Will Apple get Microshafted by Google?

Having lived through Apple’s entire corporate history (and still own IPO shares), I see the writing on the wall – history will repeat itself 25 years later.  This time, it will be Google spoiling Apple, not Microsoft.  I just got back from CES in Las Vegas with this first-hand revelation.

Quick history:  in the early 1980’s, Apple’s Lisa / Macintosh operating system and graphical, mouse-driven user interface were the leading innovations in personal computers.  The hardware worked with the operating system which worked with the applications.  So far, so good. Along comes Microsoft acquiring MS-DOS, licensing it first to IBM and then every other PC manufacturer (remember Compaq, DEC, Kaypro, etc?) and eventually to all the “clone” manufacturers.  Market share of DOS soared and eclipsed Apple, stuck at under 10% of personal computer units.  Apple’s policy of not licensing their OS ensured a superior user experience for their “few” users, but forever limited potential growth by denying other manufacturers the ability to provide it on their hardware.  One manufacturer would never have been able to meet the exploding market demand.

The consequences for Apple were almost fatal. Besides falling market share, from early 1981 through 1997, Apple stock FELL a total of 6%.   Microsoft rose 14,800%. What a bummer to be an Apple shareholder. In the 2000’s, Apples fortunes turned around with the iPod and iPhone in particular.  From 1998 through 2010, Apple rose 8,085% and Microsoft only 58%. (But you’d still have been better off holding MSFT the entire time.)

So, is all well in Apple land?

Walking the 2011 CES (Consumer Electronics Show) floor last week, two observations struck me hard, well three.  First, although Apple does not exhibit, their dominance of the entire mobile accessories / integration market is clear. I saw hundreds of booths selling cases, stands, boom-boxes, devices for the iPhone / iPad / iPod platform. No other single platform, alas, not even all other devices combined, has created such an ecosystem of add-on manufacturers.  That’s good news for Apple.

Second, Windows on mobile devices seemed non-existent. Microsoft came out with tablet versions of Windows years ago. Almost nowhere to be found at CES. Except at the Microsoft booth. The same goes for Blackberry. Okay, they’re business-oriented, but hey, the consumer market is moving upstream into business, and they’re losing out. Consumers are buying smartphones and expecting business quality services on them.

Third, and most important, Google-powered Android tablets and phones were EVERYWHERE. The entire Hilton pavilion was full of mainland Chinese manufacturers selling all styles of white-label tablets. Every single one was powered by Android. Apple is projected to sell 50m iPads worldwide in 2011, but I predict that nearly every tablet Not sold by Apple will be running Android. Of the big names, Sony, Panasonic, Dell, Asus, Samsung, Toshiba were all showing Android tablets. I believe market demand will outstrip Apple’s supply, and the cheaper price point of Android devices, and their variety, will fuel tremendous growth.

Although the Android OS is still rough around the edges, and the iPhone provides a superior user experience, I think Google will catch up within a couple development cycles. At that point, Google will overtake the Apple platform in sheer numbers. Google has a lot of cash and a disruptive revenue model.  Is Apple doomed to repeat history? I hope not. Or I gotta sell my stock now…

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Demo Slam – Google Finally Starts Marketing?

Surfing around today I ran across a Google AdSense banner promoting a couple videos and the tag line “Choose the Champ”. Curious what Google was advertising on its own network, I clicked.

Turns out Google has started promoting how its (free) technologies can be used in the real world. Basically, www.DemoSlam.com is a site showing two videos head-to-head where users can vote for their favorite. Nothing new in that. Some of the videos have 100,000+ views, which is fair in the 4 weeks since launch, but not impressive, given the millions of people visiting Google sites daily.

My favorite is two women using Google Translate to order over the phone Indian take-out food in Hindi. Sure enough, the food shows up. Pretty funny. Also very impressive that Google Translate works so well. Of course, they can’t understand what the order-taker says back to them, but it won’t be long before Google does voice recognition, I’m sure.

The point is, Google acquires and/or develops some remarkable technologies but has been terrible at promoting them. I’ve complained about that for a long time. They seem to assume that just because they deploy a new feature, people will magically find and use them.

As they get better at marketing their various functions, and the rest of us become so dependent on using them, when will the inflection point occur where Google becomes the scary monopolist with access to all our information in every medium and we start turning against them? Just ask Microsoft

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Google Shoots Local Business – Lost Their Head?

Getting a haircut the other day at my neighborhood barber, I nearly fell off the chair when she said a man from Google had stopped by and photographed her small shop – inside and out.  Actually she said something like, “You’re on the Internet; see this company that came by and said people wanted to see photos of my shop on the web.”  This proprietor doesn’t have an e-mail, doesn’t realize her business listing already existed on Google, didn’t reach out to become a client, doesn’t have a Google advertising account, and was impressed they were doing this for free.  No strings attached.  Whoa – if I were the Yellow Pages, I might as well close down my business now.

Online yellow pages charge businesses $57-$199 per MONTH for listings, but Google’s traffic swamps them all – and it’s growing.   So the stakes are huge.

We’re all familiar with Google Maps and Street View – you can check out who parked in front of your home or what your neighbor’s backyard looks like.  Until recently, there was not much monetization in that business.  It was a huge logistical effort to drive down nearly every street in major cities and display the resulting database.  Free to users.

What’s happening now is the next logical step – going INSIDE businesses and shops to create an even more rich experience.

Given that there are 40,000+ barber shops in the US, how many does Google intend to photograph for free?  Even if a photographer could shoot 16 shops per day, that’s 2,500 man-days or about 10 man-years of effort, probably a $1m expense.  That works out to about $25 per shop.

Now, I am all for a company providing a free service – if the terms are clear and transparent.  But I am suspicious when a company doesn’t present any economic model that makes sense.

I could understand Google contacting my barber if their statistics system identified a large volume of users searching for barbers in my zip code.  But quite frankly, knowing the clientele of my barber, where I am one of the youngest clients, there ain’t a lot of online searches going on here.  Given that my barber did not reach out to Google, and the traffic volume has to be light, why spend the resources to approach this shop and shoot it for free? When she didn’t even ask for it?

What intrigued me was the two pages the Google photographer left behind.  You’d think Google would ask for a signed release, or at least leave behind a specific offer or price list.  Apparently not.

How will Google use these photos?  How can the owner get them removed?  What prevents these photos being used against the owner?  What if they show up promoting another shop?  None of this is explained.  Check out a scan of the pages here:

My favorite line is “Here’s what we [Google] think you should know about the shoot.”

If that isn’t a sign of an omniscient power with paternalistic tendencies, then I don’t know what is…

We are in an incredible age, where even people and companies “off the grid” are being mapped and cataloged.  As an Internet advertising fan, I have no doubt that Google will make sure my barber pays up – when a significant amount of her customers begin to contact her through a Google Voice system, or an e-mail, or electronic coupon.  I am impressed and humbled by the resources Google is willing to spend.  A truly long-term goal, indeed.  Who needs the Yellow Pages?

www.answers.com/topic/barber-shops

A couple online Yellow Pages companies:

www.supermedia.com/packaged-solutions/business-profile-packages
$99 to $199 per MONTH for a guaranteed 25 clicks per month.
Superpages.com and Verizon printed yellow pages.

http://listings.yellowpages.com/Services/ServiceTieredProducts.aspx
$57-$172 per MONTH for a detailed online profile.

Posted in Internet | 2 Comments

Run a Startup on Google Apps?

In my quest to become less dependent on PC-based programs (that’s you, Microsoft Office and Outlook) and to become more web and “cloud” centric, I have experimented with running a couple startups on the Google Apps platform. It is both impressive, and scary, at the same time.

Google Apps is a single log-in for a set of functions necessary to any company or organization: e-mail using a shared domain (e.g. @kbhayes.com), group and individual calendars, shared and individual document repository and a wiki to keep track of all the details. Of course, any individual can use Gmail, but that introduces a host of logistical and lack-of-company-control issues. Apps integrates all these functions.

The amazing part is, the cost to a small company (say, under 50 e-mail addresses) is zero. To get guaranteed up-time and access to more advanced features, like Google Video and Blackberry Enterprise Support, the cost is $50 per user per year. In contrast, my Yahoo Business Mail account for one person is $96 per year.

Gmail and calendar are great functions, but the Apps module which sold me is the wiki, known as Google Sites. As I am now running a number of micro-startups under multiple domains, I am faced with detail overload – how to track dozens of partners and the dialog with each, dozens of log-in credentials to different services, constantly changing documents like price lists, to-do action lists, links of competitors, etc. And my collaborators are located on the other side of the world – so anything I work on has to be accessible to them constantly. Like most wikis, Sites maintains an audit trail of changes and e-mails me whenever my partners update any part of the wiki – which helps me stay on top of changes without drowning in e-mails which get buried in my inbox.

Those who read my blog know I’m no blind fan of Google (see my predictions of Google as a monopoly), but I checked out a number of alternatives – ZoHo, Zimbra, Yahoo, Outlook/Exchange hosting, ACT, etc. Some of them are better at individual functions than Google Apps, but none can beat the pricing and overall integration of Google.

The downside is almost complete dependency on Google, which is the scary bit. Google’s infamous non-transparency as to how it applies its own rules, and the inability to reach an actual customer-service person, create frustrating situations. For example, a few days ago I had to send the same e-mail one-by-one to about 70 clients, with minor text variations. Lo and behold, Google’s rule of “sending a max 500 e-mails per day” suddenly kicked in and I received the dreaded bounce-backs with a message “Delivery to the following recipient failed permanently” and a link to a Google Help page explaining why they now think I am sending SPAM.

Of course, this happened after just 70 e-mails, and the ban was lifted without notice about four hours later. But I had no clear explanation of why the limit kicked in so quickly. Nor is there any way to appeal such a decision.

Am I being dangerously tempted by Google’s Siren Song? Is my business venture, which is pure “white-hat” legitimate work, at risk of being squashed by Google? Am I really just trading one monopoly in the Windows platform for another monopoly in the cloud? Is Microsoft actually the underdog on their home turf? Stay tuned…

Google Apps: www.google.com/apps/

Posted in Internet | 4 Comments

Rather be a Shark or an Angel?

Amused that ABC thought there was any entertainment value in showing the entrepreneur-investor fund-raising process (yawn!), I checked out the first few episodes of Shark Tank. Actually, it’s pretty entertaining, and my kids and I are now sitting in front of the tube yelling “Take the offer you idiot!” or “Walk away – they’re greedy bastards!” or “What the heck were you thinking?”

Shark Tank’s five investors – themselves successful entrepreneurs – see pitches from hopeful and sometimes desperate entrepreneurs. Thanks to Mark Burnett (Survivor, Apprentice, Contender, etc), I now know what it’s like to have your profession turned into a reality show. It’s very stylized and quick-to-judge and loud. Most of the time, investors accept no less than 50% of the company. That’s pretty harsh by typical Angel terms.

I’m not sure if a show like this sets back the Angel trend or enhances it. The reality (at least here in L.A.) is not nearly as sexy as it is on TV. Angels are more cooperative with entrepreneurs rather than confrontational. Deals are never evaluated nor negotiated so quickly between commercial breaks. There is always a ton of due diligence required from both sides to become comfortable with each other. All that is ignored in the show.

I would love to see some audience interaction – like the entrepreneur can poll the audience whether to accept a deal, or the entrepreneur can call a lifeline expert for advice.

One lesson becomes painfully visible on the show, and it has also become clearer and clearer to me during my career:  The hardest decision an entrepreneur makes is letting others “in” on their company stock, whether they be investors or employees.

Does an entrepreneur give away a big stake in their company in order to increase the chance of success, or do they hold on to everything and risk never making it? In other words, can they accept a smaller piece of a bigger pie or keep a bigger slice of a much smaller pie. There is no right answer – only that investors and entrepreneurs must have shared expectations and a way to part cleanly when those expectations diverge.

But hey, if a show like Shark Tank raises awareness and brings in more deals and better terms for Angels – and these sharks are pretty good at beating down their entrepreneurs – then ultimately I may have to thank Mr. Burnett. But like the guys selling pick-axes and jeans to gold miners, he’ll be too busy laughing all the way to the bank.

Shark Tank on ABC Sundays at 9pm.  Official show website:
http://beta.abc.go.com/shows/shark-tank

Unofficial blog with summaries and commentary about the show:
InTheSharkTank.com

Posted in Angels | 3 Comments