An expose on telecom bait-and-switch

I don’t know telecom analyst Bruce Kushnick, but I’m definitely interested in the subject of a new book he has written (and is selling himself using the Internet). In a nutshell, the topic of his book is a scam that the major U.S. telecoms pulled on the American government — and the American people — by effectively promising high-speed, fibre-optic Internet in return for concessions on licensing requirements and other regulations set by U.S. telecom regulators. Then they reneged on their end of the bargain.

Steve Stroh, who has been covering the telecom and networking industry as an independent consultant for some time, has written about Kushnick’s book on his blog, and so has veteran telecom consultant Gordon Cook, and Richard Stastny of the VOIP and Enum blog, and David Isenberg, a fellow at Harvard’s Berkman Center for Internet and Society, on his blog.

Given that kind of support, I’m prepared to believe Kushnick’s version of events has some truth to it, since several of the people mentioned above have said that he has documentation backing up his claims. Beyond that, it certainly sounds like something the telecom companies would do — they may even have believed it when they said it. But the U.S. certainly doesn’t have anything like the 45-megabit-per-second connections that the telcos promised.

And it definitely sheds a different kind of light on their repeated claims that Internet content companies should be paying more for access to their pipes (something my friend Rob Hyndman has written about many times). It sounds to me like U.S. consumers have already paid for it several times over.

Google misses – but will it matter?

Google may be working on a version of the Ubuntu Linux OS, as reported by The Register, but maybe it should be spending a bit more time on a good accounting app — it just missed Wall Street’s estimates for both sales and profit for the latest quarter. The stock dropped by as much as 19 per cent in after-hours trading.

Does that matter to the company’s long-term future? Probably not. But it will likely take some of the shine off for the momentum traders, of whom there are likely a lot. And there were some troubling signs in the numbers at first glance — even if you assume that the analysts’ estimates were inflated (which they likely were). For one thing, the company’s tax rate was substantially higher than expected – 41 per cent instead of about 26 per cent – and costs were also higher than anticipated. Too much money being spent on projects like the lame addition of bookmarks to the Google toolbar perhaps?

One caveat: Even assuming that a majority of analysts are craven weasels (just kidding, guys) it is difficult for analysts to analyze a company that is not only growing at an incredible rate, but which refuses to provide any guidance on future results, or any details on current operations. That’s going to make future surprises even more likely.

Update:

As usual, some of the hysteria that is common with after-hours trading (when there is less volume and therefore more volatility) dissipated on Wednesday, but Google’s stock was still down almost 10 per cent at one point in the morning. Not surprising, given the number of momentum traders that are riding this particular horse. Although UBS has downgraded the stock to “neutral” – in other words, closing the door after the horse has left the stable – Google’s explanation that the higher tax rate accounts for the bulk of the miss seems plausible. And the company has said it will provide more details on that kind of thing.

In the end, there’s no real smoking gun in these results for the Google bears – although my friend Paul Kedrosky notes that it’s worth asking why the tax rate was so much higher than expected. And whatever the answer to that question, Google’s “miss” serves as a healthy warning to investors. As the old saying goes, bulls make money and bears make money, but pigs often get slaughtered.

Cisco buy TiVo? Dream on, TiVo fans

CNet.com has a piece up on its website that talks about how networking equipment giant Cisco Systems might be looking to acquire TiVo, the digital-video recording pioneer. The article, which is labelled “news analysis” — which in the journalism business is code for “speculation” — starts off with Cisco’s recently announced $6.9-billion acquisition of Scientific-Atlanta, one of the largest makers of set-top boxes in the world next to Motorola, and then asks the question “Who’s next?”

One response might be “Why should anyone be next?” The purchase of SA is one of the largest acquisitions Cisco has ever done. The idea that it’s going to rush out and buy something else right away is more than a little wacky. But a better response might be “Why TiVo?” As much as everyone seems to want to see TiVo get snapped up by either Yahoo, Google or Microsoft, I’m not sure that’s as likely as TiVo fans might want it to be — and I think a purchase by Cisco is probably even less likely (The Stalwart isn’t convinced either).

Why? Because — as Rafat Ali also points out at PaidContent.org — TiVo doesn’t really bring anything to the table that Cisco doesn’t already have with Scientific-Atlanta. Yes, it’s true that TiVo (and Replay TV) pioneered the DVR business, and the company has a small legion of devoted fans who love the extra features it provides. But when it gets right down to it, DVRs are a commodity, SA already makes them — including ones that do high-definition, and have interactive features for integration with the Internet (or the ability to add them) — and so there is little or no reason to pay the $500-million or whatever it would take to buy TiVo. For what it’s worth, I think the idea of Cisco buying Nintendo makes even less sense, but maybe that’s just me.

More Google-bashing — this time on Picasa

I don’t want to get into a big Google-bashing rant, after knocking their lame bookmark offering, but Phil Sim of Squash makes a good point in a post today about another Google service: Picasa, the photo-organizing software the company bought way back when. His question — and I think it’s a darn good one: Why is there no online sharing component?

It’s not like certain services haven’t already shown that people really get a charge out of sharing their photos with others, and that this can make a viable business for companies such as, say, Yahoo. So why hasn’t Google, which has warehouses full of servers it could host terabytes worth of photos on with no trouble at all, added an online component to Picasa? One reason could be that Google also owns an instant-messaging/photo-sharing app called Hello, which interfaces with Blogger.com, and it would probably rather people used those tools. But why not have Picasa do it too?

Sometimes the things Google does or doesn’t do make perfect sense. And sometimes they make me wonder what the heck is going on over there in Mountain View at the Googleplex. Get off the Segways, guys, and get with the program.

Google bookmarks — is that the best they can do?

Okay, it’s not as bad as the Google China thing, but I have to say the bookmark feature that Google just released has to be one of the lamest things to come down the Web 2.0 pike since Froogle. I mean, come on. Saving your bookmarks with a toolbar? How 1990s. Sure, you can keep them in one place so you can get to them from anywhere — Yahoo’s only had that for about two years.

Not only that, but I have to say that Google’s implementation sucks, from a whole bunch of different perspectives. One, it relies primarily on a toolbar, which I hate. I don’t need or want another toolbar offering to install itself, and I don’t care how useful it pretends to be. Whatever happened to bookmarklets and plug-ins? I thought that was the wave of the future. Of course, Google isn’t even supporting Firefox with this one yet, so there’s another strike against it. And when you go to the Google site — which you can do if you don’t want to use the toolbar — there’s no way to import bookmarks from a browser or file, or to sort them.

Then there’s the fact that there’s nothing even remotely different about what Google is doing — no digg.com-style ratings, no del.icio.us-style sharing, no integration with any other part of the Google-verse even. Kind of like the company’s blog search isn’t anywhere to be found when you’re searching Google news, which you would think would be a natural (Yahoo seems to think it is, since their search blends both). In other words, a completely ho-hum product. Why even bother?