Friday, October 26, 2007

Oh god, please don’t let us screw it up

That’s the prayer of the Internet dependent as we all enjoy another growth period.

And then comes the news that Microsoft has outbid all comers for the “privilege” of investing $240 million bucks in Facebook, the latest thing in social networking ... probably. Microsoft’s investment legitimizes a valuation of $15 billion for Facebook. I know I’m not the first to make this observation but that’s more than the valuation of many companies that actually design and build products, popular products! There are news stories all over the place about this—the AP story gets right to the heart of it.

Much is being made of Rupert Murdoch’s “brilliance” in paying a measley $580 million for MySpace for News Corp. but in the long run, Microsoft could well have the better deal. MySpace, dominated by teen screamers, pre-teens, and stalkers is slowing down and losing relevance for adult users. Facebook has a more grownup appeal and is growing faster than it’s more adolescent rival. In addition Facebook has added attractive development tools for advertisers and partners.

But the most important advantage Microsoft may have is that they didn’t actually buy Facebook (and founder Mark Zuckerberg isn’t selling for the moment either). Microsoft has made a deal to sell advertising for the site and share the proceeds and no doubt the new partners have plenty of plans for new revenue sharing opportunities but an outright buy might never be in the cards. (Here we are firmly in what-do-I-know territory.)

Shawnee sniffed that all this smelled like irrational exhuberance to her and she’s right, if a tad glib. The key to social networking is very likely to turn out to be not about individual sites like MySpace, Facebook, Friendster (remember them?), LinkedIn, or any other of growing list of affinity sites. Rather, it’s the enhanced ability of people to communicate and network online.  After all, how is a site like Facebook all that different from a site like ExtremeTech, or Hot Topic? Sites come and go, becoming popular and then fading as users wander off to play with a new toy. When a site is hot, then by all means buy in, get leverage, buy advertising, make strategic deals but when it fades do you want to be the guy holding the bag with a $580 million or $15 billion price tag? I think not.

Monday, October 15, 2007

Web 2.0 or deja vu all over again?

I was at dinner with some very interesting and urbane executive types in Boston recently. The subject of what’s next/what’s the latest trend/where’s the money came up as it inevitably does. We were talking about Web 2.0 and how interesting it all was that MySpace had become so last 20 minutes ago in the space of uh, 30 minutes. Now it’s all about Facebook said one of my dinner partners.

Really? Why in the world should Facebook prevail where Friendster and MySpace have failed? Doesn’t all this Web 2.0 stuff have the stench of doom wafting all around it? It’s nice to think of building communities around a group of friends, but a lot of work goes into personal sites for questionable gain and building networks of strangers for the sake of adding huge numbers of names seems a pointless exercise (There’s an interesting story in Wired News on this subject by the way: http://blog.wired.com/business/2007/10/getting-anti--s.html.). Think about it, are the people you know on LinkedIn more valuable because they have more links? A look through your lists will no doubt reveal that some of the most important people you know don’t have all that many links—they’re too busy.

What we have also discovered the very hard way is the dark side of community. We probably all have some kid friends or relatives who have utterly appalling MySpace sites where they’ve revealed information no one wants to know, have indulged in public spats, and posted party pics that make Paris Hilton and Lindsey Lohan look like sober citizens. And there are just about as many ugly stories about bullying and stalking as there are stories in the Naked City.

So, there will definitely be new sites coming along that are cooler than the last ones and there’ll be new twists on the community model to make it appeal to specific niches but none of this is all that new. From the day there was an Internet there were grumpy math professors sending flames that criticized each other for dicey science or poor word choices. There were public bulletin boards where trolls roamed free spewing hatred and vitriol because they had nothing better to do. The mediums may have changed but humans seem to stay pretty much the same.

This is not to say there’s no point in innovating or building on the interesting applications that are appearing. Each new iteration of an idea is generally better. For example, it’s much better to interact with each other by trading picture, videos, and music. Many real friendships have formed thanks to better and more varied ways to communicate. And I have reconnected with lost friends via LinkedIn. That one thing alone helps justify the pointless adding of connections and friends.

I can’t wait to see what comes next but I’m not quite ready to bet on what’s happening now. 

Wednesday, October 10, 2007

The future of CAD

The computer industry may seem to change at the speed of light but that’s not true of the CAD industry. After back to back meetings with Autodesk and Dassault I am struck once again by the slow pace of change. I’ve decided to see this in a positive light. After all, it’s really just hard on those of us who are making predictions and getting it wrong. In many cases, say designing bridges or artificial hearts, it’s better to take predictable paths and get it right.

Here’s another positive view. The democratization of CAD might be slow in coming and the delay has granted breathing room to companies selling more expensive products like Dassault, UGS, and PTC.

Still, democratization is going to come and those companies who are not creating the groundwork for it will live to see newer, younger companies come along and take the prize. After all it was Solid Works and Solid Edge, hot new programs that challenged the incumbents with features and attractive pricing.