News and analysis to 28th February 2008
Microsoft!
Organic growth in the pay per click market will not enable
Microsoft to take on the mighty Google. Thus it intends to acquire Yahoo! to
achieve an instantaneous growth spurt. Microsoft values the search engine
player at $44.6bn, which is a substantial premium on Yahoo!’s share price. The
various competition authorities will have a view on this, as will Yahoo!’s
board. Some might argue that the takeover would be good for competition because
it would provide customers with a viable alternative to Google. It’s a sign of
changing times if it is in the market’s interest to support Microsoft’s
strategy.
Sun says – It’s mySQL now
Sun Microsystems has successfully acquired open source
database vendor MySQL for $1bn. It’s a princely sum for a company that has
revenue of circa $55m. However MySQL’s MySQL database is a major player in the
web application development space, so this situation can only improve. The move
may well irritate partners Oracle and IBM who are both major database vendors.
Sun already has a database footprint with its support for open source
PostgreSQL. Both Google and Yahoo use MySQL. So expect Sun to top the search
results, regardless of the keywords.
Microsoft achieves EU first
The European Commission rewarded Microsoft’s pioneering
breaking of the EU anti-trust laws by fining it a further 899 euros. This is on
top of previous fines of 280m euro and 497 euros. These fines cover Microsoft’s
endeavours to use its operating system to freeze out rivals. The EC plans to
continue the dialogue by launching two further investigations against
Microsoft. Given the general trend
towards browser based computing this seems like the EC flexing its legal
muscles for the sake of it rather than helping the consumer. Possibly it needs
to become more aware of the new world order and start looking at the world of
pay per click advertising.
Green is the new gold
Technology providers with a strong green message are heading
for boom time, as customers choose ethical suppliers over less environmentally
friendly competitors. Some 40% of the tech execs in a PricewaterhouseCoopers
survey said that growing demand from customers for green products and services
is creating significant market opportunities. Wouldn’t it be great if the
hardware vendors adopted bio-fuels that in some way enhanced their branding? So
for example the iMac would be fuelled by Apples? Though this might be a bit of
a branding disaster in the case of IBM’s eye-series.
Amazon’s talking books
Virtual bookstore Amazon.com has agreed to acquire
Audible.com for $300m. Audible.com as the name suggests provides online digital
spoken word content, digital audio editions of books, newspapers and magazines,
television and radio programs. It currently has over 80,000 products. In the
same way as the keyboard, and texting, have removed the need to be able to
write, possibly this is the first major step towards needing to be able to
read.
Marks and Software softwear
British retailer Marks and Spencer has already made a foray
into the high-tech market through selling PCs, laptops, iPods, digital cameras
and mobile phones. It is now planning to sell branded software including an
office suite, driving-test software plus Internet security and backup software.
In essence M&S is re-branding software from UK firm Formjet, which acquires
software distribution rights to third party software and then sells these into
new markets. High street brands such as M&S have well-established links
with consumers, unlike most technology vendors. Either Microsoft develops a
retail chain and extends its offerings into underwear (underware?) and packaged
food solutions. Or like Formjet allows other better-known high street brands to
channel their software. Possibly Visual Studio can be sold via home
furnishings?
Google’s revenues soar
Google reported a 51% increase in revenues for its recent
fourth quarter. However the associated income ‘only’ climbed from $1.03bn to $1.21bn. This is the first time
Google’s profit has grown less than 25% since it went public. Possibly it’s a
little too early to suggest the writing is on the wall for the pay per click
giant? But there will come a time when Google has to modify its lavish approach
to investing in its staff’s weird and wonderful ideas. Google’s available ‘sandbox’ cash is likely to diminish as the
rate of business growth decreases. Google’s strength has been its ability to
innovate without concern for cash. Constraining this innovation by controlling
the funds available is likely to further contribute to a slow down in growth.
Mac Attack
Apple iMac users are always quick to defend their much-loved
devices. The emotional bond between an Apple user and their iMac often bemuses
ordinary PC users. But they are now going to have to defend their devices
against mackers (Mac hackers). At least that's what 350 computer users surveyed
by IT security Sophos believed, following the first financially motivated
malware attack. Some 93% of the respondents thought that Apple Macs would come
under the attack from hackers, compared to 79% two years ago. Up until recently
Apple technology was seen as too niche a market for hackers to bother with. It
is hoped that the problem will not become as widespread as for the traditional
PC market. But unsuspecting iMac users
may, through their lack of protection, accelerate the spread. What if the
mackers turned their attention to the iPod. Mind you having looked at the play
lists of some of my colleagues, I think this has already started.
