”

In a single sentence, Mr. McCain summed up just how much the U.S. stock market, and as a result much of the American economy, had come to rely on the central banker known in some circles as “The Maestro.” The Senator’s joke also hinted at the very real truth that the Federal Reserve chairman’s presence alone — rather than any specific act by the central bank — was enough to soothe investors.”

Continue reading “Column: So long, Mr. Greenspan…”

Column: Google wows the crowd

Here’s a column I posted at on Google’s quarterly results:

“First things first: Anyone who wishes they had bought even a few shares of Google when it went public a little over a year ago, at the now bargain-basement price of $87 (U.S.), raise your hand — the one you’re not slapping yourself silly with, that is.
Plenty of people (including yours truly, if you must know) scoffed at the idea that Google’s stock would take off like a rocket after its IPO. Some analysts at the time were projecting a stock value of $145 a share and a total market capitalization for the company of $25-billion. Dream on, others said (including yours truly).

And where is Google now? Closing in on $350 per share, which would give the company a market value of almost $100-billion — just shy of Coca-Cola and a little behind networking giant Cisco Systems. Shares of Google jumped more than 12 per cent on Friday, after the company announced its quarterly results, results that blew the doors off most estimates.

Of course, one of the complicating factors when it comes to valuing Google is that the search company doesn’t provide a whole lot of information about its business, and doesn’t give forecasts for upcoming quarters, the way most companies do. For the time being at least, that is playing in Google’s favour, allowing it to obliterate even the most positive forecast from Wall Street analysts. Among other things, the search leader seems to be changing a lot of peoples’ minds about the wisdom of a totally advertising-driven business model, and the growth in demand for Internet search-based advertising in particular, and it is growing much faster than the rest of the industry. Continue reading “Column: Google wows the crowd”