Paul Wallbank – Brilliant Communications

Category: computers

  • Monetizing the Masses

    Monetizing the Masses

    Monetization is a horrible word.

    The term is necessary though as many online business models are based upon giving away a service or information for free. For those businesses to survive, they have to find a way to “monetize” their user base.

    When Google were floated in 2003, the question was how could a free search engine “monetize” their users. The answer was in advertising and Google today are the world’s biggest advertising platform.

    Facebook’s Inital Public Offering (IPO) announcement raises the same question; how does a company valued 99 times earnings find a way to justify the faith of its investors?

    Advertising is the obvious answer but that seems to flattening out as the company’s revenue growth is slowing in that space. The AdWords solution tends to favour Google more than publishers as most advertising supported websites have found.

    Partnering with application developers like the game publisher Zynga is another solution. Again though this appears to be limited in revenue and Zynga itself seems to be having trouble growing its Facebook user numbers.

    So the question for Facebook is “where will the profits come from?”

    There’s no doubt the data store Facebook has accumulated is valuable but how the social media service can “monetize” this asset without upsetting their users is open to question.

    For Facebook the stakes are high as the comparisons with Friendster and MySpace are already being drawn.

    We’ll see more partnerships like the Facebook Anti-virus marketplace, but these seem to be marginal at best.

    In the next few months things will get interesting as Facebook’s managers and investors strive to find ways to make a buck out of a billion users who don’t pay for the service.

    While “monetization” is an ugly word, it is one that every online company thinks about.

    Every web based businesses will be watching how Facebook manage their monetization strategy closely as the entire industry struggles with the faulty economics of providing services for free.

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  • Ending the era of Mac complacency

    Ending the era of Mac complacency

    The news that the Flashback Trojan has infected an estimated 600,000 Apple Mac computers has been greeted with joy by the dozens of industry experts that have predicted a virus holocaust for smug Mac users for nearly a decade.

    While the Flashback malware – the earlier versions could be described as a computer Trojan Horse while the later editions are more like a computer worm – is a real risk to Mac users and it’s important to take this risk seriously.

    The Netsmarts business site looks at how Mac and Windows users can protect themselves from Flashback and its variants.

    One of the key things in the advice is to make sure anybody using the computer has limited rights; as a Managed User on the Mac and as a Limited User in Windows. This dramatically reduces the opportunity for bad things to happen while online.

    I’ve discussed previously while user privileges are one of the reasons why the Mac has historically been less prone to infection to virus infections than their Windows cousins.

    Microsoft made the decision in the 1990s not to tighten Windows’ security settings and their customers paid the price for the next decade. This was compounded by some poor implementations of various technologies in Microsoft Windows.

    This isn’t to say the Mac, or any other computer system, doesn’t have security bugs. Every operating system does and it’s a conceit of everybody immersed in new technologies, be it cloud computing back to horse drawn chariots, to believe their products are magically infallible.

    Part of the crowing from the security experts and charlatans who’ve been desperately predicting a “Macapocalypse” for nearly a decade overlook this.

    Even with the proven problem of the Flashback virus, its unlikely we’re see the deluge of malware like that of the early 2000s simply because the Mac OSX, Windows 7 and all the other mobile and computer operating systems don’t have the structural flaws that Windows 98, ME and early versions of XP had.

    Much of the Mac versus PC argument in security is irrelevant anyway; the main game for scammers and malware writers has moved to social media services like Facebook and this is where computer users need to be very careful.

    However the stereotype of the “Smug Mac” user was true, one caller to my radio show claimed he didn’t have a problem with spam because he had a Mac. Nothing could convince him that email spam wasn’t related to the type of computer you used.

    To be fair to Apple they never made the claim their computers were invulnerable to malware, apart from the odd dig at Microsoft. Their users did it for them.

    That type of smug Mac user are those who do need a wake up call. For the industry though, it’s business as usual although some will be feeling a little smug their hysterical predictions of the last decade came true in a small way last week.

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  • 702 Sydney Weekend computers: April 2012

    702 Sydney Weekend computers: April 2012

    On ABC 702 Sydney Weekend computers this Sunday, April 8 from 10.15am Paul Wallbank and Simon Marnie will be looking at the end of innocence for Apple Mac users, the DNS Changer Virus and how political campaigning is coming to a Facebook site near you.

    Some of the topics we’ll discuss include;

    If you’d like to learn how to protect your Mac or Windows computers from malware, visit our Netsmarts article on the Flashback virus that explains the security settings and suggests some free anti-viruses.

    Listeners’ Questions

    While we had a great range of calls from listeners, there was only one we promised to get back to. Kay clearly has a virus infection on her Windows computers and we recommend the free MalwareBytes program to clean it up.

    Our IT Queries site has more instructions on cleaning up a virus infection if you’re worried about a sick computer.

    We love to hear from listeners so feel free call in with your questions or comments on 1300 222 702 or text on 19922702.

    If you’re on Twitter you can tweet 702 Sydney on @702sydney and Paul at @paulwallbank.

    Should you not be in the Sydney area, you can stream the broadcast through the 702 Sydney website and call in anyway.

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  • Insanely profitable

    Insanely profitable

    Apple’s announcement that they will start paying dividends to shareholders changes a number of things in Apple’s business model and those of many other businesses.

    The sheer size of Apple’s cash reserves also illustrate how profitable the outsourced manufacturing model is as well the contradictary nature of special pleading by affluent corporations.

    Moving a cash mountain

    Not only is Apple’s business insanely profitable, but sales are growing exponentially. In the company’s conference call, CEO Tim Cook reported that 37 million iPhones sold last quarter and 55 million iPads sold in the last two years.

    Apple’s CFO Peter Oppenheimer pointed out the company’s cash reserves increased $31 billion in 2011 and 2012 is on track for a similar result in 2012, leaving them plenty of money for investment along with a “warchest for strategic opportunities”.

    Paying a dividend

    The reluctance to pay dividends has been a feature of the US corporate for the last few decades and Apple are certainly not alone in not distributing their profits to shareholders.

    Companies like Microsoft, Google and Oracle -even Yahoo! once upon a time – have been just as profitable as Apple and their efforts to shrink their cash mountains has had some perverse effect.

    Many of these companies have squandered suprpluses on poorly thoughtout and badly executed buyouts of smaller businesses, this urge to avoid returning money to owner has been one of the drivers of the Silicon Valley VC Greater Fool model.

    Another result of fat profits is the rise of flabby, overstaffed management ranks at some of these companies. Although this certainly isn’t the case at Apple where Steve Jobs ran a very lean machine.

    The retail model

    Unlike their major tech competitors Apple is a manufacturing and retail business as well. In 2012, 40 new stores are planned around the world.

    This vertical control of their markets, from the beginings of the supply chain  to “owning” the end customer is anathema to modern MBA thinking and probably the area that gives them the greatest competitive advantage over their hardware competitors.

    Justifying Mike Daisy

    In some ways this announcement justfies Mike Dasy’s discredited criticisms about Apple’s Chinese suppliers.

    The reason for manufacturing these goods in places like China, India or Vietnam is the vastly cheaper cost of doing business, not just in labour rates but in reduced environmental and safety standards.

    Plenty of brand name clothing, footware and fashion accessory companies make similar massive profits to Apple with their ten, twenty and sometimes hundred fold markups on their products.

    Repatriating profits

    One of the big changes of Apple repatriating money is that is undercuts the special pleading by these extremely profitable companies that they should have a US tax holiday so they can repatriate their riches.

    It’s now clear these companies can easily afford to pay the taxes of their home countries and it’s time they started to, along with returning dividends to their shareholders.

    Once again Apple have changed the way others do business, how these changes affect the way we invest and governments treat companies is going to be one of the most interesting developments over the next decade.

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  • Reputation’s long tail

    Reputation’s long tail

    When you decide customer support is an unnecessary cost, you make a statement that defines your position in the market place. Dell are reaping the consequences of this now.

    Micheal Dell, CEO and founder of Dell Computers, hopes to grab some of the tablet computer market from Apple with the release of Microsoft Windows 8.

    It’s a big goal – Apple have owned the tablet computer market since launching the iPad.

    Dell, along with most of the other PC manufacturers, squandered the decade’s head start they had in tablet computers with poorly designed and overpriced tablet PCs which were based around a clunky version of Microsoft Windows using styluses.

    Part of the problem was Windows itself; the operating system was designed for desktop users and to make it work on tablet computers it required a clunky workaround. Being designed for smart phones and tables mean Windows 8 may overcome previous limitations.

    But Dell have a problem; they are perceived as a low price, low quality supplier and have a competitor in Apple that has locked in the supply chain for the product.

    So Dell will struggle to beat Apple on price while customers believe the Dell system is inferior.

    Even more difficult for Dell is their support reputation, a quick look at the comments to the Bloomberg story illustrates the problem.

    Of the the sixteen reader comments, admittedly not a scientific sample, three business owners claim they will never buy Dell again after customer support issues.

    This is the critical mistake Dell’s management made in the 2000s – in order to cut costs so they could be profitable at lower price points they trashed their support.

    Eventually this culminated in the Dell Hell debacle where Jeff Jarvis’ experience summed up the frustrations of thousands of Dell’s disillusioned customers.

    Apple on the other hand chose not to go down the rabbit hole of cheap and nasty systems. Today they can offer free, and skilled, support in their genius bars as their fat margins allow them to provide constructive and helpful assistance to their customers.

    Now Dell has the reputation for at best indifferent after sales service which means they are locked into competing on price and ever declining margins.

    It’s not a good place to be for Dell but that’s what you get for treating your customers like an unnecessary nuisance while fixating on headline prices.

    We often talk about the Internet’s long tail; our online reputations could be the longest tail of all.

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