Google Gears Down for Tougher Times - WSJ.c

http://online.wsj.com/article/SB122826503489174369.html#project%3DGOOGLE0812%26articleTabs%3Darticle

Following up on the article that Jerry posted, this is just one on the reasons why the recession that we are in will be worse than it should be.  This is one of those reactions that is made because others are making similar moves.  I don't disagree with that idea that Google spends a lot of money on perks, along the lines of SAS, but Google is not the company that needs to worry about its business or change things because things are difficult.  Would Google have changed its ways if its stock price was at 600?  Not a chance, so why make the change today?  Why show weakness?  Why act like every other company?  Google has over $8B in cash, more than it has ever had and not a penny of debt, so why change things now?  Why change the culture?  Why even give employees the thought of leaving? 

I know I pose a lot of of questions but I just don't understand why Google would changes its ways.  Times are tough but Google does not need to change.  It needs to spend more and conquer when competitors are weak.  If one talented person left because he/she thinks Google is becoming too corporate or changing who they are, then it is a bad decision.  Of course I am a bit bitter as well because Google does not need to add to GDP declines and the economy contracting, not with $8B of cash and more coming in every day.  Spend Spend Spend Google, don't add to the weakness in the economy, or show any weakness to your employees or competitors>

Knetwit: Understanding Napster from the other side

http://profkane.wordpress.com/2008/11/12/knetwit-understanding-napster-from-the-other-side/

In response to Professor Kane, I agree there is something very strange about this. People share the work of the teachers, which is probably technically property of the universities, and not only does Knetwit make money on the model but so do the students who post the information. I didn't completely check at the websites' ins and outs but found out that students earn "Koin" by submitting notes and for inviting new members. The Koin can be redeemed for products in the Knetwit store (Tvs, Ipods, beverage coolers etc) or for cash. Users also build up different levels, is this like the blog rankings? It looks like Carnegie Mellon has the most users or is it cheaters. This really is crossing the line in my opinion. What is the next step? Posting past exams? Selling papers? Universities should keep a close eye on the website. I was at least happy to see that there was only one BC student that was a member. When asked on the comment board why he was doing it he responded to the reporter $$. So proud

Why Tech Won't Deflate

http://www.forbes.com/technology/2008/11/03/tech-bubble-deflate-tech-enter-cx_ag_1103forrester.html?feed=rss_technology

The article is written by Andy Greenberg and is essentially an interview of Forrester Research's CEO George Colony. Colony argues that although IT cutbacks will begin immediately (Q4) and tech companies will feel the impact in 2009, it won't be as painful as it was in 2001 (for tech ). Technology is less about hype and more about day-to-day use and integration into the supply chain and socially. In addition IT spending increased only 5% compared to 12% in 2000 and much of which was complete nonsense Y2k spending. He has some other interesting thoughts about the valuation of Facebook (an investment by MSFT to stop its employees from going to FB) and how social networking sites will become more valuable in a recession. Interesting points by I do not particularly agree with his feeling on tech.

My thoughts

1) A lot of tech is built on ad spending and that is a major problem. The largest buyers of advertising are autos, financial services and retail, three sectors that are getting destroyed. Ad budgets are being cut and dramatically. Advertising companies here in Boston are closing up shop so who is going to put the orders in with the tech companies? Now that the election is over political dollars will be gone as well. There is an argument that online is cheaper than TV etc however ad spending will be down everywhere and the tech/media companies will feel the pain.

2) In 2001, we didn't have the job losses or a global recession, only a tech bubble. We are now in a prolonged recession and capital budgets are coming down and fast. IT spending is usually a large piece that can be easily be delayed. Companies are scared and cutting spending as fast as they can.

3) One of the largest buyers of IT are the Financial companies. Financials are disappearing or consolidating faster than anyone could imagine. They are cutting a massive amount of jobs, cutting spending, and that means IT will be slashed. PCs, handsets, servers...you name it, will be down and hard.

4) Microsoft Vista- How much is Vista gonna cost not only MSFT but also the industry? Vista has been a disaster and now with a recession, companies are sure to wait and what could be a while. Are we in the midst of a change? Will Microsoft no longer be the system of choice?

5) In addition with so much free on the web why would any company pay for socialtext? Either build it internal or use the free web services. Why pay?

I understand that this is much different from the tech bubble however in many ways it is much worse. This could be prolonged fundamental weakness which could do some damage to the tech industry.

Microsoft Heads into the Clouds w/ Dell

http://www.microsoft.com/presspass/features/2008/oct08/10-29SSTools.mspx

http://www.theregister.co.uk/2008/10/29/dell_does_azure_servers/

It finally happened. Microsoft announced it joined the party. At Microsoft's Professional Developers Conference it unveiled Azure, its new cloud O/S and other developer services. Developers will be able to host and build online services. Azure is expected to compete with Amazon's EC2. I can't say that I completely understand how this works but this is ceratinly a change for Microsoft. It also sounds like simple versions of its office suite will also be available for free. Microsoft? Really? I'll have to find out more information about all of this.

It is also interesting to note that Dell was picked as the sole provider of the hardware infrastructure and data services for Microsoft. The unit of Dell that will be providing the service was specifically created in 2006 to "chase the cloud-computing -Web 2.0-utility computing opportunity." This unit is still small with only 200 employees but it is chasing 30 customers (including Google). It sounds like this deal is pretty big for this unit and I'm sure for Dell overall. Is this move sort of like what IBM has done? Piecing out of the personal computer business into corporate network/hardware and business services/consulting? It will be interesting to see what this amounts to for Dell and Microsoft.

Boston to get own social networking website - The Boston Globe

http://gdw1blog.blogspot.com/2008/10/boston-to-get-own-social-networking.html

In response to Greg's blog and the Boston.com article -

I'm really struggling with the idea of another social networking site, especially since Menino endorses it and is chairman of the board. Will it really be a useful tool or is this just Menino setting himself up on a board as a part of his retirement plan? I was impressed he was able to get some high profile business leaders on the staff which should help, but could this be a million dollar goof like Greg alluded to? Notables on the board include the CEO of Boston Properties, Chairman/CEO of State Street, President/CEO of BNY Asset Management, as well as executives from Gillette (P&G) and Fidelity. There are also some high profile education leaders, such as the Presidents of BU and Northeastern and the Dean from Harvard Business School. Notably absent is any representation from The Boston College. Not surprising though as Boston hates that elite school out in Chestnut Hill.

How will this be useful? Don't we already have enough social network sites? How will people connect on this website? I would assume through a larger Boston network (done on Facebook), through schools (done on Facebook/LinkedIn), and through clubs and groups (done on Facebook/LinkedIn). I just feel like this is a gigantic waste of money. All of this can be done through what is out there. Perhaps they could have just created a group called Menino's Mob on Facebook. I am a bit frustrated because I feel that social networking is getting a little crazy. I understand its usefulness for connecting when needed but do I really need to know that Joe is "nervous about tonight's game" or Jen is "giving her daughter a bath." I think I just needed to vent a little bit especially after being at the BC game on Saturday and finding out that my friend's mom was on Facebook (and her daughter suggest that she friend me). Of course on Sunday I was on the site and Facebook suggested I might know my friend's mom. Wait, maybe this new site is the answer. This can be for all of the parents in the Boston area so they can play/network and stay out of their children's way. Good Luck Menino.

Web 2.0 comes to my company

I was looking on my company intranet site and the top headline was, "MFS extends voice with iTunes, RSS feeds." MFS has actaully joined Web 2.0. My first thought was that I was glad I knew what they were talking about but then I was proud that MFS has stepped in, although probably at the trough of disullusionment. A montth ago, my company starting posting podcasts on iTunes for free. The podcasts are market commentaries and investment outlook pieces that are available to everyone. More recently, MFS began offering RSS feeds from the company website that investments advisors can sign up for. The article even mentions how one can utilize RSS feeds through a reader and mentions GoogleReader. Even my company is pushing Google.

So what does this do for my company? It is another way that it can extend its voice to advisors and to investors, and more importantly in an very difficult time like present. It can launch podcasts that advisors can use to help educate their clients and it also place a face behind the name. To most investors, a mutual fund company is just one of many but if investors see and learn from podcasts, and keep up to date from MFS RSS feeds, perhaps those investors will keep investing with MFS and spread the word to others.

I wonder what Web 2.0 tools my firm will tackle next

Google making its way into everything

http://www.pcworld.com/article/151396/faq_what_tmobiles_new_g1_phone_will_do_for_you.html

I have to admit, I am a big Google fan. I use Google a hundred times a day. I am a Gmail user and thus naturally went on to use blogger and Google reader. Part of the reason I stuck with Google products was the ease of one login. So far this has worked well but I haven't really played around with blogs or RSS enough to see if they are the best, but sometimes the first is the one that takes. Now comes the Google phone. It certainly is late to the party or is it?

Handsets have been around for 10 years but only in the last 2 or so have smart phones really taken over. Crackberries and Palm ruled the early universe and one of them still does. Of course now we have the game changing iPhone. It turned a business use product into multimedia and communication play station. I'm actually a blackberry user and am struggling to give it up. I just hate with a passion the iPhone's touch screen keyboard and I am not the minority in this camp. Many blackberry users feel the same way. In response to the iPhone, RIMM announced the Blackberry Bold, but where is it? It launched in Canada and the UK but continues to be delayed in the US. Another problem is the price tag is expected to be much higher than the iPhone. So is RIMM slowly losing customers? RIMM is also planning on launching a touch screen version like the iPhone but at this point it could be a very long time. So what now? Enter Google...

The Google G1 smart phone hits the market and officially announced its launch today. What is it? A touch screen smart phone with most of the same qualities as the iPhone but most importantly a slide out QWERTY keyboard. Another selling point is an attractive price of $179.00, slightly cheaper than the iPhone and much less than the Bold's expected price of $299.00. Obviously it is too soon to see the response to the G1 phone but this could be a giant step for Google. It is another launching platform for its software (I wonder if Chrome is the browser) and potentially an extension into a new business to diversify away from the advertising model. I would hope that the quality is at a high enough caliber so that it creates a buzz and further propels Google to the next step but it might want to be careful. Microsoft has tried these kind of things...music, gaming etc and some haven't been well received. I give Google a pat on the back for the design, timing and price. Who knows, maybe G1 becomes the next blackberry and Blackberry turns into Palm.

Best Buy to acquire Napster for $54mm

http://www.marketwatch.com/news/story/best-buy-acquire-napster-54/story.aspx?guid=%7B08814974%2DC2C6%2D4134%2DBAE6%2DAC9651B16AB8%7D&dist=TQP_Mod_mktwN

BBY is buying Napster? Is this the late 90s before the lawsuit? Does BBY really think Napster can be meaningful in this world? 700,000 members? More people go through the BBY NYC store in one day (ok that might be a stretch). Obviously AAPL is enormous in this business, then you have multiple other players such as AMZN, YHOO, WMT, AOL etc. Is this Blockbuster/Netflix all over again? It seems like BBY is getting into the wrong game, especially with MSFT recommitting to Zune and its music service. Realistically this is a week of cash flow so it is peanuts to BBY but I just wonder why it would want to get into this business? I guess it could try to sell music players and the service together or use it as a promotional item with the sale of Zune or a Sony MP3. Sounds like a stretch and could backfire and tickoff its suppliers like AAPL, MSFT and DELL. I guess we'll see how this develops.