The Pivot: Business Gold or Baloney
August 15, 2012
Let’s think about the belief that services will cure revenue problems. Straight away, services can be lucrative. Check out the revenues from McKinsey, BCG, or Bainie Mr. Romney.
The question is, “Can a company anchored in services become a hardware company?” And the flip side, “Can a hardware company become a services company?” These questions highlight the latest in business baloney: The pivot. The idea is that a company can go in a different direction, pay its debts, maintain its existing revenues, and generate large flows of new revenues. The pot of gold at the end of the rainbow is a children’s book metaphor for this strategic vision.
Google is doing the pivot. First, there was the purchase price of $12 billion and change. Then there was the $200 million plus operating loss mentioned in the most recent Google quarterly report. Today (August 13, 2012) I read “Google to Cut 4,000 Motorola Mobility Jobs, Take $275 Million Charge.” The core of the news story is like the refrain of a sad Sinatra tune:
Motorola Mobility has lost money in fourteen of the last sixteen quarters and in its latest quarter reported an operating loss of $233 million on revenue of $1.25 billion. “These changes are designed to return Motorola’s mobile devices unit to profitability,” Google said in a filing with the U.S. Securities and Exchange Commission. Google has “grand plans.” The task is to keep the ad revenues pumped up as the company invests in new revenue opportunities such as Motorola hardware, legal experts to deal with the copious supply of litigation, and tactical moves which seem to target Amazon, Apple, Microsoft, and other companies with possible monopolistic business models.
Will firing people and the possible sale of deadwood make the pivot work?
Given enough money and time, my view is that Google may succeed. The race
is on for Google. The three reasons I have identified include:
The click pattern difference between desktop Google searching and mobile device Google searching. To sum up what I understand is the “new wisdom”, mobile clicks are growing but deliver less bang for the advertisers’ buck. Desktop searches are not growing as they once did. Advertisers get less bang for their buck. My simple conclusion is that Google will have to find ways to work around these revenue producing online behaviors. But isn’t down down?
Second, like Amazon, Google has a cost control problem. Google is making cuts in services, buying companies to get a jump start or head start in certain application spaces, and investing in gee whiz technology in hopes of getting operational costs to flatten. My view? Good luck with that. Companies like Amazon and Google need increased revenue to keep pace with technology costs. In my experience, technology costs just keep on going up no matter what a manager does to contain them. The solution is to cap the budget and fall behind or keep spending until the business model collapses. (Example: Convera.)
Third, the bets on the future are predicated on the fact that the Internet is nothing more than a communications and information utility. The ubiquity opens the door to a cuteness and convenience thermonuclear war. Witness the efforts of Facebook and Google to co-opt the other company’s territory. The problem is that when cuteness and convenience become important, the tech companies may find themselves at the mercy of the experts in these disciplines. Google is making nice with the entertainment industry. Facebook cooperates with US government agencies. The problem for Facebook and Google is that the specialists in cuteness and convenience have more monetization options that the technology companies. One buys a mobile phone or runs a Web search. A child nags to go to the new Disney movie, get the coloring book, and have the Mickey Mouse T shirt. Facebook and Google give these cute items away. Disney and other experts in cuteness and convenience sell them, year in, year out, generation after generation.
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Some Countries Still Prefer to Read the Newspaper
August 13, 2012
Science Daily recently posted the article “Online News Takes Off in US and UK While Most Germans Prefer a Newspaper” shines a bright light on traditional publishers. Unfortunately for American journalists, Germany seems to be the only country left that prefers print news.
According to the article, a recent study published by the University’s Reuters Institute for the Study of Journalism, based on surveys in UK, US, France, Germany and Denmark, found that While the majority of Germans prefer print news over online, US and UK residents prefer to access their news online. More specifically. 28% of UK and US residents access the news from their mobile phones and 60% of tablet users in the UK regularly access online news.
Report author Nic Newman, a Research Associate at Oxford University’s Reuters Institute for the Study of Journalism, said:
“For many people digital news is now the first place to go for the latest news, rivaling television as the most frequently accessed type of news in the UK and the US. Of those surveyed, nearly eight out of ten people accessed online news every week, but the transition from print to digital is much slower in other European countries. The report suggests that the Germans were the least likely to access news online of the five countries studied with almost seven out of ten, of those surveyed, saying they still read a newspaper.”
As online news continues to thrive in some western countries, it is interesting to see that others remain attached to traditional media forms.
Jasmine Ashton, August 13, 2012
Sponsored by ArnoldIT.com, developer of Augmentext
Ami Revamps Web Site
August 11, 2012
Ami, the enterprise intelligence software company, has refreshed its Web site. If you navigate to the UK version of the company’s site here, you can learn about the firm’s current positioning. (Be warned, though: there is an auto-run video explaining the firm’s approach.) There is also an “old” Web site which is still online at this link.
The new site is more slick and sleek than the old. The color combinations are less jarring, and there is much less clutter on the page. The auto-run video, though, could be a problem. A software company should be aware that, yes, even now, not everyone’s system can handle such an imposition.
The company’s mission as described on the new site reads:
“Our mission is to enable our customers to develop the most far reaching insight and intelligence about the markets and sectors in which they operate through the optimised acquisition, analysis and presentation of information from both internal and external sources. . . .
“AMI Enterprise Intelligence specialises in the development of information and content processing software designed to capture, organise and analyse information from both internal and external software using horizon scanning techniques that are widely considered as best practice in competitor analysis.”
Ami was formed in 1999 by some individuals from the areas of aviation and electronics. These professionals applied the rigorous standards from those fields to the development of their software; those standards, they say, impart an unrivaled level of reliability to their products.
Cynthia Murrell, August 11, 2012
Sponsored by ArnoldIT.com, developer of Augmentext
Wikipedia Travel Site Anticipated
August 8, 2012
Rumor has it that Wikipedia is about to branch in a new direction. CNet News asks, “Wikipedia to Debut Revolutionary Travel Site?” At the time reporter Chris Matyszczyk wrote this article, the new venture had not been confirmed by the company. It is said that the site might be, like Wikipedia itself, free of advertising. The write up tells us:
“It is also reportedly to be bolstered by the arrival of 31 out of 48 administrators of Wikitravel, which does bear more than a passing resemblance to Wikipedia.
“Wikitravel is owned by Internet Brands — a group that includes FlyerTalk and FrugalTravelGuy.
According to Tnooz.com, there has been something of a contretemps between Internet Brands and certain factions at Wikitravel. There has been criticism, for example, of a lack of technological investment.”
Matyszczyk also speculates that the new site could enjoy the same prominent placement in Google results that Wikipedia has captured. He notes that getting trustworthy travel information online is challenging. Is that review really from a hotel guest, or written the hotel itself? Or was it penned by a competing establishment?
It is unclear how a Wikipedia travel site would be any more reliable than existing travel sites, but perhaps the organization has something up its sleeve. We’ll see; Wikipedia has disappointed before.
Cynthia Murrell, August 8, 2012
Sponsored by ArnoldIT.com, developer of Augmentext
A Periodical for Linguists?
August 8, 2012
What would a linguistics magazine look like? Back in 2007, Language Log’s Mark Liberman created a spoof cover of the hypothetical “Linguistics Today,” which he reproduces in his recent post, “Linguistics: the Magazine.” He shares two other parody covers for magazines that might be aimed at language nerds, Mignon Fogarty’s “Grammarian” and Jon McWhorter’s “Werd.” Lots of fun, but Liberman isn’t entirely kidding. He proposes:
“Jokes, parodies, and illustrations aside, I really do think that this is a good idea. A semi-ironic supermarket-magazine approach might work — especially for cover stories — but the most plausible core market, I think, would be more a upscale and intellectual one. In addition to those cover stories about the juicier aspects of interpersonal communication, there could be sections dealing with language variation and change, speech and language technology, literary analysis, political language, usage advice, language and gender, linguistic history, advertising language, forensic linguistics, scrabble, whatever . . .”
The write up mentions that the online publication option would probably be “easiest, cheapest, and sanest.” I, for one, would subscribe to such a publication, online or in print. Our burning questions: What system will be detailed in the Road&Track-style exploded diagram? And, more importantly, who will be the person featured in the foldout?
Cynthia Murrell, August 8, 2012
Sponsored by ArnoldIT.com, developer of Augmentext
Designing for the One Percent. Thinking for the 99 Percent.
August 5, 2012
I remember when my family moved back to America from Brazil, where we lived for a while. My teacher in the local Campinas school recommended a tutor. I was a “cabeça óssea” or stupid. No kidding. After three days in Brazil, I was unable to read or speak Portuguese. At age 11 or 12, I was a 99 percenter.
I went to special Portuguese lessons, picked up trash talk from the kids in the neighborhood, and supplemented the Estado de São Paulo schools with something called the Calvert Course. My Calvert Course “teacher” was a missionary of a fervent ilk.
As luck would have it, he stepped on a spider, became delirious, wandered into the scrub which in the 1950s surrounded Campinas, which is now a suburb of the city of São Paulo. “A selvla comeu” or something along those lines. So I missed those Calvert Course lessons. I think I missed a couple or three “traditional” US educational hurdles. When I returned to the US, I popped into the American school without having “taken” the classes my peers enjoyed. No problem. I was plonked into what was called then the “advanced class.” Instant one percenter. Magic.
I zoomed through college and graduate school. I was dragooned by Halliburton Nuclear and three years later, I was recruited by the blue chip consulting firm of Booz, Allen & Hamilton. The “old” BAH was different from the azure-chip outfits sporting the name today. I don’t recall brushing shoulders with the “real” 99 percent, but in Brazil I was not just one of the 99 percent. I was one of the stupider 99 percenters.
I learned one thing about being stupid: A log depends on context and point of view.
What’s happening in the digital world is that the one percent are making the world which they want. The problem is that the 99 percenters don’t have a clue about that world. There are some interesting examples of what I call “one percent think.”
ITEM: “Reversing the Decline in Big Ideas” explains that the Silicon Valley “thing” has eroded innovation. Here’s the passage I noted:
But now much of the transformational potential of the “pure information technology” possibility space has been exhausted to the point of terminal differentiation…Now I look around and see lost opportunities for collaboration everywhere.
ITEM: “The Naked and the TED” is a clever and coruscating (if the New York Times writing covering automobiles can use the word obdormition although I would prefer paresthesia, I can employ a form of coruscate). The write up by a one percenter tackles baloney from two other one percenters, Parag Khanna and Ayesha Khanna. The précis for the review of the Khanna monograph “Hybrid Reality: Thriving in the Emerging Human Technology Civilization”, only $2.99 is, “Baloney.” One percenters criticizing one percenters is probably not going to have much of an impact on those in the 99 percent.
ITEM: “The Linguistic Interface” explains why a command line interface is not such a bad thing. After all, the article says, “We live in a Kingdom of Nouns.” Here’s the ace quote:
There does come a time when all you want to do is pick up a pencil and draw a cat. But we must remember that we aren’t using an application in which one draws cats, we’re simply acknowledging that paper is a thing we can draw on. There is still no application harness set up to isolate us from the rest of the world, and the pencil is not inextricably bound to the paper. The terminal — a record of the conversation we’ve been having with the shell — happens to be one thing to look at, but even as we scribble over the page we can still talk to the shell, and it can do things to the drawing just as it can anything else. “Now add to this all the pictures I drew of kittens. All of them.”
I can see the folks at the bar in Harrod’s Creek arguing over this insight and not the University of Kentucky football scrimmage.
Google: Communicating Differently, Maybe Less?
August 5, 2012
There was an interesting “official” Google Blog post on August 3, 2012. Google slipped in a zinger with its usually run down of terminated products I never heard about. Here’s the killer passage in “Giving You a Better Google,” which is a heck of an Orwellian title in my opinion:
Google maintains 150+ blogs and other communications channels about our products and services, and so over time we’ll also be closing a number of Google-created blogs that are either updated infrequently, or are redundant with other blogs. This doesn’t mean that we’ll be sharing any less information—we’ll just be posting our updates on our more popular channels.
When online content disappears, how does one know what was there? One doesn’t. Does the Wayback Machine or the Library of Congress tweet project captures the information? I don’t think so. Are the data in these blogs potentially useful going forward? I can’t answer the question. I do know that if content is not online, it does not exist.
George Orwell allegedly said:
All political thinking for years past has been vitiated in the same way. People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome.
Stephen E Arnold, August 5, 2012
Sponsored by Augmentext
YouTube Boasts Most Creative Commons Licensed Videos
August 3, 2012
Creative Commons has brought “free” video to millions, and now The Next Web reports, “With 4 Million Videos, YouTube Now Has the Largest Collection of Creative Commons Videos in the World.” What a surprise.
The write up by Drew Olanoff notes that YouTube began building its Creative Commons video library one year ago, and has quickly captured the lead, at least in terms of quantity. Flickr, by the way has amassed the most Creative Commons-licensed photos.
Cathy Casserly, the Creative Commons CEO, recently blogged about her project’s YouTube-hosted library. She promotes:
“Do you need a professional opening for your San Francisco vacation video? Perhaps some gorgeous footage of the moon for your science project? How about a squirrel eating a walnut to accompany your hot new dubstep track? All of this and more is available to inspire and add to your unique creation. Thanks to CC BY [the Creative Commons Attribution license], it’s easy to borrow footage from other people’s videos and insert it into your own, because the license grants you the specific permissions to do so as long as you give credit to the original creator.”
Founded in 2001, Creative Commons is a nonprofit organization. Designed to counter the inability of bureaucratic systems to adapt to rapid technological changes, the organization provides a suite of licenses that works within copyright law’s “all rights reserved” realm. The goal is to empower folks to share and build on each other’s’ creative work online without the risk of some commercial entity snapping it up for profit.
Cynthia Murrell, August 3, 2012
Sponsored by ArnoldIT.com, developer of Augmentext
LinkedIn and Desperation Marketing: The State Farm Case
July 13, 2012
I am all for making sales. What I found interesting this week (July 8 to July 12, 2012) was a flurry of four spam emails from what I believe to be LinkedIn’s marketing operation. I poked around a little and realized that I had signed up for a Louisville (Kentucky) sales discussion group. When I say “I”, one of the goslings who manages my social presence on LinkedIn joined the group. We are researching the local market for a project, and I assume joining a LinkedIn group of local businesses was a good idea. Wrong.
Is this State Farm’s favorite marketing department lunch meat? Yummy, spam.
The sender was a person who believed that I would be interested in an “Entrepreneurial Career Opportunity” with State Farm Insurance. Now anyone who runs a query for me on Bing, Google, or Yandex will be able to conclude that I probably am a long shot for this type of work:
After reviewing your LinkedIn profile, I was impressed with the experiences you’ve had in your career and would love the chance to chat with you regarding our career opportunities!I am expecting several openings in 2012/2013 in Louisville and surrounding areas. I am looking for qualified candidates to become our next State Farm Agents. We offer a 7 month paid training program at your current salary (subject to a cap of $144K). Following your training you would earn renewable income from an existing book of business, $30,000 in signing bonuses, retirement benefits, worldwide travel incentives, office set-up assistance and more. We are not a franchise, so there is NO franchise fee to start a business with State Farm. We have an 85% success rate on all new agents and the support system that we offer to our agents is the best in the industry. This is a great business opportunity!I’m not necessarily looking for someone who is looking for a job; I’m looking for highly successful individuals…
The job is to earn six figures selling insurance in Louisville. Okay. Now Louisville is in my view wallowing in the economic hog slop. There are quite a few people out of work. I know because we are adding staff to Augmentext, so I have a pretty good sense of the level of desperation in the job market. I don’t understand why State Farm is having such a tough time finding door to door, hammer dialing, bright white teeth and big smile workers. Unemployment is about 15 percent, maybe as high as 20 percent around Harrod’s Creek. What’s up?
I did some poking around and the sender is a State Farm insurance person is based in Nashville and has a colleague named Jerry D. I wrote Ms. Swing, suggesting she do a better job of screening her spam. I also requested that she not spam me with four identical emails in a span of minutes. One works just fine, thank you. She apparently told her boss, “Jerry”, whom I had a tough time understanding on his panting and nerve-tinged voice mail. Jerry wanted me to call him so he could explain the process used by State Farm. He gave me a phone number to call too: 615 692 6149. I did not call. You feel free to call.
World Wide Web Not Quite World Wide Yet
July 8, 2012
I was just pointed to an article in which a current Google Exec warns us that many of the world’s population are missing out on the advantages brought by the Internet.
Google’s executive chairman Eric Schmidt said that less than a third of the world’s population has Internet access and believes that the benefits of connectivity that are brought on by technology is lost on far too many global citizens. In an article on Phys.org, “Google Exec: Technology Wave Leaving Many Behind,” we learn about Schmidt’s recent conference in Israel, his thoughts on the current limitations of the Internet, and his optimistic views on the spread of technology. The article states:
“‘All of us are blessed with a capacity for innovation [and] connectivity will help unlock that potential,’ [Schmidt] said. He pointed to the Internet’s ever-widening reach and its educational potential, citing the Khan Academy’s 3,000 video lessons on YouTube. The Khan Academy, which receives funding from Google, is a nonprofit organization that offers free online lectures in subjects ranging from physics to American history and algebra.”
Perhaps this means Google realizes that its market is not “Googley” and, therefore, is more easily shaped with filtering, predictive outputs, and selective relevance?
Andrea Hayden, July 8, 2012
Sponsored by Ikanow
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