IN THIS ISSUE:

* The Fighters of the .com (”English”) Hegemony

* Help Me on Business Model Development!

* Wireless Multimedia, Where Does the Stuff Come from?

* Yourstuff.com, an Emerging Portal Category

* Improvement Opportunities at Ericsson

* Wall Street Pick of the Week

The autumn is heating up here in Silicon Valley but I managed to find time to do some digging into startup opportunities. The “quick takes” has some interesting hyperlinks, go check them out at http://webacademy.ericsson.se. I have also found a number of new industry events and store them under Trade Show Watch.

THE FIGHTERS OF THE .COM (”ENGLISH”) HEGEMONY

Most Swedish and Finnish companies launch these days “.com companies”. Which countries are boosting their national Internet initiatives promoting national content? The Network Wizards have published the new Internet Domain Survey dated July 99. Published every six months, this study depicts in my opinion quite well the growth of the national Internet activity in various countries (separates the .com sites). The total growth of the host count during Jan 99 - Jul 99 was around 30%, the .com domains grew at 50%. The following country domains seem to be growing fastest (includes only the domains which are estimated to have over 100,000 hosts).

Growth Jan-Jul 99: Mexico (100%), Belgium (65%), Singapore/Argentina (55%), Poland/Brazil (45%), Austria/South Korea/Taiwan (40%), France (35%).

The fastest growth is occurring in China (270%), with 63,000 estimated hosts in July 99. For comparison, this is when the magic 100,000 hosts were reached in selected countries: Mexico/Argentina/Singapore (1999), Taiwan/Brazil (1998), South Africa/South Korea/Spain (1997), Italy/Norway (1996), Japan/Sweden/France/Finland/Netherlands (1995), UK/Germany/Canada/Australia (before 1995). The country domains probably reaching the 100,000 club in the year 2000 are China, Hong Kong, Hungary and Czech Republic. Still missing it in 2000 are countries like India, Malaysia, Chile, Turkey, Thailand and Indonesia. The sub-10,000 host list includes Philippines, Venezuela, Saudi-Arabia and Egypt (loses out to Greenland at 2,000 hosts). The sub-1,000 host list includes Sri Lanka (loses out to Faroe Islands), Morocco, Kenya, Iran and Senegal. Finally, the countries defeated by Antarctica (92 hosts) include Albania, Nigeria, Tunisia, Algeria, Vietnam, Libya and Iraq. (http://www.nw.com)

This does not represent the number of users which tends to be relatively speaking higher in developing countries. The number of Hotmail accounts is in some countries a much better measure of Internet activity there. As an example, here are some estimates on the 1998 Internet user figures in selected lower-tier countries (source: http://www.nua.ie): China (1.5 million), India (500.000), Malaysia (600.000), Thailand (130.000), Brazil (3 million), Mexico (700.000), Argentina (330.000), Kenya (15.000), Nigeria (1.000) and Saudi Arabia (50.000). The non-US/European countries where the Internet user penetration exceeds 5% are mostly from Asia/Pacific: Australia (24%), Hong Kong (13%), Japan (11%), Malaysia (nearly 5%), New Zealand (16%), Singapore (15%), South Korea (7%), Taiwan (14%), Canada (25%) and Israel (11%). Most European countries exceed 5%, Iceland (45%) and Sweden (41%) are the world leaders, USA is at 35%.

As Paul Saffo from the Institute for the Future says: “The future is here but it is not evenly distributed.”

HELP ME ON BUSINESS MODEL DEVELOPMENT!

I have been asked by the WISE Team who coordinates our wireless Internet activities, to put together a description on business models which Ericsson should apply with its partners and customers as well as what new business models are emerging on the Internet. I would very much appreciate if you could identify for me people who have done or plan to do work in this area at Ericsson as well as material they might have available. I know there are lots of this type of activities in local Ericsson companies that I am not aware of.

WIRELESS MULTIMEDIA, WHERE DOES THE STUFF COME FROM?

Cisco takes a 4% stake in Akamai Technologies (http://www.akamai.com), a media distribution technology vendor, valuing the company at $1.2 bn. Akamai basically enables you to create a site without all that multimedia, you just refer to it and it will be delivered to the viewers through the Akamai high-capacity network. It should be easier to implement the QoS like this. Now think about your 3G communicator as a web editor/server and your multimedia devices as extensions of your account on the Akamai service. How can you best create your digital story on the spot? Just asking you.

“YOURSTUFF.COM”, AN EMERGING PORTAL CATEGORY

There are a number of startups building services or service portals which build around consolidating end-user services through one portal and notification service. These companies can become extremely important from the wireless Internet perspective. With Paymybills.com (http://www.paymybills.com) you allow your bills to be sent to them and they will manage the bill payment for you, notifying you when appropriate. Desktop.com http://www.desktop.com , launching in September, is perhaps the most advanced of the “desktop on the web” companies, allowing third parties to offer their applications as web services. Other similar companies include http://www.hotoffice.com, http://www.visto.com and http://www.fusionone.com, all companies we should evaluate.

At The Industry Standard weekly Rooftop Party on Friday, I found out about http://www.verticalone.com. It’s service acts as an agent to consolidate, organize and present consumers’ personal account information for confidential viewing and access: banking, investments, credit cards, telecommunications, reward programs, bills. A great idea!

IMPROVEMENT OPPORTUNITIES AT ERICSSON

Ericsson’s wireless Internet related business development takes place both in the network operators and in the mobile phones group. The Network operators group tends to focus on market creation through selecting vertical industry segments and building solutions for reference customers within those segments. The mobile phones group tends to focus on various segments of the consumer market, such as traveling businessmen, teenagers (only a few people at Ericsson know which segments). The major problem is that these two groups don’t really cooperate.

Let us take a concrete example. In the educational sector there is a well-defined consumer segment of college students and an industry (particularly in the US) supporting focusing on offering them products and services. This segment offers on both sides attractive business opportunities for Ericsson: 1) build wireless Internet services for campus extranets, 2) sell feature phones and communicators customized as “study management devices” and 3) use student portals to promote Ericsson mobile phones (a recent request from http://www.bigwords.com). The point is we will not be able to enter the market effectively without the recognition of the existing “segmentation matrix” and the cooperation of both network and terminal sides of the company. As an example of companies focusing on college campuses, see http://www.campuspipeline.com, http://www.voicefx.com.

WALL STREET PICK OF THE WEEK

EBAY launched their wireless service with SkyTel and rumours tell about them launching an OEMed pager for the service. All this success of SkyTel is possible partly because the vendor in the cellular industry have failed to establish a strong position for SMS. It is still important to try to do just that. “This week, eBay launched its anticipated wireless service, eBay a-go-go, with SkyTel, whereby service subscribers can receive notices when they have won, been outbid, or sold an item on eBay. We believe wireless technology could positively impact eBay and other eTailers’ revenue opportunities over the longer term. Now that fanatic eBay customers can break free of their PCs, we can only hope road rage does not set in when a commuter learns she/he was outbid on a Superman collector lunch pail. However, more important to us is the stock’s recent rebound following eBay’s analyst day last week, at which the company provided us with a road map of new product launches. We look at this week’s wireless service launch as the first in a series of upcoming announcements that we believe could drive significant share appreciation.” - Lauren Cooks-Levitan, Sr Software Analyst, BancBoston Robertson Stephens (http://www.internetstocks.com)

QUICK TAKES - According to The Industry Standard, EBAY unveiled a co-branded pager with SkyTel, I could not find any press releases yet… Extending its scope from an online yellow pages service bureau, InfoSpace prepares to offer e-commerce services… Wireless solution from X10 will enable playing MP3 on your stereo set while downloading with the PC, looks like a very useful innovation… Motorola’s Bo Hedfors considers WAP acquisitions in Sweden, including Palm Reach. It’s all about business after all: I firmly believe Zaheed will be a millionaire before next summer… Jalda beware: eCharge is backed by Deutsche Telekom venture arm, they just got a deal with MSN… “Franchised” local online newspapers service providers like PowerAdz are a business opportunity for Ericsson wireless Internet and for GeoPortal… Kleiner Perkins is financing the online photo community Zing which is providing the service to consumers free of charge… SkyTel, Motorola and Palm are developing wireless solutions for the healthcare industry via a partnership with Wireless MD… AtMobile.com announced their Wireless Internet Gateway as well as plans to launch a wireless instant messaging solution this fall… The Amazon.com Purchase Circles are a revolutionary new merchandizing and targeting tool… VCOM.com, a communications services portal, launched last week. We need to affiliate ourselves with intermediators like this, for the promotion of SMS, WAP etc…. Multitude announced a voice-chat service based on its experiences from multi-player gaming… - (To view the embedded hyperlinks, view this section online at http://webacademy.ericsson.se.)

SELECTED THOUGHTFUL READING -  The Toys “R” Us problems in becoming an e-retailer are useful reading for us at the ‘voice “R” us’ Ericsson… There are  tens of millions of small businesses in the US. Studying the Digitalworks.com website gives you an idea on how they will all learn to conduct e-business… Sunday Times says CDMA has won and Dr Irwin Jacobs is now worth $ 1 bn. He should perhaps buy Ericsson a drink… - (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.