- IN THIS ISSUE:
- * Thank You for the Feedback!
- * Nokia Ventures Starts to Execute in Silicon Valley
- * It’s time to sign up for some betas!
- * Wall Street Pick of the Week
- * Are Total Privacy Solutions the Next Big Thing?
The newsletter is one day late this week due to Labor Day, sorry. Now it is 5 AM in Stockholm and I am sitting in Hotel Adlon (http://www.adlon.se) and writing this, being connected to the Internet via a LAN from my room. Their connection to the Internet, though, appears to be only one ISDN B-channel. When they eventually upgrade it to 2 MB/s this will be fun. After one hour of usage the DNS at their ISP went down and I switched over to the familiar and trusted Tele2. This is typical of the Internet today: you need to know what’s going on in your network. We are living in the era of “Windows”, not “Apple”, in computer networking.
THANK YOU FOR THE FEEDBACK!
My question on who at Ericsson is working with Siebel Systems on wireless Internet solutions was sent to my readers last Monday at 1 AM PDT. When I woke up five hours later, I had five highly relevant answers in my email. I guess IOW has become an effective tool for business intelligence… By the way, the people with the most advanced Ericsson SAP business development activity are at http://inet2002.dsn.ericsson.se. The latest on SAP was that Lucent seems to have entered in close cooperation with them in the call center space: http://www.techweb.com/wire/story/TWB19990831S0021.
NOKIA VENTURES STARTS TO EXECUTE IN SILICON VALLEY
Nokia Venture Fund was established some 18 months ago. It takes time to develop a deal flow and to start executing but now apparently things start happening. During the latest two weeks I have run into two Nokia investments: Softbook (http://www.softbook.com) and Pogo.com (http://www.pogo.com). Take a look at the Nokia Ventures homepage as well as the bios of the six employees I have to compete against all those guys basically alone… http://www.nokia.com/inbrief/units/nvcf.html
It would be beneficial for Ericsson to have a larger unit in Silicon Valley to screen opportunities and to develop a deal flow (which always takes some 6-12 months). This way we would be better prepared if we would ever establish a venture fund or other investment activities in early stage companies. Needless to say, an enhanced activity in Silicon Valley would also enable us to enhance our business intelligence as well as prepare for partnering talks with the major IT companies in the area.
- IT’S TIME TO SIGN UP FOR SOME BETAS
iPulse is the Ericsson instant messaging platform developed at PU Wireless Internet Applications as well as at our partner OZ.com in Iceland. (http://www.ericsson.com/ipulse) I have been encouraged to tell all my readers to sign up for the iPulse Friends and Family Program to beta-test their technology. Please sign up at http://www.ipulse.oz.com. Maybe we can have some moderated chats in the future among the IOW readers!
Zopps is the old Ericsson Employee Network project which is finally becoming a success. It has been running its English beta site for the global Ericsson audience for some two months now. There are currently over 1,400 members of both Ericsson employees and their families worldwide. The full launch is planned for October 10th. I recommend all the readers to check this out, to have your family members registered and to give them lots of feedback. This is a place where all those new Ericsson Internet products could be safely beta-tested in the future! Moreover, this is creating a global Ericsson culture, important for our future as a company. http://www.zopps.com
WALL STREET PICK OF THE WEEK
Last week Keith Benjamin got al excited about FatBrain as a consumer-enabling publishing model. I agree that this is potentially as big for the written word as MP3 has been for music, or hungryminds.com for teaching. Sorry about the long quote but I id not want to cut his good analysis. Pay attention to what he says about viral marketing. “Fatbrain launched eMatter this week, a new model for digital publishing. The idea is to allow secure downloading of documents, enabling publication of smaller-than-book length work on an economically viable basis. Adobe and Microsoft have developed a technology that stops consumers from sending electronic copies of downloaded file formats. However, upon receiving a forwarded email, one could chose to buy and effectively unlock the file. As such, we believe the technology lends itself to viral marketing. Security functions also allow publishers or authors to disallow printing. eMatter acts as almost an online auction service, connecting publishers or authors with readers. The publisher or author sets the price per download per document, then pays eMatter a $1 monthly listing fee and splits the royalty 50/50 with eMatter. Until the end of the year, the fee
will be waived and the authors will be allowed to keep 100% of the royalty price. This should help build a critical mass of content. Fatbrain already has an audience that should generate some significant amount of demand. The service will be consistent with Fatbrain’s eBusiness strategy and is focused primarily on the
professional marketplace. Documents such as research reports, self-published documents, presentations, and newsletters will be available as both Adobe pdf files and Microsoft Word documents. The promise of virtual publishing has been buzzing for years. We believe Fatbrain may have figured out the formula with eMatter.
eMatter’s strategy appears to have less friction than the music downloading technologies, which could displace the role of music labels, allowing self-publishing through the major Web networks. MP3 technology has enabled thousands of want-to-be recording stars to give away music to test demand before selling full albums,
effectively eliminating the need for traditional clunky music labels. eMatter can provide some of the marketing functions currently provided by publishers, but is more of an enabling system for both publishers and authors. It helps the publishers exploit the 10-100 page range of short stories and articles from authors. Publishers like MacMillan and McGraw-Hill have joined eMatter to istribute content. We expect much more new content can emerge. We believe there are plenty of aspiring authors of both fiction and professional writing that can self-publish. If a digital publishing market emerges, who is positioned to compete? We expect it would be natural for Amazon and eBay to consider adding this capability. We believe Fatbrain has a first-mover advantage at this stage and can stay focused. As we have seen with eBay, there seems a strong advantage to building the biggest base of suppliers and buyers. Maintaining focus has appeared to help eBay maintain its wide lead against Amazon. Fatbrain is starting with its current reach of over 1 million people within its corporate customer base of outsource online bookstores. Already, Fatbrain reaches over a million potential
customers through its outsource corporate bookstores. With some marketing efforts, eMatter should be able to reach a much broader audience. In fact, we wonder how quickly this model can grow by word-of-mouth. How big can this market become? While we are keeping our revenue and earnings estimates unchanged, we think the market could easily start in the hundreds of millions to multiple billion range someday. Some titles might generate hundreds of dollars and others much more. In either case, the business appears highly profitable for Fatbrain. For a hypothetical $320 in revenue per title, a gross margin of $115 less a $5 processing cost and a $10 customer acquisition cost results in a $100 contribution. The marketing cost may vary somewhat, depending upon the profile of the title. Some authors may be worth more of an investment. We liked the stock before eMatter, which now provides a relatively open-ended and more profitable business opportunity.” – Keith Benjamin, Sr Software Analyst, BancBoston Robertson Stephens (http://www.internetstocks.com)
ARE TOTAL PRIVACY SOLUTIONS THE NEXT BIG THING?
“…It’s ironic that a Canadian company is being flooded by requests to protect American citizens from their own government.” (http://www.zeroknowledge.com/company/pressrel.asp). Zero-Knowledge is currently beta-testing its Freedom technology, which provides total privacy for Web, email, newsgroup and chatroom activities by encrypting data and rerouting it through independently-operated servers scattered throughout the world. Available commercially in fourth quarter 1999. This company which I first saw at Demo 99 in February is sailing under favorable winds due to the recent US government initiative to compromise on citizens’ privacy related to computer use. A company to study when building “total privacy WAP” solutions…
QUICK TAKES – uGive.com has developed an interactive, semi-automated take on gift-giving, investors include 3Com and OpenSky, smells like a good wireless application… Nokia is investing in game companies in Silicon Valley. One of them is Pogo.com (formerly TEN)… Album To Go is a Palm based interactive photo album. Photos transferred to your Palm can be viewed as is, one picture at a time, or in the slide show mode… Microsoft’s e-book solution will start shipping 1Q2000, important information for the GPRS and 3G application developers. I never forget my discussion with J-Stream which has reappeared under a new name Infinite Ink… Softbooks were hot at the Seybold Show: available in Q4 1999, the Enterprise SoftBook Reader with Ethernet is priced at $699.95 with up to 10,000 pages of storage capacity (16 MB)… Speedia is a new entrant in the wireless information delivery space offering a service cross platforms like WAP and Palm… Anu Puhakainen from LMF writes good reports on what is happening in the WAP area in Finland. Here are some developers to check out: www.absolutions.fi, www.lpg.fi, www.akumiitti.fi… Riverbed Technology will launch their ScoutWeb product at Internet World in October It claims to dynamically convert webpages to handheld devices like WAP… Those in Asia should note down the strategic investment events listed here: www.asiamergers.com/conference.html… - (To view the embedded hyperlinks, view this section online at http://webacademy.ericsson.se.)
- SELECTED THOUGHTFUL READING – Students start rating their professors on Campus portals, this “user feedback” is certainly disturbing to professors but this is an example of the new “digital darwinism” which is here to stay… On24.com is a useful new online investing news site… – (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.
