Carlos Domingo - Un poco de todo

The municipal WIFI projects (basically, blanket a city with free hot spots so everyone can be online for free all the time) have been a topic of discussion since a year ago at work. Obviously, when you make money providing Internet connectivity to consumers, the idea of the city using taxpayers money to provide the same service for free is pretty challenging for your business model. I also defended that those projects were not going to be successful due to the difficulty and cost of covering well enough the city for the service to be useful. At least, not with WIFI technology, WIMAX is a different story but then WIMAX runs in licensed spectrum while WIFI in unlicensed so we are talking about different things here. The last couple of weeks there has been a string of news announcing projects being killed or postpone (Chicago, San Francisco) and more importantly, EarthLink (the main company behind this projects) has announced that it will lay off 900 workers, including the head of the municipal WIFI division. The main reason is that they do not see how to make money with a “free” service (there is no free lunch, remember?). Actually, those projects were never completely free to start with (obviously, being a company involved that is suppose to be there to make money). The idea was that the city puts some money to subsidize part of the cost and then the “free” version was either ad supported or low speed with a higher speed version available for free. Two things have happened, the number of pay subscribers has been generally very low and then to get a decent coverage, they have had to install lots more WIFI receivers than expected. Not surprising, I cannot even get WIFI all over my apartment with just one receiver so I always wonder how they were planning to get coverage throughout a whole city full of buildings like Chicago. Now it seems that they want the city to pay in advance the cost for everything so even if the number of subscribers do not go up to cover costs, the company deploying the service will not lose money. The moment this becomes very expensive for a city, all these projects will end. I think that solutions like the one in NY were you get free WIFI in most of the major city parks are good, they do provide some sort of free connectivity for the citizens but are not too costly for the city.

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I am no fan of republishing links to other articles but this article of Richard MacManus from the Read/Write Web blog is so right on spot that I wanted to share it with as many people as possible. Many of the topics he is listing are already here in some form or another (virtual worlds, mobile web, RIA, online/Internet TV), some others have been here since ages like AI (btw, mencioning Amazon Mechanical Turk as an example of AI is not correct, as far as I know, there is no articial intelligence involved there) but without becoming mainstream and others like the Semantic Web, everyone talks about but there is no where to be seen yet.

Here is the list of trends, for specifics, read the article:

1. Semantic Web

2. Artificial Intelligence

3. Virtual Worlds

4. Mobile Web

5. Attention Economy

6. Web Sites as Web Services

7. Online Video / Internet TV

8. Rich Internet Apps

9. International Web

10. Personalization

CD

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This summer I have seen two of the latest Marvel flicks, Spiderman 3 and Fantastic Four 2 (disclosure, when I was a kid I was a huge reader of Marvel comics, specially X-Men, Spiderman, Fantastic Four, Daredevil and Conan and I like most of the movies they have made). In both, I clearly recognized Stan Lee doing a cameo (specially in the Spiderman one since he is in a scene talking to Peter Parker) so I went to the web and discovered that he in fact has been doing cameos in most of the movies, some of them very hard to recognized. This YouTube video summarizes most of them.

Incidentally, looking for this video in YouTube I found these set of parodies of the Mac vs. PC Apple ads with Marvel vs. DC, some of them are very funny, just follow this search link and you will get them all.

CD

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There are lost of articles these days about the iPhone cracking, how Apple and AT&T are going to react and what that means for the iPhone business model.

One that I read that did not make any sense to me is this one on Cnet. The whole article reads like a big conspiracy theory about the real intentions of Apple with the iPhone. The author claims that since Apple is basically a hardware manufacturer (true to some extent), they are more than happy with the IPhone being cracked since that will allow them to sell more iPhone. His argument is that the iPhone business model is basically like the iPod where the money is made on selling iPods and not on selling music in iTunes, the fact that you can buy music so easily and cheap on iTunes is just a feature that allows Apple to sell more iPods and according to him. So similarly, according to the aurthor, the revenue deals that Apple has cut with the carries (only AT&T available at the moment but we will see the first european ones before year end) are just a nominal amount compared with the revenue made selling the phone itself. Therefore, following this line of though, Apple will be motivated to leave the iPhone unprotected even if then the carriers will be less motivated to given Apple a piece of the revenue since it will allow Apple to sell more iPhones. I do not agree with this. The music revenue that Apple gets from iTunes is certainly nominal for Apple, not just the revenue but most importantly, the profits it makes selling songs. First, most iPod users never buy any music in iTunes (just do the math on how many iPods are out there and how many songs are sold in iTunes). Second, the margins that Apple must be getting selling music in ITunes are probably very low, better than what other companies make selling music online due to their weight but still low, I guess on the 5% or less when you take into account all the royalties and distributions costs). On the other hand, everytime Apple is selling an iPhone, is going to get some extra revenue out of that user since the iPhone user will certainly have to get a contract with a carrier and if that is the carrier that Apple has negotiated with, then a piece of that revenue will go to Apple (note here that if someone buys the iPhone, cracks it and use it with a carrier that does not have a deal with Apple, Apple gets no money). Second, the revenue that Apple gets from the carrier has 100% margin, it is basically all profits since it carriers no cost for Apple to generate that revenue, only the carrier has the cost of the network, support, etc. So in my view, Apple should be motivated to continue doing for as long as it cans (won’t last forever though), deals like the one it has made with AT&T and get a piece of the carrier revenue. Now the other interesting question is, why the carriers will give revenue to Apple and not to, let´s say, Nokia? Well, it is all about the fuss around iPhone, Apple has made the phone so attractive (and I had one in my hands so I can certify that it is amazing) that end users pay for the device so the carrier saves the subsidy on the phone (the largest user acquisition cost) at the expense of giving a a piece of the revenue to Apple. Now if the iPhone can be easily cracked and freely used with any carrier, I wonder what will be the carriers motivation to give Apple a share of their revenue. So in my opinion, Apple will try to keep the iPhone secure as long as it has these deals with the carriers. It is important to notice as well that even though Apple (or AT&T) cannot do anything legally to stop people cracking the iPhone, they can try to avoid it by updating the iPhone software remotly every time they sync with iTunes or connect to the Internet (something that every iPhone user is going to be doing frequently).

CD  

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Aquí va un post en español para variar un poco.

Llevo un mes en España pero los últimos meses (tres meses diría yo) he empezado a notar un incremento en las peticiones de compañeros, amigos, conocidos (e incluso desconocidos) para unirme a redes sociales. Que me acuerde de memoria, a parte de las usuales peticiones para linkarme en Linkedin (Hector, tuvistes el honor de ser mi link número 300, recuerdame que te invite a una cerveza en Tokyo la próxima vez que parece ser bastente popular entre la gente de Telefónica, me han llegado peticiones para Facebook (la única red social que uso habitualmente ya que creo que es la mejor con diferencia, mas sobre esto en otro post otro día), eConozco, Neurona.com, Xing.com, Myspace, Mipasado.com y Doostang. Si a esto añades peticiones para linkarme en Flickr, es un total de 9 redes sociales diferentes a las que deberia apuntarme para hacer tracking de todo el mundo. Las peticiones me han llegado no solo de los tipicos early adopters, geeks o gente de la industria si no de compañeros o amigos “normales”, es decir gente que hace un uso normal de Internet. Por tanto creo que estamos ante la explosión inminente del uso de las redes sociales en España. Veremos quien sale ganando, yo apuesto por Facebook aunque de momento si miras el tamaño de la Network Spain en Facebook solo tiene 31,091 personas (y entre ellos un montón de extranjeros) con lo cual deben ser de las mas pequeñas y además no está localizado en español lo cual es una barrera para muchos. Y tambien empieza la consolidación, eConozco y Xing estan en proceso de fusión. El valor de una red social crece exponencialmente con el número de usuarios así que aunque Facebook tenga la mejor plataforma y funcionalidad si no espabilan se pueden quedar fuera del mercado español.

CD

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While I was in Thailand during my vacations I got an email from Oriol titled “por algo se llama costa brava…” with this link to a YouTube video he published inside http://www.youtube.com/watch?v=AAGlpTEnq84 When I clicked on the link this is what I got:

The message below in English (no idea about the Thai part) says “Sorry! the web site you are accessing has been blocked by ministry of information and communication technology”. Well, I was aware that Thailand political situation had changed since last coup in 2006 but now I experience that myself. The situation in the country does not look that different than in previous trips there (my last one in December 2005) except perhaps for a bit more police and military around (for instance, I do not remember police checking bags in the entrance of public transportation as I saw now in Bangkok) so I wonder what else has changed in terms of human rights and freedom besides blocking YouTube (other lesser known sites were not blocked though).

CD

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Check out this site, it contains some very funny videos about what the world will be if we were shopping offline with all the difficulties that we have online.

My favorite one below about search engine results

CD

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I just read two related blog posts (Calacanis here and Blodget here) and I share with them the view (out of my own past professional experience) that the recent market correction might have a large impact into the revenue stream of most Internet companies. Why? Well, if you run a company (and I am talking about a regular, any kind of company, not necessarily an Internet company) and the market slows down for a reason, you most likely need to reduce cost temporarily to mantain your cash flow level. Where do you take it? Well, there are not many places where you can do so without firing employees (which is usually a very last minute thing after you have tried everything else since that is very painful not just for the people leaving but also for the people staying and for the managers executing and communicating that to the company). In the P&L you have got what is referred to as the “controllable expenses” which are all the expenses that you can theoretically control like travel expenses, legal, contractors, etc. but unless your company is in a very special business that uses tons of lawers or relies heavily in contractors, controllable expenses are just somewhere around 5% of your total expenses. So there is not much you can do just reducing controllable expenses. What else? Well, the marketing budget. That is typically a place you can cut temporarily without raising any panic around the office and without doing something that might have long term impact into your business. So when the economy slows down or there is a sign of recession, companies tend to first reduce marketing costs and that also means online marketing costs. This then will mean less revenue for Google, Yahoo! and any other Internet company that relies solely on online advertising revenue (which means 99% of the Web 2.0 companies). Blodget mentions that after last crashed 50% of online advertising revenue vanished overnight. I do not think that it will be this bad now (first, we are just on a “correction” and not clear whether this will be a long term crash) but still we might see either reduction or much smaller growth on that market which might also impact valuations of companies like Google, M&A activity and VC activity so the Web 2.0 bubble (or sort of) might burst.

CD

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When I first began blogging back in November 2005 after two years of actively reading blogs but not participating was because attending the first Mind Camp triggered my desire to participate in the blogging community not just as a voyeur but as a contributor. That year of blogging allowed me to learn about the medium, my interests, my communications habits and style and how quickly people find your blog on Internet without you ever tell them that is there.

Last year my blogging activity has dropped to levels that even David Sifri´s from Technorati, with his generous definition of what a live blog is, will probably agree that my blog was dead. My last post was in March this year and the overall activity since last summer was very low. Another problem was that since my blog appears now first in Google when you search for my name, having a dead blog there did not reflect very well, so I was thinking about completely removing the site from the Internet.

A great deal of personal and professional changes have happened to me in the last year since I moved back to Barcelona and joined Telefónica and I have been using that as a self-excuse for not blogging.

So why the blog restart?

I just came back from attending the 11th edition of Campus Party in Valencia and being there has again spurred the need for being active part of the Internet community as attending Mind Camp did back when I was in Seattle. Campus Party was a great event and I had the chance to participate not just being there but attending the opening ceremony (so I saw the now famous “I am Deivid from Tenerif” life, you can see it in You Tube here), organizing a visit with some Telefónica executives on Tuesday (some pictures here), sponsoring some development and robotics competitions and participating in the jury and in the awards ceremony (pictures of that here). Campus was great and it made me realize that the Spanish Internet community, although smaller, can be as active and creative as the US one, that I was more familiar with, and the finding has made my job suddenly much more interesting. And I want to be part of that community. Also being there was a great opportunity to spend a great time with the organizers, Paco, Belinda, Alejandro, Marcelo, Richard, David, Miguel Angel, etc. and with some friends and colleagues like Raul, Oriol, Pablo, Fernando, Mario, Juan Carlos, etc. the gang from Telefonica R+D Barcelona and tons of other people that I met there so restarting my blog is a great way to keep in touch with them.

For the time being I am using the same blog platform even though I am not particularly happy with it (and it is not free) but I will leave changing to some other platform for a later time. I had a more urgent need to start writing than to get up and running a more fancy platform. Alternatively, I have decided to set up a Facebook account since I had lots of recent request to join Facebook from friends the last few months. Even though is still a bit buggy, I was impressed with the site, how easy is to configure and add third party apps to your profile after they opened up the platform, great move from their side and even tough lately some prominent bloggers are claiming some Facebook fatigue I think that the time you spend updating the site is worthwhile so I will stick to it for a while. You can find me here in Facebook and feel free to link to me.

So, here we go again.

Welcome to Carlos Domingo’s Un poco de todo Weblog, V2

PS.- Geek test: Which famous post was the source of inspiration for this post? Post the response in the comments section, the prize is that I will consider you from now on a true Internet geek.

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The above “couch-potato” is the image of the blog of Meevee, a startup that is trying to solve the problem of what to see on TV in a world with IPTV, cable, Internet TV and YouTube and its millions of clones. The site is pretty cool and useful (not working for European countries at the moment though) and the problem they are tackling a huge and interesting one but their choice of the couch potato image (specially that underwear…) a very questionable one.

CD

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