Blue Screen Of Duds

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Archive for the ‘business’ Category

Sign o’ the times

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There are events and then there are not-so-ordinary events that give us hints, even in their disassociation, about the direction that technological (or any other type, for that matter) developments will head.

In the past week we have seen three such events – Microsoft’s formal overture towards Yahoo!, Facebook’s less-than-stellar numbers and Twitter’s ongoing saga in trying to keep a web-scale messaging framework up and running – that give us tasty hints as to where we may be headed.

The simpler, shorter version of the Microsoft – Yahoo! story is that companies that do business in the old school way – a manner similar to a behemoth, clumsy and ugly in gait – are history on the internet. Lock-in of the user and his/her data to platforms or products is a strategy that is history. It is only a stellar product that will keep companies alive in the future. And neither Microsoft, nor Yahoo! have built and in-house hit web-scale product in recent times.

The feeling that keeps coming back to my mind is that Microsoft and Yahoo! will be one of those weddings that look perfect as a mental image (for the shareholders and business wonks), but in practice it ends up being an absolute nightmare. There is a staggering amount of redundancy (for every Yahoo! product you can think of, there is almost a competing one with MSN/Live.com) and the integration will also be rotten in terms of platforms and cultures.

Even if you set apart the strong stench of desperation in the move, the fact remains that these are two companies that are struggling to catch the imagination of the younger and upcoming generation. By the time the dust settles on this one, much confusion would have ensued, which would tick off the loyal users who make up a vast majority of the numbers that make the deal look exciting.

That said, it is indeed a sad development to see an internet icon like Yahoo! being in the position that it finds itself in now. And in that state of distress lies a story for everyone who makes a living off the internet – don’t take anything for granted. Earlier, a company’s lifecycle – from inception to success to the demise – used to take decades, now the same is being compressed into ten years.

It is a theme that I will never tire of telling everyone I know: being nimble is a priceless asset in doing business now – nurture it, grow it and covet it with as much care as you covet your bottom line.

Written by shyam

February 4, 2008 at 12:32 pm

Did outsourcing just save American jobs?

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Just a quick note before the day starts in full flow choc-a-bloc with meetings. For all those really loud people who have dismissed outsourcing and given it so much grief, go and take a look at IBM’s Q4 2007 earnings call. A lot of IBMers in the US are getting to keep their jobs because of their company’s strong performance have to thank outsourcing for it. Services, which is mostly driven by outsourcing has been their rock star performer:

Looking at our results by segment, Services continued the momentum we’ve seen over the year. Global Technology Services revenue was up 16%, profit up 26%. Global Business Services revenue was up 17%, profit up 9%. And we signed $15.4 billion of new business, and importantly short term signings were up 8%.

They have also benefited from having a truly global operation, which enables them to focus on emerging markets, that drew in a 3rd of their revenue for the quarter. You can expect a similar set of results from Google (growth, but at a much slower rate) and from other geographically diverse companies who can limit their exposure to the carnage that we will see this year in the US market. Google itself crossed the crucial landmark a while ago, when, in Q1 2007, their international revenues pretty much hit 50% of their total revenue.

Once again, companies that will take a huge hit are ones like Apple, who depend extensively on retail spending in the US markets, which is why they have been gradually moving into other segments (iPhone) for which you can look at recurring revenues per customer than a one time engagement. 2008 will be critical for Apple and if they have to escape the carnage, they have no choice but to forge ahead with the launch of the iPhone in other markets.

Then again, the iPhone is vastly overpriced for a market like India, even if you were to assume something like INR 16,000 as the price point. If they need a winner, they’ll need something in the sub-INR 10,000 price range to set the market alight and I don’t see something like that coming from Apple.

On an unrelated parting note, I think I’ve linked to David Manners’ blog on the semiconductor trade, but it is an absolutely lovely blog to read even if you are not a semiconductor wonk. Highly suggested.

Update: HP too, apparently, is in on the same game.

Written by shyam

January 18, 2008 at 9:24 am

Automattic turns down $200 million offer

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Automattic, the company that created the WordPress.com blogging platform and oversees the WordPress.org open source project, has rejected a $200 million acquisition offer, says multiple sources. — Techcrunch

I’d said a while ago that even the $300 million figure quoted by Rafat earlier was not the right valuation for the company. Automattic does not only create software that helps people — and now a fair number of publications — publish content, they also organise it in a consistent manner using global tags and categories. They are, in fact, a content management, content delivery and allied services company, very much unlike what the world thinks of them as: a blog software company.

If they stick it out in the long run by themselves (no reason why they should not do it, since they have not taken on board any major funding in a while now, which is a good indication that the company is doing well in terms of cash flow/reserves), they would be worth a whole lot more.

Update: More evidence to back it up that WordPress is much more than a blog software company.  How long it will be before they get an actual editor to run that page and push out more organised content?

Written by shyam

October 30, 2007 at 9:15 am

A Brijj too far

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When I started writing this sort of a review, I honestly wanted to rip Info Edge apart for releasing such a sham of a website. Having read a lot of what Sanjeev Bikhchandani has written and said over time and having seen Naukri grow into the robust company that it is today, I had considerably greater expectations from Brijj. But I’ll hold my horses, tone down the criticism and look at the larger picture, that the blame is almost universally spread out among the Indian internet landscape. Our idea of innovation is to look at the hottest 50 websites out there in the west, pull elements from each of them and promise to do everything, including an unconditional end to global warming, and hope nobody notices that beyond the stellar messaging (email for body builders, email for stupid people, anyone?) the product is the same wine in the same bottle.

Of course, a lot of Indian internet companies are profitable and in a good shape and at least in theory that should drive innovation across the board. But we seem to be happy to wait for the next big thing to fall from the western landscape, lap it up, spit it out and hope the audience here picks it up and voilà, you have a shortcut to near-instant profit. The strangest thing is that even here where there is hardly a decent business model online beyond the traditional banner spots, you get to hear almost endlessly about Web 2.0 and the like from within and outside the trade almost like it is the gospel that fell straight off the money tree.

What nobody will tell you is that most Web 2.0 companies in India today are neither successful nor feasible in both the long and the short run, including the latest string of Ruby on Rails-powered monstrosities, which often don’t have user bases that don’t extend beyond the developer’s immediate family and a string of former and current lovers. From that point of view, the ‘copy from west and paste here in the east’ routine may sound like a good and easy idea, but it is a malaise that will end up leaving us behind like cheap clattering Chinese imitations before soon. I think someone has to wake up, ground some good beans, brew some strong stuff and smell a whole lot of it.

Now to the product at hand: Brijj

On the surface, Brijj picks out the best of Facebook in terms of presentation (the squeaky clean lines, funky Javascript, Ajax etc) and marries it with the best of Linkedin (references, plug ins for Outlook, Outlook Express etc). But that’s where the similarity and the theory ends. Neither does Brijj have the stupendously awe-inspiring backend data wizardry that is the hallmark of Facebook, nor does it have the professional-friendly feel of Linkedin. For existing users of people networks, the lack of what are considered as standard features also stick out like a sore thumb.

For example, there is absolutely no granular privacy settings in terms of who gets to see what and how much. I am assuming that a lot of it is controlled by who you are a friend of and who you are not a friend of, but there’s hardly any easy way to figure it out. Beyond a few clicks and a handful of links, there is nothing to discover about the website. There is just no surprise factor. It looks and feels like a low cost carrier and the killer blow comes in when you see the best done page: product comparison — where you get to see what the different membership options are. And that is a dead giveaway of the shortcut to profit route, when you are crystal clear about your pricing options and are relatively clueless about the rest of the website.

On the technical front, the site is a bit rough around the edges. The server signature is the standard “NWS” or Naukri Web Server, which is actually Apache under the hood, running PHP and possibly one of the MVC frameworks. There are some duplicate meta and doctype declarations all over the place (UTF-8 or iso-8859-1? Make up your mind!), possibly due to some unfortunate soul including a default editor template in some controller file. There is almost certainly only a limited amount of QA done on it (other than a basic copy check) and page titles and meta tags are the same all over the place. And at least in the logged in home page, there is an invisible DIV with a certain Sonal Mehta’s (apparently, an HR manager at Infy) email and phone number hard coded into it.

So what’s the verdict? I am afraid unless Info Edge puts some real hard work into it and revises/refreshes the product, this will end up in the dustbin before soon. In any case, I can imagine the company having real pressure on it to diversify, especially after their successful listing. With 99acres and other properties not doing too well and still being huge cost points that gnaw away at Naukri’s healthy constitution, this won’t come as a relief in breaking the one hit wonder curse. Positioning-wise, I can’t see too many existing users moving over to this. The switching costs are way too high and the features are way too less and honestly, it all feels a bit too amateurish.

Info Edge is also making critical mistakes like not having a common registration database among its properties. Who on earth wants to maintain yet another login in an already troubled world of products where there is almost nothing that goes by the name of interoperability. I am assuming that at some point Info Edge will roll into Brijj, the muscle of Naukri’s database, but they have again erred gravely by not having it on from day one. It would have stood out as a major differentiator to any other similar product and this is again made considerably difficult because of users having to maintain two different identities on Naukri and Brijj.

Written by shyam

August 9, 2007 at 8:33 pm

Parsing ‘active’

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We really have to come up with better ways of measuring subscriptions and usage. After the entire ruckus by Naukri and Timesjobs about who is the big daddy as far as job sites go, it is now Reliance’s turn to go overboard with usage numbers. According to a release (reproduced almost in toto by Alootechie), Zapak Digital Entertainment has signed up more than 1 lakh users on a single day for their new email service Zapakmail.

If you go by IAMAI’s *cough* numbers, the average ‘active’ users in March 2007 was estimated at 28 million and the way ‘active’ has been defined is thus: “someone who has used the internet at least one in the last 30 days.” Even by that number, and after taking extreme liberties in considering it to be true and extrapolating it further, we have roughly 903,225 users for the March 07 number, on a daily basis in India. If you go by Zapak’s numbers (1,15,263 in a single day), it would mean that 1 out of 9 users who logged on to the net in India that day signed up for an email account at Zapak. How likely is that? You can judge that for yourself since there’s no way we are going to get the real numbers out of Reliance.

In any case, as it was earlier with the Sunsilk Gang of Girls concept, sign ups are not a good enough measure of stickiness and active users. You might have a million signed up users who never log in and the reason why we can’t ever agree on which site is better is because everyone has different definition of an active user. And this is a problem that the industry has to address at some point because even with the presence of an external auditor, metrics like pageviews, user sessions are far from being above board and bereft of inflation.

p.s: Sanjeev, please get your blog hosted on Naukri than on Blogger, or at least get a better template than the boring default blogger template. It would not take more than half a day for the chaps at your labs to get this done.

Written by shyam

May 8, 2007 at 8:04 am

Posted in business, India