Wednesday, March 30, 2005


The home front

Well, we've been busy the last couple of weeks searching for a home in Dallas. The real estate market is very reasonable, undervalued in the eyes of some (by 11% according to one source), but since our time frame is unknown and we're nowhere near a coast, we're not tied to expectations of hyperfast appreciation. Dallas has been fairly steady.

A couple of days ago we found (and have since negotiated on) a house that was in the process of being built and it happened to fit our needs/wants very nicely. Location-wise, it's perfect: 10 minutes from the DFW airport, 15 minutes from work, and 20 minutes from my wife's family. We love the house, but all in all, we're just excited at the prospect of having a place to call our own. Not sure how much time I'll actually spend there once work starts, but it's nice to know it'll be there.

posted by Ryan : 11:34 AM | permalink

Tuesday, March 15, 2005


TiVo, Comcast, Apple

As a long-time fan of TiVo, I was happy to read the good news that the company will be making a customized DVR for Comcast. it's good to see TiVo get a little respect (i.e., distribution). I think this was a great move on the part of Comcast too: user experience will be a huge driver of video-on-demand consumption, probably second only to content availability. Based on my statistically invalid study of several family members who have knockoff DVR's (i.e., the Dish system), I think TiVo users have a much better experience. And if video on demand is going to be a home run, I think the relationship experience is crucial... sticking a hard drive into a cable box and providing an inventory of content isn't enough.

In weeks past, there was some speculation that TiVo might get acquired by Apple. I think there is still an argument for that deal, although Apple doesn't like to share the spotlight when it comes to product design. Still, Apple needs a few long-shot, shoot-for-the-stars strategic scenarios and the living room could be one. From a purely financial perspective it's very doable. Even after TiVo shares shot up 75% today, TiVo's market cap is $560M and Apple has over $6.5B in cash... to say nothing of the high currency that Apple's stock is running at right now.

posted by Ryan : 6:03 PM | permalink

Thursday, March 03, 2005


Google the one-trick pony?

BusinessWeek has a provocative article on Google today. The basic point of the article is that nearly all of Google's revenue comes from paid search, and therefore it's much more risky (especially at a $50B valuation) than, say, Yahoo which only derives 45% of its revenue from search. All true statements. But it's very typical for the media to write a story like this after two analysts have downgraded the stock in the last couple of weeks. Ironically, despite all the hooplah created by Jordan Rohan's downgrade, the action wasn't a very bold or severe one. He relegated the stock to a $200 target which would give it a $55B valuation, roughly speaking. Hardly an expression of doubt as to Google's future.

The other exception I took to the article was its comment about Gmail, which totally misses the point:
Take Google's ballyhooed foray into e-mail, dubbed G-mail. Instead of charging users $10 or $20 per month for jumbo-size accounts, Google is delivering text ads alongside e-mail messages, targeted toward the content in the e-mail. A message about an upcoming Boston Celtics game, for instance, might trigger ads from online ticket brokers. So even if targeted e-mail ads take off -- a questionable proposition, since most industry observers believe e-mailers are far less likely to click on links than searchers -- the money will come from the same budgets that buy the rest of Google's ads.

So I sent an email to the article's author with the following response (abridged):
I enjoyed your businessweek article about Google being a one-trick pony. I agreed with many of your points, but I think one point was neglected with respect to Gmail. I think the value of Gmail for Google is a strategic one. Personally, I was surprised at how long it took Google to come up with an email service. The revenue from email means very little in comparison with the loyalty it drives to the network. In short, email increases switching costs for customers. That has always been Google's achilles heel, in my opinion. Even if search revenue continues to grow, how hard is it for people to switch if Google somehow fails to keep pace with innovation? Brand name and reputation mean a lot, but in the long run they don't create a sustainable competitive advantage.

Just my 2c.

posted by Ryan : 6:33 AM | permalink

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