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

I didn't know that a majority of people still use answering machines. But a new breed of premium voicemail systems are hoping to change that according to this Wall Street Journal story (subscription required):

About 76% of households use a machine to answer the phone, while just 18% subscribe to voicemail, according to a 2002 survey by the Yankee Group, a consulting firm. While voicemail is more flexible, many consumers find machines are cheaper and easier to use.

...America Online, a unit of AOL Time Warner Inc., is marketing voicemail directly to its 26.2 million U.S. subscribers, who can pay $5.95 a month to access their voice messages over the phone or by e-mail. The service, introduced in March, alerts users of an incoming call with a popup window on their computer, if their phone line is being used, and shows who is calling. If the caller leaves a voicemail, the user is alerted immediately by e-mail and can stream the message over the Internet as a WAV file, or downloaded as an MP3 file, two common audio formats. Users can also get their voicemail by calling a toll-free number.

In an unusual move, Microsoft earlier slashed the price of its market-leader Office suite of products and changed its controversial volume pricing according to this Wall Street Journal story (subscription required):

The estimated retail price for its Office XP Professional package, which includes word processing, spreadsheet and e-mail software, dropped to $499 from $599 in the U.S. The individual components, including Word, Excel and Outlook, will be discounted about 32% to $229 each.

...In the nine months ended March 31, the business segment that includes Office had $7.25 billion in revenue and $5.74 billion in operating income. The majority of those sales are to corporations via volume licenses. Retail sales account for about 20% of the Office business, analysts estimate.

Ringtones are taking off in the US as I can vouch -- in Silicon Valley I've run into friends of friends who're working for ringtone companies and I've gotten irritated that my Verizon Samsung cellphone has some of the most childish ringtones ever and doesn't allow me to substitute them by downloading some of the ringtones available online. OK, so I'm not interested in Madonna or Eminem...just something business-like and boring but I would still become a new ringtone customer! According to this Wall Street Journal story (subscription required):

The U.S. has lagged behind Europe and Asia in cellphone technology, and ringtones are no different. In Western Europe, for instance, the ringtone market grew to €1.18 billion ($1.36 billion) in 2002, from €941 million the year before, according to the European Information Technology Observatory, a trade association in Frankfurt. In the U.S., ringtones generated only $16.6 million in sales in the U.S. last year, according to IDC. But the Framingham, Mass., research firm expects that figure to more than double this year and shoot up to more than $400 million in 2005.

Several developments are expected to fuel this growth. As wireless carriers search for new revenue streams, add-on features such as ringtones, wallpapers and games are seen as enticing existing customers to spend more, says Dana Thorat, a senior analyst at IDC.

This number according to a Wall Street Journal story (subscription required) on Yahoo and Overture, the search engine/advertising company that's under attack by Google:

About 19% of Yahoo Inc.'s total first-quarter revenue was attributed to the Internet company's partnership with Overture Services Inc. for search-related advertisements, according to Yahoo's quarterly filing with the Securities and Exchange Commission.

The Sunnyvale, Calif., company said that about $53.8 million in revenue for the period ended March 31 could be attributed to its agreement with Overture.

Wireless text messaging (also called texting as described in the great book Smart Mobs I've just started reading) was put on the map by the success of Fox's American Idol show according to this Wall Street Journal story (subscription required):

John Zeglis, chief executive of AT&T Wireless Services Inc., said 2.5 million votes were cast by customers using the company's text-messaging service during the "American Idol" finale Wednesday night.

In all, about 24 million votes were cast, mostly by telephone, in the talent contest that ended with Mr. Studdard's narrow victory over runner-up Clay Aiken.

A Direct Marketing Association study shows that email spam does pay for the advertisers and the consumers according to this Wall Street Journal story (subscription required):

The study found that "commercial e-mail advertisements" generate more than $7.1 billion in sales each year and $1.5 billion in potential savings to American consumers. A DMA spokesman says the study was intended to measure "legitimate" online purchases of items such as books, hotel accommodations and travel through e-mail promotion.

The good news: "This study shows convincingly that the e-mail marketplace is huge, both in the number of purchasers and the dollars spent," the study says. The bad news: ditto.

Google has Yahoo on the run...with a new advertising blitz from New York to San Francisco (I really liked the first Yahoo Personals campaign that used drawings/cartoons to convey the dating process) according to this Wall Street Journal story (subscription required):

The Sunnyvale, Calif., Internet company recently kicked off a national ad campaign with a state-of-the-art billboard that shows 20-minute-delayed Internet searches from Yahoo users in the U.S. The billboard spans 7,000 square feet, or 22 floors, and 11 screens. New Yorkers and visitors to the Big Apple will be able to watch different "live" Web search queries as they occur for 15 minutes every hour for a month. Yahoo will display search queries from different U.S. cities. The 20-minute delay allows filtering for offensive content or redundancy. Yahoo also is showing ads on television, online, street billboards and in print publications to get the message out. It is even hiring live "searchers" to walk around Boston, Chicago, New York and San Francisco carrying a 5-foot-long search bar.

While Google continues to grow, Overture is facing some growing pains as it assimilates its acquisition of Alta Vista and faces the increased competition according to this Wall Street Journal story (subscription required):

The Pasadena, Calif., Internet search-technology company said late Thursday it expects to earn between 35 cents and 42 cents a share in 2003, as announced last month, when it severely cut its guidance from a previously anticipated 60 cents to 70 cents a share. Overture also said it still anticipates earnings to double from 2003 to 2004.

....Overture also said Thursday it expects continued growth in the average price advertisers pay the company for each customer introduction. Average price per paid introduction reached 40 cents in April. The company reaffirmed its goal for that figure to reach the range of 40 cents to 42 cents at the end of 2003.

Good insights into what Barry Diller is now up to in this Wall Street Journal interview (subscription required) that reveals that he has spent some $2 billion in acquisitions all consolidated under a company temporarily named USA Interactive after he sold his "company's cable, film and TV operations to France's Vivendi Universal SA and kept his new-media assets."

Barry Diller is a legend in Hollywood, where he worked his way up from the mailroom to become head of the Paramount movie studio at age 32. For the past few years, however, he has turned away from "old media" and morphed into an Internet mogul. He has bought up companies like Hotels.com, Match.com and Expedia.com. On Monday, Mr. Diller's company acquired LendingTree Inc., an online mortgage exchange, for about $716 million.

...Mr. Diller, now 61, vows that USA Interactive will be a dominant player in e-commerce -- and says e-commerce is ripe for growth, despite the dot-com crash of a few years ago. He believes the potential is such that he would like USA Interactive to be valued at the lofty stock-price multiples of eBay Inc. and Amazon.com Inc. But the company's results have been dragged down by poor performance at its Home Shopping Network unit, which Mr. Diller has hinted he may sell, and uncertainty about how much value he will gain from his company's 5% stake in Vivendi.

Dell Computer (soon to be renamed just Dell as it branches out into all kinds of other technology industries) will be awarding more cash bonuses this year as compared to stock options in response to the growing outcry against the usual policy of companies not expensing stock options according to this earlier Wall Street  Journal story (subscription required):

As at many technology companies, stock options have been an extremely popular form of compensation at Dell, creating a class of wealthy employees dubbed "Dellionaires." But the Round Rock, Texas, computer maker has been a vocal opponent of expensing stock options, and has said it plans to halve the total number of employee options issued this year compared with last year.

...In the past, Dell's granting of stock options to employees significantly expanded the company's cash flow and reduced its taxes. UBS Warburg LLC has estimated the company saved as much as $1 billion in annual taxes during the late 1990s by deducting from corporate income taxes the exercise of stock options by employees. When employees exercised the options and paid for the shares, the payments also increased Dell's cash flow.

Expensing options when they are granted would hit Dell's bottom line hard. If Dell had expensed options for its last fiscal year, its earnings would have fallen by a third, to $1.4 billion from $2.1 billion.

A few weeks ago, AOL Time Warner retiring Vice Chairman Ted Turner sold more than 60 million shares reducing his stake by more than half and leaving him with about 1% in the company acording to this Wall Street Journal story (subscription required) which alos mentions that he's trying to expand his bison meat restaurant chain (I believe, he owns the largest bison herd in the country):

Mr. Turner in the past year has emerged as a strong critic of the AOL-Time Warner merger. AOL's stock price has fallen more than 70% since the merger closed, amid a sharp decline in America Online's business and questions about its aggressive accounting. The decline slashed the value of Mr. Turner's fortune to $1.7 billion from as much as $8 billion, a situation he frequently bemoaned in public.

Consistent with earlier rulings that considered eBay a venue rather than an auctioneer such as Sotheby's and therefore limited its responsibility for sellers' and buyers' actions comes this new court ruling according to this Wall Street Journal story (subscription required):

Judge Thomas L. Willhite Jr. of the Superior Court of California in Los Angeles last week granted eBay's request to dismiss the libel claim by Roger M. Grace. Mr. Grace, an eBay user, received negative "feedback" -- a form of rating that eBay buyers and sellers leave for each other after transactions -- from a merchant, Tim Neeley, who sells Hollywood memorabilia on the site. According to the court ruling, Mr. Neeley wrote that Mr. Grace "should be banned from eBay" and was "dishonest all the way" following Mr. Grace's purchase of several items from Mr. Neeley.

Mr. Grace sued eBay for libel for publishing Mr. Neeley's negative comments on its Web site. But the court ruled that eBay is immune to such claims under the Telecommunications Act of 1996, which protects providers of "interactive computer services" from liability for the online comments posted by their users. "We think it's an important ruling, because it affirms the principle that eBay is not responsible for the content of third parties," said Jay Monahan, eBay's deputy general counsel.

Wireless express checkout, smart shelves that alert staff when an item is running low, shopping carts that guide consumers to the best prices etc. are all coming to a supermarket near you -- especially at the showcase store of the German retail chain Metro -- according to this Reuters story in the Wall Street Journal (subscription required):

Perhaps the key feature at Metro is smart tags, or RFID chips -- short for radio frequency identification -- that broadcast data for several feet, enabling receiver-equipped smart shelves or handheld scanners to track what's in the store. Thus, the store alerts staff to outdated products or when the milk is running low. More enticingly, RFID offers retailers the chance to make the time-consuming job of taking inventory by hand simply go away.

The new store, which opened to the public on Tuesday, is perhaps the most integrated example of how supermarkets are advancing in high-tech wizardry. U.S. giant Wal-Mart Stores Inc. and British chain Tesco PLC, along with consumer product companies such as Procter & Gamble Co. and Gillette Co., are also experimenting with RFID technology. Meanwhile, a number of supermarkets have self-checkout.

 

In the first quarter, AOL lost 290,000 dial-up subscribers, MSN lost 300,000 (even though it has been conducting an expensive marketing and advertising campaign which includes CDs with all kinds of fun movie and other content -- just received the second copy of the same -- just as AOL is now doing with its throwaway millions of CDs with the latest version of AOL), and Earthlink lost 74,000 but made up with a strong growth of broadband subscribers according to this Wall Street Journal story (subscription required):

It's official. Dial-up is dying.

The big three providers of "premium" dial-up Internet access -- that is, access that costs somewhere around $20 a month -- all reported significant declines in dial-up customers in the latest quarter, a steady drop that is expected to continue.

As CD sales fall (by 8.8% last year) and 19% of Americans 12 and older have downloaded "an audio file from a file-sharing network" (according to a December survey by Ipsos-Reid) and more than half of 12-17 years old have done the same, the Recording industry is under siege. After its success in driving Napster into the ground, they were hoping to do the same with the new breed of file-sharing services but a federal court thought otherwise in a recent ruling according to this Wall Street Journal story (subscription required):

The decision came in a case brought by major record labels, movie studios and music publishers against Grokster Ltd. and StreamCast Networks Inc., which provide software programs called Grokster and Morpheus that let users trade music and movie files between their computers. Rather than shut down the file-sharing software, as the industry had hoped, U.S. District Court Judge Stephen V. Wilson in Los Angeles ruled that Grokster and StreamCast are not breaking copyright laws by making their software available.

That is largely because the companies are not operating centralized services [like Napster did] that would allow them to monitor the activities -- and copyright infringements -- of their users. The companies didn't have "actual knowledge of infringement at a time when they can use that knowledge to stop the particular infringement," he wrote. Sharman Networks Ltd., which offers the similar file-sharing program Kazaa, joined the case later than Grokster and StreamCast and wasn't covered in the ruling.

With more than 50,000 profiles submitted to Match.com each week, a team of almost 300 people makes sure to reject the ones that don't fit Match.com's arbitrary but focused standards on what can and cannot be included in them (although Match is planning a separate R rated site soon) according to this Wall Street Journal story (subscription required):

Match.com has its list of banned words -- all the predictable obscenities. But it also has a second, much longer list; words that, when used in profiles, require extra-careful review.

Some of these are surprising, such as "discreet." It's on the list because it's often code for "married and looking to fool around." Match.com is for singles only.

The only reason why I buy on Amazon is exactly the reason why many other consumers are flocking to Amazon...making their free-shipping porgram a hit and causing its revenues to continue to increase (Amazon expects a 2nd-quarter operating income of $45 million to $60 million and sales growth of more than 19% in 2002 to at least $4.7 billion) according to this Wall Street  Journal story (subscription required):

If Amazon.com Inc.'s leadership team had known five years ago what offering free shipping on orders larger than $25 would do, they would have done it much sooner, Chairman and Chief Executive Jeff Bezos said at the company's annual meeting.

...Asked about third-party sales on Amazon.com's site, Mr. Bezos said these sales "are now a very large part of our business." In the first quarter, third-party sales made up 19% of total revenue, Mr. Bezos said, adding that customers have told the company they like to have the choice of both new and used products.

The latest file-transfering/downloading/swapping tools that are taking the Web by storm are detailed in this News.com story (thanks to a Scripting News link). This story comes only a few days after Kazaa claimed to have become the most-downloaded application ever, some 229M copies.

Going by names like eDonkey and BitTorrent [written by local SF programmer Bram Cohen], many of the latest generation of file-swapping tools have been designed specifically to increase the efficiency and speed of transfer for large files such as movie files. Some of these tools have been in development for several years, but are just now reaching the critical mass needed to make a dent in the file-trading world....

"We see people downloading like crazy," said Mark Ishikawa, chief executive of BayTSP, a Los Gatos, Calif., company that monitors file-swapping networks for movie studios and record labels. "eDonkey is passing Gnutella, and is even on its way to passing FastTrack." FastTrack is the technology behind Sharman Networks' Kazaa and Grokster.

Steve Ballmer sold less than 10% of his stake in Microsoft according to this Dow Jones story in the Wall Street Journal (subscription required):

In shares, Mr. Ballmer, 47 years old, trails only Chairman Bill Gates. Unlike Mr. Gates and other Microsoft executives who have been regular sellers of Microsoft shares, Mr. Ballmer had held onto nearly all of his stake in the software company in recent years.

Mr. Ballmer last sold some of his Microsoft holdings in April and May of 1991, when he sold 25.2 million shares, according to Thomson Financial. In recent years, Mr. Gates has sold more than 400 million split-adjusted Microsoft shares, or nearly 40% of his stake.

Ballmer sold the stock under Rule 10b5-1 which allows,

company insiders to set up transactions of company shares under a preexisting plan so information they acquire later isn't a factor in their trading decisions.

Companies that normally would have gone public -- giving their early investors a convenient way to cash out -- are now working on building themselves into acquisition targets according to this Wall Street Journal story (subscription required):

Two-thirds of those who responded to the latest "Silicon Valley Venture Capital Conference Survey" conducted by Deloitte & Touche Corporate Finance LLC indicated they didn't anticipate the return of a vigorous market for initial public offerings of stock until 2005 or later. The other third were more optimistic, expecting the IPO market to return in 2004.