Motorola Splits Into Two Units After Weak Mobile Performance

March 27 - Motorola said yesterday that the company plans to split into two units, one of which would handle mobile operations. The company press release states that it plans to divide into two, “Industry-leading companies.” Motorola’s Chief Executive Officer Gregory Brown, however, cited problems to fill the void of the once-popular Razr phone. At the Razr’s inception, it was a must have device; lately, however, it is hardly a blip on the mobile unit radar.

This decision does not necessarily have drastic consequences to the mobile device market other than this: keep research and development working. If the Chief Executive Officer is willing to recognized that the flagship device is the reason for the undoing of one company into two, what happened in research and development? Though the Razr has gone through generations of evolution, where was the foresight to anticipate the need for a follow-up flagship product (or new innovation to the same product) to maintain market share.*

*Hindsight is 20/20.

The New York Times reports here.

Spread the Word: :: :: :: ::

After 700-Mhz Auction, Verizon Can Put the Puzzle Together

March 21 – The Federal Communications Commission released the winners’ identities of the 700-megahertz auction yesterday, announcing Verizon as the top bidder for C-block spectrum licenses. Verizon will pay $9.6 billion for 108 licenses, most from the highly valued national licenses in the “C Block.” AT&T came in second place, winning 227 licenses for $6.6 billion, mostly from the regional “B Block” of spectrum. Verizon Wireless is a joint venture between Verizon Communications and Vodaphone.

This spectrum is critical to developing new wireless data networks for cellular companies. Traditionally, cellular networks operate at higher frequencies, such as 850 and 1900 megahertz. Lower broadcast frequencies in the 700-megahertz range penetrate buildings much better, as allowing for easier data transmission. AT&T traditionally has the most diverse spectrum license portfolio. For Verizon to compete with next-generation wireless markets, this auction presented a must win situation.

As a general matter, a wireless communications company must have three components to remain the leader in the industry: A rock-solid network infrastructure, spectrum space, and a flagship end-user device (or even a few) for consumers to take advantage of the first two. Verizon has secured two with respect to the next-generation wireless services.

Verizon is either missing the third component or being very creative in the way it plans to fill that void: open-network access. In November 2007, Verizon announced it would open it’s networks to all devices, rather than having “locked” devices that are tied to one wireless carrier. Hopefully, other companies will follow suit and join much of the international community in allowing portable devices among multiple networks. Verizon first challenged this concept when the FCC ordered that a portion of the “C block” have open access. Verizon claimed this would furnish more competition for the market and better consumer choice. The wireless company’s about face was a voluntary recognition of how important open access was to the next generation wireless market.

This open network concept for Verizon could shift the focus on the consumer to find the best end-user device and bring it to the best network, rather than forcing Verizon to spend time on research and development to fulfill the third component of the puzzle. Being the first company to voluntarily open its network shows Verizon’s foresight into solving the end-user dilemma for next generation wireless services. Verizon certainly will still have to invest in network devices and keep a close pulse on consumer trends, but this decision, along with their success in the 700-megahertz auction aligns the potential for Verizon to take the lead in next generation wireless services.

The New York Times has more on the auction here.

FCC Commissioner Kevin J. Martin’s comments are available here (pdf format).

Venture Capitalists Confirm Saturation of Social Networking Market

March 20 – Dow Jones Web Ventures put together a group of professionals in the online investment industry to study the future of social networking. The meeting recently concluded that the venture capital field is growing tired – with good reason – of the social networking sites showing up ad infinitum. Barry Schuler, a speaker on one of the featured panels, posited an extreme position on the issue, stating, “If I see another business plan for a social network, I might blow my brains out.” Put simply, the market is feeling saturation.

Aside from a previous chritic.com post highlighting many of the important criticisms of copycat social networking sites, niche website business models are starting to realize that funding will likely dry up in the near future. Social networking began as something else to do on the Internet—a dashboard for web surfers desiring social interaction. When people become members of a network for every conceivable interest, each commitment becomes more overwhelming and interest declines.

Additionally, it is important to recognize that the social network fatigue is not coming just from users. Sophisticated investors are seeing the inevitable future of social website traffic.

The most surprising issue with the venture capital fatigue is their conclusion that they don’t want any more business model proposals, rather than demanding different proposals. With the FCC’s 700-megahertz spectrum auction closing, and next-generation wireless on the horizon, for example, where are the plans to transcribe the network business model on the mobile cellular devices? Where are plans that look to connect similar users of mobile devices? Hopefully, the saturation of social networking business plans will not turn VC’s away from derivative concepts that may serve vital to the market and take advantage of growing future technologies.

“Buzz” Moves Yahoo! Into Web 2.0 Community

March 17 – Yahoo! recently launched a new service on February 25, “Yahoo! Buzz,” attempting to wedge itself into the website aggregation field. Buzz provides a running list of the most popular websites every hour, as well as maintaining an archive of popular searches. This service certainly qualifies as a copycat to Digg, Del.icio.us, and Stumbleupon. Though too many copycats may supersaturate a market and turn off eager users, this service is exactly what Yahoo! needs to sustain itself in the Web 2.0 world. Most importantly, this represents Yahoo!’s potential for independent innovation — an improvement over the simple ability to acquire existing successful companies, such as Flickr.

Yahoo! Buzz stands apart from other aggregation websites through an innovative source of information: user-based sharing and popular Internet searches from Yahoo.com. Digg and Delicious, for example, require the user to either install an application or affirmatively report interesting information from the Web. Buzz, in addition to user-based sharing, harnesses Yahoo!’s existing market power to report popular searches as newsworthy websites. Users may “Buzz Up” (thumbs up) or “Buzz Down” (thumbs down) each top story to manipulate its popularity. This second avenue of information gathering gives Yahoo! a unique edge in aggregating popular websites.

Buzz is also physical appealing with a brightly colored, engaging user interface. Most importantly, the site does not overwhelm the senses nor over-complicate the user’s experience. The site’s main focus is a headline box using rotating pictures that represent recent headlines. Large, demonstrative icons clearly illustrate the site’s basic services. The search bars are not overbearing but allow the user to explore beyond the Homepage. The Buzz logo also is simple, consistent with the “Y!” icon, yet modern in the font style, color, and size. When the cursor passes over certain entries or menus, colors change and new menu options appear; this feature makes the experience more interactive than a simple point and click.

Yahoo!’s efforts demonstrate the company’s potential to reinvent its traditional business model and create innovative services. It looks back while looking forward. Older online companies do not have to completely abandon old ways to compete with newer, younger, and fresher concepts on the Internet. Buzz accomplishes this, all the while using familiar roots of Internet searches to power the company’s evolution. It speaks to Yahoo!’s willingness to shift gears, which other 1990’s companies seem hesitant to follow suit.

This is not to say that aggregating websites cannot or do not harness the power of user-based sharing and popular searches. The more important point is Yahoo!’s willingness to recognize that the old search engine model is out. Complacency inevitably leads to downfall.

AOL, Social Networking Website Could Revive AOL’s Image

March 16 – AOL recently purchased the third largest social networking site Bebo in an attempt to expand advertising audiences and boost online revenue. AOL currently owns several of the Internet’s top blogs. Experts speculate, however, the value of this acquisition and what it means for Time Warner’s attempt to revive AOL.com. The New York Times reports here on the acquisition. Though this qualifies a significant acquisition, an important discussion rests on whether or not AOL is attempting to truly reinvent itself as its own website company, rather than become a patchwork of other successful websites.

So what does AOL plan besides the already exhausted strategy of buying companies with a large audience and hope that shakes up current business models? AOL’s next shift must be an internal one. By the looks of their current website, they are nothing more than a Yahoo.com copycat, providing a portal for simple web users. To bring back their mid-1990’s status of Internet pioneers, AOL must shift its energy from doing only what other Internet companies attempt to expand their customer base.

AOL must be careful to not use Bebo as a tool merely to tread water and remain a fading company. Though Bebo’s usage has declined over the last twelve months, social networking clearly is not going anywhere. To harness its potential for company growth, AOL must internalize Bebo’s user base and reemerge with a strong derivative concept. One suggestion includes resuscitating AOL Instant Messenger (AIM) by allowing real time messaging between Bebo users. The worst thing that can happen is that AOL owns Bebo in name only and refuses to take advantage of Bebo’s potential as a springboard for its viability.

Bloomberg has more here.

NFL, Cable Providers Clash Over Restrictions on Access to NFL Network

March 6 - The National Football League and cable networks clashed in front of Congress this week over current pricing policies restricting access to the NFL network from cable service subscribers. NFL stated that cable providers are high-jacking subscriber access to the network by placing it in a higher-tier package plan, requiring customers to purchase another tier of often unrelated programming just to see out-of-area network games. Cable companies state this as a very legitimate business plan, as the market has allowed for viable competition. Citing the exclusive contract with DirectTV for NFL ticket, an inclusive package to view all out-of-area games, cable rejects the notion that Federal regulations should interfere with programming regimes that provide ample choices for consumers.

The NFL already has antitrust exemptions for being the only authorized league for professional football, as most other major sports leagues do thanks to the Sports Broadcasting Act of 1961. Though it would be best for consumers to be able to buy a-la-carte programming through cable providers, would Federal regulation intervention be best for the consumers? The NFL already has rights to its own games, which it licenses to broadcast networks such as NBC, CBS, and Fox Sports. If the NFL had easier access to its audience through its own broadcast channel, this may thwart competition among those broadcast networks. Eventually, it is foreseeable that all football games would be placed on the NFL network, requiring the audience to pay unpredictable costs for viewing its own games. This outcome likely extends beyond the NFL’s antitrust exemption and starts interfering with consumer interests.

The cable providers have a solid foundation for their concerns that requiring a breakdown in current pricing regimes would have not only on their business model, but on the competition that works to bring customers the best programming possible. Should one network be able to strong-arm and entire industry? The NFL should be best left to what it is authorized to do via antitrust exceptions: football. If they have intentions to enter newer markets, they should be prepared to meet tough competition and skepticism where competition dictates what takes place, rather than league executives.

The New York Times has more here.

Review: “Flock” Aggregates Social Networking Into Web Browsing

March 2 – “Flock,” a new “social web browser” created by Flock, Inc., integrates web surfers with social networking to make managing online content easier. This seems like the next logical step for the the web browser world as memberships to Facebook, Myspace, Youtube, Flikr, and Photobucket become almost expected. Though it is still in beta form, the Flock team seems energetic about this new product. The “About Us” section of their site shows enthusiastic and young entrepreneurs eager to come up with the Internet’s next big change. Take a look at it and see for yourself. It is worth the short time to explore Flock’s new features.

Operating System: Windows or Mac
Development Stage: Beta
Version: 1.1
Most Recent Release Date: February 19, 2008
Site: www.flock.com
Developers’ Blog: http://www.flock.com/blog

Overall Rating: (Four of Five Bars)

Pros:

Innovative – As previously mentioned, this product is the next logical step in the evolution of web browsing. Internet aggregating sites have caught on quickly as the web 2.0 movement has gained momentum. Digg, Del.icio.us, and Newsvine become a dashboard for heavy web surfers looking for popular information all in one place. It takes the work out of searching for popular trends in website trafficking. Flock comes out at the right time to aggregate the most commonly used, highly trafficked sites that depend on strong user-based interaction.

Firefox Plus Sidebar – Flock has all of the Firefox innovations to web surfing: tabbed browsing, bookmark/cookie importing, bookmark toolbars, pop-up blocker, and embedded search bar. It simply adds an additional layer for signing into multiple social networking and file-sharing websites. On the left of the browser, Flock has created a navigation haven for Facebook, Youtube, and News feeds. One click seamlessly switches back and forth between different online services.

Web Clipboard – This extremely useful feature, which opens in the sidebar, allows the web surfer to grab pictures, large amounts of text, or portions of favorite websites and drag them into the side navigation bar. Then, this portion of the favorite site can be revisited later. Additionally, with one click, this portion can be published in a blog or embedded in an email.

Blog Editor – Flock has integrated a blog editor directly into the toolbar. With one click, the user creates an account and begins editing and publishing posts. It would be nice if the user could simply sign into an already existing blog account (e.g., wordpress, blogger, typepad) and simply edit posts from there. A feature like this seems like Flock would accommodate in the very near future.

Photo Uploader – With one click, the user can open a photo uploader with the ease of drag and drop technology. By simply grabbing files from the computer and placing them into the photo editor, pictures can be cropped, rotated, and tagged. A drop down menu then provides the option of what site (e.g, Facebook, Youtube, Flikr, or Photobucket) to upload the photos. For many sites, this simplifies the “click-browse-upload, click-browse-upload” annoyance of getting pictures in to web gallaries one file at a time.

Webmail integration – Flock allows for the user to sign in to Yahoo Mail and Gmail, and with one click, monitor their email inboxes, compose mail, and share current web pages.

Cons:

Busy Work – If you have signed into the various social sites, the browser window ends up becoming incredibly overwhelming with graphics, information, windows, and frames (see example screen shot here). This is easily fixable, as you can close “sidebars” and open them as needed. This seems to beg the question that if the user can sign into multiple sites while browsing, and closes them as the window becomes busier, why use this feature in the first place? It seems perfectly reasonable to simply have multiple tabs in Firefox or Microsoft Internet Explorer to serve the same function Flock desires to perform.

Not for the Office – While giving credit to the graphics team at Flock.com, as their logo and user interface is very visually appealing and entertaining, it lends toward the cartoon-ie side with all of the bubbles and colors. A working professional may steer clear of this as the default browser for two main reasons: social networking at work screams unprofessional; the color scheme falls in the same camp.

For the web surfer deeply entrenched in the web 2.0 community, this sight is very effective and innovative. Keep an eye out for this idea to catch on as it seems the Flock team eagerly anticipates meeting the demands of the web 2.0 surfer.