After declaring bankruptcy in November, Circuit City announced that it is officially closing its doors and going out of business. Only a couple years ago companies could not grow fast enough, but now most real estate projects have been canceled, stores are closing everywhere and many retailers are in danger of succumbing to the same collapse as Circuit City. The Washington Postreports that the current economy has made restructuring company debt more difficult and that this could merely be the first wave of many U.S. business closures in 2009.
It is true that poor debt related decisions by companies several years back compounded by the current economy is the driving factor for corporate failures such as Circuit City, but I believe there is another subtle shift occurring that touches all companies regardless of their industry or their current financial standing. Bill Clinton’s 1992 campaign can be summed up in one phrase, “It’s the economy, stupid.” It was simple, direct and highlighted the country’s shift in focus from foreign policy to the recession. The economy is bad, real bad, but while to some it may sound unbelievable, many companies will fall this year because they were four years late in developing a viable online business model. Predictably, “It’s the internet, stupid.”
Consumers’ desire to shop and more importantly buy at brick and mortar retailers is fading. Online retail spending dipped three percent this past holiday season, but more and more people are growing comfortable with online shopping and the superior prices found there. Specifically, electronics are a popular online purchase through sites like Amazon.com and NewEgg.com. While this is not surprising news, it is arguably the reason why Circuit City failed and why companies like Blockbuster who were slow to adapt and implement an online strategy may be on borrowed time.
It is a shame to see Circuit City go. It was where I bought my first computer, but unfortunately is where I previewed my new computer and TV before purchasing them at Newegg. For nostalgia sake, here is a memorable commercial that was probably my first exposure to “The Circuit”
Google’s unchecked online dominance may finally be coming to a close. The company just had its 10 year anniversary and in that time it is hard to argue that they have not established monopolies in both online search and advertising. With its next three large initiatives, Android, Chrome and O3b, it has become clear that Google wants to own and monetize every action we do online. While most of Google’s projects have failed, its successes may now warrant antitrust evaluation.
The Justice Department is currently looking into whether it should launch an antitrust case against Google regarding its search advertising deal with Yahoo. It seems clear that a deal that would give 80+ percent of the search ad business to one company is bad for advertisers, consumers and innovation. Sounds like a monopoly too, which may be why the California Attorney General is also looking into the matter.
Then on Friday, the New York Times broke the Sourcetool.com scandal that may prove to be the straw that broke an empire. It appears as though Google’s algorithm may receive human assistance in the process determining what business are allowed to succeed online. One day earlier, CNet News uncovered Google’s log anonymization propaganda that proves the company plans on tracking the indivudual search history of its users indefinitely. Even more disturbing is the npGoogleOneClick5.dll plugin that is installed onto every existing browser on a computer when a user downloads Chrome. It then sends all URLs a user clicks back to Google, regardless of the browser you use. It fits the very definition of spyware and at minimum violates a certain code of ethics with consumers.
The HD video format war was thought to be over. Back in February Toshiba accepted HD DVDs demise and announced it would step aside, allowing Sony’s Blue-ray to be the industry standard. This was thought a momentous victory for Sony, who’s Betamax had been defeated by JVCs VHS in the videotape format war in the 1970s.
The industry predicted that once a format was settled on, sales of HD video players would explode. Unfortunately this did not happen because the increase in price did not match the overall picture enhancement. To the average consumer, the increase in picture quality between a HDMI DVD player and Blue-ray is marginal, but the Blue-ray machines are still double the cost.
Then the roof caved in this week as Toshiba shot back with its new XD-E500 that utilizes its new eXtended Detail Enhancement (XDE) technology, which upconverts standard DVD to 1080p. Many would suggest this will have no impact on the market because Blue-ray players do the exact same thing as well as allow customers to view true HD videos. I disagree. Instead I think this is the final nail in the coffin for Blue-ray for three reasons:
Price.The Toshiba machine is half the price of a Blue-ray player, making it the lowest cost option for maximizing standard DVD quality.
Confusion. Did you know Blue-ray players also upconvert standard DVDs? It is likely the masses will not and try to extend the life of their DVD libraries until forced to abandon them. The longer the standard DVD player is in a majority of households, the greater the certainty that Blue-ray will be skipped over for reason number three.
Online movie distribution. Netflix, Blockbuster and Amazon all offer movie download and streaming options today. Then of course there is the iTunes behemoth. There is no need for a DVD player when you can obtain movies online and sync them to your TV. The need and desire to own movies in a physical form has past.
As stated by Molly Wood on Buzz Out Loud, Blue-ray is evolutionary, not revolutionary. It is not the next groundbreaking technology, but merely an expensive upgrade. Whether it is video, articles or radio, all media is headed online. Digital distribution is the revolutionary technology and it is right around the corner.
Cloud computing for the every day user is right around the corner. More than simply the next tech buzz word, companies are putting into motion business plans that address what is deemed the future of computing. Probably the most significant news came out of Camp Microsoft. The semi-mythical Midori has already received coverage this year as Microsoft’s future operating system that will replace Windows. Now even more intriguing, Midori is reported to be a cloud computing operating system. This is a bold yet necessary move, and finally Microsoft has beat Google to the punch. Google has discussed the browser as the future operating system. Surely it has plans to develop more than the programs and tools, but also a browser/OS as well. It is nice to know there is competition for a cloud OS considering all the issues surrounding Android.
One issue with the cloud routinely brought up is security. While there is not any good updates here, companies can now rely on Zscaler for web filtering through a cloud based service. I imagine this offering will have strong appeal because it relieves the burden of running filters and security on your own servers. AT&T also announced, though garbled, a complete end to end cloud solution dubbed Synaptic Hosting. The significance here is that AT&T will not only manage the services, but also the network it runs on, which gives the company greater control and presumably higher reliability.
Need more on the cloud, well BusinessWeek just released a special report titled the CEO Guide to Cloud Computing that provides a great deal more fodder to the discussion. Humorously, Dell decided it would try to trademark “cloud computing” and in completely unrelated news Delta decided to take cloud computing literally and the era of the tag cloud is on notice.
In the last couple weeks two top tier blogs, Lifehacker and ReadWriteWeb have posted stories on how Google’s beta Gmail not only competes with, but is better than Microsoft Outlook for business communication. Lifehacker’s post came out first and received a lot of attention, mainly because it was such a radical concept. It stuck with me though and I became perplexed when just two weeks later highly respected ReadWriteWeb proposed the same idea.
I believe all ideas have merit, but it is simply wrong to suggest Gmail has dethroned Microsoft’s Outlook and its Exchange service. I am not alone as the comments for both posts disarm and criticize the analysis or lack there of as one commenter suggests. In fact what both were really arguing was Gmail versus Outlook with Exchange, but for some reason ReadWriteWeb in a particular consistently focused on Outlook alone. Of course Outlook is not mobile, but Exchange is the most powerful mobile email service available. Hopefully this is just two misinformed Gmail fanboys stirring the pot, and not something more insidious like Google prepping for Gmail coming out of beta by engineering positive posts for the product’s business usability. I am not a conspiracy theorist, but this all just comes off as way to coincidental. Perhaps I need not worry about the integrity of Google because how could one question a company that has “Don’t be evil” hanging on their wall.
On Friday the FCC ruled that Comcast had violated network neutrality principles last year through its traffic management of BitTorrent. The company was ordered to disengage in these practices and disclose to subscribers in advance any future changes to how it manages data. This should have been a significant milestone for unfettered, open internet for U.S. consumers, but I think it unfortunately may be the beginning of the end.
For starters, the FCC’s ruling has no teeth and can be viewed as just a slap on the wrist. It cannot be enforced by the agency and will undoubtedly be challenged because the Supreme Court has previously ruled that the FCC has no power to regulate “unless and until Congress confers power upon it.” This said conferring of power has yet to occur in regards to regulating how companies manage access to the series of tubes. Under this premise, Comcast has every right to fight the ruling and probably would win. The caveat here is that it may open the door for Congress to examine its role in regulating how internet access is managed, resulting in a net neutrality law enforced by the FCC.
While net neutrality protects against the tiering of traffic speed, ISP compliance could result in full adoption of metered consumer billing where users are charged for their total monthly data instead of simply access to the internet. Seems moderately reasonable until you realize it is structured to fight against online video. This model ensures that if you cancel your cable, you will still windup paying for content that would otherwise be free and ad supported. To the detriment of consumers, cable companies are slowing learning that the game is changing and that they have become a commodity. Consumers do not need to pay them for content anymore because it is legally available online. Whether net neutrality is accepted or not, consumers lose.
Every once in awhile major companies and organizations make waves with dumbfounding decisions that are wrought with clear consequences that cannot possibly benefit consumers, which in turn bring about irrevocable harm to the entity or entire industry. This week was an announcement blockbuster for said decisions.
Lets start with ICANN, which is the internet’s body for domain name management. This week they announced a plan that will allow for an unlimited number of top level domains(TLD). Previously there were a very select and organized set of TLD such as .com, .gov, .net, .org, etc. Now with $100,000-$500,000 and a “business plan” anyone can register a new TLD. This means big.problem, huge.mistake and dumb.move could all theoretically be new sites. It also makes it virtually impossible for companies to maintain some semblance of brand protection online (google.sux, google, sucks, google.reallysucks) and remembering or even finding Web sites will be a complete mess for consumers. Type google.ocm and you could now be going somewhere entirely new with browsers and search engines unable to assume you meant .com. Speaking of which, Jeff Jarvis thinks this decision could be good for one industry…search. This plan has been overwhelmingly panned and I just do not see how it will be a benefit, however it is possible we will need considerably more online real estate as our entire world continues to move online.
ICANN’s announcement was fun, but the RIAA really needs to look into stand up. On the heals of suing grandmas comes its epiphany that radio is actually a form of piracy. No, seriously. The RIAA contends that we should throw out decades of precedent where radio was considered a promotional vehicle, thus forcing radio to now pay both songwriters and musicians for each song they play(often different people, currently radio only pays songwriters for their work). Not to long ago (and still indirectly today) music labels were paying radio to play artists though payola. With emerging online music distribution, radios importance in getting artists heard has weakened and the RIAA believes now is the time to take advantage and bleed as much money from medium before it is completely irrelevant. (more…)
My work has recently provided me the chance to live in a Mac world…exclusively. I was excited about the opportunity because I have heard for years the greatness that is OSX and how Macs are significantly more secure (security by obscurity?) and provide a flawless computing experience. I jumped headlong into the Mac ocean…eh-em…pond I mean.
Understandably, I have been a daily Mac user for exactly four days. I may need a full month of usage to compile a fair revue, but I find my user experience lacking. Many have told me that moving around in the Mac environment is very intuitive and simple. I agree, but perhaps its too simple. I am very knowledgeable of Windows and its inner workings and thus far have found the OSX coming up short. There is a great post I happened on to today at Gizmodo that mirrors my thoughts and mild frustrations. As the post suggests, perhaps I am just too smart for Macs.
Probably my greatest complaint would be the functionality of programs beyond the browser. Lets get serious, trying to use Microsoft Office on a Mac is obnoxious compared to Windows. When I am working in Word, I want it to be the only thing in my screen and the text should be simple to read. Yes, I have learned the magic of the little green button, but it takes significantly more work to operate Office on a Mac. Simple…not so much. Also, one mouse button is great until you want to copy a link. Now I have to hit Control and the Mouse simultaneously. In Windows land I can copy thousands of links and paste them into a document without ever utilizing the keyboard. Trite? Perhaps, but this is not simpler.
My roommate has a solution for my MS Office woes. Its called Parallels. This virtualization software allows you to run OSX and XP at the same time (unlike Boot Camp). With Parallels, I can get flawless browsing and media experience, while creating documents in its native world. For this reason, I may still consider getting a Mac for home computing, but surely this option is not simpler. Additionally…No Microsoft Money for OSX and a Quicken program that is embarrassing. How do the Mac faithful budget?
Lastly, there was a recent mention on Buzz Out Loud about the Mac vs PC commercials and how Microsoft has yet to respond. The mention points to a great conversation on its message board about how this impacts the business of both companies. I however was surprised that there was zero mention of Microsoft’s plans to respond as laid out in the June 2008 issue of Fast Company. You can hear my response and their candor on episode 753. I think this makes me legit. I am officially a content provider for CNet.
This morning I was alerted to a new universal power adapter from Green Plug. Fascinating and perhaps game changing for consumer electronic energy consumption. Many electronics such as laptops, iPods, etc. require DC power via batteries. Recharging these DC power sources requires converting the AC power we get from power outlets. Unsurprisingly, this is very inefficient and most devices require individual custom AC to DC power transformers or chargers.
Green Plug’s efficiency and positive environmental impact can be seen in several ways. First, it will eliminate the need for companies to develop and ship custom battery chargers because consumers can charge all the DC powered electronics from a single universal charger hub. Westinghouse recently announced that it has adopted the technology. Not only will it eliminate unneeded production of chargers, but also the disposal of them once a product is replaced.
Another significant advantage is that Green Plug converts the AC to DC power more efficiently and shuts down power to devices that are fully charged. Preventing energy consumption from charged devices can dramatically cut down on phantom or ”vampire energy” waste. Here is what Green Plug states about its environmental impact.
I hope this technology takes off. Its smarter, more efficient and benefits companies, consumers and the environment. Perhaps its time to send a motivational email to Apple, Dell, HP, Samsung and Nokia to get on board.
Perhaps it is possible you were not aware Microsoft was attempting to acquire Yahoo. I would wager that this has been the number one story in the tech community since February and most suggested Yahoo would be foolish not sell. Some felt that the internet had passed by the company, while most purely view this as a financial story. Meaning take the fast money now instead of building and maintaining a pillar of the digital world.
I have been outspoken about the ignorant and short sighted view of nearly everyone in the media, however I became incensed with this highly questionable post on TechCrunch after Yahoo announced its partnership to outsource a portion of its search advertising to Google that effectively ended any potential deal with Microsoft. This motivated me to finally outline publicly why Yahoo made the best deal for the longevity and health of the company. I am also an active investor that is disgusted by those who seek short term profits versus decisions that will strengthen a company for the long term. Invest in a company you believe in and want to see succeed in business, not to cash in quick by stripping the company of all its assets. Here is my reply to the TechCrunch article:
Beginning of the end for Yahoo? It is beyond me why the media keeps suggesting Yahoo and Google are in the same business and that search is everything. Google does one thing well. The majority of their products are worthless. Yahoo is a content portal. It has the number one site for Finance and Sports (by traffic) and the top email. They also lead the industry in display advertising, which is significantly more important/useful for marketers. Search ads…seriously, who is really clicking on this. If Microsofts CPA model catches fire, advertisers will revolt against the fraudable CPC model of Google.
Surely Yahoo is going to only farm out the low profit search terms to Google to maximize revenue. Yahoo is using Google as a tool because thats all they are. Beyond all of that…why is there not more discussion on Google diversification. Everything it does that provides revenue is tied to search. Thats great when you have the best search, but there has been plenty of articles outlining how the industry can be improved and if Google cannot figure it out, the house of cards falls down.
Yahoo is fine. It hovers between the number one or two most visited site in the world. Unlike social networking sites, it also has a clear and viable way to monetize this traffic. One being display advertising, which Yahoo is the industry leader. Why would they sell to a company scrambling to find its place online that would only dissolve the Yahoo name in a few short years (much like the iconic Kinko’s that is now no more). I am not the only one who feels this way though as it looks like even Carl Icahn is warming up to an independent Yahoo. Moreover, Google is not going to eat Yahoo nor should this deal bring about antitrust concerns. Search is not the end all be all for the internet as TIm O’Reilly states and the two companies are not really competitors. Yahoo creates content. Google does not. Google is a tool, while Yahoo is a destination. Yahoo has interesting new products such as Yahoo Buzz (a Digg killer) and Go 3.0 and I expect the company to still be a thriving and relevant five years from now.
decisions.
secure (security by obscurity?) and provide a flawless computing experience. I jumped headlong into the Mac ocean…eh-em…pond I mean.
Perhaps it is possible you were not aware 
