the reflexions insider

Recently I spent some time in Budapest, Bratislava, and Vienna before visiting my brother in London and returning to New York via Helsinki. It was terrific, and made me appreciate Central Europe as a destination not to be missed.

Nevertheless, finding cheap and reliable internet access while traveling abroad has never been a trivial matter. Recent interest in the “international roaming” issue has been sparked by some recent comments on the issue by Fred Wilson and Silicon Alley Insider. Having dealt with this issue recently in a variety of locales, it’s a challenging problem that can be overcome with some determination and specialized hardware.

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At around 2:30 this afternoon something significant happened: Apple’s market capitalization exceeded that of Microsoft. Apple is now valued as the second-biggest American company after ExxonMobil, and the biggest technology company in the world. This is a stunning event, as it was a decade ago that Apple was nearly written off, saved in part by a cash infusion from Microsoft itself. At that time Microsoft’s market cap was over half a trillion dollars bigger than Apple’s.

It’s clear that this marks a milestone in the long arc of computing history, where corporate IT spending has been overshadowed by consumer spending. And that’s directly the result of mobile.

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At times the internet feels like a giant shared electronic hallucination, as if willed by some absynthe-and-ether-fueled Victorian-era futurist (someone like, say, Jules Verne who arguably envisioned it in 1860). The internet is mind-numbingly enormous, and it’s fundamentally changed human communications. We’re fortunate to be witnesses to this.

Some of what makes the internet interesting is how it scales: servers, routers, data centers running on a shared set of protocols. But what tickles me the most isn’t the internet-as-infrastructure. It’s what rides atop the internet, above the layers of network cables, servers, and even above applications and RSS feeds; it’s about identity, and how it’s represented in a digital world.

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If you haven’t yet seen it I recommend you take 20 minutes and review Morgan Stanley analyst Mary Meeker’s presentation from last week’s Web 2.0 Summit. Her focus on macro trends in the tech sector and mobile in particular are insightful and compelling.

We’ve been working with a few different mobile platforms recently and have seen an increasing level of interest among our clients in exploring what a mobile strategy should look like.

Of course, mobile is just one piece of the larger strategy puzzle (one common mistake: not everyone should have their own iPhone app). And anticipating what’s on the horizon is key to leveraging trends, rather than reacting to them.

With that in mind, here are some trends and predictions that we think will be relevant for the mobile landscape over the next four quarters:

Location-aware apps combined with push notification services will add a new dimension to consumer marketing campaigns and social networking.

Peer-to-peer wifi is scheduled to become a formal standard in the middle of 2010. This will usher in a new wave of apps that can communicate directly from device-to-device, and will enable apps that leverage “mesh” networking and new [...]

We were recently hired by a large professional services firm to deploy a social platform that helped senior decision-makers share ideas about new revenue models amidst the changing economic environment. It’s something that more companies should be doing, and - I bet - would be doing if they understood what tools are out there to make it possible.

From a technical perspective, the solution wasn’t trivial but it wasn’t complex either, and we were able to pull from open source platforms to deliver a solution on an accelerated timeframe (in this case, we happened to use WordPress). Partly helped by the client’s streamlined process, customizing an off-the-shelf platform enabled us to deploy an attractive, polished, and functional solution over a long weekend that even a few years ago would have required weeks or months. By all accounts, it was an enormous success.

When a large company with a lot of stakeholders tries to deploy a conversational or social platform, the hurdles are usually organizational or political rather than technical. These types of tools are disruptive by design; their very deployment usually involves challenging assumptions about decision-making process and procedure that have literally been ingrained in an organizational memory for decades.

I think traditional hierarchical organizational structures are being increasingly challenged by social platforms; they’re simply not compatible with distributed, conversational media without awkward [...]

This recession is different for a variety of reasons. It’s already the deepest recession since the 1980’s and it will probably be the deepest since the 1930’s. Charts like these are enough to make anyone feel like we’re collectively driving off an economic cliff.

But this time it’s different for other reasons too, and I think they’re the reasons why small and mid-size companies are far better equipped to deal with the challenges we’re facing than ever before.

The web as a platform for business applications has become ubiquitous. It has enabled companies to cut costs and increase productivity with tools like hosted business applications and collaboration tools. Much of the underlying “plumbing” of the web, such as open source server platforms and next-generation cloud platforms, are more accessible and offer an attractive option for managers looking to slash budgets.

Here are some of the strategies we’ve been advising our clients to consider:

Reduce software licensing costs by switching to open source platforms including Linux-based servers and database systems like MySQL and PostGREsql, or cut costs while improving scalability with cloud hosting solutions like Amazon Web Services, Mosso, and 10gen. If deployed well, cloud platforms can deliver a better value than [...]

The “prisoner’s dilemma” is an analogy in game theory that’s used to describe everything from crowd behavior to stock markets and employee group evaluations. One variation is this: you and an associate are each arrested and interrogated separately. The first to implicate the other will get a light sentence; the other is imprisoned indefinitely. If you implicate each other you both get a moderate sentence. But if you both stay quiet, you’re both let go. It’s about mutual trust and cooperation for a mutually beneficial outcome. If you look hard enough, economists and behavioral anthropologists will tell you, you’ll find it everywhere.

David Carr wrote an article in yesterday’s New York Times about why newspapers find themselves in this very predicament, but with a twist — there’s no way out unless they cooperate. Cooperating in this scenario would probably mean something like a subscription-based paid content model for a network of websites from large daily newspapers. If you pay the fee, you get unfettered access to all participating websites. If you don’t, you get very little (except what others might be willing to repost, a possible copyright issue lurking in the shadows of what has historically been a free and open [...]

Google is full of really smart people working on really hard problems. This is nothing new. Indeed the image of brilliant young engineers working on game-changing new products has come to define the company’s identity. What’s surprising to me is Google’s relative lack of significant innovation in recent years on its bread-and-butter product: search. Recent rumblings indicate that this may start to change.

The company is understandably hesitant to tinker with its core product, which some analysts estimate generates over 90% of its total revenue, especially given its most recent quarter which exceeded even the most optimistic expectations (in a recession, no less). But the sands are shifitng, and the sheer size of Google means it will be hard-pressed to compete with smaller, more nimble competitors who are starting to get attention, like Powerset and Twitter.

A recent article at Google Watch suggests that Google sees its future in the semantic web, a collection of standards and technologies that seek to deliver more meaning and structure to the web’s content but have largely languished due to a lack of widespread adoption. From the article, Google CEO Eric Schmidt is recently quoted as saying:

“Wouldn’t it be nice if Google understood the meaning of your phrase rather than just the words that are in [...]

Like the flying car, teleportation, and artificial intelligence, the concept of micropayments has been espoused for years by some futurists — and many crackpots — as not just a good idea but something that will do nothing less than transform society. Others have been less than thrilled with the idea. But what has happened over the last 10 years or so since real investments were made (and almost without exception, lost) on the concept is startling. Micropayments are fast becoming a part of the fabric of the commercial internet, although in very practical context and mostly due to two companies - Apple and Amazon - who are competing for the future of digital music sales.

The comic artist Scott McCloud made a name for himself during the early 2000’s with unique and visually compelling arguments in his own web comic form for why micropayments were the future of at least one type of digital content: web comics, drawing the ire of everyone from Clay Shirky to Tycho of Penny Arcade (many original links of what became one of the web’s legendary flame wars are dead but see Wired’s coverage of McCloud from 2001 here). Micropayments - a simple and innovative idea in principle if not in practice - has been one of the [...]

(Image by nswlearnscope via Flickr)

Recently the ever-snarky tech/finance blog Silicon Alley Insider held a contest to propose how to fix what they called Digg.com’s “broken business model” (”broken” because Digg lost $2M on $6.4M in revenue, a staggering loss by any standard). The winner would have his or her proposal (and resume) delivered personally to Digg founder Kevin Rose and CEO Jay Adelson. The winner was Keith Cowing, an MBA student at Cornell, who suggested among other things that Digg generate revenue by selling sponsored posts on the home page and data to marketers about its users. Probably something Digg should consider but it’s hardly a revolutionary thought and not exactly the kind of model that will transform underperforming web 2.0 properties into revenue generators.

By and large the “web 2.0″ crop of business models has been disappointing. There are no shortage of examples. YouTube, purchased by Google for $1.65 billion, has a revenue model that’s “so secret, even Google doesn’t know what it is.” While Google doesn’t publish financial information about YouTube, its impact on revenue has been [...]