Column: Google and Sun and the Web

Here’s a column I posted at globeandmail.com about rumours of a deal between Google and Sun:

“In the late 1990s, senior executives at Microsoft — including then-CEO Bill Gates — were obsessed with what they saw as the biggest threat to the company’s domination of the software industry. That threat was the combination of a Web browser called Netscape with software called Java, developed by Sun Microsystems. Starting with the infamous “Internet tidal wave” memo in 1995, Microsoft spent a great deal of time and energy trying to combat this threat. Why? Because the software giant saw it as having the potential to dethrone its desktop hegemony, by moving what people did with their desktop PCs onto the Internet.

That threat was defused by a combination of market power and savvy marketing from Microsoft, and also — if the truth be told — by some fumbling on the part of Netscape and Sun. Microsoft started giving away its own browser, and began offering “Web-friendly” software. Netscape was acquired by America Online and gradually became irrelevant, and Sun failed to build on the potential of Java for a number of reasons. Among other things, the company was blindsided by competition from open-source server software and the popularity of the Linux operating system. Continue reading “Column: Google and Sun and the Web”

Column: RIM investors get nervous

Here’s a column I posted at globeandmail.com about RIM’s stock falling on its latest results:

“Research in Motion co-chief executive officer Jim Balsillie often gives the impression he’s frustrated by the lack of respect the Waterloo-based company gets, and it’s easy to sympathize. After all, RIM just reported blockbuster sales growth, a huge number of new subscribers and new deals with tech industry leaders such as Intel and Nokia. And what did the stock do? It went south. Not only that, but all anyone can talk about is how Microsoft and Nokia and little upstarts like Good Technology and Seven are going to eat Jim’s lunch.

So what does a company like RIM have to do to get the kind of recognition it deserves as a technology leader?

RIM’s problems actually have very little to do with its technology. Almost everyone agrees the BlackBerry is a great device, and that the kind of end-to-end email solution it provides for companies is second to none. The company continues to sign up telecom partners around the world, and it has new devices either on the market or coming soon that will help bridge the gap between the type of handheld PDA that primarily does email, and newer “smart phones” that do voice, email and other things. Better still, the BlackBerry name has tremendous brand recognition in the marketplace, which is hard to duplicate. Continue reading “Column: RIM investors get nervous”

Column: Palm sues for peace

Here’s a column I posted at globeandmail.com about Palm’s deal with Microsoft:

“Chalk another one up for Microsoft. With Monday’s widely-expected announcement involving handheld-maker Palm Inc., the software colossus has added to the long list of victories it has won over lesser mortals — a list that includes Netscape Communications, which also pioneered a market only to see it eventually taken over by Microsoft. For Palm, agreeing to use Windows Pocket PC as the operating system on its devices is like Ford agreeing to put General Motors engines in its trucks, and many Palm devotees clearly see it as dancing with the devil. The company may have saved part of its business (although even that is open to debate) but it has likely lost its soul. The next target in Microsoft’s sights, of course, is Canada’s Research in Motion.

Rumours about a deal between Palm and Microsoft have been flying for the past few months, and according to several reports — including one from a programmer who works at the software giant — the two companies have been working on blending their products for 18 months. In other words, even as a survey last year was showing Palm as the leader in the handheld industry, with 33 per cent of all PDAs shipped in the second quarter of 2004, the company was already in discussions with Microsoft about using its software. Why? Because the PDA company had already seen the writing on the wall, and it spelled out three words: “shrinking market share.” By the second quarter of this year, Palm had just 18 per cent of the market for handhelds. Continue reading “Column: Palm sues for peace”

Column: What is Google up to?

Here’s a column I posted at globeandmail.com about Google’s Web plans:

“First eBay, and now Google. The on-line auction network dropped a bomb on the tech sector last week by announcing its takeover of voice-over-Internet provider Skype for somewhere between $2.6-billion and $4.1-billion (U.S.), and now there are rumblings that Google is not only about to roll out a wireless service of some kind, but is also putting together its own optical fibre network — something Web commentators have dubbed GoogleNet.

Is Google planning to become a virtual phone company, combining all the “dark” or unused fibre it’s buying with its new Google Talk service? Does it want to roll out Wi-Fi access across the U.S. — or even around the world — to make it the de facto Internet provider for mobile surfers? Or does it just want to control as much of the Internet as it can, so it can monitor all your web traffic and serve up ads wherever you are? Perhaps all of the above.

One thing is certain: Google has big plans, and they don’t just involve search. And not only is its market value closing in on $90-billion — which puts it ahead of Hewlett-Packard and Nokia (not to mention SBC Communications, the largest telco in the U.S.) and just behind Time Warner and wireless telco Verizon — but it also has $4-billion in cash it just raised from a stock offering. That’s more than enough money to finance some interesting investments. Continue reading “Column: What is Google up to?”

Column: Telcos drag their heels

Here’s a column I posted at globeandmail.com about number portability:

“It’s a simple enough request, at least from a consumer’s point of view. You’re planning to switch from using Rogers as a cellphone service provider to Bell, or from Bell to Telus, and naturally you would like to keep your phone number, so that all your friends and co-workers will know where to reach you. It would be easier if there was a national telephone directory for cellphone numbers, but there isn’t (that’s a story for another day). So you ask to keep your number. And what is the phone company’s reply? Oh, we can’t do that, sir. Why not, you ask? After all, they do it in lots of other countries, including the U.S. and Europe, don’t they? Maybe so — but we don’t.

After years of watching other jurisdictions get wireless number portability, the federal government stepped forward earlier this year and said that it wanted the broadcast regulator to “move expeditiously” to implement the feature. Last week, the Canadian Wireless Telecommunications Association released a position paper prepared by PricewaterhouseCoopers, grandly titled Implementation of Wireless Number Portability: Setting a New World-Class Standard, in which the wireless companies said that they would be ready to start offering portability just as soon as they could. And when might that be? In 2007. Continue reading “Column: Telcos drag their heels”

Column: eBay tries a Hail Mary

Here’s a column I posted at globeandmail.com about the eBay takeover of Skype:

“There’s only one real question that springs to mind in the wake of eBay’s takeover bid for voice-over-Internet provider Skype — which could cost the on-line auction company up to $4-billion (U.S.) — and it is this: Is the dot-com bubble back, or has eBay chief executive officer Meg Whitman lost her mind?

As is typical with such deals, there was plenty of talk on Monday about the “synergies” between the auction provider and the VoIP company started by Swedish entrepreneur Niklas Zennstrom — who also co-founded the notorious Kazaa file-sharing network. Ms. Whitman, for example, talked about “leveraging” Skype’s software and services along with eBay’s on-line payment service PayPal to create an “unparalleled e-commerce engine.”

Even if you agree that there are synergies between the two companies, however — and that takes a little thinking outside the box, not to mention a few leaps of faith — $4.1-billion is a lot of cash to pay for benefits that remain purely theoretical. Does eBay have so much money that it can afford to bet $4-billion on a company that has less than $100-million in revenue and no profits? Or is it so desperate for growth, and so afraid of losing ground to competitors such as Google, Yahoo and Microsoft, that it is willing to mortgage its future on such a deal? Continue reading “Column: eBay tries a Hail Mary”

Column: Is it Skype or hype?

Here’s a column I posted to globeandmail.com about the speculation that Skype will be bought:

“First it was Yahoo. Then it was Microsoft. Then it was Rupert Murdoch’s media conglomerate News Corp. Now eBay is supposedly in talks to take over Skype, the voice-over-Internet company started by Swedish entrpeneur Niklas Zennstrom. According to a recent report in the Wall Street Journal, the on-line auction site is considering paying between $2-billion (U.S.) and $3-billion for the VOIP provider, while a report in the New York Post says the deal is worth $5-billion. Oh yes, and Skype has also reportedly hired an investment bank to look into an initial public offering, which sources say could raise billions.

Is it a coincidence that the name of this voice-over-Internet company rhymes with “hype?” Perhaps. It’s certainly possible that eBay is having takeover talks with Skype, just as it’s possible that Yahoo, Microsoft and News Corp. had talks — or even Google, Amazon or Time Warner, for that matter. Talking doesn’t cost anything. But does it make any sense for eBay to pay $2-billion, $3-billion or $5-billion for the company at this point in its development? Not in any universe that obeys the laws of financial reality.

That doesn’t mean it won’t happen, of course. With eBay and other maturing tech companies looking for sources of growth wherever they can find them, almost any combination you can think of has probably been considered by someone, somewhere. But that doesn’t mean such a deal would make any sense. Continue reading “Column: Is it Skype or hype?”

Column: Kazaa fight continues

Here’s a column I posted at globeandmail.com about the Kazaa lawsuit:

“What a hydra-headed monster Shawn Fanning gave birth to. The Napster founder’s company didn’t single-handedly create the digital music revolution — German researchers arguably did that when they came up with the MP3 standard — but the Napster network poured fuel on the flames, and helped to make the terms “peer-to-peer” and “file-swapping” part of the public consciousness.

By the time Napster was crushed by a U.S. court, of course, it had already been usurped by Kazaa and Morpheus, a new breed of file-sharing network. And as the record and movie industries have shifted their focus to those newer threats, those networks too have been overtaken, by BitTorrent and eDonkey and Limewire, and other P2P systems that are still in their infancy. Like nailing Jell-O to a wall or trying to push a string, getting a handle on digital file-sharing is something that’s easier said than done.
The recent ruling against Kazaa by an Australian court is the latest attempt to grapple with the P2P threat, and like a similar decision by a U.S. court earlier this year it tries to walk a fine line between dealing with illegal activity on one hand and criminalizing an entire technology. Continue reading “Column: Kazaa fight continues”

Column: ATI and the big picture

Here’s a column I posted at globeandmail.com about ATI:

“By now, anyone who follows the computer-graphics chip market — which is effectively a triumvirate made up of Toronto’s ATI Technologies, U.S-based Nvidia Corp. and computer-chip giant Intel — knows that it can be a roller-coaster of a business. Since both ATI and Nvidia are constantly coming out with newer leading-edge chips, who is on top can change rapidly. In one quarter, ATI will have the hottest chip (which in turn usually commands the highest profit margins) and Nvidia will be playing catch-up; a couple of quarters later, the positions will often be reversed.

Last year, for example, Nvidia was the one who was late to market with a competing chip, and ATI was getting all the glory. Now, ATI looks like it is behind the eight ball on the high end of the graphics market and its margins are suffering as a result, which led to the company’s latest sales and profit warning. Meanwhile, Intel is hammering away at the lower end of the market — “integratedâ€? chips used in laptops and desktops — which has been one of ATI’s core businesses. And since newer chips come out so frequently, older products have little longevity, which means they have to be discounted heavily just to get them out the door. Continue reading “Column: ATI and the big picture”