Paul Boutin has this piece in Slate today which has a superb title: A Grand Unified Theory of YouTube and MySpace. Boutin tackles something that’s been nagging at me too — why are arguably funny-looking and technologically boring (in comparison to the razzamatazz stuff found elsehwere) sites such as YouTube and MySpace so popular?
His deceptively simple answer: they’re easy to use and they don’t tell users what to do.
But the focus on the collaborative nature of these sites has been nagging at me. Sites like Friendster and Blogger that promote sharing and friend-making have been around for years with nowhere near the mainstream success. I’ve got a different theory. YouTube and MySpace are runaway hits because they combine two attributes rarely found together in tech products. They’re easy to use, and they don’t tell you what to do.
(And I love his characterization of the difficulties of using BitTorrent. “Given up on BitTorrent because it feels like launching a mission to Mars?” All these many months and I thought it was only me that had problems getting BitTorrent to work.)
Boudin writes well and persuasively but something is still missing. Lots of sites and places on the Internet are easy and flexible, but it’s just plain fascinating how so many people jumped on the MySpace train, for example, in such a short period of time.
Posted by Cynthia Brumfield at 6:41 PM | Print | Comments (1)
If you live in the DC market, you’ve read, heard or watched ads that portray phone companies as luddite-sweetheart-deal-makers or that depict cable operators as greedy-over-chargers. This kind of entertainment does not come free.
My friend Gary Arlen of Arlen Communications has done a little analysis to calculate how much the two industries have spent to flood the DC metro airwaves with ads related to the Telecom Act rewrite activity. Based on his analysis of the local TV ad market and broadcast monitoring services, supplemented by interviews with Washington advertising executives, Gary concluded that the campaigns have boosted local ad revenues by about $975,000 per week.
Here’s how it breaks down:
*U.S. Telecom Association: $1.5 million over six weeks (i.e. $250,000 per week)
*AT&T (for its “Choice” campaign): $600,000 per week
*TV4US (an “astroturf” campaign) $75,000 per week for 4 weeks (or until Congress acts on the legislation)
*NCTA: $1 million over the course of a year, but not broken out by local DC campaign…but let’s estimate ~ $50,000 per week during this Congressional period.
*Total saturation spending (not including print, bus shelter signs, airport signs, etc.): about $975,000.
Most of you outside of DC won’t have seen much of this advertising. Why? Well, you don’t get to vote on any legislation or brief those people who do get to vote.
Anyway, it’s nice to see the local economy get a lift from this battle.
Posted by Cynthia Brumfield at 3:57 PM | Print | Comments (0)
Today’s the day to hear about just how fast independent VoIP providers are growing. First, Skype announced this morning it has passed the 100 million registered user mark (and some commentators question just how many of those users are active).
Now, Vonage has come out with a revised S-1 registration statement for its IPO showing booming customer gains. During Q1 06, Vonage added almost 422,000 gross subscribers, with the net gains totalling approximately 328,000, up from Q4 05 and year-ago levels. By the end of Q1 06, Vonage served approximately 1.6 million VoIP lines.
But, as was clear from the company’s initial filing, Vonage’s growth does not come cheap. During Q1 06, Vonage lost $72.8 million on revenue of $118.9 million (up from a loss of $69.9 million during Q1 05), with marketing expenses chewing up $88 million during the quarter. Vonage said it spent an average of $209 per gross subscriber addition.
Maybe that’s why the IP voice upstart doubled the amount of money it seeks in its debut on the public market. Vonage said in its filing that it plans to raise $530 million by selling 31.25 million shares at $16 to $18 per share, more than double the $250 million it planned to raise in January.
| Vonage Operational Data | |||||
| 2003 | 2004 | 2005 | 1Q05 | 1Q06 | |
| Gross subscriber line additions | 91,522 | 364,214 | 1,099,641 | 280,123 | 421,890 |
| Net subscriber line additions | 77,936 | 304,849 | 878,472 | 249,333 | 328,279 |
| Subscriber lines | 85,717 | 390,566 | 1,269,038 | 639,899 | 1,597,317 |
| Average monthly customer churn | 2.48% | 1.82% | 2.05% | 1.70% | 2.11% |
| Average monthly revenue per line | $ 33.4 | $ 27.9 | $ 27.0 | $ 26.3 | $ 27.7 |
| Average monthly telephony services revenue per line | $ 30.1 | $ 26.6 | $ 25.9 | $ 25.0 | $ 26.0 |
| Average monthly direct cost of telephony services per line | $ 15.3 | $ 8.1 | $ 8.4 | $ 7.8 | $ 8.7 |
| Marketing cost per gross subscriber line addition | $ 129 | $ 154 | $ 221 | $ 198 | $ 209 |
| Employees | 189 | 648 | 1,355 | 1,045 | 1,416 |
Posted by Cynthia Brumfield at 3:00 PM | Print | Comments (0)
A rumor is afoot that German tech giant Siemens, via its Communications Group, and Canadian telecom tech provider Nortel are thick in merger talks which are about to bear fruit. This isn’t really surprising given the consolidation in the telecom tech sector, which is a domino effect of the consolidation in the telecom carrier sector. And the idea has been bandied about for a while.
Nortel is facing a tough market, made tougher by the merger of Lucent-Alcatel. Moreover, the company is coping with chronic accounting problems simultaneously. It might just make sense for Nortel to solve its woes by a sale.
Siemens, particularly the company’s Communications Group, which has made a relatively recent push to capture a bigger share of the North American telecom market, would be getting in Nortel a company rich with VoIP and enterprise telecom capabilities. This core expertise dovetails nicely with Siemens’ skills.
The Siemens purchase of Nortel could, however, just be the rumor du jour. Not too long ago some press reports suggested that Siemens would be selling its communications group to Motorola.
Posted by Cynthia Brumfield at 11:29 AM | Print | Comments (0)The New York Times’ John Markoff has this piece today regarding Microsoft’s earnings report, issued yesterday, and whether the company is telegraphing a renewed vigor by projecting increased expenses over the coming year. The Redmond giant is projecting lower shareholder returns for 2006 due to vague increased expenses, which makes some analysts believe that the sluggish company may be getting into shape to tackle competitors such as Google.
“It looks like Microsoft is going to war with Google, and trying to get their product development back in track,” said Eugene Munster of Piper Jaffray. According to Mark Stahlman of Caris & Company, the fact that Microsoft plans to spend significantly more in 2007 was an indication of renewed aggressiveness in its competitive strategy and an indication that the company was returning to the kind of actions it exhibited before the Justice Department’s antitrust lawsuit in the mid- and late 1990’s.
Microsoft, which has been a little lost over the past four or five years, would definitely be moving in the right direction if it were to make some smart investments to become more competitive. As usual, however, Wall Street, with its quick-buck bias, could kick the company down for moves that dilute earnings.
“It looks like a mess,” said Brendan Barnicle, an analyst with Pacific Crest Securities, “and the big issue is margins and expenses, the big issue is the bottom line. It makes it hard to get very excited about the company’s near-term prospects.”Posted by Cynthia Brumfield at 10:25 AM | Print | Comments (0)
Ebay-owned P2P-based VoIP provider Skype announced this morning it has hit a big milestone — 100 million registered users. That’s a whole lot of free phone calling going on given that only a small fraction (10 million or so) of Skype’s users use the service’s premium Skype Out function.
It also represents very rapid growth, with Skype’s registered user base doubling since just September. As company founder Niklas Zennstrom notes in the press release, Skype has hit this high-point in less than two and a half years. And as the figures in the table below note, Skype has added around five million net new users in less than one month.
| Skype Registered Users | ||
| (in mil.) | ||
| Quarterly | ||
| Total | Additions | |
| Q104 | 4.1 | na |
| Q204 | 6.8 | 2.7 |
| Q304 | 11.5 | 4.7 |
| Q404 | 19.8 | 8.3 |
| Q105 | 32.9 | 13.1 |
| Q205 | 44.1 | 11.2 |
| Q305 | 54.0 | 9.9 |
| Q405 | 74.7 | 20.7 |
| Q105 | 94.6 | 19.9 |
Posted by Cynthia Brumfield at 7:11 AM | Print | Comments (0)
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