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Ask.com Run Out of Search

In a sign that competing with Google in search is very difficult to do, Ask.com recently announced that they will leave the general search business and focus on helping married women manage their lives. Ask.com has an Alexa ranking others would die for. Under 225, meaning that the site is in the top 225 of all sites in the world.

For what it's worth, this will put Ask.com in competition with iVillage, a company with an Alexa ranking of 2,012.

It is worth pointing out that iVillage was sold last year to NBC Universal for $600 million. Competing in this space may be a lot easier than going head-to-head with the world's largest search company.

We'll see how this plays out.

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White House E-mail Controversy

I just came across this summary of the White House missing e-mail fiasco and I am pretty blown away at just how out of touch Washington is with technology. I knew that this administration was tech-phobic when Dick Cheney was asked as a Vice Presidential Candidate what Napster was and he didn't know. And this was back when Napster was the "hot" software on the web.

Of course then there is President Bush saying he uses "The Google."

Before I get hate mail, I should say that I am a registered Republican (will that get me even more hate mail these days? ;) )

Although I didn't read the entire article as it is voluminous, I did get a chance to see that the White House's IT practices border on the insane... Archiving via PST files that are ten times larger than is recommended is not smart.

They also seem to not know how much technology actually costs or perhaps vendors charge our government ten times more than they charge other companies. Either scenario scares me to death and it seems we will soon have a tax increase allowing the White House to buy more $50,000 server farms for a cool half a million.

I wonder if technology implementation happens from the top down. In other words do the President and Vice President's knowledge (or lack thereof) of technology have a material impact on IT budgets and best practices?

Although it may be impossible to ascertain such details, reading about White House e-mail fiascos may make some lean more towards candidates that are more technologically savvy.

This should scare Republicans to death. At this point, perhaps as a bit of positive PR we could see John McCain utilizing social networking and web video more often in order to show he is "with it."

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AT&T's Bullish Investment

AT&T is making a major telecom investment in many areas of its business. The telecom giant cites the explosion of high-speed networks, data consuming devices and the move to IP as the reason for this investment.

The money is being spent to become a larger global player as well as a big provider of utility computing services.

Where will the company be spending money?

• Subsea Fiber: Expect the company to expand capacity to area of the world experiencing economic growth such as Asia and the Middle East.
• MPLS Routers: The company will add a number of these throughout the world in order to ensure there is proper capacity in areas of rapid business growth.
• Metro Ethernet: The company will invest in a manner which allows it to have such services available in 39 countries.
• DSL: Investments will allow AT&T to provide this service in 21 countries.
• Data Center Increase: AT&T will add 180,000 square feet of global capacity by mid 2009 throughout its 28 data centers.
• Unified Communications: Integrating and developing recently acquired Interwise - a web conferencing company into AT&T's network.
• Expanding Audio Conferencing: Expect IP-based conferencing in more than 140 countries with native language support.

Here is my analysis of this news:

As AT&T gets more involved in the utility computing market, I expect them to butt heads with Sun, Amazon and Google. Google is a past foe - Amazon and Sun are new ones.

While a year ago the cable companies were eating the lunch of AT&T and Verizon, there has been a rapid about-face in the market which has been fueled by the wireless arms of both LECS, IPTV and well as international expansion.

I believe the cable companies will have to do something soon to be able to compete effectively in emerging markets.

In all, this news is fantastic for the telecom market as AT&T is spending 33 percent more than last year and double what they spent in 2006.

It will be great to see these investments allow AT&T to can overseas and whether it can compete effectively against other utility computing players in the market.

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The Self-Fulfilling Recession

In my discussions with the people who run tech companies, for the most part they tell me they are lowering their guidance because people tell them they should. Yesterday in fact in a podcast interview, Joel Hackney, President of the Enterprise Solutions Group at Nortel mentioned they have lowered earnings forecasts but this move seems to have more to do with what the company is hearing than what they think their prospects might be.

Having said that, it is tough to be optimistic about your future prospects if the media is beating a recession drum 24x7.

Don't get me wrong... I realize housing in many parts of the country is in a depression.

The question is, without all this constant talk of a recession, which many argue we are not in, would the rest of the economy (non housing-related companies) even be slowing?

Frost & Sullivan is a well-respected analyst and they just put out a release on the economy which goes into a bit more detail on the above topics.

I thought it worth sharing:

Increasing pessimism about the U.S. economy is causing many CEOs to preemptively lower growth goals expectations and plan conservatively for 2008 – but is this a smart strategy?  With phrases such as “darkening outlook”, “market freeze”, and “economic meltdown” dominating the financial headlines, companies are electing to implement a cautious approach.

“CEOs tightening their economic belt and implementing cautionary growth strategies, and consumers spending more conservatively will fundamentally cause any real slowdown or recession we may experience,” states Frost & Sullivan Chairman David Frigstad.  “The problem is a spiral effect driven by fear.  A fear-based climate is causing consumers to lose confidence and cut back on their spending, banks will tighten their credit policies and turn a false perception of doom and gloom into reality, thus driving the economy into recession.”

While this response is driven by the perceived fear, it is in fact, out of proportion with the actual condition of the U.S. economy. “There are no economic measurements that support the fact that we are going into a recession. The fundamentals are strong for continued growth and the overall global economy is very healthy,” continues Frigstad.

The global economy in general is being driven by several huge factors which significantly outweigh any blip in the U.S. mortgage market.  Global investment in commercial real estate increased from $665 billion in 2006 to $930 billion in 2007, and foreign buyers will likely look to the U.S. for properties with long-term value.  Furthermore, the current exchange rate of $1.51 per Euro expects to support the growth of exports by offering strong opportunities for the U.S. economy.

A recession is not inevitable, but it may be a self-fulfilling prophecy.  Frost & Sullivan research reveals the current concern over the “crisis” in the U.S. subprime market is overstated and reflects the risky lending practices of banks.    The subprime mortgage market accounts for $1.3 trillion of the total U.S. economy, of that only 1.5% is actually at risk.  Considering the default rate of 1.5% is the same today as it was in 2004, it seems foolhardy to tie this amount to a nationwide economic downturn.

Growth opportunities reside in uncertainty and this should not change in the time ahead.  “Overall, our research on technology, markets, and economics clearly shows that the global economy remains strong and fueled by technology-driven productivity improvements, enhanced logistics, global democratization trends, better trade infrastructure, and a highly dynamic, commercially-focused Asian business community,” concludes Frigstad.

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