Wednesday, April 23, 2008

Microsoft's Best Move Yet

A TickerHound member asked:

“If Microsoft can't get Yahoo! then what's next for the company?”

Normally I might’ve shrugged my shoulders, suggested another acquisition candidate and considered the conversation over. Microsoft (Nasdaq: MSFT), while still a very successful company, hasn’t yet shown me that they really “get” the web.

That is until Tuesday night!

Let me explain…

Now when I first heard that Ray Ozzie was joining Microsoft I was thrilled, to say the least. Ray Ozzie has been innovating in the tech space for decades and has really been one of the few consistent hitters when it comes to emerging technologies.

But after watching (quite frankly) a series of disappointing product launches come out of Microsoft for the last few years, I began to lose faith in Oz.

Had he lost his touch?

Did being stuck in the confines of Microsoft rob him of his mojo?

Well he must’ve taken some notes from Austin Powers, because as of the other night, the “Great and Powerful Oz” has finally gotten his mojo back!

Lately, much of my focus has revolved around web-based services. For example, a couple of weeks ago I wrote about Google’s new web application platform (Why Microsoft Should be Shaking in Its Boots): App Engine.

This is was a HUGE move for Google and one that I think will serve the company very well in the future.

At the end of the article I asked if this was “check or check mate?” for Microsoft. Well, I think Microsoft just answered my question…and it is most certainly NOT the end of the line for the boys in Redmond.

On Tuesday evening Microsoft announced its most ambitious plan since the launch of Windows 95 – Microsoft’s upcoming “Live Mesh” service.

Similar to Google’s application platform, Microsoft hopes developers will make use of its toolset in order to develop robust web-enabled applications. But Microsoft is taking the vision a bit further. Instead of giving people a backbone to host their web-centric software on, Microsoft is providing a fully integrated platform that connects web applications directly to a user’s device(s).

Ozzie’s vision is to have a service in place where Microsoft’s products – and anyone else who wants to develop applications for the platform – can be synchronized across all devices (phones, PDA’s, game consoles, etc.)

How About an Example?

Ok, let’s say you have your trusty camera phone out at a ball game and decide to snap a quick photo of your favorite New York Yankee, Derek Jeter. Instead of just saving the photo to your phone, Microsoft’s Live Mesh will instantly beam it to your PC back home and your online photo album (along with any other connected device).

Then when you get home, you decide you want to edit the photo a bit because it’s a tad blurry (i.e. you can’t see the ball flying over the Red Sox outfielder’s head clearly). So you touch the photo up on your PC and instantly, the photos on your PC, your phone and your online photo album are all updated at the same time with no other action on your part.

And that’s just a silly example with photos…

Now imagine what that means when it comes to calendars, contracts and other business documents?

The array of services and solutions that can be built on top of a holistic platform like this are endless.

Microsoft’s also launching community features into Live Mesh, which in my opinion, makes it dramatically more powerful than anything else taking shape on the web right now.

Imagine you’re working on a team with several other people and you’re trying to edit a Power Point presentation or a Word document.

The Old Way:

  • You make a change to the file

  • You email it to everyone and wait for feedback

  • Then you realize that somebody else changed a part of the file that doesn’t quite match yours and now you have to work their changes in on top of your own

The New Way:

  • Everybody makes changes in real time, regardless of what type of device they’re using

  • Everybody’s copy is synchronized

  • There’s a record (visible to everyone in the group) of every change that was made so it’s easy to rollback and clean things up

Think about the productivity gains here! Think about the types of services that can be built on top of this platform. Think about the amount of commerce that this will drive – and not just for Microsoft, but for every web, desktop and mobile application developer out there!

Plenty of people would argue that this isn’t a direct competitor to Google’s platform, but I think if we examine the implications of a universal application platform, that bridges the device-to-internet gap in a seamless way, we’ll see that this is definitely Microsoft’s best move yet!

So even if Google’s platform is the foundation that the cities of the web are built upon, then Microsoft’s Live Mesh will be the roads that bind them together.

Sunday, April 20, 2008

E-mail needs to get Socialized

There have been several blog posts over the last few months about how hard it is to keep track of, read and reply to all the e-mail that we get bombarded with. I don't personally have a big problem with that but folks like Fred Wilson and Mike Arrington, who have to field 1,000+ emails a day, are certainly going to find it hard to maintain a decent response rate.

So in reply to a post Fred made today on the topic, here's what I think needs to be built:

There's a big opportunity here if someone could do it "right"...not to jump on the "social graph" bandwagon, but what if we could use our social graphs to help prioritize email. For instance, if someone created an email client (better yet, an add-in for existing clients) that would give you a way to sort mail based on how "connected" you are to a person. Could be a point based system and it would use criteria like:

1. Email history (e.g. have you corresponded with this person before, how long ago, how many times, etc.)

2. Connect to your Facebook or LinkedIn profile and assign points by how well connected the person is to you (degrees of separation + number of mutual connections)

3. See how engaged the person has been with your digital presence (have they commented on your blog posts - could pull the data from disqus - or your flickr photos, or sent you a tweet on twitter, etc.)

I'm sure there are some other relevant data points here but the main idea is that getting through 1000 emails a day is always going to be tough no matter what. But there are some emails that really can wait and there are some emails that deserve a quicker read and reply. How we organize those emails is what will ultimately determine which ones will get read and replied to quicker.

Anybody have any thoughts on this or know of an add-in that does it already? Might actually be fun to go out and just build it if it doesn't exist.

Any ideas?

Tuesday, April 15, 2008

Is There a Monster in Your Portfolio?

Yesterday on, a member asked: “What do you think about“.

I haven’t thought about this company for a long time. But once I started to really take stock of our current economic climate and Monster’s business model, I began to see why I needed to tell all my friends to double check their portfolios and make sure they weren’t holding onto any shares of this one.

Monster Worldwide (Nasdaq: MNST) is one of the world’s largest online job databases. The company is one of the few successful holdouts of the dot-com era and performed rather well after the market began to make a comeback in 2003.

The stock went from a low of $8.57 per share in March of 2003 to a high of $57.40 in April of 2006 - that’s a 569% return in under 3 years. Not bad, not bad at all.

But to keep all this in perspective, the stock was at $91 a share in March of 2000. So over the course of 6 years, the stock was actually down about 37%. Reason being: the recession of 2001 and the subsequent multi-year bear market that followed.

Monster, being so tightly correlated to the job market, got hit so hard because as unemployment went up and companies stopped hiring, their site provided very little value to employers and employees alike.

So now, we’re at the beginning of 2008, it’s pretty obvious we’re heading into a recession (no one knows how bad this could get) and I feel like I’ve seen this movie before.

Many people would tend to agree - Monster’s already down about 30% since the beginning of 2008.

Some may call that oversold, I call it “the tip of the iceberg“.

If we were simply talking about an equities market “correction”, then I’d say we’ll be coming out of the downturn by the 3rd quarter. But we’re talking about a crisis in the credit markets here - we haven’t had to deal with this since the 70’s and when you stack inflation on top of it we’re looking at a “perfect storm” scenario.

So this isn’t even a matter of performing deep financial analysis or picking apart the chart to identify a pattern. Let’s use some common sense (an underused asset in many investors’ tool boxes) here and see if we can figure out what’s going to happen to Monster…I think asking ourselves a few questions will be a good way to proceed:

  • Do you think companies are going to be hiring aggressively or laying people off?
  • Do you think they’re going to want to pay to list their jobs or will they simply use word of mouth to attract the relatively small number of employees they might hire?
  • Is it a good sign or a bad sign when 3 - 4 top executives leave the company over the last 3 months?

I feel like I’m watching a rerun of 2001 here and Monster’s on its way to $10 per share!

Now, I’ve never been one to go short a stock…it’s just not something I’m comfortable doing.

But you should definitely have a look at your portfolio, because if you have “a Monster” lurking in there, it’d be a smart move to rid of it and get rid of it quick!

Tuesday, April 8, 2008

I Got a Google App Engine Account!

Sorry, I might be running a company right now, but I'm still a geek at heart.

Scoble had the Qik cam going during this evening's Google Campfire event where they announce Google App Engine - a direct competitor to Amazon's AWS (S3, EC2 and SimpleDB) offerings. Unlike Amazon, however, with Google App Engine you don't have to worry about instantiating machines, adding new ones, clustering, etc. You just create an app, upload, tweak a bit and Google takes care of the rest. Scaling, clustering, backup, etc.

For a small company without a SysAdmin, this solution is going to be extremely important!

Right now they only support Python and since TickerHound was developed using PHP we won't be able to use the service right away. But we're creating some other mini-applications at the moment that this will be perfect for.

Good news though - according to Google, "Python is simply the FIRST language we'll support, it won't be the ONLY language." So as soon as this thing supports PHP, TickerHound is going to be moving.

The one negative I see right off the bat is that it's still a proprietary platform - it doesn't seem like it'll be easy to move to another service (if one ever wanted to). That doesn't give me the old "warm n' fuzzy", but if this platform is as good as it sounds, I doubt I'd want to move anyway.

Built in analytics, trouble shooting, version control, roll backs, monitoring, etc. - Google App Engine seems pretty tight to me! Psyched to have an account and I'll be posting updates and links to our apps as we build them.

Sunday, April 6, 2008

Google to Buy Expedia? No Way!

Re-blog from TickerHound Blog:

I saw this question come up on TickerHound the other day and just had to write a post on it.

A member asked, “Expedia’s been up this week on Google acquisition rumors - what do you think?read more>>

Ok, now I might have to eat my hat on this one but my gut (and plain business logic) makes me think otherwise. Anybody who is saying different, I won’t mention them by name, is probably doing so out of ignorance, desire for attention or a bit of both.

One has to understand that Google isn’t some “dot com” growth engine that’s looking to build at any cost. This company is extremely disciplined when it comes to its finances and it shows in the bottom line – but more on that in a moment.

The point I’m trying to make is that Google is not going to swallow up a company simply to add eyeballs, revenue or whatever else to the Google pie. They’ll only acquire a company when it compliments their core business of search and search advertising.

For example, – Google acquired the company for $1.6 billion last year and hasn’t looked back since. YouTube serves up roughly hal the videos on the web right now and I really believe Google has the wallet, connections, etc. to deal with the copyright issues the service faces. The other thing to recognize is that YouTube wasn’t just some online video site. The service fit within Google’s model of content aggregation, indexing and search – and then monetizing that through advertising.

YouTube doesn’t create content, they aggregate it, index it and make it available to the public…strangely similar to Google’s search engine. The same applies to many of the acquisitions, albeit smaller, that Google has made over the years…

  • which formed the foundation of Google’s Office applications: users publish documents and Google hosts and indexes them.
  • Bloggers post tons of content which Google indexes and monetizes with advertisements.
  • And the list goes on…

Now if Google acquired Expedia they would be entering an entirely new business: E-Commerce.

This might make you say, “Well, why does that matter, money is money, right?”.


Money is always money, but the question is, what does it COST to get that money? In other words, what’s your Return on Capital?

Right now Google has an average Return on Equity of 21%.

Expedia: 5%

Why on earth would Google take on a business that would make its margins worse off?

Answer: They wouldn’t!

Like I said, this is just my opinion and if Google comes out next week and announces that they’ve taken over Expedia, I’ll issue a public apology on But, as I said before, my gut and business logic are telling me otherwise.

The one travel company I could realistically see Google taking over would be – it’s a privately held travel SEARCH company. They index and search over 140 travel sites in an effort to find you the cheapest airfares, hotels, etc.

While I “think” this would be a match made in heaven, Kayak is a privately held company and I have no idea what their financials look like. But from a synergistic perspective, Google-Kayak makes a lot more sense than the Expedia story.

Saturday, April 5, 2008

I Love Saturday Mornings


  • 9:00 AM - Wake up (that's right, I like to wake up early on Saturday's, see item 3 for why)
  • 9:30 AM - Head to my new favorite west side bagel shop, Brooklyn Bagels (go figure). I highly recommend the Oat and Raisin mini bagel...coming from a former bagel boy, you need to take this recommendation seriously!
  • 10:00 AM - The cartoons begin, starting with none other than Teenage Mutant Ninja Turtles!! Sorry, but I can't stop watching Saturday morning cartoons, I imagine I'll be doing this until I'm 90.
After some cartoons I usually end up working for a few hours before we figure out a good spot to head to for lunch. I'm thinking Flushing today...nothing like Taiwanese food from flushing!