I'm a business and technology columnist at the San Jose Mercury News where I think about innovation in Silicon Valley. I also run The Next Newsroom Project where I think about the future of journalism. This site aggregates all my online writings and conversations.
// August 6th, 2010 // Comments Off // Apple, Innovation, O'Brien, Silicon Beat, Strategy, facebook, google
Since the announcement that it was killing Google Wave, Google has turned on the spin by proclaiming how they “celebrate our failures.” There is a lot to admire about Google, and one of those things is its ability to experiment and, as CEO Eric Schmidt said, “try things.” It’s not just hard for many organizations [...]
// April 21st, 2010 // Comments Off // 1, Innovation, O'Brien, Silicon Beat, Social Media, Strategy, facebook, google
After spending the morning at f8, the Facebook developers conference, I’m convinced more than ever that Facebook is about to take over the whole Web. And by the whole Web, I mean, well, all of it.
And if Google isn’t trembling over this, they ought to be. We might look back at this day as the moment [...]
// February 17th, 2010 // Comments Off // Innovation, O'Brien, Oracle, Silicon Beat, Strategy, google
One of the most significant trends I’ve been watching over the past decade is the dramatic drop in public companies in Silicon Valley. Naturally, that number was artificially inflated during the dot-com bubble when it reached 417 in 2000. For our purposes, Silicon Valley includes San Mateo and Santa Clara counties, and the southern half of [...]
// February 9th, 2010 // Comments Off // O'Brien, Silicon Beat, Social Media, Strategy, facebook, google, twitter
Google Buzz is here. And the big question is this: Can Google finally get in the social game? After playing around with Google Buzz for a bit today, I’ll say the jury is out for me. But I have a few thoughts, and will have more after I’ve played with it for a few weeks.
The [...]
// February 5th, 2010 // Comments Off // Future of Media, O'Brien, Silicon Beat, Social Media, Strategy, advertising, google
We learned in late December that Yelp turned down an acquisition offer from Google reported to be worth $500 million. Yelp then raised $25 million from Elevation Partners, with another $75 million possibly coming down the road.
It may need that money to ward off Google, which is ramping up its local advertising offerings. The new service [...]
// February 5th, 2010 // Comments Off // Future of Media, O'Brien, Silicon Beat, Social Media, Strategy, advertising, google
We learned in late December that Yelp turned down an acquisition offer from Google reported to be worth $500 million. Yelp then raised $25 million from Elevation Partners, with another $75 million possibly coming down the road.
It may need that money to ward off Google, which is ramping up its local advertising offerings. The new service places Yelp directly in Google’s scope. And I wonder if it won’t lead Yelp to regret not selling when they had the chance.
Google is now testing a paid, enhanced advertising feature that lets small businesses add all sorts of content to the listing people find via Google: coupon, website, photos, videos, menu, reservation, and directions. These will all be available starting for $25 per month via Google’s Local Business Center. Yelp business accounts cost from $300 to $1,000 per month and allow a business to promote themselves via sponsored listings.
Google launched the Local Business Center last year. Basically, it allows a business to “claim” their listing and monitor all sorts of search metrics about how and when people are finding their listing.
The new services, being tested in San Jose and Houston, allows a business to control even more information about their listing. Here’s a screenshot of how it will look in the LBC dashboard:
Yelp will still have the advantage when it comes to its community or reviewers. And Yelp still has one of the best location-based mobile phone apps around.
Still, it will be interesting to see how this affects consumers’ search behavior. If they’re getting so much additional information right in the Google search result, will they still need to click on the Yelp link that probably also showed up? I wonder how much Yelp traffic comes via Google, and how it will affect that.
In any case, it shows Google has big ambitions in the local ad market. We’ll see how disruptive this new service proves to be.
// February 1st, 2010 // Comments Off // O'Brien, Policy, Silicon Beat, google
Over the weekend, my column looked at the remarkable growth in Google’s lobbying operation in Washington, D.C. In just four years, Google has become the valley’s second largest company when it comes to lobbying expenditures.
Naturally, I left out a some details. While the story focused on money, there are other ways Google has been trying [...]
// January 21st, 2010 // Comments Off // O'Brien, Silicon Beat, Strategy, google
Looks like it’s full steam ahead for Google. Revenues rose 17 percent to $6.7 billion. Non-GAAP earnings jumped 35 percent to $2.2 billion.
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// January 21st, 2010 // Comments Off // Future of Media, O'Brien, Silicon Beat, Strategy, google
Once again, Netflix has been placed on a death watch. But I’m not buying it for a second. We’ve heard that too many times over the company’s history. And each time, the company has nimbly defeated new and established competitors, while growing like gangbusters in a horrid economy.
I wrote last year that I was done betting against Netflix. And I’ll stand by that now.
The latest obituaries for Netflix started being written this week after two separate developments. And it sounds like there’s a third coming next week when the Apple Tablet-Slate-Thingy is unveiled.
On Wednesday, YouTube announced it was going to experiment with offering some movies to rent starting tomorrow. From the AP:
“The Internet’s most popular video channel will make its debut as a rental outlet Friday to help promote some of the movies that will be shown at the upcoming Sundance Film Festival in Park City, Utah.
It’s part of a test that YouTube hopes will encourage more studios to rent movies through its site, eventually creating a new financial stream to supplement the Internet ads that bring in most of its revenue.
The first five films available to rent through YouTube will cost $3.99 for a 48-hour viewing period. Movie studios will be able to set their own prices, with rental viewing windows ranging from one to 90 days. YouTube will get an unspecified commission from each rental.”
It’s one more step in the tranformation of YouTube into Hulu, its smaller but more financially sound rival. It’s less than a start, given the limited offerings. We’ll see if studios bite. But even if they do, YouTube will need a major overhaul to offer the Web features of Netflix, like movie queues, finding features, ranking, etc. I’ve found these to be incredibly valuable. And I typically use Netflix to rent TV shows and movies. So YouTube needs deals with the networks and cable stations along with movie studios to pose any threat to Netflix.
Also on Wednesday, MG Siegler at TechCrunch wrote that Netflix Just Gave iTunes A Big Fat Kiss. Why? Siegler was upset over:
”Netflix’s idiotic new 28-day rule; (they can’t rent Warner new releases on Netflix until after they’ve been available for purchase in retail store for 28 days).”
The deal was struck in exchange for Warner offering more movies for streaming. Siegler noted that he could rent that same movie from iTunes right now. Great. Of course, the problem is that you have to pay to rent it. If you’re a Netflix customer, you’re paying by the month. If I’m on the 3-DVD rental plan for $16.99 per month, I can probably watch a dozen or more movies each month, depending on how efficient I am in watching and returning them. Renting 12 movies from iTuneswould cost me almost $40. Plus, Apple still places lame restrictions on rentals. Once I “rent” a movie from iTunes, I have 30 days to watch it. And once I start playing it, I only have24 hours to watch it. Terrible. Almost as bad as Comcast’s OnDemand. I’ve used Apple’s movie rentals a couple times, but don’t recommend it.
Where things could get interesting is with the announcement next week of the Apple Tablet. This week the Wall Street Journal reported that Apple is creating a new ecosystem for the tablet that it hopes will do for traditional media like news and TV what the iPod did for music:
“In developing the device, Apple focused on the role the gadget could play in homes and in classrooms, say people familiar with the situation. The company envisions that the tablet can be shared by multiple family members to read news and check email in homes, these people say.
For classrooms, Apple has been exploring electronic-textbook technology, these people add. The people familiar with the matter say Apple has also been looking at how content from newspapers and magazines can be presented differently on the tablet. Other people briefed on the device say the tablet will come with a virtual keyboard.”
This begins to get at a question I asked earlier this week about the tablet: “What problem will this solve for me?” Knowing Apple and its human-centered approach to innovation, I had a hunch they were focused on this question. And from the looks of it, this is their rationale. And if this includes a different subscription plan for streaming movies and other content, then that could make things uncomfortable for Netflix. But that would happen only if Apple vastly expands its movie offerings. Remember that the number of movies available for purchase and rental on iTunes represent only a fraction of those available on Netflix.
Beyond that, the reasons I’m still bullish on Netflix are simple. Throughout its history, it’s faced periodoc challenges and let many to write it off. Postage costs. Blockbuster’s belated move to online rentals. Increase in movie streaming. Netflix and CEO Reed Hastings have deftly beaten back each one. And when the economy went into the tank, Netflix kept right on growing.
I’ve been a Netflix customer since it launched and have never tried anything that made me think twice about dropping my membership. The company continues to strike a careful balance between trying to offer a full selection of DVDs while goosing the studios to increase the offerings available for streaming. Going up against Google and Apple represents a mighty challenge for Netflix. But for now, Apple and Google remain the underdogs in my view until the prove otherwise.
// January 19th, 2010 // Comments Off // Innovation, O'Brien, Silicon Beat, Strategy, google, techcrunch
For those of you thinking the IPO market is going to come roaring back this year, think again.
I just saw the post from Techcrunch yesterday that Yelp was on the verge of taking a $50 million investment from Elevation Partners. This comes after the failed acquisition talks with Google. Here’s what’s interesting:
“The size of the round is in the $50 million range, but includes both a primary investment component as well as a secondary offering for long time employees. These deals are now being referred to as ‘DST deals,’ since DST first invested in Facebook in May 2009 at a $10 billion valuation and later funded employee buyouts at a $6.5 billion valuation. They did a similar deal with Zynga.”
In other words, part of the investment will allow long-time employees to cash out options. Same deal with Facebook and Zynga. But why?This is what a company does to release some of the pressure to go public or sell. I can’t blame anyone for wanting to avoid an IPO. But it’s a sign of just how much the world has changed since the dot-com bubble a decade ago.
But companies should avoid finding themselves in this spot. And that’s why last fall I suggested it was time for the valley to stop using options as a compensation tool and figure out a new way to provide incentives for entrepreneurs and long-time employees.
Copyright © 2010 Chris O’Brien. All rights reserved.
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