In this issue: Silicon Valley: the Bridge between the Internet World and Asian Wireless Opportunities - Motorola and Sun to Develop Wireless Internet Solutions - Online Career Services: an Attractive Wireless Internet Opportunity - Zowi Promises to Raise Well-Behaving Teenage Consumers - Palm Reach: a Quick Update - Wall Street Favorites: Pick of the Week - A Patron Saint of the Internet: The Arrival of True “Carrier Class”?
- 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.
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My apologies for the delay in getting this newsletter to you. You certainly know the reason: the virus issue made accessing ECN impossible yesterday.
I spent part of the week attending the Asia - Silicon Valley Capital Highway Conference, a gathering of 300 venture capitalists and startups from the Valley and from Taiwan, Hong Kong, PR of China and other Asian countries.
Silicon Valley - the Bridge between the Internet World and Asian Wireless Opportunities
Asian countries have so far rather modest venture capital infrastructures. Strong state-backed incubators are in operation in both Hong Kong and Singapore. The strong ethnic ties between Silicon Valley and Asian markets are used to reap benefits from the favorable start-up climate in California. Often a startup will establish its headquarters in Silicon Valley and regional ofices in various Asian countries. A good example of this is Sina.com, a leading Chinese-language portal, headquartered in Sunnyvale, CA (http://www.sina.com).
Regarding the presence of Asians in Silicon Valley, the numbers speak for themselves: one third of the high-tech engineers in Silicon Valley are ICs (the somewhat humoristic term stemming from “Indians and Chinese”). Even more importantly, 29 % of Silicon Valley high tech startups in 1985-98 were founded by ICs.
The B2B (business-to-business) commerce opportunity in Asia is phenomenal and far exceeds the B2C potential short- and medium term. Building vertical industry solutions is relatively easy compared with horizontal businesses where crossing an industry border might represent a significant amount of bureaucracy (e.g. e-commerce fulfillment).
The best startups presenting at the conference:
* Amplify.net: IP bandwidth service management solutions, billing solutions. Reference customer: Telia Globalcast. - http://www.amplifynet.com
* Advanced Manufacturing Online: a huge online marketplace for the Asian high-tech manufacturing industry based in Singapore, “just-in-time e-commerce”, pilots with Sony and Matsushita, includes an auction service (!) - http://www.amoweb.com
* FotoNation: building a worldwide digital photography network with their technology embedded in cameras and fulfillment center infrastructure. Compatible with Windows 2000 and Adobe products. Wireless modem planned for sometime in 2000. http://www.fotonation.com.
Useful links: http://www.asiaventure.com/ - http://www.mtjade.org/
Motorola and Sun to Develop Wireless Internet Solutions
Motorola and Sun formed a 10-year pact to develop equipment that will allow network operators to deliver a high level of wireless telephone service to businesses and consumers.
Rumors tell Motorola was close to cut this deal with Microsoft some 9 months ago but the CEOs Galvin and Gates had a glitch. Now Motorola does the deal with Sun. I would think this would be highly complementary to the existing Motorola/Cisco pact with the great OEM/VAR channel Sun has.
Anyway, seen from the market value creation and market message perspective, Motorola seems to be drawing the big picture for the customers whereas Ericsson is picking up bits and pieces without a clear message and shying away from promoting its own achievements (Bluetooth, WAP, …) “because we don’t have enough products”.
Online Career Services - an Attractive Wireless Internet Opportunity
Iconocast (http://www.iconocast.com) reports the leading online job search site Monster.com (http://www.monster.com) has 3 million registered users who get customized e-mail updates on jobs offered by 60,000 employers. About 215,000 employment listings and 1.5 million resumes are currently posted on Monster.com, with 4,000 new resumes pouring in daily. One out of four users are offered a job, with users averaging three offers.
Monster.com has actually managed to be profitable with $1.2 million in profits on $48.5 million in revenue in 1998. Most of that revenue (60%) comes from payments made by employers for job postings. Another 24% is derived from selling access to the resume database. Banner and sponsorship sales make up the remainder.
Employment sites are starting to take a bite out of the revenue streams of offline media. Forrester reports that in 1998 recruiters allocated 70% of their budget for newspaper
classifieds and 14% for online job boards. But by next year Forrester expects the split will look more like 32% for online employment sites and 52% for newspaper classifieds.
Why are then online career services a particularly attractive opportunity for wireless Internet? Many companies block access to career sites with a special software, such as LittleBrother from Kansmen (http://www.kansmen.com). Therefore, an employee might be without access to his/her job offers during the work hour.
However, with a private mobile phone or pager…
Zowi Promises to Raise Well-Behaving Teenage Consumers
This year over 35 million Americans ages 13-22, known as the Online Generation, will spend more than $128 billion at retail. Almost 28 million are regular online users. But only a small fraction have a credit or debit card necessary for e-commerce. Zowi enables this core market to immediately spend a portion of their $39 billion on the Internet.
The Online Generation wants to make their own buying decisions. Zowi allows them to buy everywhere on the Web as easily as they do now with cash in the real world. Zowi is not credit, nor does it rely upon the credit of parents. Zowi enables members to register online, safely transfer funds from their own bank accounts, and buy everywhere Visa and MasterCard are accepted online. Zowi has additional protections to identify and help prevent the purchase of alcohol, tobacco, and pornography by minors.
Zowi offers what merchants want: The Zowi payment solution requires no front-end integration, no changes to the e-commerce server, and no modifications to the merchant card processor. In addition, Zowi provides retailers higher margin sales, increased velocity, and unique programs to reward customer loyalty. Zowi has patents pending with 108 claims in the areas of funds transfer, protection for minors, and ‘reverse’ couponing with online redemption.
I visited the presentation of this startup last week. Their concept is very interesting: they are in essence educating young consumers to be responsible adult consumers and to be eligible to have a premium credit card earlier than other young people. Regarding wireless Internet opportunities, bundling Zowi offering together with a prepaid solution would be attractive. - http://www.zowi.com (just an empty site - I have more info for those who are interested).
Palm Reach - a Quick Update
Palm Reach WAP portal is trying to survive in the exploding attention the wireless Internet industry is getting. With introductions like the new Mobile MSN (http://mobile.msn.com), it will not be easy. More competition is coming from http://www.yahoo.com, http://www.airflash.com, http://www.iobox.com, http://www.razorfish.com and http://www.lava2140.com.
Zaheed is planning to extend the portal to cover also the Palm and CE platforms (including Web TV). “There is an opportunity to host Palm.net for Europe, they don’t have that much international focus.”
Palm Reach is becoming more like a service bureau for different technologies, including even voxML. We will wait for July 15th when they have promised to launch the next version of the site with more content. Then we will probably know if we need to return to this topic any longer.
- Wall Street Favorites - Pick of the Week
Last week Keith Benjamin obviously visited Europe, speaking at the BBRS Technology Conference in London: We were pleasantly surprised by the strength of the European companies that appear to be beating U.S. based competition. Living in San Francisco, we sometimes suffer a cultural blind spot. While the Web may allow access to a global range of products and services, we believe the need for local brands, appreciating local regulations and customs, remains strong, even on the Internet. Prices for European equities may be rising with the emergence of new trading markets starting to float IPOs. We were disappointed to learn that some of our favorite U.S. companies may be missing opportunities. Fortunately, the valuations of the leading U.S. companies may be the best competitive weapon as faster start-ups emerge in Europe as attractive acquisition candidates.” - Keith Benjamin, Chief Internet Analyst, BancBoston Robertson Stephens.
That’s it! Build a European Internet company and sell it to the Americans when they are forced to grow and acquire customers abroad. In theory, Palm Reach is not that far from doing the right thing…
A Patron Saint of the Internet: The Arrival of True “Carrier Class”?
The Vatican is considering a move to create a patron saint of the Internet, helping millions of users around the world pray for a quicker service. The choice of religious saviour is thought to be St Isidore of Seville who died 1,400 years ago. St Isidore is the preferred choice for patron saint of the Net by many users as he is credited with creating the world’s first database - a 20-volume encyclopaedia.
The saintly move has not yet been confirmed by the Vatican, but it has been rumoured for some time and the campaign by Internet users has been growing. Spokesman for the Catholic Media Office Tom Hallwood said: “There are patron saints of many things, so why not let the Internet have one? “It is a good idea and might be able to help us all when we are about to crash.” “There has been no official statement from Rome but this has been an idea floating around for a while, so why not?”
The Vatican and the Roman Catholic religion are heavily involved with the Internet, with the Pope broadcasting live speeches on the Web as well as having Vatican Radio which can be heard online. (THE IRISH TIMES)
END NOTES - Mr Wakeup delivers alerts from the web to your phone. This would be a great service, especially if you would have a “dual number” system so that these call would ring with different tone… (http://www.mrwakeup.com/) - Sina.com, headquartered in Silicon Valley, is building the leading Chinese-language portal, something for our Asian business developers to look into! (http://www.sina.com/index.html) - Microsoft, IBM, Sun and a number of other players created a standard for electronic wallets. Can we afford to stay and watch? Transactor Networks (http://www.transactor.net), a startups backed by Draper, Fisher & Jurvetson, is one of the drivers behind the standard. (CNET, http://www.ecml.org) - Microsoft acquired Omnibrowse and branded the service MSN Mobile. My friends close to Microsoft tell me that if we don’t get WAP established on the market by October, we can forget the whole thing. Microsoft will probably do a number of major launches at Wireless IT in San Jose in November. (http://mobile.msn.com/) - First EBay, then Priceline, now Respond.com: the innovation tide of dynamic pricing models has not come to an end (http://www.respond.com/). - InterNAP is building Cisco into a QoS brand. (http://www.internap.com/news.htm) - GlobalBrain is a new revolutionary search technology based on the collective behaviour of users. This could be a valuable differentiator for the Ericsson WAP portal… (http://www.globalbrain.net/) - CAST Information Systems is developing a smartcard solution with proprietary operating system for the new Chinese social insurance system in partnership with Microsoft, IBM, Oracle and Compaq. Market: 1.1 bn people over 18 years old, 100,000 hospitals… You get the point… - Broadvision has a worldwide distribution and co-development agreement with the new HP e-services group. This is clearly one major player making personalized wireless Internet services a reality (press release) - Metricom financing should now be close to be completed. The investment bank told me that they are looking for four parties to share the total investment of USD 600 million. I guess we are talking about some regional ISPs… and they have been talking since January, where are the results?
That was all for last week, this week I will be in San Francisco setting up some new contacts and stories for next Monday.
