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Alphabet, the holding company parent of Google, just announced earnings and they were amazing. Microsoft, too, announced earnings with which they were quite happy following some tumultuous, leggy years. I’m no economist so the difference between revenue, net income and post-tax profit are a bit beyond me but I will make one observation, software is back and cloud computing is the haps, to quote Dave Robicheaux’s pal Cletus.
Of course, we still have to make stuff we can sit on (furniture), wear, eat and communicate with (telecoms), but it seems the business of hosting and information access is as profitable as ever. The margins associated with software and cloud computing are killer. The margins on content aren’t bad but a distant second. Companies like Google and Microsoft are closer to “pure play” software and hosting companies than most. Salesforce.com too. Companies like Verizon, on the border of a deal with Yahoo! (content), and Netflix, smitten by Hollywood, are drifting away from their core – software and hosting.
For investors, code and iron are looking more and more attractive.
Tags: alphabet earnings, code and iron, Dave robiceaux, googkle earnings, google earnings, hosting companies, Microsoft earnings, Netflix. Yahoo!, salesforce, software and hosting companies, Verizon, whatstheidea
BAM! (And I’m not talking Brooklyn Academy of Music.) Verizon has agreed to buy AOL for $4.4B and AOL’s stock price has jumped like a marlin. Here’s the quote announcing the deal from Verizon’s CEO:
“AOL has once again become a digital trailblazer, and we are excited at the prospect of charting a new course together in the digitally connected world,” Verizon CEO Lowell McAdam said in the statement.
A digital trailblazer? I haven’t seen a lot of trailblazing going on in 15 years. The purchase of TechCrunch was blaze-y enough, I guess, but that brand has laid fallow since Michael Arrington was moved aside. The story in Ad Age suggests a big part of the purchase rationale is AOL’s content, yet the real story is in the ad platform. Specifically, AOL’s ability to track users from desktop to mobile device. And now Verizon offers AOL the ability to collect data from mobile devices like few others. Also Verizon knows where you go on your desktop…and soon may integrate your TV.
The key to being able to do something smart with all of this data is having a single user identifier. A social security number, if you will, for each person on the web. My wife pays the Verizon bill and when I use my mobile to make business calls, her name comes up – so they have a long way to go.
Make no mistake, this deal isn’t about the content, that’s secondary. It’s about advertising and data and analytics. Good work Verizon, this is a nice start. But don’t turn to AOL for you vision. Nuh uh!
Tags: AOL, brooklyn academy of music, michael arrington, single user identifier, techcruch, Verizon, whats the idea, whatstheidea
T-Mobile and Sprint are in talks to merge. The two mobile carriers, each with 50 million U.S. subscribers, have well-established brands. What should the resulting brand be? Some might say T-Mobile has a little more cache, mostly due to smart, flashy CEO John Legere. Yet Sprint has been around for decades; America’s first all fiber optic network. Some brand and naming experts will suggest combining the two names into some clunky hybrid and go all “one plus one equals 3” on us. I say it time for a new name. A new mark. And a fresh start.
AT&T and Verizon are really strong brands. Each is spending hundreds of millions in advertising. The work is likeable, but shallow and noisy. It’s either campaign-for-campaign-sake or product showcase. People don’t love selling or advertising, they love brands. And AT&T and Verizon are missing this point.
The combined Sprint/T-Mobile brand has a chance to start from the ground up. Break the mold. Find the sweet spot customers care about and move the product and experience in that direction. Mr. Legere gets this with his moves to offer no contract mobile service. Sprint/T-Mobile should do a little brand spanking research – spank the AT&T and Verizon brands around and find some product and emotional weaknesses. Then write a killer brief and start with a new name.
Rebirth opportunities don’t come along that often. Peace.
Tags: at&t, brand rebirth, brand spanking, john legere, naming, T-Mobile Sprint merger, Verizon, whats the idea, whatstheidea
In January IBM decided to sell its server business to Lenovo, China. Today about 15% of IBM’s revenue comes from hardware. Cloud computing and services are the ways to a smarter planet it seems. IBM has a well-established consulting business and a wonderful brand so this new approach will be an easy evolution for customers to understand.
The leader in cloud computing is, and will probably continue to be, AWS (Amazon Web Services.) They were the first big player in on-demand cloud services. Microsoft is doing cloud, as are Verizon, Google and lots of others.
One player doing a great job for a while but who lacks some brand strength is Rackspace. They’re not your average by-the-pound cloud provider. Sadly, their name suggests so. You’ve heard the term value-added-reseller? Well, the name Rackspace is about as far from value-added as possible. They may as well have called the company Cloud Vacancy. Hee hee.
Rackspace doesn’t need to change its name (though it wouldn’t hurt). What it needs is a plan to embed some serious meaning into the brand. It could use an organizing principle that embodies all the smart people, processes and hardware/software advantages this company bestows upon users.
Brands are not empty vessels into which one pours meaning. They are full vessels — overflowing often — mostly in need of organization, an idea, and discipline. Peace.
Tags: Amazon Web Services, AWS, brand strength, cloud on demand, google, ibm, lenovo, microsoft, naming, Rackspace, Verizon, whats the idea, whatstheidea
Okay, check it out. Credit and debit card purchases work like this: you buy a $100 dinner and the restaurant gets $97, the card issuer (Visa, Amex) gets $2 and the restaurant’s bank takes $1. On a per transaction basis it doesn’t sounds so onerous; credit cards are complicated, bankers have to make a buck, restaurants love the convenience and so long as there isn’t any technological fallout (sorry) everyone is happy. But this whole electronic payment thing reminds me of the landline telecommunications industry. To make a long distance phone call you have to pay your local telephone company, the long distance carrier, and the local telephone company on the terminating end. ‘spensive.
Rethinking Mobile Electronic Payment
It doesn’t take an MIT grad to see that there are some inefficiencies in the current tripartite payment system, especially since nothing but data is changing hands. So who is going to remove the first and last mile of money transactions as we move to smartphone payment technology? Google is thinking about it. JPMorgan Chase is debating it. Mr. Zuckerberg wonders. Verizon, too, has dreams. (Phone companies billing systems are very bank-like in their complexity.) Don’t forget, American Airlines once made more money on its first-to-market reservation system than it did flying planes.
This electronic wallet, direct from consumer payment system is a comin’. Question is: Who will be the winner? Thoughts?
Tags: Americaa Airlines, Amex, Credit card, debit card Visa, direct from consumer payment, electronic payment futures, electronic wallet, JPMorgan Chase Mark Zuckerberg, MIT Google, telecommunications, Verizon, VOIP Skype Mobile Electronic Payment, whats the idea, whatstheidea
I feel for Sprint, I really do. They were the first and only top-tier national fiber optic voice and data network yet they never made it past #3. They started when analog telephone calls and digital data packets were coin of the realm. Today, when speed is needed more than ever, when iPhone users are complaining about dropped calls while sitting in front of computers with sluggish load times, poor Sprint and its lightning fast fiber still aren’t getting any respect. Fiber is an idea consumers understand. Sadly, the story has never been correctly told.
FIOS, a Verizon product built on Fiber, is gaining mindshare in NY as a faster means of digital transport. (Fiber into the house makes machines scream.) Sprint, on the other hand, is airing a TV spot promoting the HTC EVO mobile phone running over its 4G network — the world’s first 4G network – using a strategy about “firsts.” The TV spots borrows a visual idea from Honda and Google (so much for firsts) showing other technology innovations tipping over in dominoes fashion. A Model T, knocks over a bi-plane which knocks over a steam locomotive, etc. It’s so far removed from fiber, a medium that connotes speed and clarity, you might as well be watching a Fruit Loops commercial.
Verizon, via Droid, is implying “futures” in its TV work. Sprint focuses its images on the past. Quick, close your eyes. Visualize which company gets credit for speed? No contest.
Tags: 4g network, EVO, Fios, fruit loops, google, honda, HTC, iphone, sprint, Verizon, whats the idea, whatstheidea