broadstuff

Today we read with some amusement that Google is stating that the desktop is dead (again):

Google believes that in three or so years desktops will give way to mobile as the primary screen from which most people will consume information and entertainment. That’s according to Google Europe boss John Herlihy who said that smart phones enhance Google’s mission to make information universal.

Speaking at the Digital Landscapes conference at UCD, Herlihy said that the cloud-computing opportunity will make sure that every mobile device will be capable of doing rapid-scale applications.

“In three years time, desktops will be irrelevant. In Japan, most research is done today on smart phones, not PCs,” Herlihy told a baffled audience, echoing comments by Google CEO Eric Schmidt at the recent GSM Association Mobile World Congress 2010 that everything the company will do going forward will be via a mobile lens, centring on the cloud, computing and connectivity.

This of course was predictable, as the above chart shows. The "Network is the PC" meme comes around regularly every 10 years. Its one of the best examples of a perpetually reccurring hype cycle that we know of. To recap:

The IBM Network PC wave

In 1988 or so and to regain its position (and play to its overall strengths) IBM brought out the Network PC, essentially a dumbed down device that would serve its client faithfully on these new fangled Client-Server Local Area Networks. It failed of course, as (i) The network wasn't reliable enough, (ii) the users liked the standalone capability and control and (iii) the kit wasn't good enough to replace the desktop at that point

The Sun "Network is the Computer" Wave

Cometh the Internet, and Sun has a problem - its tins are in the server farms but not on the desktops. Clearly, the world needs to move towards this new fangled Internet thingy, and put all its data in the (I forget, I think it was called The Cloud at that time too). It failed of course, as (i) The network wasn't reliable enough, (ii) the users liked the standalone capability and control and (iii) the kit wasn't good enough to replace the desktop at that point

The Google "It will be in the Cloud" Cycle

Cometh Big Broadband, and Google has a problem - too many customers are irresponsibly sticking to their desktops rather than sticking all their data into the big GoogleMine. Hence the call for The Cloud rings out clarion like across the Valley. It will fail of course, as......

Why Ten Years? Our hypothesis is that that is the time it takes the Corporate Memory to wane to a level where the Bright New Things can haul the Network PC punt out again without some grizzled and wise old hand reminding them of the phenomenal waste of time and money the last cycle had been. Its also interesting that Eric Schmidt's company (Sun, now Google) has been the major proponent of these last two cycles.

What's interesting about the Googleshot is that this is almost a double top, in that they've tried the "netbook data in the cloud" gambit - which hasn't crossed the chasm - and now its a smartphone gambit. A sign of desperation surely, as if the netbook didn't work its a lot less clear that todays' (even less capable) smartphones will - which is why we think its a sign that this cycle is already on the wane.

Here, as they say, endeth the lesson.

Update - well, not quite endeth - as my learned commentators have pointed out:

(i) There has always been a (shifting) balance between client side and server side, its juts that companies (and bloggers) always push the edges for their own ends

(ii) Each wave does result in a new layer of cloud service usage - networked data, web services etc.

But we suspect static services will be around for a long, long time as (i) people are largely static and (ii) they too improve over time. Th high power workstation with 2 large screens has attractions all of its own.

A few days ago we remarked on the inevitability of Twitter looking at the best 3rd party Apps areas and grabbing them for itself. News comes today of Facebook throttling developers ability to virally market (aka spam) their apps - All Facebook:

Just over 24 hours after Facebook turned off application notifications, developers are reporting a dramatic decrease in traffic. Speaking to a number of developers, we’ve heard traffic has decreased in the range of 10 to 50 percent, depending on the application, most hovering between an 18 to 27 percent decrease. While our poll sample was small, Facebook developers are now entering the “post-notifications era”.

And why do this? To regain control of their own distribution channels and put their own castles on them of course:

With an estimated $350 million in revenue last year from performance advertising, Facebook is heavily focused on this space. However, virtual goods are also an area which Facebook is hoping to experience a large amount of growth.

While it’s not known whether or not Facebook will force developers to use their Credits platform, there’s a very good chance Facebook will become the primary payment provider of all virtual goods on their site. This means Credits could very well become a business worth over $300 million a year if the platform is expected to generate over $1 billion in revenue each year.

..............

There are two parties now who are “paying to play”: developers, who will now purchase more ads to drive traffic to their applications, and users, who will increasingly pay for virtual goods in games. While it appears that application requests and other channels still drive traffic, developers have become one of the largest buyers of Facebook ads.

Do developers have other options? In theory they can decamp to other platforms but of course those have their own dominant ecosystems so new entrants have to spend even more resources to clamber up the greasy pole, and it is probably inevitable that all ecosystem holders will increase rents over time. But in the sort term....

...developers will have to deal with the short-term implications of the removal of notifications and figure out ways to regain traction, as they always do. The entire time it’s important for developers operating on the Facebook Platform realize: this is Facebook’s world. If you don’t want to put up with the challenges of the platform, you can just set up your application off the site.

So - for app developers a caveat. Its a jungle out there - and its their jungle, not yours. As an ecosystem matures, life is probably going to be nasty, as the interests of customer and ecosystem holder do not align with that of the developer once the Ecosystem is functioning. Its also going to be brutish, as its about who gets (a lot of) the money, and - if you are a funding VC you will need to take this into consideration - its probably going to be short. In this eat-or-be-eaten world, there is probably only one App in each category that can sell itself to the Ecosystem, the others will have real problems surviving.

Matthew Ingram writing on GigaOm about the fascinating rise of the Book as the Killer App on the iPhone (see above chart):

According to Mobclix, which does mobile advertising for apps, the number of books in the iTunes store now exceeds the number of games for the first time since the device was launched, making books the largest category in the store. The numbers from Mobclix, which keeps a regular tally on the most popular apps and downloads, show that there are more than 26,000 books in iTunes, compared with a little over 24,000 games.

And just yesterday we wrote that the market for small, stand alone apps on the iPhone (and by extension other smartphones) was probably an early adopter fad. Prescient or what As Matthew notes, this is disruptive to an already Disrupted 1.0 industry

This fits in with something Om wrote recently based on data from Flurry, which also showed a substantial increase in the number of books being downloaded to the iPhone. At the time, Flurry said that Apple was “positioned to take market share from the Amazon Kindle” for book reading, despite the small size of the display, and that “with Apple working on a larger tablet form factor [Aka iPad], running on the iPhone OS, we believe Jeff Bezos and team will face significant competition.”

The Battle for the Book is thus looking very interesting, albeit it seems to be taking an initial backward step as various publishers and hardware providers try and jockey for proprietary supply models. This of course will be a hit with the customer like it has been every other time its been tried (not!)

So - some predictions in this space over the next few years:

(i) Greedy and shortsighted players will try and make proprietary content-to-device deals and attempt to lock in high prices of eBooks despite much lower production costs

(ii) This will be accompanied by the wails from the Book Industry that billions are being lost to e-Piracy (oh wait, that's started) and demand the Government Must Do Something

(iii) One player (my money is on Apple as the have form) will break the logjam allowing you to get most of the content on one (ie their) device

(iv) Les Autres will wail about unfair competition, but they have only themselves to blame - after all, the playout of the music industry is plain for all to see

(v) Authors still won't see more money for their work, so will start all teh alternative channels as musicians have.

In other words, another Santayana Moment

Matthew Ingram writing on GigaOm about the fascinating rise of the Book as the Killer App on the iPhone (see above chart):

According to Mobclix, which does mobile advertising for apps, the number of books in the iTunes store now exceeds the number of games for the first time since the device was launched, making books the largest category in the store. The numbers from Mobclix, which keeps a regular tally on the most popular apps and downloads, show that there are more than 26,000 books in iTunes, compared with a little over 24,000 games.

And just yesterday we wrote that the market for small, stand alone apps on the iPhone (and by extension other smartphones) was probably an early adopter fad. Prescient or what As Matthew notes, this is disruptive to an already Disrupted 1.0 industry

This fits in with something Om wrote recently based on data from Flurry, which also showed a substantial increase in the number of books being downloaded to the iPhone. At the time, Flurry said that Apple was “positioned to take market share from the Amazon Kindle” for book reading, despite the small size of the display, and that “with Apple working on a larger tablet form factor [Aka iPad], running on the iPhone OS, we believe Jeff Bezos and team will face significant competition.”

The Battle for the Book is thus looking very interesting, albeit it seems to be taking an initial backward step as various publishers and hardware providers try and jockey for proprietary supply models. This of course will be a hit with the customer like it has been every other time its been tried (not!)

So - some predictions in this space over the next few years:

(i) Greedy and shortsighted players will try and make proprietary content-to-device deals and attempt to lock in high prices of eBooks despite much lower production costs

(ii) This will be accompanied by the wails from the Book Industry that billions are being lost to e-Piracy (oh wait, that's started) and demand the Government Must Do Something

(iii) One player (my money is on Apple as the have form) will break the logjam allowing you to get most of the content on one (ie their) device

(iv) Les Autres will wail about unfair competition, but they have only themselves to blame - after all, the playout of the music industry is plain for all to see

(v) Authors still won't see more money for their work, so will start all teh alternative channels as musicians have.

In other words, another Santayana Moment

There are a number of people whose blogs I always read, and when it comes to incisive comment on Planet Mobile one of those is Dean Bubley who writes Disruptive Wireless. I thought his recent piece on Mobile Apps was particularly useful when I read a story about an app on android selling $13,000 pm

Numbers

- About 70,000 downloads of the free version.
- 6,590 downloads of the paid version
- Price of the app was raised from $1.99 to $3.99
- The app steadily climbed the charts, briefly reaching a peak of #4 in the Travel category for paid apps.

Good luck to them, but putting one's business hat on I asked "is this a business model" - and then recalled Dean's post:

Wandering around Barcelona last week, I started feeling a deep unease at the current level of hysteria around mobile apps. It is was compounded this week by seeing a T-Mobile advert on the London Underground which didn't show a phone, but just said "Would you like a free phone with apps for just £20 a month?" [meaning "We'll sell you a cheap Android instead of an iPhone, but don't dare mention it or show it"]. Apple is bombarding the world with "apps, apps, apps" advertising as well.

That was what was on my mind too - as Dean says, this may not be sustainable:

But maybe it's just a fashion? After all, do you really want any form of ongoing "relationship" with a handset manufacturer? Will the mass market really want to keep adding new stuff to their device?

The first 100-200m owners of PCs bought and installed lots of applications. The most recent 100-200m have probably just got Office, a browser, Norton or some other security package, Skype and their favourite IM client. Apart from gamers, most people don't continually look for and download PC apps - although they're there occasionally if need strikes.

........

Most "cool new stuff" will be in the browser, just as it is with the PC. And maybe, just maybe after you've got used to it, you'll bother to find out if there's a 20%-better application. Once there are easy metaphors for multiple browser windows and tabs on mobile, and more ubiquitous support for multi-tasking, the idea of a "widget" becomes obsolete. They're just contrivances to get around small screen size, I think.

And the endgame?

The bottom line is that I'm wondering if the massed billions of phone users will really care about iPhone-style junk applications. Personalisation is all very well - but it's best done upfront, not on an ongoing basis. The hand of fashion could also start to dictate that people customise something else rather than phones.

A vision of 4 billion "modified" smartphones represents a dystopia of geekiness.

I must admit to having a lot of sympathy with this view, probably the kindest alternative view is to extrapolate the iPhone evolution, where an 80/20 (at best) is emerging - a small number of Apps are selling well (and these are the "$13,000 a month" stories), but a huge number are not.

Incidentally, in case you were wondering where the money really is, news today that the iPhone has a 60% gross margin.

Article in the latest McKinsey Quarterly on The IOT, its interesting insofar as McKinsey looks at it with a bit more economic responsibility than many. Expurgated version:

Information and analysis

1. Tracking behavior

When products are embedded with sensors, companies can track the movements of these products and even monitor interactions with them. Business models can be fine-tuned to take advantage of this behavioral data. Some insurance companies, for example, are offering to install location sensors in customers’ cars. That allows these companies to base the price of policies on how a car is driven as well as where it travels. Pricing can be customized to the actual risks of operating a vehicle rather than based on proxies such as a driver’s age, gender, or place of residence.

2. Enhanced situational awareness

Data from large numbers of sensors, deployed in infrastructure (such as roads and buildings) or to report on environmental conditions (including soil moisture, ocean currents, or weather), can give decision makers a heightened awareness of real-time events, particularly when the sensors are used with advanced display or visualization technologies.

3. Sensor-driven decision analytics

The Internet of Things also can support longer-range, more complex human planning and decision making. The technology requirements—tremendous storage and computing resources linked with advanced software systems that generate a variety of graphical displays for analyzing data—rise accordingly.

Automation and control

1. Process optimization

The Internet of Things is opening new frontiers for improving processes. Some industries, such as chemical production, are installing legions of sensors to bring much greater granularity to monitoring. These sensors feed data to computers, which in turn analyze them and then send signals to actuators that adjust processes—for example, by modifying ingredient mixtures, temperatures, or pressures. Sensors and actuators can also be used to change the position of a physical object as it moves down an assembly line, ensuring that it arrives at machine tools in an optimum position (small deviations in the position of work in process can jam or even damage machine tools). This improved instrumentation, multiplied hundreds of times during an entire process, allows for major reductions in waste, energy costs, and human intervention.

2. Optimized resource consumption

Networked sensors and automated feedback mechanisms can change usage patterns for scarce resources, including energy and water, often by enabling more dynamic pricing. Utilities such as Enel in Italy and Pacific Gas and Electric (PG&E) in the United States, for example, are deploying “smart” meters that provide residential and industrial customers with visual displays showing energy usage and the real-time costs of providing it. (The traditional residential fixed-price-per-kilowatt-hour billing masks the fact that the cost of producing energy varies substantially throughout the day.) Based on time-of-use pricing and better information residential consumers could shut down air conditioners or delay running dishwashers during peak times. Commercial customers can shift energy-intensive processes and production away from high-priced periods of peak energy demand to low-priced off-peak hours.

3. Complex autonomous systems

The most demanding use of the Internet of Things involves the rapid, real-time sensing of unpredictable conditions and instantaneous responses guided by automated systems. This kind of machine decision making mimics human reactions, though at vastly enhanced performance levels. The automobile industry, for instance, is stepping up the development of systems that can detect imminent collisions and take evasive action. Certain basic applications, such as automatic braking systems, are available in high-end autos. The potential accident reduction savings flowing from wider deployment could surpass $100 billion annually. Some companies and research organizations are experimenting with a form of automotive autopilot for networked vehicles driven in coordinated patterns at highway speeds. This technology would reduce the number of “phantom jams” caused by small disturbances (such as suddenly illuminated brake lights) that cascade into traffic bottlenecks.

And the conclusion (italics are mine)?

The Internet of Things has great promise, yet business, policy, and technical challenges must be tackled before these systems are widely embraced. Early adopters will need to prove that the new sensor-driven business models create superior value. Industry groups and government regulators should study rules on data privacy and data security, particularly for uses that touch on sensitive consumer information. Legal liability frameworks for the bad decisions of automated systems will have to be established by governments, companies, and risk analysts, in consort with insurers. On the technology side, the cost of sensors and actuators must fall to levels that will spark widespread use. Networking technologies and the standards that support them must evolve to the point where data can flow freely among sensors, computers, and actuators. Software to aggregate and analyze data, as well as graphic display techniques, must improve to the point where huge volumes of data can be absorbed by human decision makers or synthesized to guide automated systems more appropriately.

Its that price thing.....we last looked at The Internet Of Things in economic detail about 2 years ago, came to the conclusion there were 2 or 3 cycles of "Moore's Law" still to go before it was cheap enough to take off. so we're looking at 2012 - 2014 before things really start to take off outside of large industries like Chemicals etc.

Well, if this wasn't predictable.... Twitter is apparently starting to build the successful features that 3rd party sites on its ecosystem have pioneered - SAI:

It seems Twitter's had enough with other folks taking control of millions of Twitter users (and the money they represent). If Twitter's new business model is based on copying Google with Twitter AdWords, controlling the end-user interface will be very valuable. And this move seems designed to address that.

Specifically, it's the difference between Google Sites revenue (Google.com), in which Google keeps 100% of the money and Google Network revenue, in which Google has to hand over 50%-80% of the money to a distribution partner.

It was predictable (this is a standard tactic of an open ecosystem play - get YOU! to do the work and then clean up once one knows what works), we predicted it*, but of course that didn't stop hordes of companies developing applications, all hoping to get a small place in the sun early. Its not all said and done of course, the Twitter functions still have to delight the customer - but of course "transactional troubles" may plague the competing sites of les autres until the end user gets the message.

So what do you do if you are a Tweetdeck, or Tweetmeme or Tweetthang etc etc? Traditionally, the ideal would be to sell the platform to Twitter - that's an exit for one (probably the most heavily used) in each area (mobile, PC, alerts, etc). After that the options look nastier in the medium term - essentially its a franchise model similar to small shops in a mall - renting space on the Twitter platform, continually worrying that your subniche is the one that Twitter goes after next.

Or maybe not - maybe Twitter will run a "big tent" model for quite a while longer, using the 3rd parties to continue to push its services ever outward to expand reach via resources it cannot command internally, and take a cut of a potentially bigger pie. If it were a Facebook the former is the no brainer option, but Twitter culture (and the game theory to beat Facebook and Google) is sufficiently different to suggest this may be on the cards for quite a while longer.

But you all know the endgame........right?

Update - Ian Betteridge points out in the comments that this story is being rubbished. I think that while this story in itself is based on small datapoints (and its a Henry Blodget story - 'nuff said), the big picture is directionally correct. To me it is very risky to assume that Twitter, over time, will not pick off the bits of its own ecosystem that maximise its own business model.

*As, of course did all the other observers with some savvy. The thing that fascinated me was all the VCs pumping money into the 3rd party ecosystem when the underlying company had no declared business model. They are clearly betting on Twitter being slow to eat its own hit head (the long tail can be given to 3rd parties ad infinitum)

Liz Gannes on the US experience of Winter Olympic Web TV

NBC knew at the outset of the games it would be losing money on broadcasting them due to licensing costs but still took an extremely cautious approach to making events accessible online, rather than experimenting with the web to goose revenue. To its credit, the network finally opened up a couple of high-profile events toward the end of the Olympics for live streaming, allowing access to users without requiring them to authenticate themselves as paying cable subscribers. But I found it incredibly frustrating that given the major advances in live-streaming video and video advertising since the Beijing Olympics (see my sub req’d story on GigaOM Pro about adaptive bitrate streaming), NBC ratcheted down its content so tightly — offering an estimated 400 hours of live video coverage compared to 2,200 two years ago.

There are two interesting subtexts here:

Firstly, the US stuff was in the same timezone, ideal for the established Web TV "watch later" model to function. In the UK it was on late at night so we were watching it live on conventional TV during the usual "catch up" time late at night. Web TV still can't compete with "real" TV for this, it was a no-brainer to be up a 2.30am watching the BBC

Secondly, there was far more going on at any one time than a few standard TV network channels could cover. This is where Web TV should really complement broadcast TV. The high profile event shown live on Web TV was the Ice Hockey game, with 500,000 streams - but long term I can't really see the point of trying to compete head to head on the main events, as that is not where Web TV economics really work except as a way of goosing revenue (as Liz puts it )

But to me, the really amazing lesson of the Winter Olympics has been how exciting the Curling has been. Partly its been the very close matches, but as the Huffington Post points out, it may also be because so many of the players are so cute

Today Facebook patented its NewsFeed (I read on RWW). The patent says that they are the patent holders for:

A method for displaying a news feed in a social network environment is described. The method includes generating news items regarding activities associated with a user of a social network environment and attaching an informational link associated with at least one of the activities, to at least one of the news items, as well as limiting access to the news items to a predetermined set of viewers and assigning an order to the news items. The method further may further include displaying the news items in the assigned order to at least one viewing user of the predetermined set of viewers and dynamically limiting the number of news items displayed.

I cannot believe that there is no prior art here! The Facebook Fanboi Nick O'Neill piously believes that:

It appears that this patent surrounds implicit actions. This means status updates, which is what Twitter is based on, are not part of this patent. Instead, this is about stories about the actions of a user's friends. While still significant, the implications for competing social networks may be less substantial.

Pull the other one, Nick. Based on Facebook's well documented benign and gentle past (for US readers - that's irony ) they are not likely to use this for commercial advantage? The main problem is that the patent system in the US is increasingly compromised, but we have covered this ad nausea before.

But I think this is becoming a real issue now, and there may be worse to come in my opinion. The problem the system has is that it is part subsidised by the state and probably costs far more to operate than it costs applicants, so its creaking. And what concerns me even more is the Vulture Capitalists are circling, this article by Nathan Myrhvold in the March Edition of HBR is quite scary- its basically a defence of his company, Intellectual Ventures', wish to Bunker Hunt the Patent market:

My company, Intellectual Ventures, is misunderstood. We have been reviled as a patent troll—a renegade outfit that buys up patents and then uses them to hold up innocent companies. What we’re really trying to do is create a capital market for inventions akin to the venture capital market that supports start-ups and the private equity market that revitalizes inefficient companies. Our goal is to make applied research a profitable activity that attracts vastly more private investment than it does today so that the number of inventions generated soars.

The basic idea is that there is a VC type market for "Invention Capital":

....a full-fledged invention capital system could solve many of the problems that have long plagued both inventors and the consumers of inventions: inadequate funding for applied research, an inefficient market for connecting companies with the inventions they need and for monetizing inventions, a balkanization of the inventors and inventions required to tackle big problems, and an enforcement and arbitration system that simultaneously permits too much infringement and relies too heavily on lawsuits to determine price.

Anyway, the argument is that the Government based patent system is not fit for purpose (true) and the solution is thus to privatise it (probably false, in our view - or at least not without a lot more safeguards than I suspect Mr Myrvold would want).

Another interpretation is that they have seen how big business has managed to buy up DNA IPR which by rights are global Common Stock, and are reselling this at vast profit to its original providers by the simple trick of legal enforcement based on having the money. In medieval England this was known as the Enclosure system, where rich Barons enclosed common peasant land and forced the peasants to pay for using it. One would also feel more re-assured IV were "doing it for us" if they didn't currently use "idea generation" sessions where their lawyers float round writing stuff down to run off and patent.

But one can see how these things will take root simply because they will get the money from backers to do them given the vast profit potential, as the existing creaking system will have few backers and defenders, and there is little financial/lobbying/ethical resource available to "Do The Right Thing".

So there is a strong argument that it behooves the Tech industry to fix the patent system, as what may replace it could be infinitely worse. One non-Myrhvoldian approach could be to wholesale import the European system, which is not yet as broken - but that would require the US to get over the Not Invented Here syndrome.

My slides from Mashupevent's Location Based Service Session last night - these are the notes, they are based on client research we did about a year ago.:

Predictability - of a sort

Location based Services is one of those cyclical hypes, coming round every 10 years or so. Like all overhyped areas, it comes complete with way overoptimistic market projections. The last time round, in the WAP fuelled dotcom atmosphere, $20bn was typical of the froth. 5 years alter, a few millions was more like the truth.

This time round, $13bn are the sorts of numbers thrown about. Suffice to say that we believe these numbers too are way overstated. However, it does give us predictability of a sort, in that the peak of each hype wave is 60% of the last one, which allows us to predict that the peak of the next LBS hype cycle will be c $7bn in 2018

Four Squares

So what is the size of the market? The honest answer is it is too early to tell (a scenario based approach is better, which is our approach of course ). The two key determinants are penetration and Average Revenue Per User.

Penetration can vary between "only smartphone users" (bottom of the chart) and a set of scenarios that imagines location aware consumer devices, cars, etc etc - and if you add low cost "Internet of Things" devices it can be immense

ARPU can vary between "Free" - is location services are given away as part of something else, and directly "paid for" - the horizontal axis - and depending on your assumption here that gives you a number to multiply by your no. of users, and you get a market size.

Update (forgot to add): One also has to be very careful about who gets this new money. The owners of the real estate - the device and the LBS info transport networks (eg operators) - have real market power here and will absorb a lot of any surplus.

We built a number of scenarios for our client, and its worth looking at the two key ones - ie there will be a large number of users for services which are low cost to use, ie are typically funded in some other way (ie the "market" as such will never see the value). Ad funding - the beloved "Ad push discount to find a cool restaurant for your friends" business case - will be a small, and "difficult to get right" part of this in our view, mainly because it is invasive of the very limited real estate on the smartphone.

Another viable market will be niche services that deliver real value to a group of people, and they will pay for these. This will be a market of smaller numbers of users but far higher ARPU.

In our view the $13bn market projections is of the "Pangloss" school of forecasting - assuming the best of all possible outcomes in the best of all possible worlds, and our scenarios tended to give an order of magnitude lower set of answers.

I'm OK, You're.....

This slide segments the most likely strategies that consumer based mobile services will adopt, and looks at the likelihood of success. We covered this area in more detail in the post over here, and the potential privacy issues over here

There's always someone looking at you....

We believe that privacy and intelligent usage of people's digital footprint will be critical - as Google Buzz found out, do this wrong and even the most respected player will be torpedoed below the waterline. The slide mentions two amusing "hacks" that illustrate the privacy issues with LBS

- Robmyhouse.com - shows what you can do to mashup location data for helpful services - for burglars . We covered this in more detail over here

- The Invasion of the Foursquare Bot Snatchers - fun hacks of Foursquare to show what a malicious approach could do - we covered this in more detail here

Other issues that were covered in the Q&A (not on slides)

- Biggest B2B markets? In our view, Logistics (Transport, Scheduling, empty truck ride clearing etc) is the major market.

- Why do people use Foursquare, Gowalla etc? First Gen LBS like Dopple failed, 2nd Gen are more "game" like as that has been shown to be more "sticky" for a user, increases the potential of selling virtual goods, and is more likely to get them to divulge personal data

Somebody asked me afterwards why we are so "down" on LBS. I replied that the problem is not us, its the hype cycle around the industry that is driving it to an artificial overvaluation (hey, even a $2bn industry by 2015 is still good) - and everyone is colluding in this. For example, we were interviewed by one of the MSM's (fairly well known) tech journalists on this topic last year, and gave our fairy rational prognosis - as above. The piece when it eventually appeared was totally upbeat and didn't even mention our views as a counter-story. This, if I may say so, is a total dis-service to all those who work in a sector. Big it up by all means, but you are on a hiding to nothing if you don't understand the limits to growth.