IN THIS ISSUE:

* Mobile Instant Messaging is Now or Never!

* Puma Acquires Proxinet

* Five Categories of Companies which Will Not Get Money

* Focus on Finns

* Improvement Opportunities at Ericsson

There was a misprint in the latest issue of IOW, I talked about Siebel Systems and SAP in the same article, sorry for the confusion, I meant SAP all the way. Well, maybe I should stop waking up AT 4 am. I am following Siebel Systems as well, that’s why.

As you know by now, the week was characterized by Microsoft’s dawning exit from the online media business as well as its entry into the backbone carrier business in Asia together with Global Crossing and SoftBank. Softbank is dead serious about bring its Internet portfolio to the global market and the opportunity is for Ericsson to understand…

MOBILE INSTANT MESSAGING IS NOW OR NEVER!

Instant messaging will be the future portal paradigm for person-to-person online communications. New moves in the instant messaging space continue to emerge. It is very healthy to try to put yourself in the position of a journalist who is familiar with the topic and try to understand what we should say and show at Fall Internet World in order to raise interest for our upcoming products. Nothing trivial is enough anymore. We need to position the story as a major mobile instant messaging (MIM) launch with a possibility to try some of our offerings out immediately on the Internet. The announcement has to go beyond  current hype around MIM (see this article in Wired and another in Fox News). We have to present the Ericsson Mobile Instant Messaging Strategy and it has to have a consumer play, not only an operator play. We also need an enterprise play, it is symptomatic that AOL just licensed ICQ technology to Facetime, a customer support technology company (http://www.vssonline.com/). We could for instance partner with their competitor LivePerson (http://www.liveperson.com).  We have all the pieces, now we have to put them together in an innovative way - or go home and continue life as a telecom company.

PUMA ACQUIRES PROXINET

“Puma intends to combine its IntelliSync synchronization platform with ProxiNet’s highly scalable proxy-based transformation and delivery architecture. This will provide a means for Internet destinations such as portals, search-engines, and e-commerce companies, to provide highly secure, real-time access to users of handheld devices, cellular phones, and other wireless devices. Users would be able to browse information online and at the same time retrieve and synchronize information, such as email, calendar events, or shopping information for use offline. The proposed solution would eliminate the need to be online for extended periods and incur wireless charges. Puma plans to market the solution to major Internet companies, such as portals and e-commerce sites, and also to cellular and other wireless carriers.  The new technology would also allow Puma’s IntelliSync Anywhere platform to provide secure, real-time access to corporate intranets and other corporate Web-enabled data. ProxiNet’s products include the ProxiWare Server, a transformation engine that turns HTML pages into live, interactive content specially reformatted for mobile devices, and the ProxiWeb microbrowser, which brings pages from any Internet site or corporate intranet to a mobile device.” (http://www.pumatech.com)

I wonder what the strategy of Puma is down the road as a wireless Internet player and who their partners are. Synchronization is a key technology and there are not so many companies with mind and market share like Puma’s out there… Does anybody have comments?

By the way, I will be launching a discussion group in the coming weeks to enable readers to post comments and discuss selected items, stay tuned!

FIVE CATEGORIES OF COMPANIES WHICH WILL NOT GET MONEY

It’s time for the annual Internet Outlook at the San Francisco Airport (http://www.tpsite.com).  This event present is a tri-annual meeting place of startups and venture capitalists, each time with a different focus. David Cowan from Bessemer Venture Partners participated in the opening panel. He listed five categories of companies which “probably should not get financed in the future”. 1) Software companies and particularly tools vendors. In the future the application rental model will dominate. 2) Fee-based dial-up ISPs. The future belongs to free private-labeled Internet access. 3) “Internet companies who are not really Internet companies.” The Internet values and characteristics have to be present from idea to execution. 4) e-tailers with a short-term differentiation. For example, a zero-margin business model does not give sustainable competitive advantage.  5) “Retailers turned e-tailers.” The cannibalization challenge will be too much for most retailers to execute properly.

I found it very interesting that the application rental model is receiving such unanimous support from the venture capital community today. The recent announcement from Sun Microsystems to acquire StarOffice and to provide free downloadable office applications will accelerate the speed this trend will be adopted with. A key question for Ericsson is how these new application rental models can be exploited with GPRS.

FOCUS ON FINNS

One more Nokia Ventures investment surfaced last week. Nokia was the lead investor in the second round financing of FusionOne (http://www.fusionone.com) which has developed a patented multi-device synchronization technology. The company recently joined the BlueTooth Initiative.

Wall Street Journal had attended the Sonera WAP launch in Finland and writes an excellent article to further enhance the country’s image as the weird chip-implant-carrying wireless guinea pigs. Sonera has a strong push for becoming a billing hub for WAP services - the company is already the fourth largest billing company in the country (!). Those who subscribe to WSJ online (you really should) can read the article under this link. I am quite worried about the goodwill Finland/Nokia is getting from the world press. In the eyes of mass media, mobile phones have become to Finland what wooden horses are to Sweden - a national icon.

Esa Saarinen - is he one of the reasons for Nokia’s success? “Self Leadership and Happiness in the Context of a High Pressure Work Environment.”  The famous Finnish philosopher and consultant to Nokia will speak at Ericsson Quality Institute in November. I would kill to be able to listen to him. Register at http://eqmi.ericsson.se.

IMPROVEMENT OPPORTUNITIES AT ERICSSON

Internet advertising. Ericsson has started advertising online, something we postponed probably a bit too long. I got briefly involved in some talks related to this and asked the people in charge: Do you know the worldwide statistics of website traffic? Do you subscribe to MediaMetrix (http://www.mediametrix.com), the authority in this area? The answer was a blunt no. I think it would pay for the Ericsson Business Information Center to source and provide this service so we don’t throw our money in the dark by advertising in wrong places. Please correct me if I am wrong.

Are there any ‘knowledge reconnaissance patrols” at Ericsson - teams whose job is to extract from the information on the Internet useful portals and toolkits for Ericsson employees to use. Trend watchers say that “knowledge surfers” is a profession of the future. It seems to me that investment at Ericsson has not increased in this area, perhaps rather the contrary.

WALL STREET PICK OF THE WEEK

I am more and more convinced of the fact that the so called e-networks are ideal partners for Ericsson. E-networks act behind the portals and destination sites, offering private labeling, aggregation and “commerce engine” services to an exloding number of media properties on the web. One well-known example is Infospace (http://www.infospace.com), others include MapQuest (http://www.mapquest.com), iSyndicate (http://www.isyndicate.com) and LookSmart (http://www.looksmart.com). “…On the heels of the significant Federal Express win, this week MapQuest announced a deal with Sprint PCS to send maps and driving directions to PCS users. … we are for the first time seeing visibility into potential opportunities beyond mapping that can leverage MapQuest’s proprietary databases. We can envision MapQuest becoming an “Internet Concierge,” doing everything from providing maps and directions to selling travel related items and informing users which store locations have desired purchases in stock. … We believe InfoSpace is emerging as a private label landlord. Over the past two weeks Ameritech, Delphi Information Systems, Net2Phone, and Sprint PCS signed deals to have their respective content or software integrated into the InfoSpace network. We particularly draw notice to the Net2Phone deal that will pay InfoSpace $14.4 million over two years. We believe InfoSpace has only begun to capitalize on its opportunity to supply Web content to a wide range of Web sites. We believe the company is developing a Web-wide infrastructure for facilitating commerce by blending its content offerings (i.e., yellow pages and classified ads) with its newly developed technologies such as ActiveShopper, ActivePromotion, and StoreBuilder. The end product is a fully integrated content and commerce solution that can be targeted toward any user and tailored for any Web site….” - Michael Graham, Sr Software Analyst, BancBoston Robertson Stephens (http://www.internetstocks.com)

QUICK TAKES - Perhaps the most anticipated announcement of 1999 (compare with Star Wars), HandSpring is going to launch their Palm competitor via web distribution on Tuesday this week. The device is supposed to be planned for a plug-and-play cellular phone module (preview article: SJ Mercury News, ZDNET)…  American Express launched its online services offering inluding a financial services portal and a new smart-card based credit card brand called Blue, In November, customers will be able to register on the American Express site for an online-wallet application to store their personal financial data…  WorldClinic and MedicinePlanet are examples of online health services for travelers, potentially well adaptable for wireless Internet. Maybe our “total wireless travel solutions” group should focus on a broader offering than just flight tickets…  Our so far non-existent “total health solutions” business development group should plan to develop wireless revenue streams for people like the new venture between LifeMasters and The Health Network…  Citiquest.com launched as a new city guide player…  ThinAirApps.com brings normal POP or IMAP email into your Palm VII… We should maybe work with Software.com email outsource house to provide wireless email solutions. Read the BBRS company analysis from last week…  HotSocket’s direct response technology would be worth studying for WAP, GPRS and location-based services…   How to start offering free Internet access? Try 1stup.com…   - (To view the embedded hyperlinks, view this section online at http://webacademy.ericsson.se.)

SELECTED THOUGHTFUL READING - Jerry Harrison a former member of the rock group Talking Heads, is one founder of an Internet startup company that wants to bridge the competing worlds of online digital music and the traditional recording industry. It is introducing a new Web site Monday. (NYT)…   - (go to http://webacademy.ericsson.se for links to stories)

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This is a weekly newsletter describing the non-confidential part of my work during the past week and how I see market evolution affecting Ericsson (as interpreted my me in my role working for LME/DMA in San Francisco as a business developer with a focus on Internet applications and enablers). The report will be published every Monday. For subscriptions go to http://webacademy.ericsson.se/elists.