To say that AT&T is disappointed with the Department of Justice’s decision to try and block it’s proposed merger with T-Mobile is a bit of an understatement. The company lashed out this week in a 25-page document claiming the DOJ’s claims that killing of T-Mobile will hurt competition shows a misunderstanding of the market, and dismissed competition from feisty young upstarts such as MetroPCS and US Cellular.
Google's primary creed of "Do No Evil" may give comfort to some, but according the New York Times the US Federal Government may need a bit more convincing. "They are not just on the radar screen. They are at the center of it," said Tim Wu, a professor at Columbia University and the author of a forthcoming book on technology monopolies, "The Master Switch: The Rise and Fall of Information Empires." "If you are in the federal government and are interested in antitrust, you are looking at Google."
Scrutiny of the California based search giant was bound to continue mounting as a result of its success, however recent privacy snafus, including the Wi-Fi sniffing issue have only served to further fuel the flames of mistrust between Google and federal regulators. Google executives acknowledge that being under the spotlight is expected given their rapid growth, but maintain that competition on the Internet is still strong and is a mere click away. This argument has kept regulators at bay until now, but it remains to be seen what action, if any the government is considering.
It may be a long forgotten issue for most, but Federal Judge Denny Chin is expected to rule very soon on the amended book publishing settlement inked with authors which could very well set the tone for any further interventions. Google has a tradition of breaking business models in just about every industry it enters, so it will be interesting to see how long this goes unchallenged.
Do you buy the "competition is one click away" argument, or is Google just becoming too powerful to responsibly organize the worlds data?
It’s a challenge trying to parse what a company might be up to. It’s obvious, for example, that Amazon will need to respond to recent events in the tablet PC market to keep its Kindle competitive. But what exact path it might take for this endeavor isn’t necessarily obvious. Unless, of course, you happen to be a keen observer of the want ads.
Michael Calore, at webmonkey, thinks Amazon is working to improve the browser engine of the Kindle, which he likens to “taking a step backwards in time.” According to Calore, a job posting for a “browser engineer” at “Lab126” is a dead giveaway that an upgrade is in the works. Lab126 is the Amazon division that develops the Kindle, and it is on the hunt for a person to “develop “an innovative embedded web browser” for a consumer product.”
Calore suggests that once the iPad hits the market, allowing for a fuller web browsing experience (and the HP Slate not too far behind it), the Kindle will look pretty lame. Looking lame is no way to hang onto market share.
Making money with online video is no easy task, just ask Google. It's king of the hill video sharing service YouTube continues to operate in the red almost 5 years after its initial release, a reality which makes us wonder how anyone without Google's nearly infinite resources could possibly survive in this space. The latest competitor to bite the dust is Veoh, which if you haven't heard of it, was aiming to fill the void of copy protected content that was created when Google purged its archives at the behest of the TV networks a few years back.
The ultimate goal of Veoh was to give users access to major studio content and independent productions, but costly legal battles, primarily with Vivendi's Universal Music Group ended up overwhelming the good intentions of founder Dmitry Shapiro. Veoh had content agreements in place with CBS, ABC, Viacom, MTV, and even ESPN. At its peak the service was hosting almost 28 million users per month, but ultimately was unsustainable. Early investors in the service include some pretty big names such as Walt Disney, Goldman Sachs, Time Warner, Adobe Systems, and even some ex Viacom executives.
On Shapiro's blog he stated the company would file for Chapter 7 bankruptcy protection in response to the difficult economy, and also due to his ongoing legal woes with Vivendi, but the most likely scenario at this point ends with Veoh liquidating its assets and rejoining the internet ether from which all web 2.0 spawns.
Brass’s bone of contention is the way Microsoft handles competition. Despite allocating tons of resources, and employing hundreds of bright, creative engineers, innovation is often stifled, if not outright trampled because there is no centralized mechanism for governing competition and shepherding innovation. Rather, it’s one big cage match, where the entrenched technologies hold sway over the newly emergent, innovative ones. Competition at Microsoft, says Brass, “created a dysfunctional corporate culture in which the big established groups are allowed to prey upon emerging teams, belittle their efforts, compete unfairly against them for resources, and over time hector them out of existence.”
Not so fast, responds Shaw. Yes, it may be true that Microsoft may be slow to innovate, but that’s because so many people depend on Microsoft’s products. Getting in a bit of a dig at Apple, the shadow lurking in this background, Shaw says “For Microsoft, it is not sufficient to simply have a good idea, or a great idea, or even a cool idea. We measure our work by its broad impact.” The delays in ClearType, an example offered by Brass, were due not to limitations on innovation, but were because Microsoft had to be sure it was a good idea before inflicting ClearType on the masses--that it was “innovation at scale.” (For the moment, let’s leave Vista out of this.)
There’s a tit-for-tat over Xbox, Zune, and tablet PCs that make both of these worth reading. In the end, it is possible to side with either Brass or Shaw, or with both. There’s no real dispute over the basic facts. But, like in Rashômon, each sees these facts as telling a different story about Microsoft's capacity to innovate.
Love it or hate it, the $499 entry level iPad is much cheaper than anyone expected. Tablet PC makers which were hoping to ride the wave of enthusiasm Apple was bound to kick up, are now being forced to step back and really question if they have what it takes to compete. Unnamed sources from within Asus and MSI claim they were counting on an iPad that would debut at $1,000 or more, making room for a more powerful and open device for $200-$300 less. Now that the new price to beat is less than half of what they expected, they will need to determine how they will differentiate if they can't win on price.
Apple made a lot of questionable decisions in the design of its new tablet, but its difficult to argue with their business intuition. They clearly understand that in order to create and hold on to early adopters, they will need to lock as many people as possible into the iTunes application ecosystem, even if that means sacrificing their usual fat margins to do it. They are willing to risk making a small profit on the entry level device with the hope that they might convince you to upgrade to a more expensive model when you reach the store, and if all else fails, make up any lost revenue when you come back for accessories or hit up the iTunes store.
The iPad has some pretty serious limitations, sure, but can a $500 tablet PC running Windows 7 really take on Apple?
It’s a fun read, actually. One worth a few moments of your time. Over at the Google Blog Jonathan Rosenberg, Senior Vice President of Product Management, defines what Google means by an open system, and lays out an argument for why open systems “win”.
Rosenberg starts with a definition of an open system. An open system has open technology and open information. Open technology consists of two parts: (1) open source: the release and active support of code; and (2) open standards: adherence to accepted standards, where they exist, and creation of such standards where they do not. Open information, says Rosenberg, is “when we have information about users we use it to provide something that is valuable to them, we are transparent about what information we have about them, and we give them ultimate control over their information.”
Rosenberg structures his support for open source by noting that closed systems, the current model, stymies innovation, harms the industry, and shafts consumers. Such a system, Rosenberg says, creates a competitive advantage by making a product popular, then “milking it” through its product life cycle. All you can expect to see is incremental change, rather than true innovation. Because customers are viewed as ‘captives’, Rosenberg argues that complacency sets in: “If you don't have to work that hard to keep your customers, you won't.”
What’s open source have to offer? Rosenberg says three things: innovation, value, and freedom of choice for consumers. If no single entity has ownership of an idea, then any number of competing solutions can be had. Each new innovation adds to the collective wealth of the industry, which in turn promotes more innovation. Ultimately, consumers are benefitted by this continually churning process of making and offering ‘better’ products or services.
One way to parse Rosenberg’s thesis is to consider the National Football League (NFL). The NFL is careful in the management of inter-team competition, through the use of rules and revenue sharing, so that no team dominates the others, such as the New York Yankees do in Major League Baseball. Overall, all teams ‘profit’ from this relatively even competitive balance. (For example, the Arizona Cardinals appearing in the 2009 Super Bowl, and the New York Giants winning one in 2008.) Rather than manage the Internet in the same way, Rosenberg argues that an open environment will produce the same outcome. And while the process may be “chaotic”, it will also be “profitable” for those who understand it and move well within it.
With over 50 new Android phones poised to hit the market next year its hard to ignore the reality that the platform is picking up not just in popularity, but in variety as well. Some argue the open approach is Androids greatest strength, while iPhone loyalists would have you believe the lack of a singular vision is its biggest weakness. Either way, Google has been able to sit back and observe the changes in the market since the G1 first launched, and the company finally has an answer for even the purist among us, meet the Nexus One. Sporting a speedy Snapdragon processor running on Android 2.1, it also features a 5.0 MP camera, and two microphones to assist in noise cancellation. The hardware itself will be manufactured by HTC, but the phone was designed, and will be sold by Google itself as an unlocked carrier independent device.
The Nexus One represents a pretty significant game changer not just for the wireless industry, but for a multi billion-dollar company that has never sold a single piece of consumer hardware in its history. With so many high profile handsets on the market already Google will need to compete not just with iPhone’s, Blackberry’s, and other Androids, but with the media perception that they are nothing more than a software company. Failure to hit a homerun on their first attempt could end up doing little more than alienating competing companies who just recently adopted Android, and now find themselves in a head to head battle with the OS maker itself.
Leaked Photos on Twitter and a January 2010 release date are pretty convincing evidence of the phones existence, but Google has yet to come out formally to confirm or deny the exact specs. I hate to drag out a tired old metaphor, but is the iPhone killer finally here?
When Rupert Murdoch announced that he was thinking of taking his News Corp web properties out of the Google search index, speculation as to Microsoft and Bing's involvement was rampant. Turns out, there might have actually been something to the rumors for once. According to the folks over at The Financial Times, Microsoft is willing to grease Murdoch palms to go exclusive with Bing, a move that newspapers will no doubt welcome.
The idea is essentially to force Google to pay for content, something it has historically never done. The news certainly came to the disappointment of Google which tends to endorse the "openness of the web", but Google's UK director Matt Brittin told a conference last week that Google doesn't need news content to stay afloat. "Economically it's not a big part of how we generate revenue" he said. In the end Google will likely still gain indirect access to the content by crawling third party websites that link to News Corp stories, but it will certainly impact Google News and start a new and possibly disturbing trend.
Steve Ballmer has admitted that he is willing to spend heavily for many years to make Bing a serious rival to Google, and Rupert Murdoch is but one of many struggling old media mongrels eager to cash in on the competition in search. If the two parties do end up inking an agreement, expect to see Bing advertise heavily as the only place to find The Wall Street Journal and possibly more deals to come.
Will this earn Bing market share? And what effect do you think this will have on the open web?
If you’re a social networking news junky, you’ve likely been getting a kick out the ongoing battle between Facebook and Twitter. The two competing companies have been scrapping away for months now, but Facebook’s vice president of growth Chamath Palihapitiya is ready to call the war in favor Facebook claiming, “Twitter is in the rear-view mirror”. “To focus on a company with 40 million users that is not growing is not a good idea,” he said, citing Hitwise market share data as evidence of Twitter’s slowdown.
Based on the interview it appears Facebook still has a lot of respect for what Twitter has accomplished (imitation is the highest form of flattery after all), but clearly feels Google is the bigger competitor going forward. “Our task it to make sure we innovate and to make sure there’s no new upstart experience that could take users away.” If going after Google sounds like an unrealistic target, it’s worth noting that Facebook currently has over 300 million registered users, followed up by Yahoo at 600 million, and Google at a whopping 900 million.
Palihapitiya claims the future of Facebook lies in redefining the way people surf the web. He claims rather than simply turning to Google to find content, users will consume information largely based upon recommendations from friends. Can you see yourself setting Facebook to your homepage?