Posts tagged ‘Yahoo’
Intel (INTC) and Yahoo (YHOO) recently announced a venture to develop a platform–dubbed “The Widget Channel”–that in effect turns your TV into an Internet thin client. Seth Gilbert over at Metue.com has a great summary.
Developers can write software widgets that can be uploaded to your TV and run in the background. You could check email, share photos with friends, bid on eBay, anything a widget on your Mac or PC can do. All while watching your favorite TV show or sports event.
Of course, you’ll also have to buy a new TV or Set-Top Box (STB) that is equipped with Intel’s CE3100 Media Processor. Good luck with that.
[I wonder sometimes whether anyone ever sees the obvious disconnect between relatively fast new media business development cycles--i.e. "Internet time"--and the much slower frequency with which people upgrade expensive items like TV sets. Many, many firms are vying to deliver a "convergence" solution. Which, if any, will be sufficiently compelling and have enough staying power to become embedded within a sizable share of TVs or STBs?]
Overall, I’m a bit skeptical of this and other similar initiatives.
What I do like is that it’s expected to be a relatively open standard (from the software point of view, at least–you still need Intel processors). Tapping the creativity of the wider software development community is a proven method for both good product and built-in viral marketing. iPhone apps, Google Maps mashups, and Firefox extensions are just a few examples. However, this alone won’t guarantee consumer adoption of the platform, just ensure functionality is available.
At the end of the day, do consumers even want this? Here’s what I think is true:
- People like to use the Internet for a growing variety of things, including watching video.
- People enjoy watching TV, preferably on a TV set. (I’d hazard a guess that most people watch TV with someone else in the room, but typically watch video on the PC alone.)
- Many do some form of Internet activity (surf, email, etc.) while they watch TV.
- Past attempts at interactive TV–at 15 years and counting–have been underwhelming, and that’s being charitable.
What isn’t at all clear, is whether those surfing are paying any attention to the program while doing so. What also isn’t clear is what the other people in the room are doing. Most likely, they’re actually watching the program.
So what happens when the surfer starts fiddling around with widgets, essentially “doing Internet stuff” while others are watching the show on the same screen. Even if the video portion of the screen is undisturbed, wouldn’t that be a bit distracting? Why does everyone seem to assume the surfer wants or needs to use the TV screen anyway? Aren’t they using a computer already?
Sometimes it seems like much of the Internet/TV/PC convergence is a supplier-driven attempt to create a market where there isn’t one. Perhaps it’s simply another self-reinforcing delusion, where media and equipment companies living in an echo chamber of trade shows, developer conferences, and press events convince themselves a market exists where it doesn’t. The 21st century’s equivalent of the videophone–a technology so compelling that consumers must want it. Except they didn’t.
I’ve seen this kind of thing countless times, especially in large, bureaucratic companies like Intel.
Someone somewhere (fairly high up in the management ranks, to be sure) has a brainchild for a new, compelling offering. A sure-fire way to help the company grow and break into new markets. So it’s funded, momentum builds, staff are assigned, and hilarity ensues.
Soon, lower level employees–who actually do the market research and understand what’s going on–figure out the idea is D.O.A. But nobody wants to tell the top brass they’re wrong, or especially that they’re “idjits” (idiots), in a shoot-the-messenger world. Particularly when their whole department was formed around the initiative. Job security will out, you know.
As the old joke goes, as you go up the management chain, crap becomes manure, then turns into fertilizer, which is recast as a way to grow the company. That’s when the flowery press releases begin. Companies rarely issue a release about how the initiative is abandoned some months later when the market fails to materialize.
Is The Widget Channel crap, or dynamic growth? It’s probably too early to tell. I suspect it’s got a decent chance to beat the competition, whatever that means. However, what’s more important is whether there is even a market to win.
Disclosure: I hold no position in any of the stocks mentioned here.
Despite Microsoft (MSFT) walking away from the purchase of Yahoo (YHOO), there’s probably still more to play out in this drama. Ballmer will wait a bit for the share price to settle back into the low 20s, and try again, perhaps for even less than the original $31 this time. If Jerry Yang and the rest of the Yahooligans can turn the ship around, perhaps they’ll be vindicated. But don’t hold your breath.
As I commented elsewhere this morning, all of this reminds me of the property currently for sale on my street. The house is in such need of repair that it’s clearly a tear-down. As such, the market values it at the cost of the land minus demolition costs. But the owners refuse to set the price properly, figuring the house has value as a living space (natural, since they reside there.)
Similarly, Wang seems to believe Yahoo has a greater value than anyone else sees. So far he’s been unsuccessful in his attempts at home renovation. But In this case, Microsoft also has a problem: there aren’t any other suitable vacant lots available, and Ballmer can’t afford to wait too long to jump on this one, even if he has to pay more than he wants.
Am I the only one out there who’s sick and tired of all the speculation about Yahoo and Microsoft?
Will Steve and Jerry tie the knot? Is Rupert going to swoop in and rescue the fair maiden? Or is Jerry destined for the arms of another, like say AOL, or Google?
Who cares, really? Yahoo shareholders ought to. Take the money and run, that is. No matter how much “synergy” there is, or how much sense this makes strategically (for either party), these things typically work out only one way–value gets destroyed, and some upstart comes in and disrupts the big guys.
Oh, they’ll hang around for awhile, sheer weight will see to that. But in a couple of years the market for search and advertising will look completely different than it does today–and neither Yahoo or Microsoft will be at the top. So why bother?
Let’s just get this over with one way or another, and go back to our regularly scheduled useless tug-of-war: Hillary and Barack.