Wednesday, October 17, 2007

Could Foleo, Based on Linux, Coupled with Google Gears, Become the Future of the PC?

I’m following a series of technologies that are coming to market to displace the aging PC concept. While Bill Gates and Steve Jobs clearly believe the rich PC, as a general use product, represents the best future, I’m no longer so sure. With Apple now being hit with Windows-like attacks and the clear realization that, from a security standpoint, it may be virtually impossible to protect any rich connected desktop client effectively, from an IT perspective, I’m beginning to wonder if it isn’t time for a major change.

This isn’t about changing from Windows to Apple or Linux. This is about rethinking the entire platform and designing it from the ground up so that the things you want to protect remain in more physically secure locations and nothing remains in the field that can’t be instantly deleted or rendered inaccessible.

The Smartphone Model

With the smartphone, in a few weeks, you’ll see the launch of a comprehensive security communications product that rivals RIM for ease of use, and is unmatched in terms of security, IT control, personalization, and capability for this class of device. For some time, we’ve had capabilities on smartphones that exceed what we had 10 years ago on laptop computers in terms of productivity and data access and this gap is closing incredibly fast.

But the issue with a smartphone is that physically it is both too small and too large. It is too small to be a useful computer for document creation, Web browsing or most forms. It is too large to be carried as a phone. This is why many BlackBerry and Treo users also carry smaller cell phones for calls.

But, ask yourself, short of video games, if you can open documents, create and show presentations, manage and create e-mail, search the Web, and even look at pictures and some video and can remain connected, do you truly need a laptop?

Cisco Executives in Brazil Jailed: Cause Could be Brazil Corruption not Cisco Wrongdoing

Cisco was just caught in a tax sting and a large number of executives, with little or no warning, were tossed in jail.

( Bloomberg reports the federal police Web site alleges the U.S. company and its Brazilian partners used offshore companies to evade import duties on networking hardware, evading roughly $824 million in taxes over five years.)

This may not be because Cisco did anything wrong but because the company didn’t give in to extortion, and we need to wait until all the facts are in. This serves as a reminder that having relatively uncorrupt law enforcement is one of the benefits of living in the United States that we probably take way too much for granted.

South America is known for having a heavy bribery and corruption problem, and even there Brazil stands out. I was an internal auditor for IBM when we had a problem there where an executive — and IBM had hard rules against this — was caught in a bribery scandal. It was clear at the time the executive was put in an unwinnable position and made a bad decision largely because he wasn’t given a good choice.

As a result, when I see something like the Cisco problem, I want to understand both sides of the story before I form an opinion. In areas where there is lots of corruption, not going to jail may have more to do with whom you bribe than anything you did or didn’t do. So we need to take a breath and hold for the facts.

U.S. Companies At Disadvantage

The problem is, U.S. companies are between a rock and a hard place in countries where bribery is common. If they don’t bribe, they get nailed to the wall by the local government, and if they do bribe, they get nailed to the wall by our government, making doing business in these countries incredibly risky.

For Cisco, even telling the whole story could be difficult because, in doing business in South America, it may have done some things unacceptable to U.S. law enforcement, making it incredibly hard to defend itself now.

Personally, I think it is probably better not to do business in countries that have this problem, or to work through independent third parties and not establish a presence there, rather than take this risk. In the end, this may be a cautionary tale for any company doing business in South America: The risks may exceed the benefits.

So to understand this, watch what happens next. If Cisco pays a large sum of money, then exits this market without criminal charges, chances are this was a failed attempt at extortion with a rather solid “or else.” If people go to jail and the U.S. Justice Department takes action, then Cisco has a more serious problem.

Wrapping Up

In the end though, I still believe we need a better way to deal with foreign corruption. Either we accept it as a price of doing business, which it is, or we don’t allow U.S. companies to enter these regions without much more U.S. protection.

Upsetting a U.S. multi-national during an election year could be a mistake for Brazil as well and give the Republicans a way to divert at least some attention from Iraq and Iran and onto something else, such as Cisco’s defense. Cisco is one of the most powerful companies in what is still a Super Power and if this doesn’t piss off the Cisco CEO, I’m not sure what will.

This isn’t to say Cisco didn’t do something wrong, but it is are entitled to the benefit of the doubt. And given it is Brazil, I have a lot of doubt.

Cisco has a reputation for being an honest company and this one event, given where it is, shouldn’t tarnish that before the facts are in. Let’s watch this one closely but not jump to conclusions before it is clear, if it ever is clear, who is truly in the wrong here.

Google To $2000/Share? Somebody Muzzle Blodget

Henry Blodget made his name by predicting outlandish price increases for Internet stocks in the late nineties. A lot of people lost a lot of money (or, all their money) by listening to his recommendations. The government charged him with securities fraud in 2003 and he was subsequently banned from the securities industry for life.

But Blodget is a bit of a one trick pony, and he likes to stay in the headlines. So he continues build cases for big valuations of Internet companies. The only difference is he publishes these thoughts on his blogs. And people still listen to what he has to say.

He isn’t always bullish (he’s recently trashed Yahoo and eBay). But he can’t seem to contain his regular predictive outbursts that such-and-such stock is worth massively more than it is now.

When he’s talking about Facebook being worth $6-$20 billion that’s ok, because it isn’t a public stock and no one is going to go out and throw away their life savings. But when he builds a case for Google’s stock to go to $2,000/share, he’s crossing a line.

Remember a couple years back when some analyst floated the idea that Google could eventually be worth $2,000 a share–and was ridiculed from coast to coast? Well, first it’s worth noting that Google is now almost a third of the way there. Second, it’s worth noting that $2,000 a share would mean a market cap of about $750 billion, which–given a reasonable time horizon–just isn’t that far-fetched.

The problem is that Blodget, like all analysts, build authoritative sounding but essentially bullshit predictive models to back up whatever prediction they’ve just pulled out of their ass. When Blodget predicted a massive Amazon price increase in 1998, for example, he used three models: price to revenue multiples, revenue growth assumption, and an earnings multiple growth model. When you read it, it sounds like he really knows what he’s talking about. But he’s really just predicting future growth based on past growth and backing it up with a lot of smoke and mirrors. If the data doesn’t fit or doesn’t exist, a common trick is to use a competitor’s or analogous company’s data instead. One way or another, a model can be built around that headline grabbing prediction.

Blodget builds his Google $2,000 prediction on similar models - in this case he talks about a multiple on free cash flow.

But market conditions change and these models just aren’t capable of taking that into consideration. Anything could derail Google’s current growth rates - a credit crunch, a housing collapse or a recession could all have a big impact on consumer spending and the advertising market, and impact Google massively. The market, over the long run, is fairly efficient at predicting the value of companies. If Google really was going to go to $2,000 per share, it would be priced there already, minus only a discount based on the time value of money. It isn’t, and so if you’re betting that Google is going to $2,000 that means you are betting against the market and all its participants. And all you have to go on are Blodget’s bullshit predictive models.

We are often criticized for being overly optimistic about young startups. That’s worth arguing over, but if we get it wrong at least we’re not moving the market. Venture capitalists do their own due diligence and don’t last long if they place too many incorrect bets. But when journalists start writing about public companies, stock prices can (and do) move, and people can lose a lot of money.

Blodget wants to stay in the headlines, but he has little concern for those that follow his advice. “If it doesn’t happen, don’t come whining to us,” he says in the Google post. That’s a disclaimer of sorts, but it also shows that he’s not all that interested in the fallout that may occur from his words. And if his past predictions are any indicator of Blodget’s ability to pick stocks, a fallout is almost certainly coming.

Update: Well, I sure was wrong. Blodget nails it in a new post valuing TechCrunch at a cool $100 million. My thoughts at Crunchnotes.

New Technorati CEO Has A Challenge Ahead

jalichandra.jpgTechnorati today announced its search for a new CEO was over, with Richard Jalichandra being appointed to the role, some 6 weeks since Technorati’s founding CEO David Sifry stepped down and 5 months since it was publicly confirmed that Technorati was seeking a new CEO.

Prior to joining Technorati, Jalichandra held roles at Exponential Interactive, Fox Interactive Media and IGN Entertainment. Most recently Jalichandra was Entrepreneur-In-Residence at Battery Ventures, an advisory board member at MyYearbook.com and Pixsy, and as an M&A and strategy consultant for several other startups.

The once great Technorati has floundered in recent years as attempts to broaden its product offering resulted in its core blog search product suffering for lack of development and support, all at the same time that Google Blog Search came to the fore. More recently, Technorati started downsizing staff as the approx. $20 million raised over three rounds started to dry up.

As I’ve noted previously, I’ve always had a soft spot for Technorati. When I started blogging in 2002, the only way of tracking the blogosphere was Technorati and perhaps to a lesser extent Daypop, which was never as good. Jalichandra’s challenge will be to focus Technorati on achievable goals, whilst purging the company of the excesses of the past. Technorati’s failed Digg clone WTF (the most unfortunate acronym I’ve ever seen) should be the first to go. Core competencies in blog search, in particular with focus on filtering results from spam blogs must be a priority. Given the new competition from Techmeme on the popular blog list side, a more frequently updating service from Technorati should be on the to-do list, with perhaps more contextual lists; say popular blogs by vertical and filtered results based on link age, for example link popularity over 1, 3, 6, and 12 months, then maybe an all-time popular list would be nice.

If you’ve got any advice for Jalichandra on how Technorati can rise from the endangered list, let him know in the comments.

Yahoo Search Just Got Smarter


Yahoo is adding some major features to its search engine today. For instance, images from Flickr and playable videos are now embedded in the main results page. A search for a major rock band like U2 brings up information from the artist’s Website, along with a list of songs that can be played as 30-second audio streams (courtesy of Yahoo Music).


Do a search for a restaurant or hotel, and results from Yahoo Local come out on top, with links to maps, ratings, and reviews. Type in “bourne ultimatum,” and the top result is a widget from Yahoo Movies with a trailer you can click on, audience reviews, and show times nearest you. Search for “Vancouver,” and the top result is a widget from Yahoo Travel, with links to a guide, hotels, restaurants, flights, and maps. Type in “digital camera,” and you get shortcut results from Yahoo Shopping.

Customized results also come up for searches dealing with health, sports, and events—all without you having to specify what type of search you are trying to do. Instead, Yahoo attempts to figure out your intent based on the search terms and the topics associated with them (Google espouses a similar Universal Search approach, as does Microsoft).

But the most important feature is an Ajax assistant pane that drops down when it detects you hesitating while typing in a search term. It gives you suggestions to complete the keywords, as well as related concepts that you might want to try. So if you type in “energy savings,” it suggests click-able links to related terms such as “energy star,” energy efficiency,” and “thermostats.” And this one is close to home for me. Type in “office sublets” and it suggests “small office sublets in new york city,” since Yahoo knows my zip code.

Yahoo has really nailed guided search with this release—as long as what you are looking for can be found somewhere else within Yahoo. That’s my one pet peeve about Yahoo’s new search upgrade. All of these shortcuts are helpful, but they are not all objective. Most of them (the search widgets, not the keyword assistant) point back to Yahoo.

More Adobe AIR Apps

picture-145.pngLots of new Adobe AIR applications are launching today at the Adobe Max conference in Chicago. In addition to those in the previous post, they include:


—A new Adobe Media Player that lets you watch shows in Flash either online or off and manage your shows in an iTunes-like application. Videos from CBS, PBS, Yahoo Video, Blip.tv, Revision3, and others are available.

—A dedicated eBay Desktop for power eBay users.


—A desktop version of AOL’s Top 100 Videos.


—A video puzzle from Nickelodeon.


—Apps for Salesforce.com.


—A stock-market visualization app called Market Replay from Nasdaq.


To try most of these apps, you will have to install the latest version of Adobe AIR.


Developers who want to create AIR apps can get the second version of the beta, released today, here.

Plug To Be Finally Pulled On Findory

Personalized newspaper service Findory is finally closing, after remaining on life support since January when development ceased.

Founder Greg Linden has now posted that the site will now be shut November 1.

Linden took the opportunity to preach the gospel of personalized news, despite Findory’s failure:

Some day, online newspapers will focus on your interests, building you your own unique, customized front page of news. Some day, search engines will learn from what you do to help you find what you need. Some day, your computer will adapt to your needs to help with the task at hand. Some day, information overload will be tamed.

Strangely, despite a fairly smart looking platform, there has been no apparent effort at selling the site and/ or backend; I would have thought an eBay exit would have suited the site well. Findory will now properly join the TechCrunch Deadpool.

Playyoo Offers Peek Of Its YouTube For Mobile Games

playyoologo.jpgLondon, England based Playyoo will today announce the launch of its Playyoo Game Contest and give a sneak preview of its community-based platform for mobile casual games at the Adobe MAX event in Chicago.

The Playyoo Game Contest is open to independent mobile game developers using Adobe Flash Lite; prizes include cash and promotional goods. Winners will be selected by Playyoo members based on download popularity and user ratings as at February 28, 2008.

Officially launching in December, Playyoo will offer a sort of YouTube for a mobile gaming that offers free games for mobile phones, user-generated content, social interaction and personal expression. Features will include:

  • A “Easy discovery and download process” that will allow mobile phone users to find games of interest through the Playyoo platform. The site will provide personalized recommendations based on each user’s preferences and those of friends.
  • Game creation tools that will allow users with no experience to design their own games
  • Social networking features that will allow developers and users who interact with others

Playyoo promises an interesting offering that in part seems to be a logical, interactive step forward from the tried and million times cloned YouTube model. Playyoo will compete directly against Greystripe, another company offering free mobile games, but with licensed product as opposed to UGC (see our previous coverage here). I suspect there will be room in the market for both models, the interesting part to watch will be seeing which model becomes the more popular over time.

Private BuyOut Of Ancestry.com For $300+ Million

Spectrum Equity Investors has led a $300 million investment to acquire a majority interest in Provo Utah-based The Generations Network (the parent company of Ancestry.com, MyFamily.com and other sites) according to a source with knowledge of the deal.

The Generations Network competes with a number of new Internet startups that we’ve recently covered. Its Ancestry.com site competes with Geni and MyHeritage. MyFamily.com competes with Story Of My Life, Our Story and others.

Geni’s last round of financing valued the company at $100 million. But none of those competing sites, or even all of those sites aggregated, have caused any financial pain yet for The Generations Network. The company is pulling in $150 million or so in yearly revenue and is hugely profitable according to our source.

This is a liquidity event for many or most of TGN’s shareholders, although it is apparently not a complete buyout. Employees and possibly some outside shareholders still have equity in the entity, which is almost certainly preparing for an IPO or other larger liquidity event.

The most recent Comscore data says TGN had 8.2 million unique worldwide visitors in August. They’ve raised $95 million to date, although the last round of financing was closed in 2001.

The company is not responding to requests for comment.

Ezmo: Another Online Music Application Nibbling At iTunes

ezmo_logo.pngWe’ve come a long way since the record industry sued MP3.com in 2000. Listening to copies of your digital music online is quickly becoming commonplace and Norway’s Ezmo is another web application helping push the trend.

Ezmo, like Anywhere.FM, is a clone of iTunes on the web that just came to the United States. Their Flash based player lets you upload your music to the web, organize it into playlists, and share with your friends (just 10). Unlike Anywhere.FM, Ezmo lets you not only pull music from iTunes, but upload music from your Windows Media Player and Winamp music collections too. However, Anywhere.FM still wins out in my mind for the time being. I find it easier for me to use because its user interface stays truer to iTunes. Their buddy radio is also an easy way to consume new music on par with Last.FM. Ezmo only lets you share music with ten friends.

The two companies compete with a host of other online music locker/streaming services like Mp3tunes, Maestro, imeem, Streampad, Songbird, and MediaMasters.

However, as labels and artists free themselves from DRM, sites like these open up a way around iTunes’s stranglehold over digital music sales. DRM-free music is compatible with the extremely popular iPod, which could turn these sites into another point of sale for digital music on the device (unless they become free). Anywhere.FM has already let listeners buy songs they listen to through Amazon’s new digital downloads service. Add to that a compelling simplicity missing from older online sites (Yahoo Music, Rhapsody) and these might be the type of convenient services Ian Roger’s is looking for.

ezmo_screen.png

Weather Derivatives Provider WeatherBill Takes $12.5 Million More

San Francisco-based weather insurance site WeatherBill has taken $12.5 million in a round led by New Enterprise Associates and Index Ventures. Original investors Allen & Company, Atomico Investments (Skype founder Niklas Zennstrom), del.icio.us founder Joshua Schachter and Howard Morgan also participated.

Barney Schauble, a partner at Nephila Capital and WeatherBill’s risk capacity partner, will join WeatherBill’s Board of Directors. Total funding for Weatherbill to date is now $16.5 million.

WeatherBill was founded by former Googler David Friedberg. The company offers weather insurance policies to businesses - such as ski resorts, farms, airlines, construction companies, and amusement parks - with more than $1 million in net worth that have suffered losses due to unfavorable weather in the past.


Users choose a weather station via a Google Maps mashup and choose whether you want it to pay out for each hot, cold, rainy or dry day. Temperatures are set by the user by degrees and precipitation by inches.

WeatherBill hedges their own risk via their weather algorithm and also sells their risk on the back end to a number of hedge funds, in theory delivering a guaranteed profit regardless of the weather.

CEO David Friedberg says that Weatherbill has hundreds of customers and faces such high demand that it needs to bring more people aboard to increase capacity. The site has launched not only in the US but Canada, the UK, the Netherlands, Spain, Germany, and Norway as well.

See our previous WeatherBill coverage here and here.

If Only Users Were Gold: Skype Hits 10M Simultaneous Users Mark

Skypehas some more encouraging news following yesterday’s announcement that it has teamed up with MySpace to provide that social network’s users with free Skype calls.

Early this morning, 10 million users were connected to the Skype global network at the same time. That’s a tenfold increase over their celebration on October 20, 2004 of having 1 million simultaneous users.

However, in light of the recent bad news concerning the state of Skype, you may want to hold the applause and remember that lots of users don’t always translate into lots of money.


Toplist