Archive for May, 2009

Facebook Valuation

I sure wish there was a way to short FB right now.  It seems to me like they are already on the decline.  Unless DST got a glimpse of a totally new platform to be offered in the future, the valuation and the size of the position seems way out there.  

Facebook is very likely going to have to start aggressively slinging customer information if they expect to keep their valuation so high.  As far as my own bias, my life without facebook is just fine.  It was odd for a couple of weeks as I missed a few invitations sent via the platform, but everyone learned quickly and I now have no need or desire to be connected to the service.

I am still surprised by the slow rate of twitter adoption among my peer group, as it seems like a natural choice because of phone integration.  

Anyway, congratulations facebook, now get moving on that IPO so I can short…

Written on an iPhone!

Posted by Eric, 0:36, May 12, 2009
Cache In, Moving Forward / No Comments

            Recently, the makers of Quickoffice released their iPhone port, and I believe it will have major implications for the iPhone/iPod Touch platform.  It is one of the first productivity tools that is not a glorified browser.  Importantly, Quickoffice allows users to create and save local versions of the file, meaning that Internet access is not required to access any features. 

            I have not yet spent very much time with the platform, but it has already paid for itself as I have been able to quickly edit documents and return them to their sender.  You can access e-mail attachments and then send the altered files back to the sender, a huge victory for the iPhone platform. 

            The Quickoffice program shows proof of concept for powerful applications that exist independently of browsers, and I look forward to seeing what is possible with the relaxed limitations of the 3.0 software platform.  Once I can connect a Bluetooth keyboard to the iPhone, I will be much more comfortable leaving laptops at home, even for short trips.  The Quickoffice platform is the first piece of software that should rattle RIM and Palm, since it brings the iPhone up to par with the editing capabilities of the more established business platforms.  Obvious features like spell-check and formatting are missing for now, but hopefully some friendly competition will bring these all to market quickly.

Dumb Smartphone Numbers

Posted by Eric, 13:47, May 04, 2009
Cache In, Waste of Electrons, Whose Data? / No Comments

I am almost reluctant to jump to the defense of Apple, but today’s released Q1 smartphone sales are completely misleading.  Many sites are making a big deal out of the fact that the Blackberry 8300-Series, the “Curve”, outsold the iPhone in Q1 2009.  What no one is mentioning is that on most carriers, the Curve is now available without a smartphone contract.  This means that handsets are going out at a heavily-subsidized price, yet Blackberry and the carriers are not receiving their data plan revenues.  It seems to me that the Curve is being picked up in droves by consumers interested in the perceived status of a smartphone (plus the great keyboard as text messaging become ubiquitous) without the high monthly cost of data and Blackberry E-mail plans. 

My guess is that the Curve is now a loss leader for RIM, who hopes that the users will think of a Blackberry when they are ready to get a true smartphone. 

This is not an attempt to discount RIM’s great quarter, but in terms of revenues, a Blackberry without a Blackberry plan is not exactly a smartphone.  Follow the money…

Game Theory and the Swine

Posted by Eric, 13:08, May 01, 2009
Govt, Incentives, Waste of Electrons / No Comments

 One of the most amusing overreactions to the “swine flu” is Egypt’s decision to slaughter all of the pigs in the country. While is a hilariously misguided campaign on its own, it serves as a very serious example of a problem with the nationalist mentality.

Globalization has led to an increased concentration of goods production, as manufacturing is shifted to countries that are not as far along in their economic development. This means that products like flu vaccines are produced in a few concentrated locations. During normal times, this simply means that transportation costs need to be considered. However, when countries begin to panic about something like a flu pandemic, scenarios involving nationalization of manufacturers materialize.

The same nationalist focus can lead to interesting implications for the world. Egypt announcing that it will slaughter all of its pigs in isolation does not have a noticeable impact on the world, but what if every country announced an identical plan at the same time in a misguided attempt to save their own citizens?

If any single animal population was in fact responsible for a disease pandemic, this concept could actually be tested. If every nation (or all that possessed the species in question) decided to eliminate their animals, there would be an organized, conscious, and preempted elimination of a species. Obviously, an outcome like this would be highly unlikely, but it is interesting that these kinds of scenarios are not considered when governments make decisions that would be destructive if adopted by everyone.

Currently, I am in an area that supposedly has a flu outbreak, and I am amazed at the lack of thinking that has led to our current situation. My local university basically inspired a panic about the flu through overuse of their post-VT emergency notification system, and then created highly visible testing centers. Thanks to the bottom-feeding of 24-hour news reporting coupled with the fear-mongering of the university, a significant portion of the student body was allowed to worry themselves into what is likely mentally-induced “sickness”. Many students were told by their families to return home, which in the case of a true outbreak would have exposed an exponentially larger population to any disease. Just like the nationalist problem described above, these students returning home would have put a bigger population at risk due to their selfishness.

When groups of people isolate themselves (whether a continent, country, city, or family), decisions that are made to benefit the group at the expense of others carry unintended consequences. Obviously, the concept of defending those you are close to is throughly engraved in modern human nature, and it would be almost pointless to combat. However, the externalities that are created by selfish behavior are rarely addressed, and should be considered before decisions are announced.

If my university would have thought about the panic their announcements inspired instead of focusing on being “proactive”, I think I would be looking at a very different campus today. Because the campus is now in a paranoid uproar and has basically ground to a halt, the university is now trying to convince the population that things are in fact okay. Ironically, this step would have been completely unnecessary if they would have calmly addressed the issue in the first place.

Having a front row seat to this absurdity has made me think about how panics are created. Obviously, the “swine flu” panic is a media darling, creating overdone concern. This concern compounds into a full panic once local cases are “identified”, and the population then creates pointless customs in attempt to show they are being vigilant. Soon enough, both the flu and the customs created will be forgotten, and the population will wait for the next media focus. It seems to me that there is an identifiable cycle of media focus, panic and new customs, and forgetfulness once the media moves on.

Recent events like the plane flying low in New York seem to support this idea. New Yorker’s do not seem to worry about plane attacks any longer, but once they see the stimulus that was given thousands of hours of media coverage like a low flying plane, the automatically abandon office buildings. The current flu will become a much stronger stimulus than something like SARS, which was only covered by the media as something happening far away. Since the flu is a common annual occurrence, I hope the attention devoted to this current strain does not result in population panics every winter.