Monthly Archives: September 2006

‘Social networking’ madness continues

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The New York Times today has a story claiming that Mark Zuckerberg, the 22-year-old founder of Facebook.com, turned down a $750 million offer for the company from Viacom last January, and is now being offered $900 million by Yahoo.

To woo Mr. Zuckerberg, Yahoo has offered about $900 million for Facebook and says it will keep the company somewhat independent, with Mr. Zuckerberg in charge. This has been its model with other acquisitions like Flickr, a photo-sharing site, and Del.icio.us, a social bookmarking service that lets members share lists of their favorite Web sites.

“A lot of people say there are problems with having a 22-year-old C.E.O., but one thing that is good about it is that he doesn’t remember the boom and the bust that followed,” said an adviser to Facebook. “That has distorted the thinking of a lot of people. If they have a good product or service, they sell way too early and they don’t stick with it.”

The adviser spoke on the condition of anonymity because of the sensitivity of continuing negotiations.

Mr. Zuckerberg, through a spokeswoman, declined to comment on any potential acquisition offers.

Money, at least so far, does not seem to draw him. He lives in a barren apartment in Palo Alto, Calif., a short walk from Facebook’s office. He only bought a stereo recently at the request of his girlfriend.

“Mark is the kind of guy you worry needs to get other things in his life,” said David Sze, a partner with Greylock Partners, one of Facebook’s venture capital investors.

The (un)reliability of business journalism (contd.)

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David Pogue had the neat idea of looking up the Lexis-Nexis newspaper database to see how Apple was being covered a decade ago. Here’s a selection of what he found:

  • Fortune, 2/19/1996: “By the time you read this story, the quirky cult company…will end its wild ride as an independent enterprise.” * Time Magazine, 2/5/96: “One day Apple was a major technology company with assets to make any self respecting techno-conglomerate salivate. The next day Apple was a chaotic mess without a strategic vision and certainly no future.” * BusinessWeek, 10/16/95: “Having underforecast demand, the company has a $1 billion-plus order backlog…. Apart from some ideas, the only and best alternative: to merge with a company with the marketing and financial clout to help Apple survive the switch to a software-based company. The most likely candidate, many think, is IBM Corp.” * A Forrester Research analyst, 1/25/96 (quoted in, of all places, The New York Times): “Whether they stand alone or are acquired, Apple as we know it is cooked. It’s so classic. It’s so sad.” * Nathan Myhrvold (Microsoft’s chief technology officer, 6/97: “The NeXT purchase is too little too late. Apple is already dead.” * Wired, “101 Ways to Save Apple,” 6/97: “1. Admit it. You’re out of the hardware game.” * BusinessWeek, 2/5/96: “There was so much magic in Apple Computer in the early ’80s that it is hard to believe that it may fade away. Apple went from hip to has-been in just 19 years.” * Fortune, 2/19/1996: “Apple’s erratic performance has given it the reputation on Wall Street of a stock a long-term investor would probably avoid.” * The Economist, 2/23/95: “Apple could hang on for years, gamely trying to slow the decline, but few expect it to make such a mistake. Instead it seems to have two options. The first is to break itself up, selling the hardware side. The second is to sell the company outright.” * The Financial Times, 7/11/97: “Apple no longer plays a leading role in the $200 billion personal computer industry. ‘The idea that they’re going to go back to the past to hit a big home run…is delusional,’ says Dave Winer, a software developer.” David Pogue’s conclusion: “When anyone asks me what the future of technology holds, or what kids will be bringing to school in 2016, I politely decline to answer.” Amen.

The Economist on Ndiyo

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From the Economist‘s current Technology Quarterly survey…

WHAT is the best way to make the benefits of technology more widely available to people in poor countries? Mobile phones are spreading fast even in the poorest parts of the world, thanks to the combination of microcredit loans and pre-paid billing plans, but they cannot do everything that PCs can. For their part, PCs are far more powerful than phones, but they are also much more expensive and complicated. If only there was a way to split the difference between the two: a device as capable as a PC, but as affordable and accessible as a mobile phone. Several initiatives to bridge this gap are under way. The hope is that the right combination of technologies and business models could dramatically broaden access to computers and the internet.

Perhaps the best-known project is the one dreamt up by a bunch of academics at the Massachusetts Institute of Technology, in Cambridge. The scheme, called “One Laptop Per Child”, aims to use a variety of novel technologies to reduce the cost of a laptop to $100 and to distribute millions of the machines to children in poor countries, paid for by governments. Nicholas Negroponte, the project’s co-founder, says he is in talks to deliver 1m units apiece to the governments of Argentina, Brazil, Nigeria and Thailand. But across the Atlantic in Cambridge, England, another band of brainy types has cooked up a different approach. They have devised a device that allows one PC to be used by many people at once.

The organisation is called Ndiyo (the Swahili word for “yes”), and was founded by Quentin Stafford-Fraser, a former researcher at AT&T. “We don’t want to have cut-down computers for poor people,” he says. “We want them to have what we have — so we need to find a better way to do it.” The system exploits a little-used feature in operating systems that permits multiple simultaneous users. Ndiyo’s small, cheap interface boxes allow multiple screens, keyboards and mice to be linked to a single PC cheaply via standard network cables.

This allows a standard PC running Linux, the open-source operating system, to be shared by between five and ten people. Computers today are many times more powerful than those of just a few years ago, but are idle much of the time. Ndiyo is returning computing to its roots, to a time when they were shared devices rather than personal ones. “We can make computing more affordable by sharing it,” says Dr Stafford-Fraser, as he hunches over a ganglion of wires sprouting from machines in Ndiyo’s office. In much of the world, he says, a PC costs more than a house. Internet cafés based on Ndiyo’s technology have already been set up in Bangladesh and South Africa. Mobile phones are used to link the shared PCs to the internet…

Google is the new Yellow Pages

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Thoughtful post by Robert Scoble

Like TechCrunch I too noticed that Yahoo dropped like a rock today and wondered what that means for Silicon Valley. Why is Yahoo in peril here? Banner ads.

Ford, for instance, has literally stopped spending anything on non discretionary things. Just one company can have a huge impact.

So, what’s discretionary? Banner ads.

You know, those colorful banners that you’ll see on lots of sites, particularly old-school sites.

So, why isn’t Google seeing a huge drop like Yahoo did? Easy. Google’s income relies on text ads that only pay when people click on them.

Those “cost per click” kinds of ads are NOT discretionary.

This reminds me of the 1980s when I helped do the advertising for LZ Premiums, a now-defunct camera/appliance store in Silicon Valley. Advertising for us back then in the Mercury News was discretionary. We did it only when we had some money from a camera manufacturer that was slated for advertising. Our ad in the Yellow Pages, though, was NOT discretionary. Do that and your business would almost stop.

Google is the new Yellow Pages. If a business stops doing Google advertising it might as well just fire everyone and send them home.

That’s the difference between the advertising world today and the advertising world back in 1999.

Later… James Cridland disagrees:

I agree with ‘Google is the new Yellow Pages’, but don’t agree with the Scoble-ster that “ad banners are discretionary”. And here’s why.

Advertising in Yellow Pages (or Google search) is for people who say “I know I want a Ford Sierra, but I don’t know where to get one”.

Advertising in car magazines (or Google AdSense on car sites) is for people who say “I know I want a new car, but I don’t know which to get”.

Advertising in the newspaper (or untargeted ad banners) is for people who say “I didn’t realise I needed a new car, but now you come to mention it…”

The crucial point is that what Scoble says is ‘discretionary’ advertising – in the newspaper, or radio, posters, or even ad banners (to a point) – are all difficult to measure in terms of effectiveness. I can’t buy anything through a poster; but the effect of outdoor advertising is undeniable.

Interesting fact: one in five people surf the internet with the radio on. I therefore argue that radio advertising has a direct link on Google’s fortunes – after all, how else would people know what to search for?

Saturn by night

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Taken last July by cameras on board the Cassini-Huygens spacecraft. From the wonderful Astronomy Picture of the Day site. The link for this image is here. The blurb explains:

In contrast to the human-made lights that cause the nighttime side of Earth to glow faintly, Saturn’s faint nighttime glow is primarily caused by sunlight reflecting off of its own majestic rings. The … image was taken when the Sun was far in front of the spacecraft. From this vantage point, the northern hemisphere of nighttime Saturn, visible on the left, appears eerily dark. Sunlit rings are visible ahead, but are abruptly cut off by Saturn’s shadow. In Saturn’s southern hemisphere, visible on the right, the dim reflected glow from the sunlit rings is most apparent. Imprinted on this diffuse glow, though, are thin black stripes not discernable to any Earth telescope — the silhouetted C ring of Saturn. Cassini has been orbiting Saturn since 2004 and its mission is scheduled to continue until 2008.

Here’s a funny thing…

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GMSV reports that

Asked to testify Sept. 28 before the investigative subcommittee of House Energy and Commerce are Board Chairwoman Patricia Dunn; HP legal counsel Ann Baskins; Larry Sonsini, a prominent Silicon Valley lawyer who is HP’s external lawyer, and Ronald R. DeLia, a Needham, Mass., private investigator and operator of Security Outsourcing Solutions….

Note the name Sonsini. Larry W. Sonsini is a senior member of the prominent Silicon Valley legal firm of Wilson Sonsini Goodrich & Rosati. But, curiously, the firm’s Web site makes no mention of their Chairman’s exciting forthcoming appearance before Congress.

Later… I’ve just come on Dan Gillmor’s view:

If I was running either the Chronicle or the Merc, I would be assigning my best investigative folks to look deeply into Sonsini and his law firm. The story has been done, but never in the depth I suspect it deserves….

Dan has covered the Valley for years and is one of its shrewdest observers.

More on Sonsini here.

50 years’ hard

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Something I’d forgotten — the hard drive had its 50th birthday the other day. IBM introduced the 305 RAMAC computer (shown here) on September 13th, 1956. It was the first computer to include a disk drive — named the IBM 350 Disk File. The file system consisted of a stack of fifty 24″ spinning discs with a total storage capacity of about 4.4 MB. IBM leased it to customers for $35,000 a year. How times change.

NHS vs. Harley Street: no contest

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Lovely column by Vanora Bennett on how her grandad was finally cured of his belief that private medicine must be best because you’re paying for it.

And, within 24 hours of excellent treatment, the problem was solved. At lunchtime the next day Grandad was sitting up by his bed, doing the Times crossword and chatting with the nurses, as cheerful as anything. He wasn’t coughing at all.  “Dr Wu took me off the medicine and put me on something else,” he said happily. “I haven’t coughed once since she did.”

It was that simple – a bit of intelligent, disinterested medical care from an NHS doctor who wasn’t looking at a fee of thousands of pounds – just a person in need of attention and reassurance. Despite all the cuts that the Royal Free has been suffering, it can still do better for its patients than the smartest of private care…

Surprises ahead?

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My colleague, William Keegan, thinks that Tony Blair may be preparing to spring a surprise. He reports that a close associate of the Prime Minister has told friends that he is concerned about his own future because Blair could be gone ‘in a fortnight’.

When people who know the Prime Minister’s mind begin to panic about their future, there must be at least a chance that Blair is thinking of bowing out at the Labour Party conference in Manchester next week. It would be a dramatic thing to do, and, with recordings of Laurence Olivier in John Osborne’s The Entertainer now on general release, he might learn a few extra tricks from that master of final appearances. Suddenly there could even be sympathy for him. It would surely be preferable to dragging out the agony for a further nine months of pregnant expectation. In effect he could be emulating Denis Healey’s apocryphal speechwriter who, according to that formidable ex-Chancellor, once left his minister in the lurch: when the latter turned to page four of his speech, all he found were the words: ‘From now on you’re on your own, you bugger.’

In Blair’s position I should certainly want to leave the stage as fast as possible and let the rest of them sort it out. Recent events in the Labour Party are worthy of Honore de Balzac, specifically the passage in Cousin Bette where we are told: ‘Complaint, long repressed, was on the point of breaking the frail envelope of discretion.

‘Oh, that frail envelope!