Here’s a column I just finished posting at globeandmail.com 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: Ã¢â‚¬Å“God forbid, I would do like they did in the movie Ã¢â‚¬ËœWeekend at BernieÃ¢â‚¬â„¢s.Ã¢â‚¬â„¢ 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 Ã¢â‚¬Å“The Maestro.” The SenatorÃ¢â‚¬â„¢s joke also hinted at the very real truth that the Federal Reserve chairmanÃ¢â‚¬â„¢s presence alone Ã¢â‚¬â€ rather than any specific act by the central bank Ã¢â‚¬â€ was enough to soothe investors.”
Continue reading “Column: So long, Mr. Greenspan…”
Here’s a column I posted at globeandmail.com 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 Ã¢â‚¬â€ the one youÃ¢â‚¬â„¢re not slapping yourself silly with, that is.
Plenty of people (including yours truly, if you must know) scoffed at the idea that GoogleÃ¢â‚¬â„¢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 Ã¢â‚¬â€ 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 doesnÃ¢â‚¬â„¢t provide a whole lot of information about its business, and doesnÃ¢â‚¬â„¢t give forecasts for upcoming quarters, the way most companies do. For the time being at least, that is playing in GoogleÃ¢â‚¬â„¢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 peoplesÃ¢â‚¬â„¢ 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”
Here’s a column I posted at globeandmail.com about RIM’s partnership with Palm:
“For something that seemed like a blockbuster deal, the announcement that Research In Motion would license its BlackBerry email software to handheld maker (and competitor) Palm Inc. did surprisingly little to boost RIMÃ¢â‚¬â„¢s stock price. After spiking by a small amount on Monday, the shares drifted back down to about where they were a week ago, which is about 20-per-cent lower than they were in September, and in fact isnÃ¢â‚¬â„¢t that far off the 52-week low of $60 (U.S.) the shares hit in March. Why would a deal to license its software to Palm — a company that virtually invented the handheld market, and has one of the hottest devices going in its Treo 650 smart-phone — cause such a muted reaction from the stock market?
There are a couple of possible explanations. One favoured by some analysts who follow the company is that this deal has already been Ã¢â‚¬Å“priced in” to the stock, which means that investors were more or less expecting RIM and Palm to do a deal. After all, RIM just recently signed a similar arrangement with cellphone-handset leader Nokia, so Palm shouldnÃ¢â‚¬â„¢t have come as a surprise. ThatÃ¢â‚¬â„¢s difficult to rationalize, however, considering the companyÃ¢â‚¬â„¢s share price is down by about 20 per cent. What else was being Ã¢â‚¬Å“priced in” to the stock that isnÃ¢â‚¬â„¢t being priced in any more? Another possibility is that investors are more concerned with the ongoing litigation between RIM and NTP, the U.S. company that claims it holds a patent on wireless e-mail technology. Continue reading “Column: RIM helps out Palm”
Here’s a column I posted at globeandmail.com on the hype over “Web 2.0”:
This idea was the backdrop for the recent news that Google and Sun Microsystems had decided to work together on… well, something. If Web 2.0 fans were hoping for a blockbuster announcement that would add some fireworks to the concept — and itÃ¢â‚¬â„¢s clear that they were, given the amount of speculation that preceded the Google-Sun press conference — what they got was more of a Ã¢â‚¬Å“damp squib,” as someone put it. Even though the actual news was underwhelming, however (Sun agreed to bundle GoogleÃ¢â‚¬â„¢s toolbar with its Java engine), the two hinted that there would be more, and some observers see Google eventually offering desktop-style applications in addition to its web-based email and satellite photo services. Continue reading “Column: Web 2.0 or hype 2.0?”
Here’s a column I posted at globeandmail.com about Delphi filing for bankruptcy:
“To the ancient Greeks, Delphi was the place where the high priestess of Apollo would foretell the future in return for the right number of gold pieces. General Motors just got a glimpse of its future from something called Delphi too, but this one isn’t an oracle — it’s a bankrupt auto-parts company that GM spun off a few years ago, one that has continued to be a millstone around the neck of the giant company. And this particular Delphi is going to cost General Motors a lot more than a few gold pieces and some incense. In the worst-case scenario laid out by some industry analysts, Delphi’s woes could force the car-maker to file for bankruptcy protection.
Those concerns pushed shares of GM down by almost 11 per cent on Monday, on huge volume, to a new 52-week low. Although the stock rebounded somewhat on Tuesday, it is still down almost 40 per cent from the peak of $42.22 (U.S.) it hit in late July, and is more than 50 per cent lower than it was in January of last year. The car-maker has lost about $15-billion in market value in less than two years, and — in a striking illustration of the market’s perception of this giant company — GM’s market capitalization of a little over $14-billion is now less than 10 per cent of the company’s annual revenue of $190-billion, and also less than the amount of cash GM has on hand, which amounts to about $16-billion. Continue reading “Column: Delphi goes bust”
Here’s a column I posted on globeandmail.com about rumours of a tie-up between AOL and MSN:
“Earlier this year, reports started filtering out that Microsoft and Time Warner were considering a merger of the software giant’s MSN division and the cable and entertainment conglomerate’s America Online unit. Nothing much came of the rumours, however, and sources said later that the talks had fallen apart as a result of disputes over technical issues, as well as the question of who would control the combined entity. Now, the Wall Street Journal and others say the talks are back on, and that the two sides hope to reach a deal by the end of the year — a deal that might even lead to the merged company going public.
There are a couple of ways of looking at this news. One is that such a deal would create an on-line colossus, one with the content provided by AOL and Time Warner, and the reach and muscle of Microsoft — a combination that could easily go head-to-head with both Yahoo and Google. The cynical (or perhaps more realistic) view is that this proposed deal isn’t so much about a merger of giants as it is a marriage of convenience — a partnership between two tired and slow-moving behemoths, one a faded relic that never managed to capitalize on a market it virtually invented, and the other a money-losing oaf that has consistently failed to gain any ground despite spending billions. Continue reading “Column: MSN and AOL to merge?”
Here’s a column I posted at globeandmail.com about rumours of a deal between Google and Sun:
“In the late 1990s, senior executives at Microsoft — including then-CEO Bill Gates — were obsessed with what they saw as the biggest threat to the company’s domination of the software industry. That threat was the combination of a Web browser called Netscape with software called Java, developed by Sun Microsystems. Starting with the infamous “Internet tidal wave” memo in 1995, Microsoft spent a great deal of time and energy trying to combat this threat. Why? Because the software giant saw it as having the potential to dethrone its desktop hegemony, by moving what people did with their desktop PCs onto the Internet.
That threat was defused by a combination of market power and savvy marketing from Microsoft, and also — if the truth be told — by some fumbling on the part of Netscape and Sun. Microsoft started giving away its own browser, and began offering “Web-friendly” software. Netscape was acquired by America Online and gradually became irrelevant, and Sun failed to build on the potential of Java for a number of reasons. Among other things, the company was blindsided by competition from open-source server software and the popularity of the Linux operating system. Continue reading “Column: Google and Sun and the Web”
Here’s a column I posted at globeandmail.com about RIM’s stock falling on its latest results:
“Research in Motion co-chief executive officer Jim Balsillie often gives the impression he’s frustrated by the lack of respect the Waterloo-based company gets, and it’s easy to sympathize. After all, RIM just reported blockbuster sales growth, a huge number of new subscribers and new deals with tech industry leaders such as Intel and Nokia. And what did the stock do? It went south. Not only that, but all anyone can talk about is how Microsoft and Nokia and little upstarts like Good Technology and Seven are going to eat Jim’s lunch.
So what does a company like RIM have to do to get the kind of recognition it deserves as a technology leader?
RIM’s problems actually have very little to do with its technology. Almost everyone agrees the BlackBerry is a great device, and that the kind of end-to-end email solution it provides for companies is second to none. The company continues to sign up telecom partners around the world, and it has new devices either on the market or coming soon that will help bridge the gap between the type of handheld PDA that primarily does email, and newer “smart phones” that do voice, email and other things. Better still, the BlackBerry name has tremendous brand recognition in the marketplace, which is hard to duplicate. Continue reading “Column: RIM investors get nervous”
Here’s a column I posted at globeandmail.com about Palm’s deal with Microsoft:
“Chalk another one up for Microsoft. With MondayÃ¢â‚¬â„¢s widely-expected announcement involving handheld-maker Palm Inc., the software colossus has added to the long list of victories it has won over lesser mortals — a list that includes Netscape Communications, which also pioneered a market only to see it eventually taken over by Microsoft. For Palm, agreeing to use Windows Pocket PC as the operating system on its devices is like Ford agreeing to put General Motors engines in its trucks, and many Palm devotees clearly see it as dancing with the devil. The company may have saved part of its business (although even that is open to debate) but it has likely lost its soul. The next target in MicrosoftÃ¢â‚¬â„¢s sights, of course, is CanadaÃ¢â‚¬â„¢s Research in Motion.
Rumours about a deal between Palm and Microsoft have been flying for the past few months, and according to several reports — including one from a programmer who works at the software giant — the two companies have been working on blending their products for 18 months. In other words, even as a survey last year was showing Palm as the leader in the handheld industry, with 33 per cent of all PDAs shipped in the second quarter of 2004, the company was already in discussions with Microsoft about using its software. Why? Because the PDA company had already seen the writing on the wall, and it spelled out three words: Ã¢â‚¬Å“shrinking market share.” By the second quarter of this year, Palm had just 18 per cent of the market for handhelds. Continue reading “Column: Palm sues for peace”
This is a story I posted on globetechnology.com about “Google-bombing” — in particular, the fact that typing “miserable failure” gets you a link to George Bush’s bio:
“It’s a tribute to the omnipresence of Google that the company’s name is used for a phenomenon that isn’t even specific to Google, but affects almost every search engine company, including Yahoo, MSN and Ask Jeeves. It’s called “google-bombing,” and you can get a glimpse of what it involves if you type the phrase “miserable failure” into Google’s search box, or even just the single word “failure.” The first result that comes up is a link to President George Bush’s biography at www.whitehouse.gov.
This is not a political comment by Google, but a result of the way the search engine operates, which involves ranking webpages based on how many other sites link to them using a specific term (a process Google calls PageRank). If a lot of websites use the word “failure” to link to George Bush’s biography, then Google’s automated engine concludes that his bio is the most relevant result for that term.
Continue reading “Google on “Google-bombing””