2008 Sep 1

Too big to fail, or too big to see small? Credit companies and micro-payments

It is a well-known truism that companies lose their market share (and their shirts, and sometimes their life), when they are so tied into their big, currently lucrative business model to support the small opportunities that can grow into big ones. In this instance, I am referring to the credit-card companies who missed the boat on micro-payments, got lucky in that no one stepped in fully (or at least successfully), and seem dead set on doing so again.

2008 Aug 25

Search and ye shall find - can a search engine understand that?

In the first part of this post, we analyzed what the position of the dominant player (Google) is, where there are opportunities, and what they need to succeed. In this part, we will briefly review the one I interviewed recently, hakia. FYI, hakia is, indeed, spelled lower-case; this is not a typo. Given our list of criteria above for success, how well do hakia meet the requirements? User Requirements.

2008 Aug 22

Search and ye shall find - the future of search

In the year 2008, there is one 80-pound-gorilla in the corner in the world of search, and its name is Google. FY2007 revenues were $16.6BN with net income of $4BN. In any industry, and especially one as R&D- (and hence expense-) intensive as technology and search, net margins of 24.1% is nothing to laugh it. Microsoft had slightly higher consolidated net margins (29%), while Cisco had only 21%, and both are much more mature businesses, having been around a lot longer than baby Google.

2008 Aug 12

The future of search - quick foreword

Some time in the near future we will be publishing an article analyzing the search industry. Although it appears to everyone that there is just one big company in this business (hint: $16.6BN in revenue and $4.2BN in net income FY2007), this is an incredibly fast-moving industry. Microsoft recently attempted and failed to spend around $40BN for Yahoo, and Google itself was a nobody a decade ago. As an advance, I recently interviewed Dr.

2008 Aug 12

From horse to Pegasus - is there any future to the music industry? Part III

In Part I of this series, we explored why the music industry is suffering, and what the market, technology and legal forces are that brought it to this point. In Part II, we discussed what the barriers to change are within the music industry, and what might be done to plan for the future. In this final Part III, we will look at some possible models. We begin with a caveat.

2008 Aug 10

Beating a dead horse - is there any future to the music industry? Part II

In Part I, we explored how the market and world within with the music industry operates has changed, especially in the last decade. Clearly a new business model is necessary, as any turnaround or strategy expert could have predicted as far back as the late 1990s, while one well-attuned to the technology sector could have predicted even earlier. In this section, we will explore what are the barriers preventing the major labels from abandoning its current model and thinking creatively enough to come up with a new model.

2008 Aug 10

Beating a dead horse - is there any future to the music industry? Part I

The jeremiads are everywhere and have been for several years: the Internet will be the death of the music industry, at least as we know it. The reasons behind this death knell, and what they can do about it, are worth exploring. First, a few facts. This past week, Sony agreed to buy out Bertelsmann's stake in Sony BMG for $1.2BN, effectively valuing the entire business at $2.4BN. (In a small ironic note, Sony BMG was accused of software piracy by PointDev; those who live in glass houses.

2008 Aug 6

We are not amused - the economics of amusement parks

Recently, I had the experience of seeing two related events in the business of amusement parks. First, The Wall Street Journal, one the front page of its Tuesday, August 5, 2008, edition, had an interesting article on the financial troubles of Six Flags and the turnaround plan of its CEO and CFO. The short form is as follows: Six Flags is in trouble. Without going into too much depth, over the last three years, it lost $105MM, $203MM and $234MM, in 2005, 2006 and 2007, respectively.

2008 Aug 2

Business consultant vs. investment banker - which to use?

I recently received a call from a potential client who is considering a sale of their business. The sale had not been initiated by the owner, but rather by several competitors who had approached the owner to purchase their business. In other words, it was a horizontal merger situation. The owner wanted to know when to use an investment banker as opposed to a business/management consultant (i.e. someone like me).

2008 Jul 23

E-Commerce Solutions - Gateways, Processors, Providers, Promisers

In dealing with e-commerce solutions over the last several weeks intensely (and the last several years in general), I have come to the conclusion that there are four different categories of e-commerce solution providers: gateways, processors, providers and promisers. In understanding these categories, as in all projects where you have a defined goal, it is important to understand what your e-commerce goal is. Most e-commerce occurs where the vendor wants to sell something to the customer.