Steve Clemons praises the taxpayer support of high-tech research in New York state.
New York has already invested $620 million of a planned $1 billion to create an imaginative network of research and development incubators - dubbed "the Empire State High-Tech Corridor."...Contrast the energetic New York program with the disappointment among business and labor advocates in Ohio when voters last November narrowly defeated a $500 million state bond issue to fund pro-growth R&D in the state.
If government takes over, what used to be the most dynamic sectors of our economy will wind up looking like our least effective industry.
Brother Ernie wonders how Apple can convince people that an iPod that can store thousands of songs should be filled at a cost of 99 cents per song.,
Something's got to give. I don't think that it will be digital storage in which advances continue to outpace Moore's Law. I don't think it will be people's expectations. Thus, it is going to have to be the ala carte pricing point. However, I think the only realistic ala carte pricing point is going to be in the micropayments realm, which is unlikely to work. Thus, a subscription-based model will be the only likely, voluntary solution.
My essay on technologies that perennially disappoint.
- Micropayments
- E-books
- Speech Recognition
- Video Conferencing
- Social Networking Software
- Virtual Classrooms
Surely, if this is successful as a movie...
the scene where a Roman soldier plunges his spear into Christ's side is, I am sorry, almost like something out of Monty Python. The soldier and those around him shower in the water and blood that cascades out of Yeshua's body.
Here's a dumb question. Why is voice over IP a business? I mean, email over IP is not a business. Web over IP is not a business. Video over IP is not a business. Why is voice over IP a business?
Clearly, some people think it's a business.
The company expects to have 1 million businesses and homes signed up by the end of 2005, said Cathy Martine, AT&T senior vice president of voice Internet services and consumer product management.
I mean, if you've developed a hack that routes voice bits to a telephone, then bully for you. But why don't you just sell me some equipment that takes advantage of that hack, rather than make me pay you $35 a month to use it?
Maybe AT&T's angle is a "quality of service" guarantee, using their proprietary network. Otherwise, I can't see getting the monthly fee to stick.
There is one governance problem that vexes me, however; namely, why are Subway stores owned by franchisees, while Starbucks stores are owned by the corporation.
Starbucks has an unusual real estate strategy that involves "flooding the zone." They are willing to have several stores near one another. That is the opposite of traditional franchise fast food, in which territory is carefully carved up.
The theory of "flood the zone" is that it is better for the corporation to have a lot of franchises in one territory, even though they appear to compete with one another. You need a corporate ownership to implement such a strategy--you could never convince individual franchise owners to do it.
In 1993, I gave America Online a brief trial. But everywhere I went, I found banal flirting rather than information. At one point, I remember typing in, "I'm too old and too married for this service."
I'm still married, and I'm ten years older, so I don't think I'll try AOL's latest venture.
Love.com members can browse profiles, find others who are online and available to IM, and can immediately initiate chat sessions with them.
To me, it sounds like he's got his mouth most of the way up the rectum of the music distributors. I don't buy this line, for example.
After talking to a lot of people, this is my conclusion: A young artist gets signed, and he or she gets a big advance -- a million dollars, or more. And the theory is that the record company will earn back that advance when the artist is successful.Except that even though they're really good at picking, only one or two out of the ten that they pick is successful. And so most of the artists never earn back that advance -- so the record companies are out that money. Well, who pays for the ones that are the losers?
The winners pay. The winners pay for the losers, and the winners are not seeing rewards
I just flat-out do not believe that the recording industry gives out million-dollar advances to unproven artists every day of the week. Once or twice a decade, maybe.
I believe that the venture capital industry works this way--the winners have to support the losers. But I don't think of unproven musicians as getting big money up front the way that entrepreneurs get money up front from VC's.
My guess is that more of the costs in the music industry are in the distribution system itself--shipping the CD's, maintaining inventory, handling stuff that gets returned from the stores unsold. My guess is that over-sized advances to poor-selling musicians is not such a big line item in the overall expense account of the big music publishers.
I know nothing about the music industry. I'm willing to be corrected by a credible source. It has to be somebody I trust more than Steve Jobs.
According to this article,
Spammers can make lucrative living even though only 50 in every million people respond to unsolicited commercial email.
Many geeks drool over PDA's. I don't own one, and I've never been tempted. So I always like a story that suggests that I'm not alone.
PDA sales are flat, and it seems pretty clear that the future for mobile devices or whatever is with wireless. Sooner or later almost every handheld will be able to wirelessly connect to the Internet in some way or another.
I like a mobile phone. And I think I would like a small laptop, like the Sony TR1A or TR2B or whatever the heck it is. The in-between form factor does nothing for me. If you want a screen that I can put in my pocket, I think you had better make it in the form of goggles.
Zimran Ahmed has thought about the issue a lot.
the RIAA has also begun to license music for various online systems, and they do not seem to be very exclusive about who they offer distribution rights to. This suggests that copyright holders do, in fact, hold all the cards and they want to commodify the distribution and hardware parts of the stack down to marginal cost so they can re-licence their content at 100% margin.
Joe Chung gets its right, I think.
I’m fairly certain that a would-be angel investor has better odds of making a killing by taking his or her $50,000 to a Vegas roulette table and smacking it all down on 22. Yet over countless lunches between friends, family, coworkers, roommates, and friends and family of all the above, tens of millions in angel money are invested each year, providing vital cash to embryonic startup companies around the globe.
Most forms of stock market investment also are ego plays. The only rational way to invest is to buy and hold index funds. But do people do it? No-o-o-o.
I think that if you're going to do angel investing, my advice is to be prepared (a) to spend a lot of time with the entrepreneurs--so you really don't want their personalities to be grating; (b) to be able to explain to your spouse why you threw away money on such a stupid, no-hoper business idea.
Kevin Werbach thinks that his Treo is close to convergence Nirvana.
Motorola's latest fully integrated phone module for hardware manufacturers measures 16 by 20 by 1.4 millimeters. That's about the size of a US nickel. We'll see phone functionality popping up in handheld gaming devices, portable music players, and other places that used to be completely different markets. When converged devices were either hulkingly large or pitifully incompetent at some of their functions, they were the domain of gadget freaks and early adopters. As the "good enough" threshold is passed, they will become the baseline standard.
This is not exactly breaking news, but once upon a time there was this company called Netscape that thought it could beat Microsoft. 'Jane Galt' reviews the episode, in response to a write-up by Steven den Beste. They both make the argument that Netscape should not have been so brazen about being out to create a new computing platform.
If they wanted to be the next Microsoft, Netscape should have looked more closely at how Bill Gates did it -- he kept his mouth shut until it was too late for IBM to respond.
Second, it is not clear that Netscape's key backers cared whether or not Netscape won the platform war. If you're Jim Clark or Kleiner-Perkins, you can make a lot of money by convincing Wall Street that you are going to be the next Microsoft, even if you have no way of achieving that objective. So you "moon Microsoft" to pump up the stock, and then sell it. I think that there was a lot of that going on with Netscape.
Which brings me to what I think is the biggest myth about Netscape, which is that they were a great engineering company. They were a crappy engineering company. Their web server software, which had the biggest potential for earning revenue, was so bad that it got no traction even though for a couple of years there was no meaningful competition. The Netscape web site did not even use Netscape's proprietary scripting language--the Netscape webmasters could not deal with all the bugs. The company would not even eat its own dogfood.
Netscape was what economist Burton Malkiel used to call a "Castle in the Sky." In the early editions of his book A Random Walk Down Wall Street, Malkiel used that term to describe a stock that fires the investor's imagination. Netscape was conceived, designed, and executed as a "castle in the sky." There was no foundation.
The Wall Streeters that Eliot Spitzer and other crusaders are going after are petty criminals. The multi-billion-dollar con artists, like John Doerr and other venture capitalists who created the castles in the sky, are untouched.
Tyler Cowen dopes out the proposed merger between Sony and BMG.
This is a desperation merger in a fading industry. The real "industry sector" includes file sharing, once you count that, and the accompanying zero price, the concentration issues do not look so bad. On the other hand, shareholders should not worry if they don't get regulatory approval. I would expect a mess more than any significant cost savings, as the merger does not address the underlying problems faced by either company.
I think that the term "desperation merger" is generally right. There are a lot of desperate media companies out there, of all sizes. I expect to see contraction in the number of TV stations, the number of radio stations, the number of music distributors, and so on. Internet-based media will grow, and traditional media will struggle.
Amazon has had a good quarter. It had sales of $1.13 billion, up one-third from a year ago in the same period. It earned $15.6 million on those sales, which translates to 4 cents per share, or 11 cents based on the accounting method Amazon uses.
My first blog was something I called "The Internet Bubble Monitor," which I set up in December of 1999. None of the companies that I put onto the monitor had any profits. I left Amazon off the monitor, and instead I focused on Yahoo! and some other companies that have since gone bust.
I think that with a retailer, you are better off using a price-to-sales ratio than a P/E ratio. Retailers operate on high sales and thin margins. If a retailer can increase the profit margin from 1.0 percent to 1.5 percent, that is a 50 percent boost in profits, which may or may not last.
If I read the numbers correctly, Amazon is showing a ratio of profits to sales of roughly 1.5 percent. As one of my commenters points out, the Christmas season matters a lot in retail. If Amazon can lift its profit margin in the fourth quarter while increasing sales, my guess is that its shareholders will be happy.
Look, the stock could be overpriced. But there is at least some probability that its performance will justify its current stock price. In 1999, the bubble stocks had no chance whatsoever of obtaining sales and profits to justify their stock prices.
