Ready, Fire, Aim! - Mihail's Public Blog

I always felt that Peet's was too strong a coffee for my taste, but a friend's recent "duh!" suggestion that I ask for fewer shots in my latte, has me hooked like never before. The coffee is good, it is consistent, it is all about community -- all the things where Starbucks has stumbled and is trying to address as I've noticed in several stores in the last month.

I'm the kind of person who used to feel all warm-and-fuzzy about a Starbucks and its logo from miles away. But here I am treating myself to Peet's when I don't need a WiFi connection and don't need to hang out (since older Peet's stores don't have much seating...an aspect that is starting to change). According to this timely New York Times story (registration required) which calls Peet's the "Apple Computer of coffee" for its small in number but intensely loyal customers:

While Peet's has accelerated the opening of its retail stores, the company's business is built around selling beans, not drinks. Sales of whole beans account for 45 percent of Peet's retail revenue, compared with 5 percent at Starbucks.

...Compared with Starbucks's 6,605 stores in the United States and an additional 2,656 abroad, the Peet's operation is about as noticeable as a fly on an elephant. Peet's operates just 99 outlets, up from 75 at the beginning of last year. It expects to open another 20 this year.

I've always known there was a connection between the two coffee chains but now I understand exactly how:

The company began operations in Berkeley in 1966, when Alfred Peet, a Dutch immigrant, opened his first store. A few years later, Mr. Baldwin and two partners opened their own coffee shop in Seattle, and contracted with Mr. Peet to supply their store with beans.

They called their store Starbucks, and gradually expanded it to five stores. In 1984, the Starbucks partners bought the small Peet's chain. Three years later, believing that Peet's epitomized their zeal for coffee, they sold Starbucks to Howard Schultz.

According to this New York Times story (registration required) as stories about the hot, frothy -- very frothy -- real estate market continue. Flipping really makes sense in a down market when you can purchase properties for a steal but it seems to be working even today with the housing marketing on an almost continuous upward trajectory these last ten years:

The flippers are part of a larger national trend that, even as talk of a housing bubble grows, has a significant number of Americans investing in real estate. A survey conducted by the National Association of Realtors showed that 23 percent of all homes purchased in 2004 were for investment, a jump of 14 percent from the year before. And with home prices rising 15.1 percent in the last year alone across the nation, the Realtors association found that real estate has taken the place of Dow and Nasdaq offerings in many portfolios. "We don't understand the stock market, and this is tangible," said Bruce Karp, a lawyer in Manhattan, who with his partner Stephen Goldstone, began buying Hamptons investment properties nine years ago.

Indeed, while many other resort areas have their share of flippers, the Hamptons, where property values seem to move in only one direction - up - are a particularly fertile area for investment buying. Just as in Manhattan, there's a scarcity of prime properties in desirable locations, which means that bidding wars are common and that prices are outlandish by any rational standard - like nearly $1.5 million for a 1,200-square-foot, three-bedroom cottage in Amagansett.

Trojan condom ads have arrived on network TV according to this AdAge.com story:

The initial 30-second spot shows white text superimposed on a black background claiming that “40% of people who are HIV-positive don’t tell their partners,” before cutting to a shot of a couple cuddling as they share what appears to be an iPod headset with the superimposed statement: “Other than abstinence, the only way to protect yourself is to use a condom every time.”

But there were protests immediately from the conservative American Family Association that asked its members to lodge protests with their politicians and the networks:

“It’s a shame the networks have crossed the line and dropped a long-standing tradition,” said Randy Sharp, director of special projects for the AFA. “Now that Church & Dwight [the company behind the Trojan condom brand] has its foot in the door, it’s only a matter of time before the ads become more risqué.”

He said the group particularly objected to the ad airing on Smallville, a show geared toward teens. But he said other issues, such as a boycott of the Ford Motor Co. for supporting gay rights, are bigger concerns for the group right now.

According to this Wired News story, the fired "staff ass" -- as men in DC rudely call the entry-level "staff assistants" in the various politicans' offices -- has converted her 15 minutes of blog fame into a "novel, a roman à clef called (what else?) The Washingtonienne, was published June 1 by Hyperion:"

[Jennifer] Cutler was working in obscurity in the mail room of Republican Ohio Sen. Mike DeWine last year when she was outed on the web as the author of The Washingtonienne -- an explicit sex confessional that briefly made some of the juiciest gossip on Capitol Hill [and retrieved by someone from his Internet Explorer cache for our full, unedited reading pleasure].

Cutler lost her job and left D.C. But she seems to have landed on her feet, converting her 15 minutes of Monica Lewinsky-style infamy into a six-figure book deal and a nude spread in Playboy. Her novel, a roman à clef called (what else?) The Washingtonienne, was published June 1 by Hyperion.

While Cutler was careful to only use initials for all the Republicans she slept with, and then wrote about in her blog, one seems to have outed himself via a lawsuit!

On May 16, Robert Steinbuch, a staff attorney for DeWine, filed a federal invasion-of-privacy lawsuit against Cutler, identifying himself as the "R.S." of Cutler's blog, citing her written references to his "spanking and hair pulling" during their bedroom antics and claiming to be a victim of her writerly ambition, resulting in "humiliation and anguish beyond that which any reasonable person should be expected to bear in a decent and civilized society."

Readers of this San Francisco Chronicle story viewed the accompanying training video some 200,000 yesterday. The video and diversity training last year were a result of one player's anti-gay remarks. Instead of fixing the problem it seems the 49ers have continued to dig themselves deeper.

It was meant to be funny — but no one is laughing now in the San Francisco 49ers' front office over an in-house training film that featured off- color racial jokes, lesbian porn, a spoof of gay marriage and a trio of buxom, topless blondes frolicking with team public relations director Kirk Reynolds.

The 15-minute video (see it here), some of which was filmed in the City Hall office of Mayor Gavin Newsom — who comes in for a few unsubtle swipes — was intended as a primer on how players should handle the media in diverse San Francisco.

...Another show stopper: "49ers love being in community. Very patriotic . . . support president and his George Bush erection."

Two stories about Google getting personal in trying to fix its search results which have recently not been that satisfactory (at least for me).

One reports a whole gaggle of Google employees around the world manually checking and prioritizing search results (can anyone say, Yahoo!). SearchEngineWatch (thanks to MarketingVOX) reports:

Google Secret Lab, Prelude from Henk van Ess's new Search Bistro blog looks at how Google uses human reviewers to improve search quality. Ess has a screenshot and a Flash movie of how the system works, for Google's temporarily hired Q&A checkers. Very nice details so far that I've never seen posted anywhere before. However, this type of system isn't new.

Thanks to this NetImperatives story pointed out by MarketingVOX: Another free service currently in beta, Google Sitemaps, allows webmasters to submit and prioritize all the pages of a website they want crawled:

Google Sitemaps is an easy way for you to help improve your coverage in the Google index. It's a collaborative crawling system that enables you to communicate directly with Google to keep us informed of all your web pages, and when you make changes to these pages.

According to this New York Times story (registration required) about the numerous challenges facing us in California, some interesting stats:

New state and federal population estimates show California gained 539,000 residents last year and is on track to reach 46 million residents by 2030. That would amount to an increase of 13 million - roughly the population of Illinois - in the period following the 2000 census.

Within the next 25 years, the Census Bureau projected, about a quarter of all Americans will be residing in what will be the three most populous states, California, Texas and Florida. Other big gainers will be North Carolina and Georgia.

According to this New York Times column by Paul Krugman that I missed last week, "the National Association of Realtors estimates that 23 percent of the homes sold last year were bought for investment, not to live in. According to Business Week, 31 percent of new mortgages are interest only, a sign that people are stretching to their financial limits."

In July 2001, Paul McCulley, an economist at Pimco, the giant bond fund, predicted that the Federal Reserve would simply replace one bubble with another. "There is room," he wrote, "for the Fed to create a bubble in housing prices, if necessary, to sustain American hedonism. And I think the Fed has the will to do so, even though political correctness would demand that Mr. Greenspan deny any such thing."

As Mr. McCulley predicted, interest rate cuts led to soaring home prices, which led in turn not just to a construction boom but to high consumer spending, because homeowners used mortgage refinancing to go deeper into debt. All of this created jobs to make up for those lost when the stock bubble burst.

Just as blogs have turned the written world upside down, now podcasts are threatening to do the same. The same informal, raw, conversation-style narratives delivered via your iPod are taking on the stuffy museum tours (that I have never ever rented myself...so I'm just making that assumption!). According to this New York Times story (registration required):

But the other day, a college student, Malena Negrao, stood in front of Pollock's "Echo Number 25," and her audio guide featured something a little more lively. "Now, let's talk about this painting sexually," a man's deep voice said. "What do you see in this painting?"

...The exchange sounded a lot more like MTV than Modern Art 101, but for Ms. Negrao it had a few things to recommend it. It was free. It didn't involve the museum's audio device, which resembles a cellphone crossed with a nightstick. And best of all, it was slightly subversive: an unofficial, homemade and thoroughly irreverent audio guide to MoMA, downloaded onto her own iPod.

According to this WSJ story (subscription required), there are 34.5 million broadband subscribers in the US (the largest number of any country), a number expected to double in four years...especially thanks to SBC's new low price of only $14.95/month for new subscribers.

The telecom companies have steadily lowered prices on broadband service in the past two years, sometimes through special promotions, in hopes of catching up to cable providers, which were the first to offer broadband and maintain a substantial edge over DSL providers. Currently, there are more than 21.1 million cable-broadband subscribers, compared with about roughly 15 million DSL subscribers, though estimates vary.

The phone companies' tactic seems to be working. In the first quarter of this year, of the 2.6 million new broadband subscribers, 192,655 more turned to DSL over cable, according to Leichtman Research Group Inc., a media-markets research firm based in Durham, N.C.

According to this CNET News.com story:

At the end of 2005, China is expected to have 34 million subscribers, compared with 39 million in the United States, according to new data from market research firm iSuppli. By the end of 2007, China will have 57 million broadband subscribers, compared with 54 million U.S. subscribers. In ensuing years, China is expected to widen its lead over the United States.

Today there are more than 150 million broadband subscribers worldwide, according to IMS Research. More than 51 million have signed up for service since the beginning of 2004. This tremendous growth rate shows no signs of slowing, and it is forecast that the number of broadband subscribers will surpass 400 million in 2009.

As analysts revise their price targets higher for Google shares, purchasers of Google stock continue to make its price soar closing today at $287.90 (after going public at what seems like a steal: $85!). According to this San Francisco Chronicle story which quotes an analyst who's argument makes sense when comparing Google to Yahoo! and eBay...but I'd be interested in comparisons to other companies not in the Yahoo-eBay-Google realm, since maybe that sector is overpriced?

Heath Terry, an analyst for Credit Suisse First Boston, raised his 12- month price target to $350 from $275 after Google's stock exceeded his previous prediction.

...Google's shares are trading at 42 times Terry's estimated 2006 earnings for the company. In contrast, online portal Yahoo is trading at 55 times its estimated 2006 earnings while Internet auctioneer eBay is trading at 37 times its estimated 2006 earnings, Terry said.

As some of you know, AB19 is up for vote today in the California Assembly which provides all families with equal legal protections.  Called the Religious Freedom and Civil Marriage Protection Act and sponsored by Assemblymember Mark Leno (D-San Francisco), Assembly Speaker Fabian Núñez (D-Los Angeles), and 30 co-authors. For the first time in our nation's history, a state legislative body will be voting on whether to grant same-sex couples the right to obtain a civil marriage license. 

This has nothing to do with religious marriage. No one will force any religious leader to marry same-sex couples but it will require that the state allow same-sex couples to have a civil marriage.

If you agree, then please pick up the phone and call the assemblymembers listed below. You need to simply say the following:

"I'm urging the Assemblymember to please vote yes on AB 19. This is very important to me. Thank you."

That's it...less than a minute and your voice will be heard. Thank you.

Home  Take Action   Support EQCA   Legislative Center Pressroom  Contact Us   LIVE UPDATE:  TODAY IS THE DAY TO PASS AB 19 June 2, 2005 9:30 A.M. PST First, I have to thank those of you who made calls yesterday to Assemblymembers that are on the fence about AB 19. Many of them reported how your kind encouragement has helped them, especially as anti-gay people call with threats and anger. Because of your calls yesterday, many of these undecided legislators are now leaning towards us. We NEED you to continue this positive support.  This battle has proven the commitment and leadership of Assemblymember Leno and Assembly Speaker Fabian Nunez to stand with us, and Equality California's staff and friends worked late into the night leaving no stones unturned. This is the team you are part of; we couldn't do this without you. We can win today, but only if you remain engaged in this fight. This vote will come down to whether our friends in the legislature believe we care about being treated with the same dignity and respect  This debate comes down to what legislators believe: Assemblymember Dennis Mountjoy said yesterday, "They [LGBT people] want to be told, they want our children to be told, that homosexuality is OK, that it's natural...I'm here to tell you it's not OK, it's not natural, and I don't want our children taught that." While... Assemblymember Jackie Goldberg said, "Unless you are willing to look me in the face and say I am not a human being, just as you are, you have no right to deny me access to marriage in this state or anywhere else." Today is another day and another opportunity for our elected officials to do what is right. Help us open their hearts to vote for equality! Please contact the following legislators and encourage them to stand with Jackie Goldberg, Mark Leno, and John Laird...three openly gay Assemblymembers who work beside them everyday. We need these friends to stand up for us more than ever before! This list is prioritized with the most important at the top. Assemblymember Rudy Bermudez (D-Norwalk) Told EQCA on a Candidate Questionnaire He Would Support Legislation to Allow Same-Sex Couples to Marry in California Call: 916-319-2056 capitol office/ 562-866-3391 district office Assemblymember Tom Umberg (D-Santa Ana)  Won his 2004 Primary by 400 votes with the strong backing of the LGBT Community Call: 916-319-2069 capitol office/ 714-939-8469 district office Assemblymember Gloria Negrete-McLeod (D-Ontario) Has always voted for equality until now Call: 916-319-2061 capitol office / 909-621-2783 district office Assemblymember Jerome Horton (D-Inglewood)  Was the key vote in passing AB 25 which gave domestic partners key rights Call: 916-319-2051 capitol office / 310-412-6400 district office Assemblymember Ed Chavez (D-La Puente)  Understands the importance of equality, but is afraid we will not stand by him if he supports us Call: 916-319-2057 capitol office /626-961-8492 district office Assemblymember Simon Salinas (D-Salinas)  Has been a strong friend of the LGBT community despite representing a tough district Call: 916-319-2028 capitol office/ 831-759-8676 district office As always, we will keep you updated throughout the day today. Yours, Steve Hansen Associate Director of Legislative Affairs Equality California

According to this New York Times story (registration required):

According to the American Library Association, which asks school districts and libraries to report efforts to ban books - that is, have them removed from shelves or reading lists - they are on the rise again: 547 books were challenged last year, up from 458 in 2003. These aren't record numbers. In the 1990's the appearance of the Harry Potter books, with their themes of witchcraft and wizardry, caused a raft of objections from evangelical Christians.

Judith Krug, director of the library association's office for intellectual freedom, attributed the most recent spike to the empowerment of conservatives in general and to the re-election of President Bush in particular. The same thing happened 25 years ago, she said. "In 1980, we were dealing with an average of 300 or so challenges a year, and then Reagan was elected," she said. "And challenges went to 900 or 1,000 a year."

Frank Wilson, book editor for the Philadelphia Inquirer, who wrote about Blogit and several members commented, is off to BookExpo America. According to this New York Times story (registration required):

Consumer spending on books rose 8 percent, to nearly $21 billion, in the three years that ended in December, according to a recent report by the Book Industry Study Group, a publishing trade group, pushing the industry's sales back above the levels reached before the stock market decline helped to lead the country into a recession in early 2001.

...On the doom-and-gloom side, a survey of Americans' reading habits by the National Endowment for the Arts, released last year, found that only 47 percent of the adult American population reported reading literature in 2002, down from 54 percent 10 years earlier. But those results are difficult to interpret. "Literature" was not defined, for example, and the percentage of adults who reported reading a book of any kind was nearly 57 percent, down from 61 percent 10 years earlier.

The latest "instant fashion trend" as propagated by the media and seen best in the Hamptons is cashmere for summer according to this New York Times story (registration required):

Cashmere has been marketed as the "in" thing for fall and winter so many times now that it is probably no surprise that the material, long a favorite of the affluent for its natural softness and its relative scarcity, has been given an extended life through the hottest months. Woven from the hair of goats raised primarily in or near Mongolia - the underbelly hairs are the most expensive - cashmere for summer is being sold at all prices, from $19.97 for a sleeveless T-shirt at Costco, to $397.50 for a cable-knit sweater at Polo, to the four-figure Loro Piana shawls at Neiman Marcus.

..."In a strange way, cashmere has become the fur shrug for warm weather," [designer Michael] Kors said. "It's a part of the nomad wardrobe where women will wear boots in the summer and layers of lightweight clothes in the winter as they go through different environments. It's fashion at its most utilitarian."

According to this WSJ story (subscription required), eBay acquired Shopping.com for $620M. Watch out Froogle (which, BTW, I'm very disappointed with so far since it doesn't seem to work very well every time I've tried to use it).

Bill Cobb, president of eBay North America, said eBay became interested in Shopping.com when it noticed its sellers listing merchandise on comparison-shopping sites.

...Shopping.com, for example, relies on Google to place advertisements on its site. Those ads accounted for 44% of the Brisbane, Calif., company's revenue of $28.9 million in the first quarter, according to the company's quarterly filing with the Securities and Exchange Commission. EBay officials declined to address the future of the relationship between Shopping.com and Google, which also declined to comment. But the deal marks an acknowledgment by eBay that it needs to reach potential Internet buyers earlier in their shopping process, through search technology.

According to this New York Times column by Yale Professor Robert Shiller, the author of Irrational Exuberance, things may be getting shaky for the real-estate bubble that we're seeing in cities like San Francisco. Friends of ours who bought a house in Palo Alto for $2.3M last February couldn't resist flipping it for over $3M last month -- even though they're now having trouble finding a place to live.

The upward pattern is a little less regular but even more striking in some U.S. cities. In Los Angeles, real home prices, after falling 2.7% in 1996, rose 4.1% in 1997, 10.3% in 1998, 4.5% in 1999, 7.7% in 2000, 7.9% in 2001, 16.9% in 2002, 19.2% in 2003, and 23.2% in 2004.

While home price increases have been getting increasingly stronger since the last 1990s, recently there's also increasingly more talk about a bubble amidst record prices.

There is a widespread perception that something big and exogenous has to happen to break the bubble. People say: Sure, after the real-estate boom of the 1980s, Los Angeles home prices fell 41% in real terms between its peak in late 1989 and its bottom in early 1997, but that was a time when the defense and aerospace industries were contracting in Southern California. They say that contraction is the real explanation of the price drop there.

Special factors may help explain the most extreme price declines, but talk and high prices are the main things that end bubbles. The intensity of talk about the high prices right now is enormous, suggesting an emerging change of public thinking that may signal the end of the bubble.

I know I've used the word bubble to describe real estate prices at least fifty times in the last few months and at least three friends are now sitting on the sidelines, renting, and waiting for the bubble to burst before entering the real estate market. Maybe Shiller has a point!

I'm not surprised that cellphone-only households have not grown as fast as they were first expected to grow especially as the quality of wireless connections continues to be spotty at best. There's a reason why Verizon uses the "Can you hear me now?" phrase in its ads...since they seem to also have that problem. According to this WSJ story (subscription required):

While the number of wireless-only households is increasing -- close to 6% of all U.S. homes at the end of last year, according to Forrester Research Inc. -- the trend isn't accelerating as quickly as many experts predicted. And some consumers are reconsidering their decision to go wireless and are reconnecting to a landline.

...When the Federal Communications Commission in November 2003 began allowing customers to switch their home phone number to a cellphone, a huge shift to wireless-only consumers was expected. About 820,000 people did make the move through the end of last year, according to the FCC, but that was only a fraction of what was predicted.

According to this New York Times story (registration required), Robert Greenwald, the producer/director of "Outfoxed: Rupert Murdoch's War on Journalism," is on to his next documentary, this time exposing the ills of retail behemoth Wal-Mart which, according to him, employs 1.5M and opens a new store each day (with 3500 stores already in place):

Their plan is to depict what they and a growing number of critics perceive to be Wal-Mart's sins against society: unfair competition and erosion of the fabric of communities; exploitation of its American workers, and of the government welfare programs many rely on to supplement their wages and benefits; union busting; reliance on suppliers with sweatshops overseas; and environmental negligence - among others.

They also intend to show how the retailer exerts its outsized influence on American culture through the so-called "Wal-Mart effect," by limiting the choices of products like clothing, music - and movies - that are available to consumers.

A thought-provoking New York Times column by Thomas Friedman (registration required) today about how the US is turning its back towards the world -- and changing what makes the US so great -- in a post-9/11 reaction. A similar theme came up a few days ago when I went for lunch with National Semiconductor CEO, Brian Halla:

Bottom line: We urgently need a national commission to look at all the little changes we have made in response to 9/11 - from visa policies to research funding, to the way we've sealed off our federal buildings, to legal rulings around prisoners of war - and ask this question: While no single change is decisive, could it all add up in a way so that 20 years from now we will discover that some of America's cultural and legal essence - our DNA as a nation - has become badly deformed or mutated?

This would be a tragedy for us and for the world. Because, as I've argued, where birds don't fly, people don't mix, ideas don't get sparked, friendships don't get forged, stereotypes don't get broken, and freedom doesn't ring.