Alec Saunders SquawkBox

Andy has some very interesting analysis on the Yahoo / AT&T deal.  Specifically, he notes that it’s Yahoo who’s in charge of routing.  It’s Yahoo’s LCR engine that determines which carriers to pass traffic over.  It’s a deal with the devil that over time makes a Yahoo ID more valuable than a phone number. 

Wow!

The Ottawa Citizen’s Peter Hum lurked around BarCamp for the whole day, with a photographer in tow.  Today’s Citizen Tech Weekly is a BarCamp extravaganza.  The front cover is loaded with photos, which you can see here, and pages 3 and 4 are one huge Barcamp story.  Unfortunately, there is no online edition of the story, so run out and grab yourself a copy of the paper.

Dvorak’s latest rant, this time on the great "IE Blunder" is convenient, revisionist, and ignorant of the facts. 

He ignores the fact that Netscape didn’t even exist in the summer of 1994 when the plan to put the browser into the OS was hatched.  In the fall of 1994 when the Spyglass deal was done, the company had already examined a bunch of other browsers, and nearly bought Booklink before it was snapped up by AOL.  But not Netscape.  Why?  Nobody knew about them.  They didn’t unveil what they were doing until early 1995. 

The real motivation was that Microsoft’s competitors had a browser in their products.  IBM had WebExplorer, and Apple had Cyberdog.  Team OS/2 used two demos over and over again in demonstrations to show that OS/2 was a superior modern OS to Windows.  One demo was their multi-tasking capability, and the other was IBM WebExplorer. 

Marc and the Netscape boys were confronted with the same conundrum many Web 2.0 companies have today.  They were building a feature, not a product.  Furthermore, they didn’t have a buyer anymore because all the logical buyers had already bought.  When they figured that out, they went on the offensive and declared Netscape a new OS.  Hunh?  Hubris or stupidity,  it doesn’t really matter.  The rest is ancient history.  They parlayed their albatross into $6 billion and went home winners.

Ya gotta stop eating out of those aluminum pots, John.  It’s affecting your memory. ;)

IP Communications is a newsletter from investment firm New York Global Securities.  I don’t remember how I got on their mailing list, but recently the content has been outstanding.  Email research@nygsresearch.com to be added. 

This week’s issue delves into commoditization of the cellular voice market.  Analyst Keith Dalrymple notes that ARPU (average revenue per user) at Cingular and Verizon has been in decline for the last 4 quarters.  Cingular and Verizon reported ARPU declines of 1.5% and 1.9% respectively for 2005, and Cingular has reported a further 2.4% decline in the first quarter of 2006.

Overall ARPU declines mask the issue, which is that data revenues are masking a much larger ARPU decline in voice.  Year over year voice ARPU declined 5.5% and 6.4% at Cingular and Verizon, respectively.  It is not until you plot revenue against usage, however, that the full story emerges.  Minutes are up 11% over the same period at Cingular, which means that revenue per minute is down a staggering 17%.  Keith believes that this an industry wide phenomenon, and that cellular voice is in "the full grip of commoditization".  As I observed some time ago, voice minutes are price elastic.  Drop the price, usage increases.  If your underlying cost basis remains constant, however, this will eventually become a problem. 

The cellular industry has been able to somewhat insulate itself against the voice commoditization phenomenon by driving the uptake of data.  However, data is on the way to becoming a commodity on cellular too.  All you can eat plans do not yet exist in Canada, but south of the border you can buy an all you can eat CDMA or GSM plan for $70 to $80 per month.  Unlike their brethren in the landline business, however, cellular operators are at least making an attempt to deliver new services, with ringtones and other kinds of new services appearing.  The challenge will be convert consumers of their commodity services to consumer of their new high value-add services.

Congratulations to the AssetMetrix team!  Ina Fried at CNET reports that they’ve been bought by none other than Microsoft. AssetMetrix’ software is an asset management system for IT departments.  Capable of cataloging every PC and all the installed software on your network, it’s an essential part of the IT managers toolkit.