The Great Tech War Of 2012 | Fast Company

The Great Tech War Of 2012

By Farhad Manjoo

Article location:http://www.fastcompany.com/magazine/160/tech-wars-2012-amazon-apple-google-facebook

October 17, 2011

Tags: Leadership, Innovation, Management, Careers

From left: The late Apple cofounder Steve Jobs, Facebook CEO Mark Zuckerberg, Google CEO Larry Page, and Amazon CEO Jeff Bezos. | Photos courtesy of David Paul Morris/Getty Images (Jobs); Justin Sullivan/Getty Images (Zuckerberg); Chip East/Reuters (Page); Mario Tama/Getty Images (Bezos).

Gilbert Wong, the mayor of Cupertino, California, calls his city council to order. "As you know, Cupertino is very famous for Apple Computer, and we're very honored to have Mr. Steve Jobs come here tonight to give a special presentation," the mayor says. "Mr. Jobs?" And there he is, in his black turtleneck and jeans, shuffling to the podium to the kind of uproarious applause absent from most city council meetings. It is a shock to see him here on ground level, a thin man amid other citizens, rather than on stage at San Francisco's Moscone Center with a larger-than-life projection screen behind him. He seems out of place, like a lion ambling through the mall.
"Apple is growing like a weed," Jobs begins, his voice quiet and sometimes shaky. But there's nothing timorous about his plan: Apple, he says, would like to build a gargantuan new campus on a 150-acre parcel of land that it acquired from Hewlett-Packard in 2010. The company has commissioned architects--"some of the best in the world"--to design something extraordinary, a single building that will house 12,000 Apple employees. "It's a pretty amazing building," Jobs says, as he unveils images of the futuristic edifice on the screen. The stunning glass-and-concrete circle looks "a little like a spaceship landed," he opines.
Nobody knew it at the time, but the Cupertino City Council meeting on June 7, 2011, was Jobs's last public appearance before his resignation as Apple's CEO in late August (and his passing in early October). It's a fitting way to go out. When completed in 2015, Apple's new campus will have a footprint slightly smaller than that of the Pentagon; its diameter will exceed the height of the Empire State Building. It will include its own natural-gas power plant and will use the grid only for backup power. This isn't just a new corporate campus but a statement: Apple--which now jockeys daily with ExxonMobil for the title of the world's most valuable company--plans to become a galactic force for the eons.
And as every sci-fi nerd knows, you totally need a tricked-out battleship if you're about to engage in serious battle.

"Our development is guided by the idea that every year, the amount that people want to add, share, and express is increasing," says Facebook CEO Mark Zuckerberg. "We can look into the future--and it's going to be really, really good."

To state this as clearly as possible: The four American companies that have come to define 21st-century information technology and entertainment are on the verge of war. Over the next two years, Amazon, Apple, Facebook, and Google will increasingly collide in the markets for mobile phones and tablets, mobile apps, social networking, and more. This competition will be intense. Each of the four has shown competitive excellence, strategic genius, and superb execution that have left the rest of the world in the dust. HP, for example, tried to take a run at Apple head-on, with its TouchPad, the product of its $1.2 billion acquisition of Palm. HP bailed out after an embarrassingly short 49-day run, and it cost CEO Léo Apotheker his job. Microsoft's every move must be viewed as a reaction to the initiatives of these smarter, nimbler, and now, in the case of Apple, richer companies. When a company like Hulu goes on the block, these four companies are immediately seen as possible acquirers, and why not? They have the best weapons--weapons that will now be turned on one another as they seek more room to grow.
There was a time, not long ago, when you could sum up each company quite neatly: Apple made consumer electronics, Google ran a search engine, Amazon was a web store, and Facebook was a social network. How quaint that assessment seems today.
Jeff Bezos, who was ahead of the curve in creating a cloud data service, is pushing Amazon into digital media, book publishing, and, with his highly buzzed-about new line of Kindle tablets, including the $199 Fire, a direct assault on the iPad. Amazon almost doubled in size from 2008 to 2010, when it hit $34 billion in annual revenue; analysts expect it to reach $100 billion in annual revenue by 2015, faster than any company ever.
Remember when Google's goal was to catalog all the world's information? Guess that task was too tiny. In just a few months at the helm, CEO Larry Page has launched a social network (Google+) to challenge Facebook, and acquired Motorola Mobility for $12.5 billion, in part to compete more ferociously against Apple. Google's YouTube video service is courting producers to make original programming. Page can afford these big swings (and others) in the years ahead, given the way his advertising business just keeps growing. It's on pace to bring in more than $30 billion this year, almost double 2007's revenue.

"Every time some big clumsy corporate behemoth buys a popular consumer-tech product, I cringe. It almost never works out. The purchased company’s executives take a huge payday; promises are made all around that they’ll be allowed to continue operating independently; and then, within a couple of years, the product disappears altogether. A little star of the tech sky is snuffed out, for absolutely no good reason."

The Future of Skype

Justin Sullivan/Getty ImagesMicrosoft reached a deal to acquire Skype earlier this week.

NYTimes.com

David Pogue
Analysts — the ones who think the deal is a good idea — say that Microsoft can use Skype’s voice and video technology to build into its products, like Windows and Kinect.

Well, you heard the news: Microsoft is going to buy Skype for $8.5 billion. It’s the most money Microsoft has ever spent for anything.

But that’s such a weird analysis, since Windows and Kinect already have voice and video built in. Hello? NetMeeting? Windows Live Messenger?

The difference, of course, is that nobody used those programs. At least not compared with the 170 million people who use Skype every month, including close to 9 million of them who actually pay for the service. (You pay, for example, if you want to make voice calls to telephone numbers, rather than other computers or phones.)

“It’s an amazing customer footprint,” Ballmer said in a Times interview. “And Skype is a verb, as they say.”

And so is “Google.” I’d be willing to guess that this purchase was as much about “look what we’ve got, Google!” as it is about Microsoft’s technology strategy.

Every time some big clumsy corporate behemoth buys a popular consumer-tech product, I cringe. It almost never works out. The purchased company’s executives take a huge payday; promises are made all around that they’ll be allowed to continue operating independently; and then, within a couple of years, the product disappears altogether. A little star of the tech sky is snuffed out, for absolutely no good reason.

Yahoo bought GeoCities, Broadcast.com, HotJobs.com, MusicMatch, Konfabulator and Upcoming. AOL bought CompuServe, Netscape and Xdrive—all gone or irrelevant now. Cisco bought the Flip camcorder, and then killed it last month.

But what about Microsoft? Its acquisitions list includes the Sidekick (Danger) service, Groove, Placeware, Massive, LinkExchange and WebTV.
It has shut down all of them.

AUGUST 30, 2010, 5:46 PM

Does Google’s Free Phone Service Work in Other Countries?

By PAUL BOUTIN

Google’s Call Phones from Gmail lets Gmail users turn their computers into telephones by talking into a built-in microphone or by attaching a headset. The service, Google said when it announced Call Phones last week, is restricted to callers in the United States. Calls within the United States and to Canada are free, and most international calls are around 2 cents a minute. If you also sign up for Google’s free Google Voice service, available only within the United States, you can also receive calls free through Google’s servers.

What if you’re not a lucky resident of the United States? Over the weekend, word spread on the Internet that at least some people outside the United States had made free calls to the United States and Canada from Gmail. According to several excited updates on Twitter, Gmail lets at least some users outside the country make calls as if they are dialing from inside the country. All they need do is make sure their Gmail account settings specify English (U.S.) rather than English (U.K.).

They can’t use Google Voice to take calls, but they can make them free, or cheaply. (To change the settings, log in to Gmail and click Settings in the upper right corner of the Gmail interface. Language is the first option at the top. Google will also prompt you to install a small voice and video chat browser add-on before you can make calls.)

A Google spokesman, Randall Sarafa, explained that for users outside the United States, or for Americans traveling abroad, Google’s free services might work, but they had not been officially introduced to other countries. To quote Google, “We launched the Call Phones from Gmail feature to U.S. users as our first step and will be rolling out additional localized versions in the future. Depending on local laws and regulations, if your account is set to U.S.-English, you might be able to access the feature in some other countries as well.”

Does it work for you, or did you get an error message? Let us know in the comments below.

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Ring! It's Gmail's new voice feature calling - reuters

Ring! It's Gmail's new voice feature calling

Wed, Aug 25 2010

Google announced Wednesday it is offering the ability to make phone calls over the Internet via its popular Gmail service.

Unlike Google's nearly two-year-old Gmail voice and video chat, which gives users an audio and visual experience online, the new calling feature allows users to dial phone numbers. With this move, Google is competing with Skype , which has long dominated this area.

"Starting today, you can call any phone right from Gmail ," wrote Robin Schriebman, a Google software engineer in a blog post . "We've been testing this feature internally and have found it to be useful in a lot of situations, ranging from making a quick call to a restaurant, to placing a call when you're in an area with bad reception."

Schriebman explained that making a phone call through Gmail works just like a normal phone. Users can click "Call phone" at the top of their chat list and enter a number or a contact name. She added that calls to anyone in the U.S. and Canada will be free "at least for the rest of the year." She said "very low rates" have been set up for calls to other countries .

So, does Google have the muscle to make Gmail a Skype killer?

Skype, a 7-year-old company, is used by individuals and companies to make video and voice calls over the Internet. According to Skype, its users made 6.4 billion minutes of calls in the first half of 2010.

While Google may be starting out behind in this competition, it has the benefit of its large Gmail user base.

"Skype could get hurt by this," said Dan Olds, an analyst with The Gabriel Consulting Group. "Skype has been offering the ability to call land lines and cell phones for years now. But having it integrated into Google's Gmail and, assumedly, their other offerings down the road, is quite an extension for Google."

Olds added that Google, always on the lookout for new streams of revenue, is looking to expand its reach over their customers and to move into complementary markets that will draw more revenue.

"Adding voice calls to their existing product set enhances the user experience and keeps people using Google apps longer and more frequently," Olds said. "It also keeps people from using another service like Skype, and it certainly may prompt some defections from Skype. Google definitely has the scale and reach to put a big dent in Skype if Google can deliver on the service side."

The voice calling feature is expected to be rolled out to U.S.-based users over the next few days, according to Google. Users will need to install Google's voice and video plug-in and watch for the "Call Phones" button to appear on their chat list.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin or subscribe to Sharon's RSS feed . Her e-mail address is sgaudin@computerworld.com .

Read more about networking in Computerworld's Networking Topic Center.

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India eyes Google and Skype in security crackdown - Yahoo! News

India eyes Google and Skype in security crackdown

By ERIKA KINETZ, AP Business WriterFri Aug 13, 11:18 am ET

MUMBAI, India – India may ask Google and Skype for greater access to encrypted information once it resolves security concerns with BlackBerrys, which are now under threat of a ban, according to a government document and two people familiar with the discussions.

The 2008 terror attacks in Mumbai, which were coordinated with satellite and cell phones, helped prompt a sweeping security review of telecommunications ahead of the Commonwealth Games — a major sporting event to be held in New Delhi in October.

Some analysts say more anonymous technologies — like the basic Nokia phones used by 10 gunmen who rampaged through Mumbai in November 2008, leaving 166 dead — and Gmail are more likely to be used to plan terror attacks than BlackBerry devices, which require reliable identity proof and contact information.

On July 12, officials from India's Department of Telecommunications met with representatives of three telecom service provider groups to discuss interception and monitoring of encrypted communications by security agencies.

"There was consensus that there are more than one type of service for which solutions are to be explored," according to a copy of the minutes of the meeting obtained by The Associated Press. "Some of them are BlackBerry, Skype, Google etc. It was decided first to undertake the issue of BlackBerry and then the other services."

"They have clearly instructed us that after BlackBerry, they are going to take to task Google, Skype and similar services that bypass the monitoring department of India," said Rajesh Chharia, president of the Internet Service Providers Association of India, who attended the meeting. "According to the law, they have to allow monitoring."

The officials' immediate concern was the BlackBerry, but they also plan to look at Google and other companies that use encryption for e-mail and messaging services, said Rajan Mathews, director general of the Cellular Operators Association of India, who was briefed on the meeting.

Google and Skype said Friday they haven't received any notices from the government.

The Home Ministry said present talks involve only BlackBerry maker, Canada-based Research In Motion.

"We are talking only to BlackBerry," ministry spokesman D.R.S. Chaudhary said Friday. "Not to Google or others."

On Thursday, India threatened to ban BlackBerry services unless the device's manufacturer makes them accessible to its security agencies by Aug. 31.

On Friday, Research In Motion Vice President Robert E. Crowe met with Home Ministry officials in New Delhi to try to avoid the ban.

"I am optimistic," Crowe told reporters after the meeting.

Saudi Arabia and the United Arab Emirates have also threatened to cut off popular BlackBerry services unless they get greater access. Like India, they've cited security concerns in pushing to access encrypted information sent by the cell phones that gets routed through servers overseas.

Rights groups fear such access could be abused.

Research In Motion said in a Thursday statement that it maintains a consistent global standard for legal access to encrypted information which precludes making specific deals for specific countries.

All such access must be governed by a country's laws and must be applied equally to all vendors and all technologies, RIM said.

It also reiterated that it cannot "unlock" secure corporate e-mails. "Contrary to any rumors, the security architecture is the same around the world and RIM truly has no ability to provide its customers' encryption keys," it said.

The U.S. has technology to crack encrypted BlackBerry messages, which it can legally use when national security is at stake, diplomats say.

India is keen to get the U.S. to transfer technologies, like de-encryption, as part of high-level bilateral discussions on technology transfer likely to come up at Obama's state visit to India in November, diplomats say.

For now, more humble devices may present a greater security threat than the BlackBerrys used by India's business elite.

Mohammed Ajmal Kasab, the lone surviving gunman in the 2008 Mumbai attack, told an Indian court that he and his comrades all had Nokia mobile phones.

Photographs of court evidence show that the gunmen carried the most basic Nokia handsets.

"We did not find any Blackberrys," Special Prosecutor Ujjwal Nikam, who led the case against Kasab, said in an interview.

The relative anonymity and disposability of prepaid mobile phones and Web mail make them attractive to criminals, said Prasanto K. Roy, chief editor at CyberMedia Publications, a trade magazine group.

He said terrorists would likely opt to use disposable handsets and keep changing the SIM cards. Another hard-to-trace method would be to use Internet-based e-mail, like Gmail, updating and saving messages as drafts to avoid interception, he said.

RIM has fast expanded its presence in India from 114,000 users in early 2008 to an estimated 700,000 today — four-fifths of whom are corporate clients, who would be hit by a ban, Roy said.

RIM won't break out the number of users in India.

India has suffered deadly attacks, by both home grown and foreign militants, with some regularity for years. Many BlackBerry users here say national security trumps personal convenience.

"If BlackBerry cannot provide a solution for the security threat to the nation, we're happy to let go of the services," said Sharad Dhariwal, a 26-year-old investment banker.

That could be good news for Nokia — RIM's chief competitor here — and Apple, which recently brought the iPhone to India.

Associated Press writers Nirmala George and Ashok Sharma in New Delhi and Da Yan in Mumbai contributed to this report.


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India eyes Google and Skype in security crackdown - Yahoo! News

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Skype files for IPO on NASDAQ

Skype, which last year became the largest carrier of international calls, has continued to grow briskly. In the year from June 30, 2009 to June 30, 2010, the company grew in registered users from 397m to 560m. During this time, users made 95bn minutes of voice and video calls

Skype starts process for public listing

By David Gelles in San Francisco

Published: August 9 2010 15:19 | Last updated: August 9 2010 16:20

Skype plans to raise up to $100m in an initial public offering, a move that would complete a dramatic journey for the company that less than a year ago was a subsidiary of Ebay.

Shares will be listed on the Nasdaq later this year according to a filing with the Securities and Exchange Commission

Ebay sold Skype to a group of investors last September after a series of contentious legal disputes between Skype’s management, its founders and Ebay. In the end, Ebay received $1.9bn for the company and retained a minority stake, short of the $2.6bn it paid for the company in 2005.

The new owners included Silver Lake Partners, the Canada Pension Plan Investment Board, and Andreessen Horowitz, a venture firm led by Netscape founder Marc Andreessen.

Skype’s founders, Niklas Zennstrom and Janus Friis, also joined the investment group after suing with claims that their company, Joltid, still retained the key technology to power Skype.

The SEC filing revealed Skype paid $343.8m to settle this dispute. As part of the settlement, Skype also invested $6m in Rdio, a new social music service founded by Mr Zennstrom and Mr Friis.

Skype, which last year became the largest carrier of international calls, has continued to grow briskly. In the year from June 30, 2009 to June 30, 2010, the company grew in registered users from 397m to 560m. During this time, users made 95bn minutes of voice and video calls.

“We believe the scale, global distribution and growth of our user base provide us with powerful network effects, whereby Skype becomes more valuable as more people use it, thereby creating an incentive for existing users to encourage new users to join,” the company said in its filing.

But most Skype users use the service for free. Just 8.1m of users pay and those that do are expected to spend an average of $96 each this year.

This is enough to keep the company profitable. In the first six months of this year, Skype generated $406.2m of revenues, but net income of just $13.1m. Of that, just $1.4m was income from operations.

To improve margins, Skype said it will focus on expanding its services for businesses and expanding its advertising and licensing. “We will continue to develop new monetisation models for our large connected user base,” it said. “We currently generate a small portion of our net revenues through marketing services (such as advertising) and licensing, which we expect will grow as a percentage of our net revenues over time.”

Skype’s filing comes a week after Demand Media filed for its own IPO, and could signal an opening in the long-stagnant market for public offerings.

Goldman Sachs, JP Morgan and Morgan Stanley are underwriting the Skype IPO, with Citi, Credit Suisse and others also participating.

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