IN THIS ISSUE:

* i-Mode Threatens WAP

* Phone.com Rules in the World of ‘Marketing Zombies’

* Who Owns Your Web Content?

* EuroSeek Invests in Palm Reach

* Wall Street Pick of the Week

* Unemployed? Test Your Marketing Skills on…

I spent the week in SFO at the WAP Forum meeting. The total Ericsson participation was 37 people which offered lots of opportunitites for internal brainstorming. The 5th of July was a holiday so you get this again on Tuesday.

i-MODE THREATENS WAP

NTT DoCoMo gave a presentation on the newly launched i-Mode wireless data service. (http://www.nttdocomo.com/top.htm)  DoCoMo was not willing to wait for the WAP but proceeded with its own standard and it is now trying to get endorsement from the WAP Forum. The service - based on PDC in packet mode and running at data rates 9.6 kbps, has gathered 500,000 users in four months and is currently adding 10,000 users per day. The three-year target is 10 million users. Japanese media and IT industry is endorsing i-Mode services: 41 banks offer services for i-Mode phones, game companies like Bandai are reported to have a huge success for their i-Mode based games, Yahoo and Excite are actively developing i-Mode services. Traffic increase resulting from i-Mode is estimated at 20 %.

The problem for Ericsson in this proprietary development is that it would have been beneficial to us to be able to develop wireless applications together with an operator on the market which will first deploy 3G. Now that opportunity is gone. Japanese handset manufacturers will be able to learn from user experiences ahead of us. That is dangerous. NTT DoCoMo might sell their know-how to international media industry, service providers and application developers. How would we compete in that situation? We need to have an answer latest at the ComJapan in November where WAP Forum will have a presence (http://www.comjapan.gr.jp/index-e.html).

PHONE.COM RULES IN THE WORLD OF ‘MARKETING ZOMBIES’

Ericsson had 37 people at the WAP Forum meeting, Nokia had almost as many. Yet it is the little Phone.com (formerly Unwired Planet) who dominates the market development of WAP. The market capitalization of the company is at USD 2 billion, only three weeks after the IPO. It is good that we have an active proponent and a professional marketer for WAP but don’t forget the market value they create could and should also benefit our shareholders. Now billions of dollars of value is being created outside Ericsson. And what are the risks related Phone.com being certainly acquired in the foreseeable future. Who will do it and with what motives? Don’t forget Phone.com is a Silicon Valley company…

Participating in the Marketing Expert Group of the WAP Forum, even only for a few hours, was a traumatizing experience: the marketing competence of this group is rather low. They fail to understand the importance of branding, developer programs and web marketing, to name a few. The problem is the challengers, Microsoft and Palm, are extremely professional marketers. The only way the WAP Forum can beat the competition is to outsource the market development activities to an separate company with the relevant expertise. An example of such a company is Stardust.com (http://www.stardust.com).

I also had dinner with the Finnish ad agency who is developing the MMM Mobile Media Mode campaign. They have difficulties in getting their quite smart ideas accepted by the consortium, partly because Phone.com, for obvious reasons, wants to prevent the brand space becoming too congested.

WHO OWNS YOUR WEB CONTENT?

Last week we saw an interesting legal battle in the online space. When Yahoo acquired the leading consumer web hosting company Geocities (http://www.geocities.com), they imposed the general Yahoo contract obligations on GeoCities members. In practical terms this meant that Yahoo was saying that all the family photo albums on the Geocities site where Yahoo property and they had rights to decide how that material is being used. The reaction from the GeoCities user community and the who Internet was furious and Yahoo had to review its policies.  (http://www.sitepowerup.com/boycottyahoo/boycottyahoo.htm)

EUROSEEK INVESTS IN PALM REACH

A leading European search engine EuroSeek (http://www.euroseek.com) just bought 26 % of  Palm Reach WAP portal (http://www.palmreach.com). These two Swedish companies plan to create a European WAP portal under the Palm Reach brand. The EuroSeek traffic is now at 13 million unique visits per month (June 99), up from 1.7 million in June 98. Palm Reach says they have postponed the launch of the WAP portal next version due to “delays in WAP phone launches” but promise to launch the site “two weeks prior to the phones start shipping”. Zaheed, the CEO, said to me that he did not have time to come to the WAP Forum meeting due to the work load. Well, I did not see there Yahoo people, either. These Internet high-flyer people don’t seem to have time for standardization meetings. http://about.euroseek.net/page.cfm?page=news&ifl=uk

WALL STREET PICK OF THE WEEK

Last week Lauren Cooks Levitan, the e-tailing analyst of BBRS wrote about the new web strategy of the home improvement retailer Home Depot (http://www.homedepot.com). Pay attention to the value of customer service excellence for a brick-and-mortar retailer in defending itself against Internet pure-plays. Ericsson should play an active role in targeting and helping customer service -focused companies with our solutions. “…We believe Home Depot’s approach to eCommerce is an intelligent complement to its traditional business, because it is designed to empower the do-it-yourself customer while simultaneously offering extensive support. Its 822-store base can be leveraged for deliveries and returns, while its existing advertising budget and unparalleled brand image minimize the need for additional marketing expenses. Online customers will have email, a toll-free number and a mailing address at their disposal to have questions answered by a live person if they so desire. We have long held that in certain categories, including the $100 billion home improvement market, leading incumbent retailers hold dramatic advantages online versus upstart eTailers. Potential online competitors to Home Depot will have difficulty overcoming the company’s formidable buying power and direct vendor relationships, existing local delivery and distribution capabilities, sparkling brand and customer service image and, now, its new site’s impressive user interface.” - Lauren Cook Levitan, Sr Internet Analyst, BancBoston Robertson Stephens (http://www.internetstocks.com)

UNEMPLOYED? TEST YOUR MARKETING  SKILLS ON…

Going through the Media Metrix official web site statistics for May 99 (http://www.mediametrix.com/TopRankings/TopRankings.html), I ran into a site which offers consumers to host “their own nasty web sites” with 10 MB storage free of charge. Hosting service for a starting entrepreneur (20 MB disk storage, 5 GB transfer per month) starts at $35 per month. Another site says it is hosting an unlimited amount of storage with a 2 GB daily transfer limit for $ 500 per month. Even more interestingly, a third company is promising to pay webmasters a $32 - $40 commission on completed member acquisition,  paid bimonthly.

Let’s take an example on the ramifications of this. In Finland you can be unemployed, receive government support and stay at home. If you start actively developing your career and enroll a university program you might loose the government support. However, you can start your own business for $35 per month, working at home. By becoming a skilled web marketer you can maybe sell ten subscriptions per week, $40 each, that’s $1,600 per month. Plus you can do your studies on the web, in front of your webcam… What do you need the government for anyway?

END NOTES - SoftBANK struck a deal with Murdoch and Vivendi to help internationalize the SoftBANK Internet properties, particularly in Europe… Agenetics is promising solutions in artificial life based communications, currently seeking financing… FotoNation is developing embedded modems and server products to create a total solution wireless delivery of photographs… The latest buzzword is ‘portable online communities, see TheDigs.com… - (To view the embedded hyperlinks, view this section online at http://webacademy.ericsson.se.)

SELECTED THOUGHTFUL READING - Productivity gains in the economy are being attributed to the explosion of the Net… Did you already read Cluetrain Manifesto? It is must reading for my subscribers… (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.