Buying Joost would fit Comcast's strategy

Comcast is looking at all possible means to enhance its high-speed data offering, but so far P2P technology apparently hasn't come into play. Hence, Joost (as well as Bablegum) could be a takeover target.

Let's first step back a little bit. Cablecos and telcos are trying to leapfrog each other in the broadband game. Telcos have xDSL technology to upgrade copper, cablecos have DOCSIS. Almost as old is the DOCSIS 3.0 conundrum; Comcast gave a demo and Giga Om justly reminds us of the barriers yet to be taken: certification, commercial availability, freeing up bandwidth. Meanwhile, let's not forget that FTTH is still the ultimate solution - i.e. Verizon's FiOS. As Comcast is reluctant to go the FTTH way, it has not only DOCSIS 3.0, but other technologies at its disposal: further plan upgrades (toward 1 GHz), node splitting, switched digital video, Vyyo.

Now how does Joost fit in here?

The Wall Street Journal recently devoted a fine article to Comcast, highlighting its efforts toward gearing up its broadband offering. Video is increasingly brought to us over the internet, so making Comcast.net a viable player is a good (defensive) strategy, complementary to the regular TV/VoD offering. The most recent Comcast.net related deals include:

• Acquisition of thePlatform: video delivery technology
• Acquisition of Fandango.com: movie info (and tickets)
• Acquisition of a stake in Revver: video sharing
• Launch of Ziddio.com: user-generated content
• Planned launch of Fancast.com: TV/movie portal
• Deal with Yahoo! (replacing Google): display and video ads
• Deal the News Corp/NBC Universal company: distribution to Comcast.net and Fancast.com

Acquiring Joost would round out the Comcast.net efforts (as long as FTTH is deemed unnecessary) and gives Comcast another tool in building a more or less robust delivery platform, based on the open internet (v. Comcast's still superior and proprietary cable network).

How Terry and Meg are marrying off Yahoo! and eBay

It is interesting to see what happened at Yahoo!, six months after Brad Garlinghouse’s ‘Peanut Butter Manifesto’ was leaked to the Wall Street Journal. In general, he called for focus and job cuts.

It looks to me like Yahoo! is quietly implementing Brad’s underlying recommendations. Focus is in fact increasing (but as a content aggregator Yahoo!’s coverage remains naturally wide). Job cuts could be on the cards next. Still, Yahoo! seems pretty phlegmatic in executing its grand plan. Take for instance Facebook. As Mr. Zuckerberg is looking for more and more money, a deal with Yahoo! is getting less and less likely.

As Yahoo! is focusing and eBay is expanding its branch of e-commerce operations (see below), speculation over increased cooperation or even a merger may continue.

So what action have we seen at Yahoo? First of all, a restructuring into three groups was launched: Advertiser & Publisher, Audience and Technology. Some high-profile vacancies were created in the process. As Susan Decker seems to be heading for the CEO job when Terry Semel retires later this year, the company is trying to hire a CFO and an Audience CEO.

Second, Yahoo! got focused on improving its search engine and monetisation efforts under the ‘Panama’ banner.

Third, it is defending the display market that Google is entering. Yahoo! is building ‘brand universes’ for large advertisers and it acquired Right Media. Also, it entered into a large newspaper cooperation.

Fourth, Yahoo! continued the ‘relaunch’ of its verticals, lastly Yahoo! Finance and Yahoo! Travel. At the same time, the company has started discontinuing other sites, such as the North American Auctions business and Yahoo! Photos (which will migrate to Flickr). Yahoo! Bookmarks and del.icio.us could be merged, but the former is simply too successful to discontinue. New verticals include Yahoo! Food.

Fifth, Yahoo! continually expands its community features. It bought blogging services MyBlogLog and Wretch (Taiwan), as well as Bix.com (runs contests). The vastly popular Yahoo! Answers teamed with Answers.com. A deal with Reuters will see uploaded photos and videos appear both on Yahoo! and Reuters.com. The new Yahoo! Pipes allows for the creation of mash-ups.

A different way of seeing increased focus is by looking at what does NOT offer: no satellite images such as Google Earth and Microsoft Virtual Earth; no Office look-alikes such as Google’s Docs & Spreadsheets and its soon-to-launch presentations tool; offline efforts are largely limited to wireless and print (no radio, TV, outdoor and in-game, as we have seen at Google); e-commerce activities are limited to certain countries.

The latter easily leads to some eBay speculation.

First, as Yahoo! is focusing, eBay is in fact expanding without creating more overlap. The e-commerce activities comprise not only the core auctions business, but a growing list of related services and sites: Buy It Now, eBay Express, Shopping.com, Rent.com, Craigslist, Marktplaats.nl, Kijiji. Recently eBay added StubHub (ticket sales) and possibly StumbleUpon (recommendations).
As a side note, it is quite easy to list a few takeover candidates for eBay to grow further within the e-commerce sector: single-item retailers (Woot.com in the US, iBood.com in Europe), travel (Expedia, Orbitz, Travelocity), securities trading (E*Trade, Zecco.com), swapping (La La Media) or even Amazon.com.

Second, Yahoo! and eBay are already partnering on a number of services (search, ads, payments, communication).

Third, strong positions in the Far East make a nice fit as well, as overlap is limited.

Fourth, eBay is aiming for increased community activity (see StumbleUpon) - a core strength at Yahoo!.

Would Terry Semel and Meg Whitman feel any urge to do a large deal before retiring or moving into politics?

Reed Elsevier and Thomson Corp could carve up Reuters

Reuters has received a takeover approach. The Reuters (!) news service mentions Thomson Corp and News Corp as possible suitors.

I am surprised Reed Elsevier isn't mentioned. They are selling Harcourt (the education unit), reducing the company to a 3-trick pony. Thomson could be interested in the news business (avoiding FCC/FTC scrutiny, which would almost certainly result from combining Reuters and Thomson Financial), even if this is a minor part. Thomson recently stated they want to create their own news service, built upon the AFX buy, to be launched this month. In short, Reed and Thomson could carve up Reuters.

News Corp being mentioned, after their Dow Jones approach, seems a bit silly, but I do think it points to a trend. Piracy, P2P file-sharing and user-generated content undermine the value of B2C content. Hence, B2C companies seem to take interest in more valuable B2B assets. Not public data (that Google's Gapminder helps disclose), research funded by government bodies (under attack from the open access movement led by people like Stevan Harnad and Peter Suber), or even stock prices that used to fuel Reuters' profits. But 'must-have' content that the B2B conglomerats are focusing on.

That could spark another round of bid and break-up speculation.

Google helps value shift to B2B media

The Voelspriet site (and Dutch language alert service) pointed me to a wonderful presentation by Hans Rosling, co-founder of Swedish Gapminder (from the 'Mind the Gap' phrase). It is titled 'Debunking third-world myths with the best stats you’ve ever seen' and is definitely worth the 20 minute view.

The content is compelling as it is, but the reason for being linked to on this site is the second half of the above title. Google bought Gapminder in March (this VentureBeat story also links to the Rosling performance) and the presentation highlights its Trendalyzer capabilities of visualising movements in time (e.g.) of (public) data.

I can see an intriguing, if somewhat vague, implication for Google. Once more this company undermines the value that B2B publishers extract from public data by making them more accessible. It builds upon the open access movement advocated by people like Stevan Harnad and Peter Suber. Imagine combining the technology with things like Google Book Search, Google Scholar, Google Health.

Last minute addition: Reuters has received a takeover approach. Reuters (!) mentions Thomson Corp and News Corp as possible suitors. So much for the undermining of the value of B2B content!
I am surprised Reed Elsevier isn't mentioned. They are selling Harcourt, reducing the company to a 3-trick pony. Thomson could be interested in the news business (avoiding FCC/FTC scrutiny, which would almost certainly result from combining Reuters and Thomson Financial). Thomson recently stated they want to expand their own news service. In short, Reed and Thomson could carve up Reuters.
News Corp being mentioned, after their Dow Jones approach, seems a bit silly, but I do think it points to a trend. Piracy, sharing and UGC undermine the value of B2C content. Hence, B2C companies seem to take interest in more valuable B2B content (apart from public data, or research funded by government bodies, or even stock prices that used to fuel Reuters' profit).

Enhancing cablemodem broadband

Broadband over cable benefits from the upcoming DOCSIS 3.0 standard. It enhances the user experience by expanding the downstream bandwidth to 160 Mbps. Approaching the bandwidth issue from the other side, namely the ISP's (i.e. dealing with efficiency), there are several options: fiber node splits, switched digital video technology, digital simulcasts, plant upgrades to 1 GHz spectrum, MPEG-4.

Also, two interesting companies are providing technology to MSOs.

First, Vyyo frees up bandwidth and had a number of equipment orders, as well as funding from Goldman Sachs and a board member appointment from another Wall Street firm. All this basically leading to a doubling of its share price.

Second, I stumbled upon this press release from PeerApp, which allows MSOs and ISPs to add P2P caching.

Separation round-up

In March, the Dutch NRA (OPTA) declined to separate network and services at incumbent KPN. OPTA said it didn't have the power to do so. It added that cable competition, as well as open access to the KPN network (be it wholesale, LLU or bitstream) were sufficient to guarantee a competitive market.

However, Viviane Reding seems to be on collision course, aiming for a European effort at separating PTTs.

I suppose this issue will produce a lot of nois.

What has happened since?

• Italy seems most advanced, preparing a legal basis.
• New Zealand is pushing forward as well. In response, Telecom NZ has its own plans.
• Sweden has commissioned a report from its NRA, PTS, due June 15.

Does anybody want to compete in the Netherlands?

As I've written before, LLU is coming to and end in the Netherlands. France Telecom yesterday in a way referred to this, meandering on its strategy regarding Orange NL.

The consequences of the next stage in copper-based competion:

• KPN thinks it's so clever, forcing the competition out of the market. Only a player like KPN can afford to build a FTTC + VDSL network ('All-IP'). However, the plans could backfire: OPTA could go the separation route; OPTA could allow UPC to merge with @Home to form an MSO with near-national coverage (and create a duopoly US style); altnets could band together Australian style (the G9 consortium, proposing a FTTN network of its own).
• OPTA, the local NRA, together with all market participants, is studying a Full Alternative for LLU. Could it be SLU (FTTC + unbundling from the street cabinet)?
• Altnets have invested very little over the past two years or so. Coverage of their ADSL-networks has not expanded.
• Municipalities are cleverly moving in, building FTTH. There seems to be kind of an arms race between KPN (also buying up ISPs) trying to get involved and Reggefiber (the Dick Wessels company).
• Orange NL was put up for sale in February (rumours, but I had them sort of confirmed). Then in March, at the final 2006 results, it was denied. Now, at the Q1 results, France Telecom acknowledges all options are open. The same happened to Telecom Italia subsidiary bbned: for sale, and then all of a sudden it wasn't. This can only mean one thing: FT and TI want out, but they can't. And with market regulator NMa still studying the KPN takeover of Tiscali NL (report due May/June), KPN is no longer a buyer.

No potential buyers and LLU coming to an end - do I hear monopoly? Is duopoly the simplest answer to this? Or can altnets overcome their cultural differences and build a joint G9-style network?

Another free paper - but bringing quality content

The freesheet industry is getting an interesting twist in the Netherlands. Free newspapers aren't new, but 'De Pers' (yes, this would be 'the press' in English) adds something new. It bills itself as a 'quality' newspaper.

The paper launched in January and since doubled circulation (to 500k) and added a news website. It distinguishes from the usual free fare with its expanded distribution - not just via public transporation stations but at retail, petrol and office locations as well. Last week they started a home delivery trial.

Obviously, the Spits (owned by Telegraaf) and Metro freesheets will get hurt as they will have to share their section of the advertising market with the #3 player. The Wegener titles (regional newspapers) and the Telegraaf flagship newspaper (let's say, 'low brow' fare) seem to be pretty much insulated from this effect by virtue of their content. Privately owned PCM (producer of a range of 'quality' newspapers) seems to be at risk, especially the nrc.next paper after which 'De Pers' may have been modelled.

Still, I think 'De Pers' needs to expand some more to really have an impact: add a weekend edition; produce several editions a day (how about an evening edition delivered by email for workers to print out at the office and read on the train). I also believe an evening edition could be more worthwile for readers to bring home and share with family members.

Anyway, the focus on making a quality newspaper (for free, with expanded distribution) seems quite unique. Contrast that with this article, which states: "... that traditional newspapers will live or die based on the quality of their content -- an authoritative perspective that free papers cannot provide."

WiFi gearing up

This article contains the timeline for 802.11r, the WiFi standard enabling handover and thus mobility. The IEEE targets certification early 2008.

The interesting thing to me is that by adding mobility, WiFi could take away even more traffic from cellular networks. Wireless operators embracing WiFi could use this to stave off potential competition from WiMAX networks.

Telecom Italia starts SLU trial in the Netherlands

Telecompaper reports that bbned, the Dutch wholesale internetprovider owned by Telecom Italia, is starting a VDSL trial in three Dutch towns in the Amsterdam area. For now, it appears to be a technical trial.
The infrastructure exists of fiber connected street cabinets, in which bbned installed VDSL gear. In other words, it uses SLU (sub-loop unbundling), instead of the more traditional LLU (running from MDF locations).
InterNLnet and SURFnet will retail the service. Speeds are 40/10 Mbps.
Bbned is also involved in munifiber projects.

Some remarks:

• As KPN is planning and building it's All-IP network (including nationwide FttExchange + VDSL2 by 2010), bbned appears to be the most committed altnet. This comes as no surprise. Orange (which denied being for sale, much like bbned itself) and Tiscali NL (which will be bought by KPN if the competition regulator NMa allows it) are on the sidelines. Tele2/Versatel is committed as well.
• When it comes to VDSL services, bbned is actually beating KPN. KPN is targeting a May launch, which is questionable now that the telecoms regulator OPTA is reviewing the All-IP plan and the market's response to it (due June). However, a bbned launch could support the case for an early KPN launch, as this shows that SLU is viable after all.
• Talking of which; Analysys produced a report which all but ruled out SLU conducted by altnets for lack of scale. In other words, as LLU becomes unavailable (when KPN closes and sells MDF locations), SLU may be realistic after all. This will make matters much easier for OPTA, which has to come up with an alternative to LLU.