The Big Picture X 3?
C'mon! Get your own f*&%in names!
I may have to follow my readers advice and get the lawyers involved...
Countrywide: "Home price depreciation at levels not seen since the Great Depression"
An amazing conference call with Countrywide Financial (CFC), the largest US mortgage underwriter. It was beyond ugly. Here are some notable quotables from Chief Executive Angelo Mozilo:
- "During the quarter, softening home prices continued to affect many areas of the country, and delinquencies and defaults continued to rise across all mortgage product categories as a result."
-Delinquencies and defaults rising across all investment tools.
-Lower home prices may effect credit.
-S&P Case-Schiller is strong tracking tool for health of housing market
[Editor: we have referenced this many times]
-CFC continues to study further tightening of loan standards for both subprime and prime
-CEO believes markets will force the weaker mortgage companies to either work with bigger players or look elsewhere for business
-For a Fed Governor to say that the lending group had this coming is unbelievable.
The WTF line that I don't get is this one:
"no one saw the deterioration of real estate values coming."
Here comes the money shot:
"Company is seeing home price depreciation at levels not seen since the Great Depression"
-Previously, the company had stated they expected a turnaround in mid-2008; now, they say they are not sure when housing declines will cease. Refuse to rule out house price declines in 2009;
-Surprising comment regarding the prime portfolio: so far what they have seen in deliquencies is due to people losing job, losing health, lost marriage, more so than any resets. Stated that the "definition of prime may not be as high as some people think."
-Expects to hear mergers and people going out of business in the near future;
-The company cut its 2007 earnings forecast to a range of $2.70 to $3.30 a share, down from previously lowered guidance of $3.50 to $4.30 range (projected in April). In the beginning of the year, the company said it expected to earn $3.80 to $4.80 a share.
All told, a simply brutal and market moving nearly 3 hour conference call . . .
Thanks to Briefing.com for the update
BNN Appearance re: Apple and Palm
We had an interesting chat about Apple's iPhone, Palm and the how technology gets designed on Report on Business Television:
click for video
After Hours with Kim Parlee
Monday, June 6, 2007
Smackdown! Microsoft versus Google
To be filed under Outsource THIS right off my desktop!
Google has taken aim at one of the two biggest Mister Softee moneymakers:
"On Thursday, Google, the Internet search giant, will unveil a package of communications and productivity software aimed at businesses, which overwhelmingly rely on Microsoft products for those functions.
The package, called Google Apps, combines two sets of previously available software bundles. One included programs for e-mail, instant messaging, calendars and Web page creation; the other, called Docs and Spreadsheets, included programs to read and edit documents created with Microsoft Word and Excel, the mainstays of Microsoft Office, an $11 billion annual franchise.
Unlike Microsoft’s products, which reside on PCs and corporate networks, Google’s will be delivered as services accessible over the Internet, with Google storing the data. That will allow businesses to offload some of the cost of managing computers and productivity software."
There can be no doubt that Microsoft has a dangerous rival in Google, but its more than mere business challenge -- its a philosophical, also. The battle is between Microsoft's approach of owning a stranglehold on desktop computing, versus Google's massive online server cloud accessible by any user, anywhere, no IT dept necessary.
As we noted previously, adaptation of both Vista and the new Office have been slower than expected; indeed, its hard to describe it as anything short of a disapointment. Google obviously recognized this softpoint and decided it was an opportune time to pounce. Very Sun Tsu of the not-so-genteel Google boys: Always take advantage when your adversary is weakened or vulnerable.
This is a potential paradigm shift. Do the math, and you will understand why:
"While most analysts say that businesses will increasingly use software delivered over the Internet and supported by advertising — a formula that Google has mastered — they are split over the threat that Google’s offering represents to Microsoft in the near term.
“I think Microsoft should be very concerned about this,” said Rebecca Wettemann, vice president of Nucleus Research.
Ms. Wettemann noted that a business may spend about $80,000 on a systems administrator to manage e-mail and desktop office software. For the same amount of money, Google Apps allows a business to support 1,600 users, she noted. Simply in terms of staffing, “this may be a better proposition even if Microsoft were free,” Ms. Wettemann said." (emphasis added)
A better value proposition than free Microsoft. Now that's a tough gig to beat (even with Googler's egregious boilerplate).
Critics will note that the Fortune 500 are unlikely to adapt this. After all, Windows XT was called the IT Department Full Employment Act, and well paid CIOs are unlikely to put themselves out of a job.
It is also true that the growth segment of business and computing is NOT the Fortune 500; rather, its in the small start up, the entrepreneur, the solo practitioner. This is the area where Google can lay a pretty decent hurtin' on their older, less nimble rival.
Is Microsoft the next Blockbuster Video? I doubt it. They have too much cash, too many franchises, and too many sharp people to be totally marginalized. But I also very much doubt they are the next GE, a company that has managed to evolve and reinvent itself repeatedly over the course of more than a century, and remain a top layer in numerous niches. Not Blockbuster, not GE, but somewhere in between (if anyone has a perfect corporate parallel, let me know in comments).
Whether Microsoft can do the same, whether they can adopt their monopolist business model to something that thrives on competition, has yet to be seen.
UPDATE February 25 2007 8:42am
IT Wire notes that:
"Google’s newly released online productivity suite Google Apps has already replaced Microsoft Office at more than 100,000 small to medium enterprises and has been deployed at two of the largest companies in the world, according to the search leader’s enterprise product boss."
Google manager: Google Apps replaced Microsoft Office at 100,000 businesses http://www.itwire.com.au/content/view/9889/53/
A Google Package Challenges Microsoft
Published: February 22, 2007
IBM Suing Amazon over Patents
Last week, I gave IBM the nod pre earnings for a number of separate reasons.
One of the factors in our analysis was their rich patent pipeline. we noted:
Huge Patents: IBM Leads in U.S. Patents for Thirteenth Consecutive Year; This is potentially a rich pipeline for the company in the future. They currently garner about $1Billion a year in (high profit) revenue from licensing their patents.
Well, that didn't take long:
IBM now alleges that Amazon has knowingly infringed upon five patents, related to: customer recommendations, purchase systems, advertising, web site navigation and the way its stores data on its network.
This is not the first time we have brought up the issue of monetizing intellectual property. Back in January 2005, we mentioned the Rise of the Pure Patent Business Model:
Patent litigation in the U.S. is substantial and rising. High-profile patent suits will only accelerate in 2005. Why? The new business model: the pure patent play. Consider VC Intellectual Ventures, which has been creating and buying patents. The defunct Commerce One's 39 Web services patents were auctioned off in bankruptcy to the unknown JGR Acquisitions for $15.5 million. I expect to see a slew of patent litigation from these (and other) players in 2005.
This promises to be an intriguing area of investing.
Oneof our biggest winners in 2004 / 2005 was the small cap stock Ampex (AMPX). Understanding the legal intellectual property issues -- and how they could create an investable thesis -- was definitely an advantage in the marketplace . . .
Relentlessly Bearish Fashion
The WSJ call's em as they see 'em:
Barry Ritholtz, in his relentlessly bearish fashion, argues against the conventional wisdom that suggests today's retail-sales report wasn't all that bad. "One might have thought that, given all of the dollar savings at the pump, at least an equivalent amount of dollars would have been plowed back into the economy. Indeed, the new-found energy savings could have led to a wealth effect, leading to more big-ticket items -- including cars," he writes. "Nope. But taking a page from the school of inflation ex-inflation, if we remove the items that went down in sales, we can reach the conclusion that sales were not punk."
I do try to "argues against the conventional wisdom."
And, I admit that I have been very bearish since moving away from the the Summer's Buy 'em for a trade call way back in June.
Hey, at least I ain't short!
Update: October 14, 2006 11:07 am
This also got picked up by the Afternoon Report, as well as Consumers Impress Economists With Quick Spending Turnaround
A WSJ hat trick!
MarketBeat: Blog Roll -- Afternoon Edition
David A. Gaffen
WSJ, October 13, 2006 1:12 p.m.
Consumers Impress Economists
With Quick Spending Turnaround
October 13, 2006 11:03 a.m.
THE AFTERNOON REPORT
WSJ, 12:48 p.m. EDT Friday, October 13, 2006
Zune: mPod or iClod?
As the graphic at right imply, the new MP3 player from Microsoft essentially looks like an iPod, but with a bigger screen.
They called this latest in their series of original ideas the "Zune," but I prefer the name given it by Wired:
"Prior to Friday's announcement, some were calling the new device the "mPod" (Microsoft + iPod) killer. But given Microsoft's typically tone deaf approach to usability and Apple's market lead it will be a miracle if its next nickname isn't the "iClod" (iPod + clone + awful)."
I don't think that many people would agree that hardware or software or user experience or customer service is their strong suit; Business methods are Microsoft's forte.
Here's a run down on the Zune's rumored features:
- It would have wireless Internet capabilities, for downloading tracks directly to the device, according to Bloomberg News.
- The device could be launched by Christmas, although the company reportedly hadn't yet briefed key retailers as of last week, casting some doubt on that schedule, according to The New York Times.
- Led by Xbox executive J Allard, the project, code-named "Argo," reflects a broader strategy that would extend the Xbox brand into a variety of digital-media products, according to The Seattle Times.
- Microsoft may be considering giving people free alternative copies of tracks they've purchased from the iTunes Music Store, for use with the Microsoft device, to help convert iPod users, according to some reports.
- The final product name may be the "Zune," according to Gizmodo.
How do those guys at MSFT keep thinking these things up? Its astounding!
UPDATE July 25,2006 3:30pm
By popular demand: The parody -- done by Microsoft's own marketing team -- of how MSFT would have marketed the iPod:
Microsoft IPod 'Killer' Is Doomed
Eliot Van Buskirk
Wired, 02:00 AM Jul, 24, 2006
Microsoft's "Argo" / Xbox wireless portable media player
Engadget, July 10th 2006 4:52PM
Microsoft Dubs Upcoming MP3 Player ‘Argo’ and Mimics iPod’s Design
DigitalJournal.com, July 10th 2006 4:52PM
Tracking Microsoft's portable media device
Seattle Post Intelligencer, July 11, 2006 9:20 a.m.
The Media Goes Blog Crazy!
Since then, we see a full array of additional bloggers have rolled forth. Barron's tech columnist Eric Savitz has a daily blog, TECH TRADER DAILY. Barron's has (so far) kept that out from behind the firewall. Most of the other WSJ blogs are behind firewalls (a mistake IMO)
Also blogging is a threesome from another Dow Jones property, Marketwatch:
Lots of other mainstream journos have been blogging for quite some time. The San Jose Mercury News has had a tech blog for about 10 years (Good Morning Silicon Valley).
I used to think the NYT had the most blogs of any MSM outlet, but it looks like Businessweek has edged them out (although they do a good job hiding them):
• Auto Beat
• Brand New Day
• Byte of the Apple
• Deal Flow
• Economics Unbound
• Fine On Media
• Hot Property
• Investing Insights
• New Tech in Asia
• Nussbaum On Design
• Tech Beat
• Working Parents
Finally, TheStreet.com's Real Money has about a half dozen blogs, although I would hardly call TSCM mainstream media. Like the WSJ, theirs are also behind a subscription firewall.
So far, I think the NYT is doing the best job of all the major media with their blogging efforts -- but the WSJ is the dark horse. If they ever figure out what they want to do with their blog collection (I gave them lots of good advice for free here), and execute well, they could leapfrog the competition from the Times.
One of the few things besides p0rn that people are willinhg to pay for on the internet is financial info. This will be intereresting to see how it developes.
Copyright Abuse by Media Bullies
This really gets me angry:
Last week, I send out a few test notices about RR&A to a handful of people in my address book -- less than 30. I get a phone call and email from XXXXX, who works for XXXXXXXX, an (obviously) major media company.
This person informs me that "I owe them money for reprints" that are posted In the section labelled "In the Press."
Now, I use, refer to and reference alot of other work by other people on the blog. I am meticulous about giving appropriate credit, and I very much try to stay squarely within the boundaries of "Fair Use." I do not merely reproduce in whole or substantial part, entire articles, but rather, take snippets, a paragraph or three, a chart -- and then annotate/comment/add value extensively on them.
On the pro site, there is even less of that.
Anyway, this weasel starts haranguing me for a reprint fee. What reprint? What are you talking about? I couldn't figure out what the hell they were going on and on about. There are no PDFs (except my own) and very little in was of reproduced content from anyone else.
Until it dawns on me -- the links? WTF?!? You want to charge me for pointing to an article of yours? (GET ME LEGAL!).
I go off on her, cite old case law that this was resolved in the 1990s, and then ask her "What's with the not-so-subtle litigation threats?" I politely tell them to take a flying f%$# at a rolling donut, and suggest she contact legal and Sue me!
That was last week, and by now, I have done the slow burn: Instead of selling a legitimate product -- reprints, PDFs, mailer inserts, etc. -- there are some weasel salespeople who (with the apparent power of a major media firm behind them) scare/bully/bluff people who do not know better in paying for something that is free.
Here's my promise: The next time one of you copyright weasels tries this, you become my new hobby.
Consider yourself warned.
Warner Bros Goes P2P via Bit Torrent
Does Warner Brothers honestly think we're going to pay $20 for a write-once DVD viewable only on our computers?
I hope not, because if it does, its plan to sell movies and television shows online using BitTorrent's peer-to-peer system is truly wrongheaded. This morning the studio, which has been fighting a bitter battle against file-sharing networks, announced a plan that on the surface appears to be a forward-thinking adaptation of a new distribution system.
"We've been struggling with peer-to-peer technology and trying to figure out a way to harness the good in all that the technology allows us to do," Kevin Tsujihara, president of Warner Brothers Home Entertainment Group, told the New York Times. "If we can convert 5, 10 or 15 percent of the illegal downloaders into consumers of our product, that is significant." It certainly would be.
But I can't imagine Warner will ever achieve conversion rates like that if the Torrented movies are priced the same as a shrink-wrapped DVD, yet be encumbered with a robust copy protection that allows them to be viewed only on the computer to which they are downloaded. Leave it to Hollywood to "embrace" peer-to-peer distribution and all the economies and efficiencies that go along with it and then ruin it by using it to peddle an inferior and overpriced product.