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January 1, 2011
Some Techy Predictions as the Bubble Keeps Inflating
By JONATHAN WEBER
Jonathan Weber writes a regular column for The Bay Citizen
By most measures, 2010 was a pretty good year in Silicon Valley, with a bubble-style frenzy around consumer-oriented social media and mobile applications on the one hand, and a general uptick in corporate technology spending on this other. Looking ahead to 2011, I’ve got some predictions:
TWITTER WILL BE ACQUIRED BY GOOGLE The logic of this combination is just too obvious. Google needs a big play in the social media arena, and Google’s engineering horsepower and ability to provide full search integration would have big benefits for Twitter. While Twitter has done an excellent job lately in morphing into a platform and servicing the big personalities that drive a lot of buzz, Google has the ability to make an offer — $10 billion? — that the company won’t be able to refuse. Twitter, in San Francisco, is just far enough away from Google, in Mountain View, to retain its own identity while still working closely with its Big Brother. And antitrust authorities may not have much to grab onto with this combination.
FACEBOOK WILL FILE FOR AN INITIAL PUBLIC OFFERING This is an easy one in light of all the activity in the secondary market for Facebook shares. Like Google and Microsoft in their day, Facebook doesn’t really want to be public, but pressure from employees wanting to cash out, and from regulators who are looking carefully at the 500-shareholder limit on unregistered stock will almost certainly force the issue. Ferrari dealers of Palo Alto, start your engines!
THE TABLET WARS WILL GO CRAZY, AND YIELD NO CLEAR WINNER The success of the iPad is attracting all the big guns of the business — Sony, Microsoft, H.P. among others. Amazon is still holding its own with the Kindle, and Apple is said to be prepping several new iPad models. Content providers are all over the map, with some doing big, iPad-specific projects, while others continue to wrestle with Apple and other device vendors over business terms and technology. Lots of cool new tablets will mean lots of sales. But the real money will be in the software — a good thing for Silicon Valley, which still has the best engineers but has long since moved the machine-making to Asia. And the shakeout that defines the contours of this new industry niche is still a couple of years off.
THE IPHONE WILL BE MADE AVAILABLE ON THE VERIZON NETWORK And lots of people will be unhappy. The Verizon iPhone rumor has been around a while, and there is every reason to think that this will be the year. Apple needs to counter the rise of Android smartphones with broader distribution, and a lot of people who aren’t willing to sacrifice Verizon’s superior connectivity are waiting — especially in the cell-reception-challenged Bay Area. But, AT&T is probably correct in suggesting that Verizon doesn’t realize what it’s getting into with those data-hogging iPhoners, and when the Verizon iPhone confronts some of the capacity issues that have bedeviled AT&T, customers will howl.
REGULATORY BATTLES OVER PRIVACY AND NET NEUTRALITY WILL LOOM LARGE In the United States, privacy is one of those things that people say they worry about, but act as if they don’t. But that is changing with the advent of highly intrusive services like Google Street View and behaviorally targeted advertising — not to mention the near-requirement that you now share at least some personal information on social networks. In Europe, it’s an even bigger issue. But some of the privacy rules now being contemplated in Washington would literally kill some business models, and the industry will fight them.
Some of the same tensions apply regarding net neutrality. The rules recently promulgated by the Federal Communications Commission to assure that the owners of information “pipes” can’t discriminate among the services that use those pipes were an elegant compromise that pleased no one. With all of this, Silicon Valley companies will be hiring — for their legal and lobbying teams in Washington.
GREEN ENERGY WILL RIDE A ROLLER-COASTER, BUT END THE YEAR ON TOP In early 2010, venture capital was pouring into green energy ventures, especially solar power. By year-end the enthusiasm was distinctly more muted. The failure of the federal government to pass cap-and-trade legislation is one factor. The declining price of natural gas is another. Competition from China is yet another. And wind power is running into problems, mainly related to building the transmission systems needed to serve remote wind farms (environmentalists are increasingly sour on wind as well).
The good news is that California has a new governor, Jerry Brown, who in one key respect is just like the old governor Jerry Brown: he’s a true believer in alternative energy, and made green job creation a central plank of his election campaign. My bet is that Mr. Brown will use the various tools at his disposal to boost the renewable energy industry through its soft spot. Entrepreneurs never like to be seen as dependent on the government, but in the energy business that’s the reality — and in 2011, it may be a happy one for Silicon Valley.
http://www.nytimes.com/2011/01/02/us...%20area&st=cse
Some Techy Predictions as the Bubble Keeps Inflating
By JONATHAN WEBER
Jonathan Weber writes a regular column for The Bay Citizen
By most measures, 2010 was a pretty good year in Silicon Valley, with a bubble-style frenzy around consumer-oriented social media and mobile applications on the one hand, and a general uptick in corporate technology spending on this other. Looking ahead to 2011, I’ve got some predictions:
TWITTER WILL BE ACQUIRED BY GOOGLE The logic of this combination is just too obvious. Google needs a big play in the social media arena, and Google’s engineering horsepower and ability to provide full search integration would have big benefits for Twitter. While Twitter has done an excellent job lately in morphing into a platform and servicing the big personalities that drive a lot of buzz, Google has the ability to make an offer — $10 billion? — that the company won’t be able to refuse. Twitter, in San Francisco, is just far enough away from Google, in Mountain View, to retain its own identity while still working closely with its Big Brother. And antitrust authorities may not have much to grab onto with this combination.
FACEBOOK WILL FILE FOR AN INITIAL PUBLIC OFFERING This is an easy one in light of all the activity in the secondary market for Facebook shares. Like Google and Microsoft in their day, Facebook doesn’t really want to be public, but pressure from employees wanting to cash out, and from regulators who are looking carefully at the 500-shareholder limit on unregistered stock will almost certainly force the issue. Ferrari dealers of Palo Alto, start your engines!
THE TABLET WARS WILL GO CRAZY, AND YIELD NO CLEAR WINNER The success of the iPad is attracting all the big guns of the business — Sony, Microsoft, H.P. among others. Amazon is still holding its own with the Kindle, and Apple is said to be prepping several new iPad models. Content providers are all over the map, with some doing big, iPad-specific projects, while others continue to wrestle with Apple and other device vendors over business terms and technology. Lots of cool new tablets will mean lots of sales. But the real money will be in the software — a good thing for Silicon Valley, which still has the best engineers but has long since moved the machine-making to Asia. And the shakeout that defines the contours of this new industry niche is still a couple of years off.
THE IPHONE WILL BE MADE AVAILABLE ON THE VERIZON NETWORK And lots of people will be unhappy. The Verizon iPhone rumor has been around a while, and there is every reason to think that this will be the year. Apple needs to counter the rise of Android smartphones with broader distribution, and a lot of people who aren’t willing to sacrifice Verizon’s superior connectivity are waiting — especially in the cell-reception-challenged Bay Area. But, AT&T is probably correct in suggesting that Verizon doesn’t realize what it’s getting into with those data-hogging iPhoners, and when the Verizon iPhone confronts some of the capacity issues that have bedeviled AT&T, customers will howl.
REGULATORY BATTLES OVER PRIVACY AND NET NEUTRALITY WILL LOOM LARGE In the United States, privacy is one of those things that people say they worry about, but act as if they don’t. But that is changing with the advent of highly intrusive services like Google Street View and behaviorally targeted advertising — not to mention the near-requirement that you now share at least some personal information on social networks. In Europe, it’s an even bigger issue. But some of the privacy rules now being contemplated in Washington would literally kill some business models, and the industry will fight them.
Some of the same tensions apply regarding net neutrality. The rules recently promulgated by the Federal Communications Commission to assure that the owners of information “pipes” can’t discriminate among the services that use those pipes were an elegant compromise that pleased no one. With all of this, Silicon Valley companies will be hiring — for their legal and lobbying teams in Washington.
GREEN ENERGY WILL RIDE A ROLLER-COASTER, BUT END THE YEAR ON TOP In early 2010, venture capital was pouring into green energy ventures, especially solar power. By year-end the enthusiasm was distinctly more muted. The failure of the federal government to pass cap-and-trade legislation is one factor. The declining price of natural gas is another. Competition from China is yet another. And wind power is running into problems, mainly related to building the transmission systems needed to serve remote wind farms (environmentalists are increasingly sour on wind as well).
The good news is that California has a new governor, Jerry Brown, who in one key respect is just like the old governor Jerry Brown: he’s a true believer in alternative energy, and made green job creation a central plank of his election campaign. My bet is that Mr. Brown will use the various tools at his disposal to boost the renewable energy industry through its soft spot. Entrepreneurs never like to be seen as dependent on the government, but in the energy business that’s the reality — and in 2011, it may be a happy one for Silicon Valley.
http://www.nytimes.com/2011/01/02/us...%20area&st=cse