Tag Archives: gigaom

Microsoft invests half billion in the Nook, making it more valuable than Barnes and Noble

Microsoft and Barnes & Noble have teamed up to compete against Apple and Amazon in the eBooks business. The new partnership sees Microsoft investing $300 million in a new Barnes & Noble subsidiary.

The $300 million investment in the Nook subsidiary of Barnes & Noble gives Microsoft about 17.6 percent ownership of this business unit. That values this part of the business at about $1.7 billion. Before the markets opened this morning, the Nook business was valued about $900 million more than Barnes & Noble itself.

via GigaOm

 

In addition, Microsoft is paying another $305 million to get Nook on Windows 8 with some content:

Microsoft will be paying the Barnes & Noble subsidiary $180 million for revenue sharing on the Nook app that B&N will make for the Windows 8 platform. This is nonrefundable, the filing notes. Microsoft is also paying $125 million (equal to $25 million over five years) “for purposes of assisting NewCo in acquiring local digital reading content and technology development.” This, too, looks to be nonrefundable.

via Techcrunch

To put that in perspective, in the last quarter Barnes and Noble made $52 million in profit (on $2.4 billion in sales), and Amazon pulled in $130 million in profit (on $13 billion in sales). Clearly, Amazon has a big edge over B&N.

But, when you look at Microsoft’s earnings for the last quarter, $5.1 billion in profit (on $17 billion in sales), it looks like the big dog just entered the game. But, don’t forget that Apple is on the scene as well.

Clearly, the e-reader battle is just heating up and everyone wants a piece.

***

On a side note, Target just announced they are pulling all Kindle’s from their stores due to ‘showrooming.’ The practice of visiting Target to physically touch a product, so you can then buy it on Amazon.

Why Facebook bought Instagram – from Om Malik and Robert Scoble

Both Om Malik and Robert Scoble make interesting points, Facebook paid double for what many considered Instagram to be worth and Facebook desperately needs help with mobile devices.

From Om Malik:

A few days ago Instagram was rumored to be valued at $500 million. A few months ago it was $300 million. Its last round — just a year ago – valued the company at $100 million.

The rising valuation of the company was reflective of the growing audience it has been garnering, despite being just on the iPhone. It had reached nearly 30 million registered users before it launched an Android app.

So the question is:  Why did Mark Zuckerberg buy Instagram at twice the valuation that professional venture investors were putting on it?

From Zuckerberg’s post on Facebook:

This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.

My translation: Facebook was scared shitless and knew that for first time in its life it arguably had a competitor that could not only eat its lunch, but also destroy its future prospects. Why? Because Facebook is essentially about photos, and Instagram had found and attacked Facebook’s achilles heel — mobile photo sharing.

 

From Robert Scoble:

Facebook has a problem. After its IPO completes it needs many quarters of strong revenue and profit growth to report to convince investors to stay put and convince new ones to buy the stock.

Zuckerberg is aiming at turning the $80 to $100 billion valuation that will happen at IPO into a $500 billion to $1 trillion company. How will he do that?

Look at mobile.

Today Facebook has NO revenues from mobile. None. That’s amazing, since so many people, hundreds of millions of us, use Facebook on mobile clients.

That will change very quickly after the IPO. Instagram will play a huge role here, plus Facebook gets a very talented mobile development team that has built world-leading mobile apps on iOS and Android (which got a million users in its first day).

Getting your attention is big business

Some interesting thoughts from Om Malik, founder of GigaOm, after their latest acquisition. He hints that while everyone can blog only certain websites can grab users attention and continue to do so.

Media is the new Wild West

We are quite strategic about our acquisitions — we acquire media entities only if we love the people and believe that we are at the starting phase of a trend. In 2008, we acquired jkOnTheRun as our tip of the hat to the growing demand for mobile devices and the changes it would bring into society. Later that year, we brought in The Apple Blog because we knew the best was yet to come for Apple. Both of those acquisitions have helped GigaOM cover the issues that matter most to our ultimate customers — you, the reader — in a smart, sensible fashion.

“The question that mass amateurization poses to traditional media is ‘What happens when the costs of reproduction and distribution go away? What happens when there is nothing unique about publishing anymore because users can do it for themselves?’ We are now starting to see that question being answered.”— Clay Shirky

Shirky’s observation means that we are in a time of chaos where the very idea of media is being questioned. And as a Chinese proverb says, from chaos emerges opportunity. I believe the best is yet to come for media.

I have always believed that we’ve got to stop thinking of media as what it was and focus on more of what it could be. In the world of plenty, the only currency is attention and attention is what defines “media.”

via Why we are buying paidContent

 

It may also help to have a name that squishes together multiple words into one :)

Review of the reviews – Apple’s new iPad

A review of the reviews from Om Malik.

The new iPad reviews are out and here is my summary of those reviews:  LTE is fast, the retina display is stunning and immersive, the new processor is speedy, the camera takes great pictures now, and the more (1 GB) memory makes the iPad awesome. In short, it is totally worth buying and upgrading.

The new iPad is a little fat and little heavy, but don’t worry — wear an untucked shirt and no one would notice. Oh, but the way, bulk or not, it is still the tablet king and it totally kicks Android’s derriere. It is a little expensive, but don’t worry, it is worth it.

My favorite review is that by Dalrymple, so read it. The old hand Mossberg is still the gold standard when it comes to reviews. And Gruber is well Gruber.

via GigaOm

 

The only thing I have to add is that ars technica always has the best review but it takes several days to come out. I’ll post that once it hits the presses, until then enjoy these.

New Apple OSX adds share buttons for Vimeo, Flickr, Twitter – continuing to snub Facebook, Google

Apple’s decision to unfriend Facebook has turned out to be a boon for third-party social services that are now finding their way into Apple operating environments. The biggest winner of them all is Twitter. 

In iOS 5, Apple integrated Twitter. And just like that the company saw “sign-ups more than double and the number of tweets sent increase over 90 percent,” according to Dick Costolo, CEO of Twitter.

Well, Twitter is about to get a yet another boost, thanks to the upcoming release of the latest version of Mac OS X, called Mountain Lion.

Twitter, Flickr and Vimeo are some of the third-party services that will offered as part of new “share sheet” that allows you to share links, photos and videos directly from the app one is using on the Mac. (Interestingly, there is no YouTube in this share sheet?)

via GigaOm

 

The new "Share" button

 

The "Share Sheet" as it looks on iPhones, iPads

Facebook's Social Mail and Innovation

When Amy and I started this company, 1×57, one of the things we wanted to do was pursue innovation. To create an environment where discussions can be open and frank, and lead us all to a better understanding of our world.

In this post I want to discuss social mail, Facebook’s latest innovation. I think this idea is innovative and revolutionary, but like any idea it is all in the execution. As the email wars heat up with AOL and Yahoo releasing updates to their webmail, it is clear that Google is in the lead. They recently released their Priority Inbox and the idea and execution are near perfect, in my opinion. Now, Facebook is entering the fray and here is why I think Google is scared..

To understand Facebook you have understand Mark Zuckerberg. The company does have countless managers, senior executives, VC’s, and nearly 2,000 employees but Mark is still king. The interesting part is that he doesn’t seem to be a good of a CEO but he is the boss for one reason and it is what drives Facebook. He wants to digitize our lives.

A process that I would argue is painful and frustrating for the average person. I think the frustrations over privacy and global domination are a thin veil for the truth. Of the 500 million users only a small fraction worry about that. The rest of us are more concerned about having our parents linked to us, or our ex-girlfriends, lame high school friends, etc.

When criticizing Mark Zuckerberg, as Debbie Weil does in her piece, I think its important to keep this in mind. Mark is not an evil genius, nor is he a polished executive. He is just a geek who regularly publicly humiliates himself. It sounds like such a familiar stereotype that I shouldn’t be surprised when the popular kids then make fun of and deride the geek. It is possible that we are blaming Mark for our own anguish over this digitization of our personal lives, even though any number of sites are pursuing this and it would have occurred anyways without him.

If you do pierce that veil you can start to see things a little more clearly. An objective business analysis shows that Google is deeply afraid of Facebook because their business model is built on turning weblinks into Page Rank. They maintain their edge over their competitors in the search market by jealously guarding that algorithm and relentlessly improving it. Facebook is built upon personal links between friends and colleagues and classmates. They maintain their edge in the same way by jealously guarding it and relentlessly innovating. The scary thing for Google is that their innovations are step based, meaning that they are only incremental improvements. In this area Google faces stiff competition from Bing and can only win by engaging in an arms race. A process that takes all the creativity and fun out of the job. It becomes a factory floor where stamping out regular new improvements is the job.

Contrast that with Facebook where innovation is exponential. This means big ideas, lots of creativity, and a real push to make it work today and you have an engineer’s dream job. It is easy to see why employees are leaving Google and joining Facebook en masse. Even though Techcrunch and most others would have you believe that it’s because of salary or a potential IPO. The real truth is that top talent cares more about the work they do than the money. Especially considering the environment they exist in where 100k salaries are paltry and talent is always paid well.

An example of this is Facebook Photos. In a silent but deadly way Facebook has come to dominate the entire online photo market, putting Flickr, Picasa, MySpace, and all the other niche sites in a distant second. It seems ridiculous how Facebook can ingest all of our photos, provide no vision for getting them out or even still having ownership of them, and still become the dominant player. Then you remember that all the other sites offered amazing features but no friends. It’s like if a (photo of) a tree falling in a forest and no one is around to see it, does it really fall?

This shows the power of personal relationships. Once you have that network built you can add countless pieces to it and people will love it. Video, links, threaded comments, events, groups. Each step adding millions more users and billions more dollars.

That is as long as each addition mimics real life as much as possible. You have to digitize our lives not filter them, because any filter will have a bias. Mark has learned this lesson many times over and now seems poised to move past it. He has a clarity of vision and is becoming very convincing to many of Silicon Valley’s brightest players.

Imagine if Mark came to you and said, ‘I want you to take your passion and create it online. I don’t want you to create one small part of it or even put your own mark on it, I want you to create a lasting perfect recreation of human culture online.” Then he shows you how he has done it before and how incredibly successful it has been. I don’t know about you but I would go googly-eyed and maybe even drop my company to do so.

This brings us back to Social Mail as Facebook’s entry into the email market. If you watch the announcement video and see it through the lens I just laid out for you, it becomes very clear. They are creating a message service that mimics our social lives as closely as possible. You want to talk to friends then talk to your friends and we will remove all the extra stuff like CC and Subject Lines. We will even add in caller blocking and other features that will make it easier to communicate. Each chapter of the video is designed to show you how much like real life Social Mail will be.

I think the idea is brilliant. The execution is the tough part. However, it seems that Mark Zuckerberg is putting all the right pieces into play, top talent, clarity of vision, and a relentless drive to make it happen.

Maybe he isn’t such a bad CEO after all…

Facebook’s Social Mail and Innovation

When Amy and I started this company, 1×57, one of the things we wanted to do was pursue innovation. To create an environment where discussions can be open and frank, and lead us all to a better understanding of our world.

In this post I want to discuss social mail, Facebook’s latest innovation. I think this idea is innovative and revolutionary, but like any idea it is all in the execution. As the email wars heat up with AOL and Yahoo releasing updates to their webmail, it is clear that Google is in the lead. They recently released their Priority Inbox and the idea and execution are near perfect, in my opinion. Now, Facebook is entering the fray and here is why I think Google is scared..

To understand Facebook you have understand Mark Zuckerberg. The company does have countless managers, senior executives, VC’s, and nearly 2,000 employees but Mark is still king. The interesting part is that he doesn’t seem to be a good of a CEO but he is the boss for one reason and it is what drives Facebook. He wants to digitize our lives.

A process that I would argue is painful and frustrating for the average person. I think the frustrations over privacy and global domination are a thin veil for the truth. Of the 500 million users only a small fraction worry about that. The rest of us are more concerned about having our parents linked to us, or our ex-girlfriends, lame high school friends, etc.

When criticizing Mark Zuckerberg, as Debbie Weil does in her piece, I think its important to keep this in mind. Mark is not an evil genius, nor is he a polished executive. He is just a geek who regularly publicly humiliates himself. It sounds like such a familiar stereotype that I shouldn’t be surprised when the popular kids then make fun of and deride the geek. It is possible that we are blaming Mark for our own anguish over this digitization of our personal lives, even though any number of sites are pursuing this and it would have occurred anyways without him.

If you do pierce that veil you can start to see things a little more clearly. An objective business analysis shows that Google is deeply afraid of Facebook because their business model is built on turning weblinks into Page Rank. They maintain their edge over their competitors in the search market by jealously guarding that algorithm and relentlessly improving it. Facebook is built upon personal links between friends and colleagues and classmates. They maintain their edge in the same way by jealously guarding it and relentlessly innovating. The scary thing for Google is that their innovations are step based, meaning that they are only incremental improvements. In this area Google faces stiff competition from Bing and can only win by engaging in an arms race. A process that takes all the creativity and fun out of the job. It becomes a factory floor where stamping out regular new improvements is the job.

Contrast that with Facebook where innovation is exponential. This means big ideas, lots of creativity, and a real push to make it work today and you have an engineer’s dream job. It is easy to see why employees are leaving Google and joining Facebook en masse. Even though Techcrunch and most others would have you believe that it’s because of salary or a potential IPO. The real truth is that top talent cares more about the work they do than the money. Especially considering the environment they exist in where 100k salaries are paltry and talent is always paid well.

An example of this is Facebook Photos. In a silent but deadly way Facebook has come to dominate the entire online photo market, putting Flickr, Picasa, MySpace, and all the other niche sites in a distant second. It seems ridiculous how Facebook can ingest all of our photos, provide no vision for getting them out or even still having ownership of them, and still become the dominant player. Then you remember that all the other sites offered amazing features but no friends. It’s like if a (photo of) a tree falling in a forest and no one is around to see it, does it really fall?

This shows the power of personal relationships. Once you have that network built you can add countless pieces to it and people will love it. Video, links, threaded comments, events, groups. Each step adding millions more users and billions more dollars.

That is as long as each addition mimics real life as much as possible. You have to digitize our lives not filter them, because any filter will have a bias. Mark has learned this lesson many times over and now seems poised to move past it. He has a clarity of vision and is becoming very convincing to many of Silicon Valley’s brightest players.

Imagine if Mark came to you and said, ‘I want you to take your passion and create it online. I don’t want you to create one small part of it or even put your own mark on it, I want you to create a lasting perfect recreation of human culture online.” Then he shows you how he has done it before and how incredibly successful it has been. I don’t know about you but I would go googly-eyed and maybe even drop my company to do so.

This brings us back to Social Mail as Facebook’s entry into the email market. If you watch the announcement video and see it through the lens I just laid out for you, it becomes very clear. They are creating a message service that mimics our social lives as closely as possible. You want to talk to friends then talk to your friends and we will remove all the extra stuff like CC and Subject Lines. We will even add in caller blocking and other features that will make it easier to communicate. Each chapter of the video is designed to show you how much like real life Social Mail will be.

I think the idea is brilliant. The execution is the tough part. However, it seems that Mark Zuckerberg is putting all the right pieces into play, top talent, clarity of vision, and a relentless drive to make it happen.

Maybe he isn’t such a bad CEO after all…