Earlier today, I was browsing through some pages on Google (the Google Press Center, actually), when I discovered yet another one of Google's features: the Google Zeitgeist page.  Sprechen sie Deutsch?  No?  Then what does Zeitgeist mean?  Well, to find out the meaning, you can use the Google language tools and choose "German to English" translation.  It literally means "spirit of the time".  Or alternatively, you can consult Wikipedia (the world-famous Wiki Encyclopedia) to find out the meaning of the word.  The alternative explanation is interesting: "...it denotes the intellectual and cultural climate of an era".  And what better medium than the Internet to capture that climate? 

The Google Zeitgeist represents an interesting compilation of the most searched words (or combination of words) on the most popular search engine on the Internet.  There are a lot of interesting conclusions one could draw.  Can the top 10 gaining queries be used as an indicator of which artists' or athletes' popularities are on the rise?  Perhaps.  But surely, my guess is that a lot of the athletes (e.g. Carly Patterson, Svetlana Khorkina, Paul Hamm, Michael Phelps) that have been gaining searches did so because of the advent of the Olympics - it would be interesting to see how long they hold.  The story is different with soccer, the world's most popular sport.  So Cristiano Ronaldo (the Portuguese born soccer player for Manchester United) and Ronaldinho (the Brazilian soccer star currently playing for Barcelona) should stay on the top 5 list for popular athletes image searches.    

But artists would probably have a bit more "staying power" on the Google "top search lists".  But if Chloë Sevigny makes it to the top 10 gaining inquiries list, can that be a sign that she is a rising star?  Events (such as Hurricane Charley) might generate a lot of traffic before, during or shortly after their occurrence, but quickly drop off the popular lists.  Ditto for movies (e.g. Shrek 2, which made it to France's July popular queries list) or computer games new releases (e.g. Doom3, which is on the declining queries list for July).

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Regardless of the validity of inferences that can be made about such "most popular" queries, researching them can be a useful exercise. Not only that, this activity could be used in a different context as well, searching for the most popular technology news; knowing those can be helpful in identifying some technology trends, or changes in public sentiment towards an existing product.   more »

The triple play (the bundling of of voice, video and data) is becoming a sine-qua-non piece of the carriers' strategies (for both telcos and MSOs). In the U.S., this opportunity is generating quite a lot of business for telecom vendors. A few well-connected Wall Street analysts whom I know gave me a few hints last week about their best-guesses on some RFP outcomes for some RBOCs.  Unfortunately, unlike Om Malik, I cannot reveal my sources here, but they definitely come from reputable investment firms. 

Verizon (NYSE:VZ) alone has 3 RFPs currently planned: one for the set-top box, and two coming out in October (but the decision not to be taken until probably late in 2005) - one for a mini (small count) DSLAM and the other for the second FTTP vendor.  Most carriers like to at least dual source their telecom equipment, and Verizon is no exception to that rule.  AFC is expected to be the primary supplier in the mini-DSLAM contest, with Adtran being the secondary vendor.  Also, there is some speculation that while Verizon will look at an extensive list of vendors as part of its due dilligence in the the seconardy FTTP provider.  However, there are rumors that Alcatel and Motorola will be the top two contenders for this project.  Finally, on the set-top box RFP, there seems to be a consensus that Motorola is the favorite choice, given that while Scientific Atlanta's gear is quite impressive, Verizon's top brass is a bit concerned about the vendor's close relations with some MSOs.  The value of the set-top boxes deal is related to the success of the FTTP project, as these devices will be used wherever Verizon offers its triple play.

Meanwhile, Bell South (NYSE:BLS) is reportedly still on a holding pattern, awaiting for further clarification from the FCC vis-à-vis new UNE rules prior to making any commitments.  The top contenders for the original FTTP RFP included AFC, Alcatel and Motorola.  However, there are rumors that Bell South will probably opt for FTTC or ADSL 2+ instead of FTTP to achieve its triple play, given that FTTP costs would be sky high.

Finally, SBC (NYSE:SBC) also has a few interesting pending tenders.  The RFP grabbing the most attention surely is the FTTN project announced at Supercomm this year, which calls for speding of $750 million within the next fiver years on FTTC and ADSL 2+ gear.  The decision is due in October, and the field is packed, with the likes of ADC, Adtran, AFC, Alcatel, Ciena, ECI, Go Digital, Lucent, Pedestal Networks and Zhone all competing for a chunk of this project.  SBC also has another RFP for small line count remote DSLAMs, which will be deployed in less densely populated areas.  The top contender in this case is Adtran.

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Update (Sep.1/2004):The above TF story (and a previous one about India) were referenced on Om Malik's blog, Om Malik on Broaband - this was quite an honor, as Om's site (devoted to various telecom and technology topics) is one of the most read and respected in the blogsphere   more »

The great Indian potential was already brought up here in a previous post about Cable & Wireless' investment in Bangalore.  Recently, I read another article on Internet.com which best epitomizes the ongoing telecom boom in India.  There are many developments that the article touches upon, including:

• Cisco (Nasdaq:CSCO) reported that its fiscal Q4 2004 revenues from India increased by 40 percent over the same period last year
• Nortel (NYSE:NT) obtained a lucrative deal from BSNL (Bharat Sanchar Nigam Limited), India's telecom giant, to deploy a GSM network 
• Alcatel (NYSE: ALA) and Nokia (NYSE:NOK) are in line to also get portions of the BSNL deal

The list of deals does not stop there.  Last week, Om Malik exclusively reported in his blog that Motorola (NYSE:MOT) was chosen as the outsourcer in the Tata Telecom CDMA network buildup.  Gaining a portion of the wireless network deployment was certainly good news for Motorola.

No wonder Cisco CEO John Chambers was so bullish about the country's prospects, calling India "a great success story", adding that Cisco "put a lot of investments over the last several years, and they are growing approximately 100 percent year-over-year".

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Wired had a rather amusing article yesterday on a story picked up from the AP newswire. It turns out that there are two U.S. wireless operators (Cingular Wireless and Virgin Mobile USA) that decided to take advantage of a niche opportunity for offering what I call a "saved by the bell" call service.  These are rescue calls designed to get a cell phone subscriber out of a bad situation (those include bad blind dates, a lengthy client meeting from which may be hard to leave, and other awkward meetings). 

The actual service is provided by BeVocal, a California-based startup founded in 1999, and backed by VCs such as Mayfield, US Venture Partners and Technology Crossover Ventures.  BeVocal's telco-grade VXML platform can provide advanced call automation solutions, including these rescue calls.  The service allows the user to be called at a pre-determined time.  When the phone rings, one of many pre-recorded messages (with the excuse for breaking up the encounter) is played, and just like magic, the meeting is over. 

The two service providers are using different billing models for this service: Virgin Mobile charges 25 cents per call (plus the airtime) for its Rescue Ring service, whereas Cingular packages its Escape-A-Date offering as a monthly service (at a cost of $5 per month).  The article does mention that the highest call rates registered by BeVocal are around 8 PM on Fridays, which might be indicative of many blind dates that go sour.  The call volume totals about 10,000 calls per month.  So the only question is how long before we see this service here in Canada?  Will Virgin (the joint partnership between Virgin and Bell Canada) be the first operator to have this service?  We will soon find out...

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Microsoft announced yesterday that its much awaited next-generation OS (codenamed Longhorn) will be introduced sometime in 2006.  In order to accommodate the new timetable and deliverable targets, the software vendor would more than likely not include its reworked Windows storage subsystem (named "WinFS") with Longhorn.

Apparently, the need to quickly patch up the security of Windows XP (under the Windows XP Service Pack 2, which was wrapped up on August 5th), created the need to redeploy some programmers that were working on Longhorn to the Service Pack team.  Given that the performance of a parallel project (Windows Server 2003, scheduled to be released in 2005) was much better than Windows XP, Microsoft made the decision to move Longhorn from the XP code base to the Windows Server 2003 code base.

The upshot of this move was a delay in the delivery of Longhorn.  In order to meet the original deadline, Microsoft decided to drop the support for WinFS in the first release of the new OS.  Interestingly enough, Windows chief Jim Allchin, declared on a ZDNet interview that WinFS was just one of many improvements that Microsoft had in store (others included "great roaming support," .Net Framework 2.0, "new browsing capabilities," the "fresh" user interface, improved migrations and deployments, "more resilience to malware" and "a new photo experience").

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Note: Here are is a blog with a lot of good information about Longhorn: Longhorn Blogs.  Also, Schobleizer is also packed with great insights about the latest and greatest research going on at Microsoft (that's where you can find the link to Channel 9).   more »

NTT DoCoMo (NYSE:DCM, the largest wireless Japanese operator) and Motorola (NYSE:MOT)announced on Wednesday plans to develop a 3G FOMA handset geared towards business users (note: FOMA is the name of DoCoMo's proprietary 3G network in Japan).  The intent is for the new model to be GSM/GPRS compatible, making it the first FOMA model that may be used outside of Japan.

The new, still to be named handset will be able to access the Internet through mopera or any other available Internet connection, and will be compatible with public WLAN services offered by wireless operators.  That way, users will be able to use high-speed Internet access at fixed, cheaper rates whenever they are close to Wi-Fi hotspots.  The browser will be capable to display standard web pages, in addition to i-mode or WAP pages.  Another built-in feature is the ability to view e-mail attachments in Microsoft Office format

Also on the same day, announced a partnership to offer seamless WLAN roaming around the world via iPass.  Unfortunately, there are no current photos to be shown, as details given by Motorola and NTT were sketchy at best, but some observers believe the product will become commerically available sometime during the spring of 2005. 

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Note: This new model will have 4 connection option available: GSM/GPRS, Wi-Fi, 3G FOMA, and Bluetooth.  I believe that is the record - even more than the handset manufactured by Motorola in the Avaya/Motorola/Proxim joint project that was discussed here in a previous entry.   more »

I was glad to see that the Pulver.com folks decided to add the VON Enterprise Forum to the Fall VON Show lineup.  The VEF (short for VON Enterprise Forum) runs parallel to the main VON conference, but it is solely dedicated to the enterprise, bringing together vendors, application developers, service providers, system integrators, enterprise telecom managers and various telecom analysts. 

Seriously, the show floor has been already sold out and it promises to be one of the hottest VON events, given the interest it has generated thus far.  For the record, the VON home page says that this year's Spring VON (held in San Jose) brought 3,500 people from 30 countries representing 950 companies. 

Taking a quick glance at the VON Enterprise Forum schedule, we can see that gathering in Boston will be many VoIP thought leaders, including the likes of Jeff Pulver (the VoIP guru, founder and CEO of Pulver.com, the event organizers and perennial VoIP evangelists), FCC Chairman Michael Powell, Cisco CTO and Sr. VP Charlie Giancarlo, Mitel founder and major tech-entrepreneur Sir Terry Matthews, and the father of SIP and Distinguished Member of Engineering, Henry Sinnreich from MCI, among others.

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Here is a story that I came across on J@pan Inc.  It is from late May, but interesting, nevertheless, because Professor Eishun Tsuchida's team is the first ever to be able to fully manufacture blood synthetically in a lab, without the need of at least one element based on actual hemoglobin.

Bad Blood -- Japan's Invention Deficit

It's not often in life that an elderly genius ushers you into his lab and hands you a bottle of freshly brewed blood. But funny things happen in the nooks of Japanese universities.  A couple of days ago, leafing through the tedious pages of a crusty medical magazine, we spotted a report about Eishun Tsuchida, a professor who has spent the last three decades of his life trying to produce totally synthetic blood. The possibilities, he was quoted as saying, are quite extraordinary. Once it has been fully tested and certified -- and an effective mass-production technique has been perfected -- man-made blood may result in a worldwide end to blood donation, screening for diseases, blood group differentiation in stocks and shortages in the wake of big accidents and natural disasters. We quickly learned that the race to create this magical elixir has become a scientific version of the holy grail: The international quest has attracted a motley crew of genuine academic researchers, garden-shed kooks and profit-hungry con-men.  The concept of making blood in a lab is not new, of course, and has even been perfected by some companies. The difference is that other synthetic bloods have always relied on at least one element based on actual hemoglobin. Tsuchida's blood is a world first for having every part of the compound manufactured synthetically in a lab. It sounded too good to be true, so it was with a fair measure of scepticism that we called the professor himself. He was very eager to see us. When we turned up at his labs in Waseda university in northwest Tokyo, Tsuchida wasted no time handing over the fruits of his 31 years of labor -- a bottle he gleefully described as "rich, red and beautiful."  The testing was already underway with lab animals, and the human tests -- a series of transfusions -- are being prepared as we write. The young researchers are all graduates of Japan's, Britain's and America's finest universites. They sat in awe of the professor as he clicked through slide after slide of successful lab results. Tsuchida concluded that he had nearly finished building a factory outside Tokyo to "brew" large quantities of Albumin, the critical ingredient, from yeast, and he believes that emergency services will be able to carry stocks of his blood -- which can be stored at room temperature, is not blood-group specific and has a shelf-life of 24 months -- within a few years. But, per usual in Japan, we left disappointed. Here was man who would be a celebrity anywhere else in the world. But he remains an unknown because of the odd relationship between Japan and its researchers, Japan and creativity, Japan and ... the individual with talent.  In the US, he would have formed a company, pushed out an IPO and have prepared a super-slick, TV-ready speech ready to woo serious investors. The problem is not that the Japanese are not great inventors -- it's that they don't have the slightest clue about how to sell their best ideas. -- The Editors

Well, for his devotion in leading such cutting edge research for so many years, Professor Tsuchida gets an honor spot here in this blog... in the hopes that, as the above article suggests, some life sciences VCs (whether in Japan, U.S. or elsewhere in the world), or a major pharma company or research lab fund this idea and does whatever possible (in terms of providing research capital) to make this project reach its ultimate goal faster.  For more details on the research, you can follow this link (from Waseda University).

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There was a pretty gloomy market story on yesterday's Financial Post about a potential "Black Monday" scenario.  Well known and respected Morgan Stanley economist Stephen Roach identified a scary parallel between the official foreign purchases (by central banks and monetary authorities abroad) of U.S. securities in 1987 and right now.  From January to September 1987, official purchases reached 47% of total net foreign acquisitions (about four times the 1986 share of 13%).  Fast forwarding to today, we are currently experiencing a dramatic increase of that ratio to 35% (from September 2003 to June 2004), which represents double the long-term average and more than four times the 2000-2002 average of 7.6%.  The reasoning behind this buying (particularly by Asian investors) is that it keeps the U.S. dollar strong, while keeping goods from other countries competitively priced.

The implication of these statistics being that if this foreign buying stops,  the consequences can be quite calamitous.  The halting of foreign US stock investment can be a distinct possibility, given that people living abroad might reasess their return expectations of U.S. securities bearing in mind the very slow pace of market growth and the currency exchange rate risk. 

What could be the implications of such a correction to VCs, startups and the high tech industry at large?  That would depend on the amount of time the recovery would take, and other external macroeconomic factors, including oil prices.  Higher oil cause inflationary pressures, which can in turn make the Fed rise interest rates, a measure that potentially can crowd out investment.  A double shock caused by rising oil prices and the above imbalance could cause a prolonged market slump, which can potentially dry up investment for a while.  But this is certainly a thought-provoking paper that entails a lot of "what-if" scenarios.

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Update: The full Morgan Stanley report is available at their web site.   more »

Constantin Basturea (Hat tip: @rgumente) discovered that there are many CEOs also doing their share of blogging and has complied a list at the New PR Wiki.  I thoroughly enjoyed reading the information in that Wiki, as it gave me plenty of interesting insights about the world of PR. 

As an telecom analyst, one often interfaces with various people in AR (Analyst Relations) departments of various vendors, service providers, systems integrators and large distribution channels, but that is a little bit different than PR on its own (actually, many AR people I know are well versed in PR as well, but there are a few exceptions, and those folks would immensely benefit at least getting some know-how from information sources such as the ones I mentioned above.  What's nice about Constantin's Wiki is that it is open to anyone (you don't have to be a PR pro to make a contribution), and it contains interesting factoids such as the CEO bloggers list mentioned above.  More importantly, it also offers insights on topics such as business blogging, corporate blogging, headlines aggregators, and many others.

So, now that I've given Constantin's efforts a much deserved accolade, let's go back to the title topic.  Which famous CEOs are blogging?  Well, after Bill Gates' very positive comments about blogging at this year's Microsoft CEO Summit (which were commented here in a previous entry), I expected to find him on the list... Well, not really.  So it came as no surprise not to see his name mentioned.  But surely, there were a few famous people that made it: Ray Ozzie (Founder, Chairman and CEO of Groove Networks), Kevin Lynch (Chief Software Architect for Macromedia), Jonathan Schwartz (COO for Sun Microsystems), and even Mark Cuban (the owner of the Dallas Mavericks, and fittingly, the author of "Blog Maverick" blog).

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Update (25/8): I've added two entries on the Wiki (one for Jeff Pulver and the other one for FCC Chairman Michael Powell.  I added Mr. Powell because the list not only includes CEOs, but also "people who are in a leadership position".   more »

Cisco (Nasdaq: CSCO) announced today that it had signed an agreement to purchase P-Cube, an Israeli start-up based in Herzliya with administrative offices in Sunnyvale, CA.  P-Cube develops IP service control platforms geared towards assisting service providers to "identify subscribers, classify applications, improve service performance and charge for multiple IP services without costly infrastructure updates", according to a Globes article.

Looks like Light Reading's crystal bowl is working wonders these days... Back on July19, the respected publication and think-tank had printed its newest "Top 10 Private Companies List" and P-Cube had made it as #10.  Incidentally, that was just because 12 days after that list went live, their previous #10 pick, Telica (a softswitch vendor), had been bought by Lucent (NYSE: LU).  Well, now it's time for Light Reading's editorial team to do yet another refresh.

So what's the big deal about P-Cube?  Well, simply put, the company has a pretty ingenious engine that can monitor traffic at Layer 7 (that's the application layer, according to the OSI model).  This allows P-Cube to distinguish and identify traffic patterns in ways that traditional routers simply are not able to.  The key benefit is to empower service providers to monitor their service levels and to conform to SLAs (Service Level Agreements) by detecing network problems more rapidly.  The P-Cube solution enables operators to monitor bandwidth hogs that use P2P sharing apps, and either charge those users extra, limit the bandwidth of those connections, or simply drop them altogether.  No wonder the company caught the eye of service providers such as Bell South, 3 Italy (Hutchison) and Pelephone (Israeli wireless operator).

This acquisition means that a potential "killer app" can soon be incorporated into a wide range of products in the Cisco portfolio, from mid-range routers up to the core.  Cisco plans on continuing to sell P-Cube's appliances until it starts absorbing the technology in its product line, which might take about a year.

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A recent study by iSuppli/Stanford Resources indicated that the demand for LCD (Liquid Crystal Display) panels were significantly lower than expected in the first half of 2004.  Hence, prices are expected to fall for 17 and 19 inch LCD TV panels based on TFT (Thin Film Technology).  The oversupply in Q2 alone was estimated at 6.4 percent, due to the lower demand and a higher supply, and is expected to continue through Q3, when 8 new LCD fabs begin production.

The biggest world producers of LCD displays are South Korea's Samsung (SSNGY:NQB) and LG.Philips (LGL:NYSE), a 50-50 JV between South Korea's LG Electronics and Holland's Philips Electronics that made its IPO recently in July. 

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The veridict was in and the movie industry lost its case against file-sharing apps.  A federal appeals court (the 9th U.S. Circuit Court of Appeals) held that two popular file-sharing programs (made by Grokster and StreamCast Networks) are not legally responsible for the way these applications are utilized by end-users, for purposes such as swapping sound tracks, movies and other copyrighted material. 

One possible implication of this ruling might be that movie studios might now take a more costly and impopular approach of suing individual user copyright infringments, following the lead of the recording companies (which already have sued more than 3,400 users with at least 600 of those cases being settled for about $3,000 each).

Judge Sidney Thomas proved to understand the underlying issue in this case, which was technology.  Unlike Napster, which relied on central servers pointing users to copyrighted material, Grokster and Morpheus use peer-to-peer technology.  His quote was: "In the context of this case, the software design is of great import".   

The three-judge panel ruled that the two software companies offer programs that allow individual users to share information over the Internet, and as such cannot be held liable if some of the information being shared by the users happens to be copyrighted.  Thomas' statement also shows that peer-to-peer (P2P) technology can have many other uses:

"The technology has numerous other uses, significantly reducing the distribution costs of public domain and permissively shared art and speech, as well as reducing the centralized control of that distribution."

Bottom line is: this is a victory for the consumers.  If the movie industry wants to pursue a litigious path, it always has the option of going after individual users.  The movie industry survived the blow of losing the previous landmark case with Sony Beta (that legal precedent was actually used in this case).  But if this ruling would have gone against StreamCast and Grokster, a lot of innovative P2P innovative products would have been halted and/or potentially killed and technology would have been the loser. 

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A recent survey from Nielsen/Net Ratings revealed that for the first time ever, the number of Americans connecting to the Internet over a broadband (DSL or cable) connection exceeded the amount of Internet users connecting via modem.  The data, taken in July, shows that 51 percent of U.S. online users connect via broadband, a significant jump from 38 percent a year ago.

The broaband penetration varies by age group, with the highest numbers being registered with the younger population.  This growth was attributed to many reasons, including the drop in service rates, with many users being lured by lower monthly DSL fees (e.g. Qwest's monthly DSL fee is $26.99, SBC offers DSL at $26.95 per month, whereas Verizon charges $29.95).  Cable is still king, however, amassing a much higher market share than DSL.  However, in Q2 2004, DSL took the lead in new customers against cable for the first time (895,000 new additions versus 830,000).   

However, for a good reality check, the U.S. numbers are still lagging behind other regions in the world, including Europe and Asia.  In Japan, for instance, broadband was used by 91 percent of home Internet users in Japan during June, according to Nielsen data.

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Two important discoveries about the Red Planet were made earlier this week by the NASA twin rovers.  The Spirit rover found additional signs that water might have once existed in Mars.  The rover's twin (Opportunity) discovered a field of dunes inside a crater.

The robotic vehicles landed in January and first uncovered signs in March that Mars had water at one point in its history. The Spirit rover has now explored nearly two miles across the plains of its Gusev Crater landing site and into an area called the Columbia Hills. The rover recently found indications water had changed an outcropping of bedrock dubbed Clovis, NASA scientists claimed. The research indicates that the interaction with liquid water changed the composition of the rock - a fascinating proof that water might have once existed in Mars.

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Innovations Report, an interesting German site with articles on emerging technologies, had a story last week on some exciting research being conducted right here in Canada (at Carleton University and the University of Toronto).  In an article published on Nano Letters, a scientific journal, University of Toronto Professor Ted Sargent discussed his work on using a laser beam to direct another with unprecendented control - an accomplishment that is quite handy for fiber-optic networks.  Fiber-optic networks can send data at 10 Gbps or 40 Gbps and are being deployed worldwide to connect all the networks.  However, when information is passed from one network to another, switches and routers can introduce delays, slowing down the effective rate of transmission.  The latency is caused by the conversions of data from optical to electronic data, which is in turn used by the switches and routers. 

Sargent claims that the speed of optical (i.e. fiber-optic) links simply cannot be matched by routers.  Going through 10-15 routers in a typicaly hopping sequence does introduce a lot of delay.  The solution was to refine optical switches so that those could forward data at up to 100 times the bit rate of the fastest networks available today.

The joint research project with Carleton Univeristy (Professor Wayne Wang and colleague Connie Kuang) eventually led to the creation of a new polymer material that could be integrated into optical switches.  The end result was a material that combined nanometre-sized spherical particles referred to as "buckyballs" (molecules of carbon atoms resembling soccer balls) with a designed class of polymer.  That combination of the polymer and the buckballs created a thin film with electron-rich molecules with enough power to make light that passes through to control the direction of other light.  That is what yields the switching capability.

This is definitely an interesting development, and pontentially disruptive to the router industry.  Once all-optical devices become the de-facto standard, the delays caused by electronics will no longer be performance bottlenecks.  When can this happen and what are the implications to router vendors?  Well, not quite yet - it is certainly a futuristic technology, because the production of the material needs to be perfected and that same material needs to be able to withstand the tough conditions of the network environment.  Another potential factor that could curtail the uptake of such a solution is the slow uptake of 40 Gb networks.

Note/Update: it might take as much as a decade for this technology to be commercially available, and, more importantly, eventually deployed by some enterprises. But this development certainly represents another milestone for the promise of nanotech.

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Well, after a much anticipated debut on the Nasdaq, Google (Nasdaq:GOOG) stock experienced some volatility today, which was expected under the Dutch auction rules (first, the high priced orders are filled, followed by the other ones, as was described in an entry earlier yesterday).

Surprisingly, the high orders came out at $140, but the stock eventually did find an equilibrium point at around $100, which is still $15 over the original IPO price of $85, corresponding to about an 18% increase on its first day.  In the biggest IPO so far by an Internet company, Google sold 19.6 million shares at $85 each, raising $1.67 billion.  Not bad for Day 1.

Paul Kedrosky has an interesting insight on the Google IPO at his blog, Infectious Greed.  I particularly liked a paragraph that he had on his article on the National Post:

To the extent that such investors are telling the truth about their intentions, they are wrong. Sure, Google's stock is expensive, but so is the stock of Google's peers -- AskJeeves and the like -- and so has been almost every newly-public high-profile company in the last decade. You don't get to be Google's size and prominence, and then somehow tiptoe public.

I have included a chart at the bottom of this article, taken from Yahoo! Finance to show the movement of the stock during the day.

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This posting is yet again another tribute to the robot enthusiasts that have been flocking this blog recently, although I have to confess that I have checked the price of Robosapien and saw a brief demo while taking a few days off in Boston in early August with my wife (note: we were in Downtown Crossing, going over to Filene's when I decided to drop by Macy's nearby).  Must be deja vu from the MIT 2.70 contest...

Japan Today had a neat story on Epson's launch of the world's lightest flying micro robot.  According to Seiko Epson, this is an advanced successor to its original flying micro-robot which was the world's lightest and smallest (136 mm wide, 85 mm tall and a light weight of only 12.3 grams with the battery included).  The new "Micro Flying Robot" follows a flight-route program sent from a computer using Bluetooth wireless technology.

A description of the model reads more like one of those James Bond / 007 gadgets: "On board is a 32-bit microcontroller, a super-thin motor, a digital camera that sends blurry images and a tiny gyro-sensor that weighs less than one-tenth of a gram."

And besides being a great toy, what can be the applications for this Micro Flying Robot?  Actually, the AP story talks about real purposes for this miniature helicopter, including disaster rescue, security and even space exploration. 

Note: the Seiko Epson web page has a press release with a bigger photo available here.  There is also a link with a video of the flying mini robot. 

Update (20/08/2004): The above story was cross-referenced on Gizmodo!  That was really nice - an honor, in fact, given the popularity of the site and how it always carries stories on the latest cutting-edge gadgets.  As it turns out, this version of the mini-heli-robot (how about that for a shortcut?) is an improvement over the previous one, which was introduced last year.  Here is the older model (hat tip: Gizmodo).

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We are inching closer to la grande finale of the symbol GOOG making it to the Nasdaq ticker.  Yesterday, the SEC gave the Mountain View, CA based search engine company the rubber stamp needed for initial public offering of the stock.  But Business Week claims that Google is still not out of the woods, and may still get a slap on the wrist from the Commision.

In the meantime, the company priced on Wednesday its IPO at $85 per share, at the low end of its already reduced price range.  So where will GOOG end up being in terms of valuation?  The smart money is saying somewhere between eBay and Yahoo!.  But we will see the results very soon.

As far as where the stock will trade in the aftermarket, I have discovered a good posting on Paul Kedrosky's blog.  It turns out Paul had saved the graph of a New York Times article explaining how Dutch style auctions work, so it is posted further below in order to make it easier to understand John Fitzgibbon Jr.'s analysis on the Francis Gaskins website (Francis is a renowned IPO analyst).  Here is what John has to say about the aftermarket price:

A true Dutch auction is an auction. The higher-priced orders would be absorbed into the initial offering and not be ready to pounce on the IPO in the aftermarket. The answer to the question –- in a pure auction -- as to how high the stock would trade? "It won’t go above its IPO price." There would be no higher-priced orders to push the stock higher in the aftermarket. They would have been absorbed into the initial offering.

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On a similar thread to the Google IPO, the Washington Post ran an interesting story yesterday on the increase in M&A, startup and IPO activity thus far in the year.  Among other notable facts:

VC funds spent $10.6 billion in new investments during the first half of 2004, up from $8.9 billion over the same period in 2003

146 US companies have had their IPOs in 2004, more than the total for 2003 (according to Thomson Financial)

The M&A segment had a flurry of activity in 2004, with notables including South Korean Daum Communications Corp. (the country's largest portal) acquiring the American web sites of Terra Lycos S.A., AOL's acquisition of Advertising.com and Mailblocks Inc., Yahoo!'s purchase of French comparison shopping site Kelkoo, etc.

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The SEC (Securities and Exchange Commission) did not make any announcement regarding the status of Google yesterday (Tuesday).  The search engine company needs the SEC's rubber stamp before being able to proceed with the pricing of its IPO.  The IPO was expected to happen last week and has been postponed until the SEC makes its decision known to the public.

In the meantime, there is no shortage of press coverage on the topic:

• The San Francisco Chronicle had a story about how hard it is for a common investor to get access to some GOOG shares
• Playboy is finding that the Brin/Page interview is selling a lot of copies of this month's issue
• Business Week is offering some words of wisdom on how much GOOG will be worth
• And even across the Atlantic, Google is making headlines in an FT editorial piece

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With all the attention of the TV audiences across the globe being captured by the 2004 Olympic Games in Athens, Greece, I decided to do a story on sports medicine.

The science of sports medicine has evolved a lot in the past few years.  One example that comes readily to mind is "Tommy John" surgery, named after the famous pitcher who once played for the New York Yankees (among other baseball teams) and was the first hurler to ever undergo this procedure some 30 years ago.  The surgery, which is career saving for many pitchers, has been perfected a lot over the past decade, with the success rate going up from 60 to 85 percent for major league players.  While the procedure has gone through some enhancements, it is still pretty much the same as it was for Tommy: a tendon is removed from the patient's wrist or hamstring and grafted into the elbow.  But it is the post-operative rehabilitation that has been really perfected over the past few years, increasing the success rate of the surgery.

Unfortunately, just as it can be used for good purposes as above, sports medicine can also be used sometimes to achieve a victory at any cost.  I am talking about the research that goes on in the dubious science of performance enhancing drugs, which always seems to get more attention during the Olympic games, particularly with such notable disqualifications as Canadian runner Ben Johnson in Seoul (1988).  In other cases, controversy sets in, such as with Romanian gymnast Andreea Raducan, who lost her gold medal at the last Olympic Games in Australia because she took an over-the-counter cold medicine.

The Economist magazine had an interesting article on the subject on its August 5th issue.  Some athletes are benefiting from taking EPO (Erythropoietin), a drug which has generated billions of dollars in sales for inventors Amgen (Nasdaq: AMGN) and licensee Johnson & Johnson (NYSE: JNJ).  Basically, the protein promotes the production of red blood cells that enable the blood to carry more oxygen, being prescribed to anemic patients undergoing chemotherapy or suffering from kidney failure.  But for an athlete, EPO definitely improves endurance, since the blood can carry more oxygen to the muscles.  For years, the detection of the protein with standard blood and urine tests has been quite a challenge.  By the time the IOC anti-doping officials perfected EPO testing, science threw them another curveball, since these newer tests cannot detect Aranesp, Amgen's newer, longer-lasting version of the protein.  The article also warns about gene therapy, which involves planting new genes in a person's cells in order to produce missing proteins.  Again, this is a technique being perfected for the noblest intetions, however it can be used both to save lives and to enhance athletic performance.  While Aranesp could be eventually detected, gene doping is almost 100% certainly undetectable, and might make the whole issue of testing a futile exercise.

Finally, there are a lot more complicated ethical questions that might not easy answers.  EPO and gene thereapy as described above clearly violate the olympic spirit of fair competition.  But what about athletes that undergo special treatments to heal faster from injuries?  Soccer idol David Beckham, a star for England and his Spanish club (Real Madrid), used an altitude chamber to accelerate the healing of a broken bone before the 2002 World Cup.  This was well known and documented even before the start of the competition.  How should FIFA or the IOC deal with those type of border line cases?  There may not be a right or wrong answer here...

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Updated 17/08/2004  There has been so much interest in the ROBO-ONE contest that was mentioned here a week ago, that I decided to post this, courtesy of Gizmodo.  It turns out that the popular site had a couple of entries dedicated to the big Macy's Robosapien exhibit in front of its New York City store.  This is part of the campaign for the much anticipated arrival of WowWee's Robosapien, "the hottest programmable, entertainment robot on the planet".  The robot is expected to be available at Macy's stores across the United States in the "Home Store" section. 

Here is another link to the story, along with a full description of Robosapien:

Designed by WowWee and robotics physicist Mark Tilden, Robosapien is the most advanced and humanlike robot available. At 14 inches high, Robosapien has excellent articulation and has 67 pre-programmed functions, including picking up, throwing, giving a high-five, whistling and dancing - all of which you program with an easy-to-use remote. Robosapien has four advanced programming modes to program a sequence of actions and three pre-programmed demo modes. And, in addition to being highly intelligent and programmable Robosapien is also totally affordable at an approximate retail price of $99.

So to all the robot enthusiasts out there... enjoy!

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After the success of the Spaceship One mission (which was documented here in May), some wondered which other contestants could contend for the coveted Ansari X Prize.  Well, one of these contenders is an entry from Canada: the Canadian Arrow project.

Yesterday, the Arrow team completed a successful test run of part of their spaceship.  From a height of 2.4 kilometers, the Canadian Arrow dropped an unmanned crew cabin from a helicopter.  Then, about five minutes later, the cabin floated safely into the waters of Lake Ontario - just a bit South of the Toronto Island Airport (a smaller airport used only for some domestic flights).

No launch date for the full spaceship (measuring 17 meters) has been set as of yet, but it will probably happen sometime in the fall.  Canada also has another entry in the X Prize contest: the Toronto-based da Vinci project.  The da Vinci team expects to launch its Wild Fire craft on October 2nd, from Kindersley, Saskatchewan.

In other Ansari X Prize news, the Washington State team private unmanned 23-foot-long Rubicon 1 subscale test rocket exploded 200 feet after take off during a flight last week.  No injuries were reported in that test, conducted in an unpopulated area of the Olympic peninsula.

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Despite the drop in its stock price and the cautious mood set by its CEO, Cisco (Nasdaq: CSCO) actually had a good quarter.  Also noteworthy, but not much commented was the company's performance in the enterprise IP voice segment, which is an important emerging source of revenues.  The Cisco IP PBX (Call Manager), along with its suite of applications, represents a unique opportunity for the company to grab a share of the lucrative enterprise voice market, which has been historically been the turf of companies such as Avaya, Nortel, Mitel, Siemens, NEC, Alcatel and others.

Cisco and 3Com (Nasdaq:COMS) both got into the enterprise voice market via acquisitions (3Com buying Andover-MA startup NBX and Cisco opting to purchase Intecom's IP PBX division, Selsius).  Arguably, both companies pushed the innovation envelope of enterprise IP telephony, forcing the traditional vendors to catch up and introduce similar offerings or risk losing their installed bases.  Some of these original incumbents, such as Mitel, got started developing their IP PBX product lines sooner than others, such as Ericsson.  But two factors ultimately helped the TDM-based vendors: the massive migration that took place prior to Y2K (when enterprises chose to buy new PBXs instead of paying Y2K upgrade fees) and the economic slump.

That said, Cisco still is enjoying quite a lot of success in this space, remaining one of the players to beat.  In the 2nd calendar quarter of 2004, Cisco shipped 437k IP phones, a jump of roughly 11% over Q1.  Some industry observers say that Cisco will face an uphill battle as the current installed base begins to age, since enterprises will go back to the VARs servicing them and request a new system from the original TDM vendor.  Regardless, Cisco still has a commanding lead in the enterprise data market, and can use that position to try to influence some decision makers (particularly if they come from the data rather than the voice side of the house).

Another point that puts Cisco in quite an enviable spot is that regardless of which company wins the voice portion of an IP PBX RFP, chances are Cisco will still make some good money on that deal.  For every dollar of voice equipment (in an upgrade from a TDM to an IP PBX), there is a pull-through effect of roughly three dollars on the data side, as the existing enterprise data network typically needs to be refurbished, in order for it to carry both the voice and data traffic.  And Cisco is very likely to gain those three dollars, due to the company's leadership in enterprise data. 

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The Google IPO is off to a bumpy start, with the sale process of roughly 25.7 million shares being kicked off yesterday, despite the disclosure that a recent Playboy magazine interview with the company's founders might have violated the "quiet period" mandated by the SEC prior to an IPO.  Some observers claim that the interview might have overstated a few aspects of the Google search engine's performance.  My own take is that the SEC made the right decision to allow the IPO to go ahead, as planned, after Google publicly filed a copy of the interview with founders Sergey Brin and Larry Page, with a list of corrections.

The Google August 13th prospectus is available at the Edgar SEC site, however the folks from the Google-Watch site have made available an easier-to-download Zipped copy at their site.  Please note that the Google-Watch site is in no way affiliated with Google.  Another good resource (also without any relationship with Google) is the Google IPO Central.

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The notion of visual component as part of a voice conversation has been around for a long time, with video phone models having been pitched in the past.  With the advent of IP phones, a new wave of IP video phones came around: first, there were prototypes such as the LG model shown in the figure, and then with other models being introduced in the marketplace such as the IP video phone that Nortel sells in Asia/Pacific.  The cost-conscious consumers always had an option of a no-frills video phone, courtesy of a free download from Microsoft's Net Meeting application (or its popular predecessor, CuSeeMe) and a low-cost web cam. 

But the Technology Review blog had a really interesting entry yesterday on its Telecom/Internet section.  The article spoke about a new concept being developed at the world famous MIT Media Lab, called Visiphone.  This is definitely not a video phone, but rather a phone that displays abstract symbols that are supposed to represent sounds made by each speaker over time.  The product consists of a glass half-dome that goes on top of a small video projector.  When a participant starts talking, a colored circle appears at the center of the dome, and as the chat progresses, that circle begins to spiral out to the edge of the cone.

Quite abstract concept, but could there be any applications?  One that I could think of would be a Visiphone for hearing-impaired people.  But there could be many features from this product that can be incorporated, for instance in an audio conferencing desktop unit.  For instance, a low-end embedded speech recognition device can be added and with it, there could be a timer that would keep track of how much each conference participant talked.  The speech recognition chip would first take a few voice prints and then be able to identify when a speaker changes.  The information (e.g. data such as length of time taken up by each participant) could be visually displayed (in a bar chart format), and updated in real-time.  This could be useful, particularly for the folks that sometimes take up all the bandwidth on such calls, or for those people that tend to fall asleep or think about their weekend plans...

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First, it was Cisco (Nasdaq:CSCO), which despite announcing that its quarterly profit soared by 41 percent, set a cautious tone with a statement from its CEO and reported an increase in inventory.  John Chambers made the following statement to analysts in a conference call: 

"Most of the CEOs that I talk with view the economy as growing at a modest level and are a little more cautious ... than they were a quarter ago."

Then, it was Intel's (NYSE:INTC) turn to state higher inventory levels and see its stock dip below the $22 mark and be downgraded by brokerage firms like Lehman Brothers. 

And today, the bearish high-tech trifecta was complete today with Hewlett Packard (NYSE:HPQ), reporting sales that were 39% below most analysts' estimates.  CEO Carly Fiorina had to shuffle the deck, and lower the boom on execs in charge of server sales after disappointing results in that area.   

Can all these results be indicative that the recovery that many were predicting might not be as strong as initially thought?  Maybe so, according to a Business Week article.  But on the same article, there is a valuable insight, courtesy of Juniper Networks' CEO Scott Kriens:

Juniper Networks (JNPR) CEO Scott Kriens argues the technology recovery isn't stalling. Instead, he says, there's a new reality. "The tech recovery will be checkerboard," Kriens says. "It won't be marked by 'a rising tide lifts all boats.'" Discriminating tech buyers are most likely to consolidate their purchases around a handful of suppliers, leaving tech's also-rans in an increasingly precarious position.

The road to this "checkerboard" recovery will be bumpy, as it will be marked by mixed results.  At least on the positive side, Dell (Nasdaq:DELL) reported good results today, and IBM (NYSE:IBM) announced it will have to hire 8,800 more people in 2004 than it had previously expected, due to growth in its IBM Global Services business. 

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With all the IPO market focus on Google, there was very little insight offered last week, when Nanosys Inc., a nanotechnology startup, decided to withdraw its plans to hold an initial public offering.  Technology Review did carry a story from AP reporter Matthew Fordahl on the subject.

The article claims that Nanosys has 43 employees, and its main focus area is inorganic materials having about 1/100,000th the diameter of a hair.  While the company had secured an enviable lineup of partners (including the likes of Intel, Matsushita, DuPont and CIA-funded In-Q-Tel), no products have yet been introduced to the marketplace.  The company also holds (internally, via acquisition or licensing agreements with universities) an enviable intellectual property portfolio of roughly 250 patents (including some that are still pending).

In an earlier post, I referenced a new nanotech stock index, created in April 2004 by Merrill Lynch.  The article claims that back then, there was a lot of interest and the index soared to $274.06.  Since then, its value has eased to $187.

Note: Despite this bit of news, I expect to hear great things about Nanosys in the future.  There is massive investment being poured in the nanotech sector (e.g. President Bush signed a bill in late 2003 to invest nearly $3.7 billion in this segment).  Moreover, almost a dozen leading nanotech scientists serve as exclusive technology advisors to Nanosys.

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Dottocomu has a pretty interesting story today about the ROBO-ONE contest being held in Japan.  The annual event features bipedal robots in a tournament that gets the attention and imagination of many enthusiasts who watch their creations tear each other apart.  The contest has a captive audience that is eager to watch robots with creative names fight each other, inspiring new strategies and designs every year.  One of the notable fans in the 2004 edition of the competition is Aerosmith's Steven Tyler, who autographed one of the robots on display in Tokyo.

Notes:

1- San Francisco held earlier this year (March 20th and 21st 2004) the Robolympics event.  Even on that occasion, Japanese and Korean robo-one models delighted the crowd.  The Korean entry in particular was interesting, as its robo-one had a vision system that enabled it to track and kick a tennis ball.

2- All this robot talk has gotten me to be a bit sentimental... I vividly remember watching the famous MIT 2.70 robot design competition, which has now been renamed the 2.007 Contest (part of the old "Introduction to Design" course, whose number used to be 2.70 in the MIT course catalog, and recently has been re-labelled "Design & Manufacturing I", or course 2.007 for short).

3- I did not have a chance to catch "I, Robot" yet, but Yahoo! users seem to have given it a B+ rating, better than the movie critics (B-).  Any opinions are welcome...

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Technology Research News (TRN) has an interesting article about chips that use light signals rather than electricity.  In their July28/August 4 issue, Eric Smalley talks about the progress made with the dawn of the photonic crystal, a material that is able to block and channel light within extremely tiny spaces.

The article talks about research being carried at MIT and Kyoto University on making such photonic crystal chips.  The process can be quite intricate, as it involves making these 3D-devices that can emit light from specific points, while being manufactured in the mass-production fashion.  One of the end goals is the all-optical computer processor.  However, other applications can include bio and chemical sensors, optical memory, and quantum communications.

But while these fine research institutions are further refining these processes, an article that appeared in April suggest that scientists at Intel Israel are very close to achieving the same goal of developing electro-optical chipsets.  In this case, they are based on silicon wafers capable of converting electronic signals to optic signals within the chip.  The joint CEO of Intel Israel, Amir Elstein, claims that the switches will be able to operate at 10GHz.  By allowing the communication to happen at the speed of light, communication will be made possible at roughly 10 times the current speed.

Note: The original article, which appeared in the Israeli newspaper Ha'Aretz, is no longer available (I even tried the Google cache).  However, I did find a reprint available here.

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Dragos Novac discovered an interesting Israeli company and wrote a piece about it in his blog.  Trendum, an Israeli startup founded 4 years ago, owns a sophisticated media mining technology.  By analyzing discussion groups, forums, communities, chat rooms, blogs, and online responses, the company is able to provide valuable insight to companies such as Time Warner (NYSE: TWX).  In that particular case, their algorithm was able to predict that Britney Spears' popularity was falling, to the surprise of some Time Warner execs, according to a story on Globes.com (a good Israeli online source for high-tech news).  Founded by former Gallup Israel founder and CEO Jacob Levy and his son Ori, Trendum is currently seeking to raise $3 million from various Israeli and American VC funds. 

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Brad Feld has an interesting insight on what some VC players usually say on certain instances, including the always contentious term sheet negotations:

Term Sheet Negotiations (Ode to Matt Blumberg's Post) We bring more than money to the table: Uh - yeah. What would that be again? That's an industry standard term: Hint - there are no industry standards in the venture business. Don't worry about pre-money - we'll take care of you later: Did your mom ever says, "Honey - don't worry about the water - c'mon in, it's not too cold."? Don't focus on percentages: This is kind of like saying to a 747 pilot "don't bother paying attention to where the runway is - just land where ever you want." Don’t worry about that term, we’ll never actually enforce that: Um, right.

Brad's piece also mentions Matt Blumberg's detailed article, also on the same topic of term sheet negotiation. Both entries are definitely worthwhile reading!   more »

Here is another interesting model on the Google IPO: Innovation Futures.  This is a predictive market system that enables users to predict the outcome of various events related to emerging technologies, one of which happens to be the upcoming Google IPO.  The three questions associated with the Google IPO are:

1- What will be Google's market cap at the end of the IPO day?

< $20 b

$25- $30 b

$30-$35 b

$35-$40 b

> $40 b

2- Will Google have a bigger market cap than Yahoo! at the end of the first day of its IPO?

Yes

No

No IPO

3- Will Google go public in August?

Yes

No

The favorite options right now are the $30-$35 billion range for Q1, No for Q2 and Yes for Q3.  Of course, normal market demand and supply forces determine the prices of each option.  It will be interesting to see how close these options can mimick the real market and secondly, how accurately they can forecast the final outcome of a particular event. 

Be sure to participate and test your business acumen!  I have made my own plays but will not divulge them at this time...

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NTT (NYSE:NTT), the Japanese telecom giant, says it is releasing today the first 3G phone that can also serve as a "mobile wallet" for making purchases and for performing ATM withdrawals and credit card purchases. 

The F900iC model utilizes a smart card to work with its FeliCa mobile wallet service, which empowers subscribers to use the mobile's near-field wireless technology to carry out various transactions.  The phone works with DoCoMo's 3G service, and also requires a subscription to NTT's i-mode service.

Another interesting feature is security: the smart card functions can be locked using either a password or a fingerprint sensor.  It is the first mobile handsetl that I am aware of that uses biometric verification.  The F900iC also comes with a 1.28 megapixel built-in camera and a 2.4 inch high-res color LCD.

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A lot of articles were written this week about the much-awaited Google IPO.  The feeling among most Wall Street insiders is that the IPO might be delayed due to concerns about the process, securities regulation issues and the high initial asking price, which might be turning off some fund managers.  On August 5th, the company recognized that it neglected to account for 23.2 million shares of common stock and 5.6 million of stock options that were issued to various employees and consulants.  There were some articles that claimed that Google was making offers to purchase that stock back, but at a significant discount to the price set on its IPO filing (in the $108 to the $135 range).

Jim Jubak (a respected columnist from MSN Money Central) goes as far as claiming that Wall Street wants Google to fail.  His article does a great job at explaining how a Dutch-style auction works and why some Wall Street investment bankers might not be happy with the Google approach:

But Wall Street has survived low commissions on high-profile IPOs before. What really bothers the investment bankers is the worry that this deal might spell the end of the very lucrative IPO game. Take their word for it Here’s how the game works: A company seeking to go public lines up an underwriting team that promises to get the best price it can for the piece of the company that will be sold to the public. The underwriting team gauges that price by holding a road show, where institutional investors hear the company’s pitch and tell the underwriters how interested they are and how many shares they’d be inclined to buy at what price. Using time-honored formulas, the underwriters report back to the company with a price and a size for the offering. It’s difficult for the company to judge demand itself, and there is no formal mechanism for setting a price that would clear the market for all shares to be offered. In practice, most companies take the underwriters’ word. The company is, after all, paying the underwriters for their expertise. Anyone who remembers the post-bubble scandals and lawsuits, however, knows that this system is extremely vulnerable to abuses.

Another point that is upsetting some people is that Google (which will trade in the Nadsaq under the symbol GOOG) is offering Class A shares, whereas its top execs and founders will hold large blocks of Class B shares, which entail 10 votes each. 

But does the Dutch style auction mean that the common investors will be able to grab a piece of the pie?  Perhaps, but that is not likely, according to another MSN article by Kim Khan.  According to the article, chances are that Google might not go that route, since a Dutch auction IPO could end up pricing Google shares at a huge valuation.  So in that case, it might be difficult for the average investor to get a shot at Google's stock (even by having an account with the lead underwriters, Credit Suisse First Boston and Morgan Stanley - chances are only the top notch VIP clients will get a shot at it).  High demand and a limited supply of stocks might prevent other underwriters of ensuring there will be shares left for common private investors.

Finally, there is the topic of valuation, which warrants another entry altogether.  But I will pass on a link of a website (John Battelle's Searchblog) that has a useful valuation model in Excel format about Google's valuation.  It is useful because of its simplicity, and how it allows one to tweak forward revenues and margins and the effect on the stock price.  The model comes as a courtesy of CNBC correspondent Cory Johnson.

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The technology newswire today has a story about a new version of MSN Messenger that does not require the installation of software: 

The new service is the latest attempt by Microsoft to extend its reach in the market for messengers, used to send instant text messages between users logged on to different computers and devices. MSN Web Messenger, offered by Microsoft's MSN Internet division, is being tested while being prepared for a wider launch by the end of the year, a Microsoft spokeswoman said. Both the test and final version are expected to be free. Web-based messengers, which typically have more limited features than the ones installed on personal computers, are aimed at users accessing via public computers or on corporate PCs that don't allow software installations.

Microsoft's MSN Internet Division is currently testing it in the U.S., U.K., France, Germany and Japan.  A beta version is available at the following website:

http://webmessenger.msn.com

I have tried it a bit - but have a warning: the current beta version does NOT work if you have a popup blocker.

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Two U.S. cellular operators (Verizon Wireless and Cingular) announced this week separate deals to carry IM (Instant Messaging) services. 

Verizon (NYSE:VZ) is adding e-mail and instant messaging via the MSN Mobile offering under its Verizon Get It Now umbrella.  The service allows subscribers to send e-mail and exchange instant messages between cellular phones, or mobile handsets and PCs.  MSN Mobile achieves this by providing these end-users with mobile versions of MSN Hotmail and MSN Messenger.  These Microsoft software packages that can be downloaded by the subscribers directly from their cellular phones.  The service in now available for Get It Now phones for an introductory rate of $2.49 per month (for the duration of the subscription).  However, starting from the end of October, customers can sign up for the service at a monthly rate of $2.99.

Microsoft (Nasdaq:MSFT) has already successfully introduced the new version of MSN Mobile in South Korea.  MSN Mobile has been available in that country since early 2003, via a relationship with Korea Telecom Freetel, geared towards offering "always-on" IM service for 3G CDMA phones.  Other variants, such as one in Hong Kong with T-Net have also been deployed in the Asia/Pacific region.  The GUI (Graphical User Interface) has the same look-and-feel of the MSN PC applications.  The Verizon account represents the first major wireless operator win in North America (for the full suit of MSN Mobile services, including IM).

Cingular Wireless, the second largest wireless U.S. operator (behind Verizon Wireless), is a joint venture between the domestic wireless divisions of former Baby Bells SBC (60% ownership) and BellSouth (40% ownership).

Cingular has partnered with Yahoo! (Nasdaq:YHOO) to enable its subscribers to send and get IM, e-mail, and to download mapping information, games, news and weather, all via the the carrier's Media Net service.  The users also have the ability to log in to the Yahoo Web site from their wireless phones.

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Earlier today, I was scrolling through some blogs that I typically read to find out some more info on Longhorn, the much anticipated next-gen Microsoft OS.  I discovered Robert Scoble's blog (Scobleizer: Microsoft Geek Blogger) and found an entry related to disruptive technologies and a simple, yet insightful definition:

A technology that no one in business wants but that goes on to be a trillion-dollar industry.

Scoble goes on to mention Steve Wozniak and how he got turned down by HP and Atari after giving demos on his home made Apple computer.  There is another example that comes to my mind: Ken Olson.  The ex-CEO of DEC (Digital Equipment Corp.) once said: "There is no reason anyone would want a computer in their home...". And we all know what eventually happened to DEC.  The business world is probably full of similar examples, and in certain cases some venture capital firms will attest to that, for it is not an easy task to seek out the perfect "disruptive technology" to invest in.

But the Scobleizer blog entry makes reference to two outlooks on what "disruptive technology" actually is supposed to mean.  The first one is a PC Magazine article by John Dvorak.  Dvorak, an accomplished and veteran writer, took issue with Harvard Business School Professor Clayton Christensen.  In the article, Dvorak is critical of Christensen's definition of "disruptive technoogy", which is based on the latter's book, The Innovator's Dilemma.  The term was actually coined by Christensen and it is used to describe "a new, lower performance, but less expensive product...".  According to his concept, "the disruptive technology starts by gaining a foothold in the low-end (and less demanding part) of the market, successively moving up-market through performance improvements, and finally displacing the incumbent's product."

Dvorak questions whether this definition is always applicable to the examples used by the professor.  For instance, does the personal computer represent a less expensive and inferior mainframe or minicomputer?  Or does it represent instead an innovative and much improved version of a calculator or slide rule?  The article does point out an interesting alternative way of looking at disruption, namely, a formulation made by James Burke (of the famous PBS TV series Connections):

When there is true disruption, it comes from inventions, regulatory and social change, complementary technologies, coincidence, and demand.

The second view on the subject came from an entry in Alex Barnett's blog.  Alex initially defines all the concepts (including the distinction between disruptive and sustaining technologies) and then highlights another viewpoint from the Nanotechnology Now website.  According to that source, a disruptive technology is defined as "...any new technology that is significantly cheaper than current, and/or is much higher performing, and/or has greater functionality, and/or is more convenient to use...".  Barnett's view is that the emphasis should be on higher instead of lower performance (the tradeoff of the second being a cheaper pricepoint). 

He further claims that Christensen's definition in a ComputerWorld article is a bit too limiting: "simple, convenient-to-use innovations that initially are used by only unsophisticated customers at the low end of markets."  According to that view, technologies such as WWW, RSS, Blogging, Wikis, Broadband, Nanotech, WLAN, P2P and VoIP would not be considered to be disruptive.  But Alex does provide another link to an interesting alternative viewpoint on the subject: an entry in Paul Wormeli's blog:

“Disruptive technologies...cover those technologies that bring change.  In most instances, what makes a technology disruptive is that it brings radical change by introducing a new way of doing things generally at a much lower cost than before, and when the technologies go mainstream, the way we do business changes.”

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So what's my own take on all these various viewpoints?

• first and foremost, what's important here is not the semantics and details of Professor Christensen's layman's terms definition of what a "disruptive technology" is.  He coined the term and is one of the best authorities on the subject (and most sought after speakers at VC or high-tech firm events).  Christensen's term has certainly been widely used and the words do convey a change in the modus operandi of a particular industry.
• over time, the definition changed from its original viewpoint to be more widely encompassing and signal a new, more efficient way of achieving a goal. 
• the discussion of whether the new disruptive method represents an improvement over the old method or is simply a new giant leap forward in terms of innovation can be extended ad infinitum and it is a "frame of reference" issue.
• but what's important is to think strategically on how to position the new method.  To use the DEC example above, positioning the PC as a cheap minicomputer might not have resonated well with enterprises back in the late 1970's.  But applying that pitch to the home user would yield a much more different result (i.e, saying that the PC can deliver the computing power of a pretty decent minicomputer to a person's home for a fraction of the price, or alternatively, that the PC is a major leap forward in terms of innovation vis-à-vis the calculator). 

In a later article, I will revisit this topic as it applies to VoIP in the enterprise, namely to IP PBXs. 

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British telecom giant Cable & Wireless (NYSE:CWP)announced earlier this week that it will be investing US$10 million to augment its footprint in India. The company has been operating in India since 1995, providing networking and system integration services.

The investment is geared towards expanding the company’s headcount (which is expected to increase to 360 employees within a year). Right now, C&W counts with 180 workers spread around offices in Bangalore, Mumbai, and New Delhi and service centers in Chennai, Calcutta, Pune, and Hyderabad for provision of local services. About half of the investment has been earmarked for expansion of C&W’s network services in Bangalore and Bombay.

Bangalore is the location for the India Centre of Excellence (ICE), which provides complex network and telecommunications solutions to other Cable & Wireless operations in Asia, including Cable & Wireless Japan. The amount of intellectual capital that is available in Bangalore, or the “Garden City” is impressive. It is not only the home for the prestigious Indian Institute of Science, but also represents one of the world’s largest concentrations of skilled high-tech workers, with an estimated 160,000 employees. Firms, from chipmaker AMD (NYSE:AMD) to tech outsourcer Wipro Technologies (NYSE:WIT) have chosen Bangalore as a location for some aspect of their operations. The San Francisco Chronicle had a pretty interesting article last week about the city, which is definitely worthwhile reading.

Note: Here is another article on why AMD chose to set up a design facility in Bangalore.

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Israeli WiMax bellwether Alvarion (NASDAQ:ALVR) reported a record revenue in the second quarter ($48.8 million, or roughly a 9% increase over the $44.7 million amassed in Q1).  This comes on the heels of the company's purchase of 3G equipment (CDMA and GSM) maker interWAVE last week, at a price tag of $56 million.  The goal behind that acquisition is to boost WiMax, since 3G wireless phone mobility will be fundamental in the development of the 802.16 standard.

Alvarion remained quite active thus far in 2004, achieving quite a few milestones, such as the introduction of various versions of its Breeze Access VL products (one in the 5.4 GHz band and another in the 5.2 GHz frequency, in order to meet broadband specs in regions such as Asia/Pacific and Russia).  Another key introduction was the BreezeMAX platform, a WiMax-ready platform that enables customers to deploy WiMax in anticipation of the availability of WiMAX CPEs.  Finally, Alvarion also successfully completed its trials with British Telecom (NYSE:BTY), having deployed wireless broadband access in four cities around the UK.

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Forbes.com today had an article about Hewlett-Packard (NYSE:HPQ) new laptop model, the HP Compaq nx5000.  The big news out of HP's camp is that the company will be the first major computer manufacturer to actually ship a notebook PC that comes pre-loaded with the Linux operating system.  Could this be a sign that Linux might start making a move from servers and back-office servers to the mainstream PC market, including business and consumer models?  Perhaps so, but a few key stumbling blocks need to be cleared first, including the issue of drivers for various hardware elements, which need to be ported over to Linux.  HP worked on some of these drivers (controlling peripherals such as printers and batteries).  The other factor is software, with most people being a lot more familiar with Microsoft Office applications such as MS Word than Unix/Linux-based text editors such as Emacs.  So the industry consensus is that Linux will ship on between 3 to 5 percent of PCs sold this year.  However, that picture might change by the time Microsoft introduces its next-gen OS, Longhorn, which will entail a major system overhaul.  This will cause some IT managers to re-evaluate Linux, which can help the OS to make more inroads in niche areas, such as contact centers and the educational vertical segment (universities students tend to be more familiar with the Unix environment and its tools). 

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Yesterday, news of a recent study commissioned by Open Source Risk Management LLC (OSRM), might have surprised the thousands of enterprises currently using Linux in their data centers.  The company specializes in providing insurance against lawsuits associated with the usage of open source products. OSRM held that none of the 400 court-tested patents could be utilized against Linux.  However, 283 of the 1,000 untested patents could pose a potential threat to the kernel. IBM Corp (NYSE:IBM), with roughly 60 potential patent infractions, and Microsoft (Nasdaq:MSFT) with about 27, can conceivably threaten the Linux kernel.  OSRM plans to charge enterprises $150,000 a year for $5 million in legal coverage that becomes active if the enterprise gets sued for using open-source programs like Linux.

Update (Aug.4/04): My own take on OSRM's claims is that while some of their observations could be true, the power of the Linux community is something that simply cannot be under-estimated.  Just as an example, I can mention a personal experience installing Slackware Linux back in 1993.  I had a larger hard drive and when I used fdisk, the physical and logical addresses for the newly created partitions did not match.  Back then, I found out Linus Torvald's old e-mail address (while he was still at HUT - the Helsinki University of Technology).  So I sent him an e-mail explaining the problem.  And guess what?  Pretty soon (less than a day later), I got a reply, with new binaries (he recompiled the code to accomodate a larger HD size), and presto! - the problem was solved.  Of course, the Linux community has grown immensely since those days, but this is just an example of how close-knitted the open source community is and how quickly an issue can be solved.  Therefore, I believe that even if there are some potential patent infringements, the Linux community can always find work-arounds and even replace the code when such issues arise.

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A friend of mine from São Paulo (Brazil) sent me an interesting article about cutting edge research being conducted at the Physics Institute (Instituto de Física) at the University of São Paulo (Universidade de São Paulo, or USP for short). Last week, scientists from USP managed to connect, via artificial connections, a group of neurons belonging to a blue crab (scientific name: Callinectes sapidus) to a computer that simulates the electrical activity of one of these neurons.

The main goal behind the project is to enable the future replacement of damaged sectors of the brain with electronic prosthetics, giving major hope for the rehabilitation of paraplegic people. The experiments use a group of 11 neurons related to a group that controls the "chewing" movements of the crustacean. The replacement circuit is substituting a portion of the stomatogastric nervous system of the blue crab, which is composed by roughly 30 neurons.

The study, conducted by the Non-Linear Phenomena Laboratory (LFNL) and coordinated by Professor Reynaldo Daniel Pinto, is sponsored by two major Brazilian research foundations (FAPESP - Fundação de Amparo à Pesquisa do Estado de São Paulo and CNPq - Conselho Nacional de Desenvolvimento Científico e Tecnológico) and the NSF (National Science Foundation) / NIH (National Institutes of Health).

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German conglomerate Siemens AG (NYSE:SI) announced yesterday its newest wireless handset, the tri-band SK65, which is expected to become commercially available in November 2004. The phone is expected to target the high-end mobile market, and features a unique QWERTY keyboard that can be revealed by rotating the phone.

Siemens’ goal is to capture some mind share in the business segment by focusing on “must-haves” such as built-in e-mail and corporate data access capabilities, instead of the typical consumer “nice-to-haves” such as built-in MP3 players or cameras. The BlackBerry functionality, licensed from Research in Motion (Nasdaq:RIMM), will enable end-users to pick up their e-mail messages without having to dial in to collect them. While other cell phone manufacturers such as Nokia (NYSE:NOK) have integrated some BlackBerry e-mail functions in the past, the SK65 is the first model to incorporate the full suite of BlackBerry applications, including features such as e-mail, a calendar, and a Web browser. The product is expected to come with a $360 price tag, and will be initially introduced in Europe, followed by emerging markets such as India and Latin America. Other features include its compact design (it weighs only 144 grams) and push-to-talk “walkie-talkie” functionality.

The adoption of the BlackBerry functionality by a giant of Siemens’ magnitude bolsters RIM’s new licensing program for its flagship software application suite. Moreover, the agreement signals that RIM will be willing to license its products to different manufacturers, so we can expect to see the software to be used with various form factors in the future. But, more importantly, another driver that will definitely benefit RIM is the advent of dual mode (802.11 / 2.5G) devices, which was reported in an earlier entry. While the pickup in RIM devices has been impressive, many cost-conscious enterprises are weary of giving away those gadgets to a higher proportion of their workforces, due to the high service costs associated with them. However, with a dual mode type device, employees will be able to use these RIM products while being inside the enterprises at almost no cost (or roaming outside them, when entering WiFi hotspots, at much lower costs than cellular high-speed data services).

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In an earlier thread, I explored the notion of digital ink (Allstream offering, with OEMs from MiCo and Anoto Group).  But the possibility of a future mass application centered on this concept is very intriguing. 

More specifically, I was thinking of using digital ink and a type of digital paper in a format for the mass media, namely newspapers.  Something along the lines of a paper that would be able to update itself on an hourly basis, everytime a subscriber would pass through a public WiFi hotspot that upon successfully verifying the subscription status, would upload the latest updates that would appear on the digital paper.

Could the idea fly?  There are many technology elements that are already in place today to enable such a solution to become a reality.  Certainly the idea itself already exists and was showcased in Tom Cruise's sci-fi futuristic thriller, Minority Report.
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