Wider Streets for Internet Traffic

Our taste for the Internet is insatiable — traffic is growing so fast that its transmission systems may soon be filled to capacity. But scientists are coping, finding ingenious ways to satisfy our deep bandwidth hunger.

Of course, they can’t accelerate the speed of light as it flies down the glass fibers of central networks carrying our Internet messages worldwide. The laws of nature limit that. Yet they can tap other characteristics of light to pack layers of information into each optical fiber in the network, so that far more data can flow simultaneously down those glass backbones.

Old systems used light that was either on or off — like flashlight signals — to send information along the fibers in the binary language of zeros and ones. But light is an electromagnetic wave, so it has a whole electrical field that scientists are now putting to work to add to the information on each wavelength.

Alcatel-Lucent (NYSE: ALU) recently announced a system for telecommunications service providers that takes advantage of both the polarization and phases of light to encode data. The system can more than double the capacity of a single fiber, said James Watt, head of the company’s optics division. Such a system, for example, can transmit more than twice the number of high-definition TV channels than can now be streamed concurrently.

The new equipment is part of a continued research drive to increase the capacity of each strand of optical fiber, said Keren Bergman, a professor of electrical engineering at Columbia University and head of its Lightwave Research Laboratory. “We are stuffing more information in the same space,” she said.

A fiber is no thicker than human hair, but can carry many wavelengths of laser light, with each wavelength adding to the bits transmitted per second. The bit rates now attainable are in the billions (gigabits) per second or even trillions (terabits) per second.

The need for core network improvement is pressing, said Stojan Radic, a professor of electrical engineering at the University of California, San Diego. “We are looking at a point soon where we cannot satisfy demand,” he said. “And if we don’t, it will be like going over a cliff.”

Demand is continually growing, somewhere below street level, as details of our e-mail, bank balances and national security zip along on light waves. And consumers can’t get enough video clips on YouTube, television shows on Hulu, and movies streamed to them by Netflix that they watch on their computers and TVs.

But that’s just a fraction of the traffic. Add to it the many demands of cloud computing and countless mobile devices and information databases, for example, and the totals become even harder to imagine.

Next-generation systems that can handle this future traffic jam are being developed by many companies, including Ciena in Linthicum, Md., and Infinera in Sunnyvale, Calif. Alcatel-Lucent says it has begun to sell equipment that transmits up to 88 channels of information, each operating at 100 gigabits a second, but it has not disclosed customer names.

The new equipment from Alcatel-Lucent is expected to reduce the cost per transmitted bit of information, compared with existing equipment, said Paul Louis Ross, a company spokesman. The systems are based in part on the work of the researcher Gabriel Charlet, a scientist at an Alcatel-Lucent Bell research facility in France, who last year sent data at a rate of 7.2 terabits a second over a single fiber more than 7,000 kilometers long.

All of those added gigabits take advantage of the complex way that light can be used to encode data. In the past, when only the intensity of light was used, the signals could transmit only one bit per time slot, said Govind Agrawal, a professor of optics at the University of Rochester.

By contrast, in the new system from Alcatel-Lucent, two binary digits or bits can be encoded by using four phases of light. And the polarized light can vibrate up and down or sideways. In this way, four bits of data can be transmitted per time slot instead of one, said Andrew Chraplyvy, a scientist and executive at the Bell Labs of Alcatel-Lucent in Crawford Hill, N.J., where fiber-optic research originated in the 1960s.

Scientists have long known how to use polarization and phases of light to encode information, said Dr. Chraplyvy, a winner of the prestigious Marconi Prize for his work in communications and information technology. “Although we could do it, we never needed to before, because the capacities we had were enough,” he said. “Now that capacity is running out.”

Dr. Adel Saleh, a program manager at the Defense Advanced Research Projects Agency, or Darpa, in Arlington, Va., agreed. “The traffic requirements on the Internet double every two years,” he said. “This is why we are struggling to keep up.”

Written by Anne Eisenburg

MarketWatch: IBM to buy Netezza for $1.7 billion

IBM Corp. on Monday said it has agreed to buy Netezza Corp for $1.7 billion, joining other tech giants in the scramble to expand their data-storage portfolios through acquisitions.

Shares of Netezza Corp. (NZ)   soared more than 12% early Monday to $27.63, after IBM (IBM)   unveiled the deal to buy the data analytics company for $27 a share. IBM’s stock was up more than 1% to $131.50.

The purchase price represented a roughly 11% premium on Netezza’s closing price last Friday.

The price also was about 80% higher than the company’s share value in late August. That was when another data-storage company, 3Par Inc., found itself in the middle of a heated bidding war between Hewlett-Packard Co.  (HPQ)   and Dell Inc. (DELL)  , underscoring the growing importance of data storage in the corporate-tech market.

H-P won the bidding war, grabbing 3Par for a whopping $2.35 billion, a price some analysts said was excessive.

In a prepared statement, IBM described Netezza as a “leading provider of high-performance analytics in a data warehousing appliance that can be up and running in a matter of hours, handling complex analytic queries 10 to 100 times faster than traditional systems.”

The fact Netezza was trading above IBM’s deal price strongly suggests that Wall Street may be expecting another bidding war.

“We could see additional higher bids for Netezza, as we have seen this dynamic in some other technology takeouts over the past two years,” Roth Capital Partners analyst Nathan Schneiderman said in a note.

“We consider Hewlett-Packard as another potential bidder,” he added.”As such we recommend investors to keep their position rather than sell with the idea that another bidder may appear.”

Bernie Spang, director of strategy for IBM’s software group, said the interest in Netezza highlights the value of the company and business analytics.

“Clearly the value of Netezza is unprecedented when organizations of all sizes are looking to grow their analytics capabilities,” he said in a phone interview.

IBM, under Chief Executive Sam Palmisano, has invested $22 billion in buying roughly 100 companies since 2003, a company spokeswoman said. Big Blue plans to invest another $20 billion for acquisitions over the next three years, the company said.

Data storage has become more important as businesses embrace the trend of cloud computing, which companies access computing power through a network, instead of in-house data centers.

Although Dell lost the 3Par bidding war, some analysts have speculated that the company may be eyeing other acquisition targets, including Netezza, CommVault Systems (CVLT) , Isilon Systems (ISLN)   and Compellent Technologies. (CML)  

Shares of CommVault were up more than 3% Monday morning, while Isilon was up nearly 2%

Original report

Why Intel’s M&A Binge Will Fail – Buying Growth is Not a Strategy

Intel’s recent acquisition binge has been enormous—they’ve spent almost $10 billion in the past month on TI’s cable modem division, security software maker McAfee, and Infineon’s Wireless Solutions (WLS) business.

At last week’s Intel Developer Forum, CEO Paul Otellini talked about this massive acquisition spree like it’s predestined to succeed. But if we look back in time, Intel’s pitiful M&A track record suggests this couldn’t be further from the truth.

Between 1999-2003, Intel spent over $11 billion buying about 40 companies, and the vast majority of these acquisitions failed. In fact, of the 15 largest acquisitions in its history, Intel has shut down or sold off the acquired products in every single case (aside from Wind River which is too recent to include).

This is an awe-inspiringly bad track record, and likely puts Intel as the worst acquirer in tech history. There isn’t even a Wikipedia acquisition page for Intel like there is for Google, Microsoft, Cisco, and Apple. If I were a conspiracy theorist, I’d say Intel’s corporate PR department had Wikipedia remove the page.

Only kidding. But the truth is, Intel doesn’t want the media and public to remember how bad they are at M&A. They want everyone to believe it will be different this time.

The Reasons Behind Intel’s Past M&A Failings

Intel has become dominant off of one single product category: PC processors. They love how easy it is to make money in PCs, and even do things like sell 100% margin scratch-off cards to consumers to “unlock” features (it’s amazing what you can sell when you have a monopoly).

Intel isn’t good at innovating outside of PCs / servers primarily because a “not invented here” (NIH) culture prevails within the company, causing internal teams to reject products which originated elsewhere, or which serve non-core markets.

Intel’s missteps outside PC processors are vast. First was the failed diversification in the 1999 – 2002 communications boom. Then Intel made a massive splash at CES in 2004 with a technology called LCOS for digital TVs, only to kill it later that year. And of course Intel tried once and failed in mobile, selling off its XScale division to Marvell in 2007.

It’s fine to fail fast like companies sometimes do with products (e.g. Google Wave), but with Intel we’re talking about a different type of failure: overpaying for bad acquisitions and a complete inability to wean itself off of PCs.

Unfortunately, M&A is Not a Strategy

In addition to its cultural resistance to outside innovation, Intel has also tended to rely on ad hoc M&A as its growth strategy. This is bad. M&A should be used to augment a corporate strategy, not as a strategy to grow in and of itself.  In this way Intel faces the classic innovator’s dilemma as they attempt to reach beyond PCs and grow through acquisition.

McAfee and Infineon are huge risky roll-up bets—Intel has very little presence in security and mobile today, and McAfee is the largest deal in corporate history. Synergies will not be realized unless the technology, operations, and people are rolled successfully into existing Intel product lines.

And large roll-up acquisitions in technology can’t typically rely on cost synergies—they must produce additional revenue synergies. In this context it’s very revealing that Intel has publicly hedged, talking openly about how both Infineon and McAfee can be operated autonomously.

But operating these companies autonomously isn’t what Intel promised to shareholders when it comes to growth and diversification beyond PCs into new markets.

And there are already ominous signs for Intel: Rumor is that Apple has already ditched Infineon for Qualcomm in iPhone 5. This is pretty ironic following Intel CEO Paul Otellini’s public gloating about Steve Jobs being “very happy” with Intel’s acquisition of Infineon. And very bad for Intel since Apple was Infineon WLS’s largest customer.

So though only time will tell if it will be different this time for Intel, it certainly isn’t starting well. And it’s tough to see how these huge sprawling acquisitions into new markets will work given Intel’s record of poor execution.

Written by Steve Cheney of TechCrunch

Is Android Surging Only Because Apple Is Letting It?

This weekend, I’ve been catching up on some reading. One post that was of particular interest to me was David Beach’s article from last week about developing for Android. Beach, who is a product manager at eBay Mobile and a co-founder of 12seconds, basically says that the experience sucks for a number of reasons (all of which Google can fix, but will take quite a bit of work and time). But one quote in particular stuck out to me:

Android has succeeded despite Google. In fact it’s safe to say that Android is successful for one primary reason. The iPhone is only available on AT&T. If the iPhone was on Verizon a year ago, Android would be no where near as popular.

Obviously, Beach isn’t the first person to bring this idea up. But he brings it up in a way that he’s able to back-up his feelings from a developers’ perspective, while at the same time roping in what isn’t ideal from a consumer perspective about Android as well.

This is going to sound like flame bait, and everyone knows that I love the iPhone — but I have to agree with Beach. I’ve used no less than six Android phones for extended periods of time over the past couple of years. I really am trying to like them. But I just can’t.

Now, don’t get me wrong, almost all Android phones are a million times better than the phones we had just a few years ago before the iPhone burst onto the scene. And if the iPhone didn’t exist, there is no question that I would use an Android phone and would probably be very happy with it. But the iPhone does exist. And I simply can’t bring myself to use an Android phone when I know a superior device is out there. That’s my only requirement for me to use a product: it has to be the best.

The only valid argument I can see for the iPhone not being the best is the AT&T requirement. So let’s put that aside for a second.

While I obviously understand that people have different tastes, I can’t see how you can objectively say that the overall experience of using an Android phone isn’t worse than using an iPhone. There are a dozen or more elements that are better about the iPhone. Everything from the big: the App Store versus the Android Market (from the consumer perspective) — to the little: the multi-touch and overall touchscreen responsiveness.

Even the most diehard Android loyalists I know (like Jason and Mike) will readily admit that the iPhone offers a better user experience. So why do they love Android (again, besides the lack of AT&T requirement)? The openness. They hate that you can’t get Google Voice on the iPhone (I hate it too). And in general they hate Apple’s restrictive policies for the App Store (which I don’t like either). But those are problems that most regular consumers don’t think about — or realize exist at all.

Instead, like Beach says, the thing some consumers don’t like about the iPhone is that it’s AT&T only (in the U.S., obviously). Even if you live in an area where AT&T doesn’t absolutely suck, having no choice of carriers is a big restriction. People have work plans, family plans, etc, etc, that they just can’t switch. Or they don’t want to.

If the iPhone was on Verizon (which is a larger network, remember), is there any question that it would be selling at least double the amount of units it is right now in the U.S.? I don’t think so. What if it was available on all the networks? And what would happen to Android sales if that was the case? That is the big question here.

Next year, it’s looking increasingly likely that we’ll get at least a partial answer. If the iPhone is available on Verizon or even just T-Mobile, will the pace of Android sales slow down in the U.S.?

I know a number of people who are Android users simply because of the iPhone/AT&T restriction. If and when the devices comes to Verizon, they will jump ship. The big question is: will millions of others follow? Or, perhaps more importantly, will millions of new users that would have gone with Android now go with iPhone?

I’m seriously curious to know why you like Android over the iPhone if you do. Is it because of the openness ideal? Is it the variety of devices? Is it the variety of carrier choices? Or is it something else?

The Market is a mess, the media situation is arguably worse, and the user experience is still just off when compared to the iPhone. Google is working on improving all of those things, but Apple is rock solid in all of those areas right now. Both sides will keep improving, but Google’s problem is that Apple is ahead and has remained ahead. Can Google surpass them? I’m just not sure I can see how unless Apple regresses — which they’ve shown no signs of doing. What I can see is a Verizon iPhone. And so do plenty of others.

Apple and Google are in the midst of a PR war for who is activating more devices each day. Google is doin 200,000 a day. Apple is doing 230,000 a day. But Apple says Google’s numbers may include upgrades. Google says Apple is wrong. This will go on and on.

It’s great that there is competition in the market right now. But would it be as fierce in the U.S. if it weren’t for the AT&T situation? Would most people just be using an iPhone? Beach states it as a fact, but I don’t think it’s an unreasonable question to consider. And it’s something I’m sure Google is considering as the Verizon iPhone approaches.

Article by MG Siegler of TechCrunch

Behind The Bidding War: The Real Reasons Why HP (NYSE: HPQ) And Dell (NASDAQ: DELL) are So Desperate For 3Par

At $30, HP’s current offer is the sixth bid, a 200 percent premium over 3PAR’s previous $10 share price. Not only is this insane, but it’s also nearly unprecedented in M&A history. And since 3PAR is trading above $32 the market thinks Dell will bid even higher.

First Off, Is 3PAR Really THAT Unique?


Yes and no.

3PAR is a classic disruption play, its value proposition based on the premise that unused storage is wasteful—often times just 10% to 25% of allocated disk space is actually used.

3PAR’s “thin provisioning” technology enables disk space to be allocated only when applications need capacity, greatly reducing IT management costs. Think of it as storage on a just-enough and just-in-time basis.

In the cloud era, pre-allocation of storage is especially wasteful, because on-demand storage and computing services delivered via the internet have wide variability and less deterministic usage patterns. This makes 3PAR a great fit for data centers, and it’s partly why the technology is suddenly perceived as very valuable.

Not surprisingly large storage vendors have been slow to adopt technologies like 3PAR’s for a simple reason: making storage more efficient ultimately means selling less gear and is essentially akin to committing commercial suicide.

EMC CEO Joe Tucci actually once went on record admitting as much saying “If I only have hardware and I just keep helping to make you more and more efficient at less and less cost, eventually I’m going to hit a wall and it’s going to be tough for me to make money.”

HP’s Vanishing R&D Budget and The Mark Hurd Effect

This classic “Innovator’s dilemma” definitely applies to HP. But something else has hamstrung its ability to innovate in high-end storage, a market HP has been a leader in for many years.

And it’s correlated to former CEO Mark Hurd’s recent firing. Word on the street is Hurd wasn’t let go for his affair or even for his embellishment of trivial expense reports. Instead the board kicked him out because his employee approval rating was absolutely atrocious.

And the reason employees hated him is because he traded short-run profits for long-term innovation by laying off entire design teams and killing HP’s R&D budget—take a look at this chart and compare HP to Cisco and IBM, both storage leaders.

In this way, I believe acquiring 3PAR is actually the beginning of a secular trend for HP in using M&A to “make good” on the company’s lack of organic innovation.

Yes that’s right, believe it or not, the real reason why HP’s board is obsessed with 3PAR is closely correlated to Hurd’s departure—divisions like HP’s storage group simply haven’t kept pace with peers. I used to sell to HP’s storage groups (as well as Dell and 3PAR) and have plenty of friends who tell me that projects have been canned and innovation has languished.

Dell is Desperate for Similar Reasons

Innovation within Dell is even more of an oxymoron. If you thought HP’s R&D allotment was low, compare it to Dell’s. Dell is not an engineering driven company. They are a system integrator desperate for growth outside of the personal computing market.

And storage consolidation threatens Dell for another reason. Storage has traditionally been like a cross selling catalog, with vendors filling in their product portfolios by OEM’ing equipment from others—Dell actually resells EMC’s high-end storage gear today. But these cross-sell deals are becoming more tenuous to defend as vendors build out more complete portfolios.

This is because cloud computing requires complex virtualized resource allocation, management and provisioning. Vendors are increasingly moving up the stack in providing services beyond hardware, which is all but a commodity.

Owning 3PAR would give Dell a chance to stay in the game and complement the low end storage solutions it acquired from EqualLogic in 2007. And the Dell board is prepared to break the bank since there is a scarcity of other good high end storage virtualization plays (Pillar Data and Compellent are two of the largest, but don’t have 3PAR’s traction).

Why HP Will Probably End Up with 3PAR

So there you have it. With its DNA as a system integrator, Dell doesn’t have a hope in hell of organically growing complex ASICs and software like 3PAR has, and is desperate to move up the food chain and stop reselling EMC’s portfolio. And the HP board is tacitly admitting it needs to rectify the fact that Mark Hurd sort of killed the “HP. Invent” culture. 3PAR would give HP several hundred R&D focused engineers and a talented ASIC team.

The interesting thing about this bidding war is that it conveys a larger lesson about why M&A often fails.

It’s easy to listen to investment bankers and overpay on acquisitions. But it’s much harder to actually handle post-merger integration. Dell is the perfect example. They have essentially no precedent for running an ASIC team, and would take a company like 3PAR that spent 25% of its revenue on R&D and eventually starve it.

3PAR is a better fit for HP, and in the end it’s likely that they will prevail. It sure seems that way anyway. HP’s board is set out to make up for lost time and right its innovation ship regardless of cost to shareholders. But the synergy premium for 3PAR will be enormous, and history suggests that deals with such a massive allocation of acquisition goodwill generally fail to pay for themselves.

Article by Steve Cheney of TechCrunch

Hewlett-Packard Trumps Dell’s Takeover Bid for 3Par (NYSE: PAR).

Hewlett-Packard Co., the world’s largest personal-computer maker, offered to buy 3Par Inc. for about $1.6 billion, topping Dell Inc.’s bid for the maker of equipment and software for data centers.

The bid of $24 a share in cash is 33 percent higher than Dell’s offer, HP said today in a statement. Dell offered $18 a share in cash, or about $1.15 billion, for 3Par on Aug. 16.

HP and Dell are seeking to add technology as they challenge International Business Machines Corp. in the market for more complex computer systems and technology services that yield higher profits than desktop and laptop PCs. Fremont, California- based 3Par makes hardware and software that makes it easier and cheaper for companies to store information. Its stock rose past HP’s offer, signaling some investors expect a bidding contest.

“One of the growth areas in technology is in the enterprise storage space,” said Joel Levington, managing director of corporate credit at Brookfield Investment Management Inc. in New York. “3Par’s products fit well in there. It’s an easy way to gain product breadth.”

3Par rose $7.26, or 40 percent, to $25.30 at 11:20 a.m. in New York Stock Exchange composite trading. The stock closed at $9.65 the last trading day before Dell’s bid. HP, based in Palo Alto, California, fell 94 cents to $38.91. Round Rock, Texas- based Dell lost 15 cents to $11.92 on the Nasdaq Stock Market.

‘Exorbitant Price’

HP’s offer values unprofitable 3Par at almost 2 1/2 times what it traded at before Dell’s bid, and at more than eight times its sales of $194.3 million in the year ended March 31. 3Par’s sales rose 5.2 percent from fiscal 2009, and it has about 670 employees.

“It’s a very exorbitant price,” Levington said. It probably wouldn’t make economic sense for Dell to top the bid, he said.

Both Dell and HP have already expanded their data-center businesses through acquisitions. HP bought Marlborough, Massachusetts-based 3Com Corp., a networking-gear maker, for $2.7 billion this year.

Dell bought EqualLogic Inc. in 2007 for $1.4 billion as the foundation for its data-storage offering. Last month, Dell agreed to buy closely held storage company Ocarina Networks and server-computer maker Scalent Systems Inc.

Other rivals are also racing to broaden their enterprise- technology businesses through acquisitions. Oracle Corp., the world’s second-biggest software maker, bought Sun Microsystems for about $7.3 billion to expand into hardware.

Hurd Departure

3Par was co-founded in 1999 by Chief Technology Officers Jeff Price and Ashok Singhal, who had previously worked at Sun Microsystems Inc. CEO David Scott, who previously worked at HP, has held his position since 2001. Another 3Par co-founder is Robert Rogers.

3Par’s chairman is Kevin Fong, a former managing partner at Mayfield Fund, a Silicon Valley venture-capital firm that invested in Internet shares as the dot-com bubble burst in 2000.

3Par will add to HP’s strategy of combining storage, server and networking products, Dave Donatelli, who heads HP’s storage and server division, said today in an interview. The company will increase 3Par’s revenue by selling its products overseas and investing in its research and development, he said.

HP’s offer is its second bid for the company, Donatelli said. The PC maker has been in talks with 3Par for “some period of time,” he said, declining to comment further.

Two weeks ago, Mark Hurd stepped down as HP’s chief executive officer, following an investigation that found he falsified expense reports to conceal a personal relationship with a marketing director.

David Graves, a Dell spokesman, didn’t respond to requests for comments. John D’Avolio, a spokesman for 3Par, didn’t immediately comment.

The deal, which would close this year, is at least the third purchase for HP worth more than $1 billion in less than a year. The company agreed to buy 3Com in November, and in April it agreed to pay $1.2 billion for smartphone maker Palm Inc.

Written by Katie Hoffmann
Source: http://www.businessweek.com/news/2010-08-23/hp-offers-1-6-billion-for-storage-maker-3par-topping-dell-bid.html

Why Isn’t Google a $1,000 Stock by Now?

On this day six years ago, high-tech got a godsend: Google went public. It started at $85 a share and doubled in 67 days. The stock doubled again in 12 months, and it had doubled a third time by two years later.

That’s up eight-fold in three years and two months, if you do the math. And then, on November 6, 2007, Google hit its all-time closing-price high of $741.79.

But lately Google trades below the $500 mark. The Dow, soaring off the lows of March 2009, still is down 26 percent from its high in October ’07; Google stubbornly remains 35 percent below the high it reached the same month.

Do investors have it wrong—or is Google itself doing something wrong? My answer would be . . . yes.

By sheer numbers a higher price should apply to the world’s dominant search engine on a global network that, in a few years, could link a trillion devices. In three years since hitting that high, Google has doubled revenue, almost doubled already-prodigious profits, more than doubled its cash on hand (to $30 billion!) and doubled its total assets.

It’s not enough. That, at least, is what investors are saying. Today Google trades at 21 times trailing earnings, about where the broader market lies. But isn’t this company worth more, pound for pound, than the typical S&P old-guarder?

A few years ago a scary-smart tech consultant gave me a good rap on why Google, in five or ten years, might grow to $1,000 a share.

For one of the first times in the history of advertising, this guy observed, Google brought together the ultimate dream for marketers: It could deliver an ad that customers themselves sought out, for precisely the product they were shopping for at that moment, in a venue that let them buy it instantly, right then and there.

Remember that old saying from the 1920s retailer, John Wanamaker? He knew half his ad budget was wasted, now if only he knew which half. Google promised to change all that.

This approach served the company remarkably well. As 2007 ended, Google had full-year revenue of almost $10 billion; net income of $4.2 billion; $14.3 billion in cash, and total assets north of $25 billion. This, for a company less than a decade old.

Now, just three years later, Google is likely to have revenue of $26 billion; net income exceeding $7 billion; $30 billion in cash, and total assets of almost $50 billion.

The biggest reason for Google stock’s ennui is the same, old same-old for any maturing tech superstar: Growth is slowing. The Law of Large Numbers. Adding resistance to Google’s rise are the global economy’s near-death experience, advertising’s role as the first thing to get cut in a downturn, and investor fickleness.

But the company itself also may be to blame. Google is driven by brilliance and hubris and attention-deficit hyperactivity disorder. Instead of focusing ever harder on its core—providing smarter search results and better-tailored ads for what you’re looking for, thereby boosting the only real revenue stream the company has—Google has wanderlust.


Google By the Numbers: A Closer Look

Giving Napoleon the finger, Google fights wars on myriad fronts all at once. Its Android software in smartphones takes aim at Apple’s iPhone. It offers free software apps and Chrome OS, undercutting Microsoft’s business for no other real purpose than just to mess with them.

Google also is tackling Apple iTunes in online music, trying to bear-hug (or maul) the broadcast networks and cable channels in Net-tv, and meddling in books on-shelf and online. Ever omnivorous, it’s itching to get into Facebook’s face in social networking.

The conceit of all this activity is that it will spur more searches and more ad-clicks, with Google collecting more revenue. (My suspicion: The real motivator is that these guys would get bored fast if search were their only sandbox; that, or they already did.)

Sun Microsystems made similar claims that its free Java programming language would drive sales of Sun servers, in the years before it faltered and ultimately faded into Oracle.

Google’s case is far more convincing, especially as it girds for the next online ad boom: extremely local real-time ads to your GPS smartphone as you Net-surf and text with friends.

Long-term the opportunity is enormous for this already-giant company. Online ads are still only 10 percent or so of all ad spending, online retail sales are at a similar share of all retail—couldn’t both businesses double to 20 percent of the pie or more by, say, late this decade?

But in the near term, investors need to see the potential for higher growth now, and that leads them back to Google’s raison d’etre: search ads and how much marketers are willing to spend on them.

The Google guys don’t seem to rhapsodize much these days about the frontiers of perfect search, not when they have platforms to fight for and wars to wage with Apple and Microsoft.

I’d love to see Google create an entirely new breakthrough in display ads online; or make video a mainstay of search ads; or forge a new people-search “vertical” for missing or estranged loved ones; or even devise a system letting millions of people place instant personal ads aimed at only a few dozen like-minded neighbors. You know, search-ad stuff, Google’s real business?

And wouldn’t it be great if searches got more surgical, more anticipative and adaptive, more intuitive and useful? The other day I googled up the latest on a hotel hotspot in New York and was offered reservations for a similarly named outpost. In Switzerland. Now, that’s just . . . silly.

Article by Dennis Kneale
CNBC Media & Technology Editor

Source: http://www.cnbc.com/id/38770266

Voice-activated Commands, Google’s latest Android innovation.

Today at Google’s office in San Francisco, the mobile team took the stage to unveil a couple new products. Hugo Barra, Google’s director of product management for mobile kicked off things by noting that we’re entering the mobile supercomputing era. What he means by this is that thanks to computation in the cloud, modern mobile devices are actually more like supercomputers.

The first new feature Google showed off was the ability to send text messages with your Android phone — using only your voice. This is a part of Google’s new Voice Action feature in their new version of the Voice Search application which is available starting today for Android phones. It’s awesome — but that’s not the only voice action, there are 12 of them (plus search) — and growing.

Another feature is the ability to call any business in Google Search. This does not have to be a company in your local contacts app — it can be any business. Another feature is driving directions in their navigation app. Another feature is searching for music on the web — again, any music on the web, not just music you have locally. These songs can then launch in apps you may have on your Android phone — such as Pandora or Last.fm.

Also included is the ability to dictate email messages — and again, it actually works. Google showed this off in a live demo on stage.

Another cool one was the ability to set an alarm on your phone simply by speaking. Basically you can now control almost anything on Android devices with your voice. And, of course, there’s a “Note to self” feature — a way to give yourself vocal reminders (these are sent to your email so you remember them later).

Here’s a list of the current voice actions:

  • send text to [contact] [message]
  • listen to [artist/song/album]
  • call [business]
  • call [contact]
  • send email to [contact] [message]
  • go to [website]
  • note to self [note]
  • navigate to [location/business name]
  • directions to [location/business name]
  • map of [location]

Apple offers similar voice control features for the iPhone — but it’s extremely limited compared to this. For example, that is all based on information you have on your phone. Google’s solution is basically anything they index on the web AND whatever is on your phone.

This feature comes pre-installed on the new Droid 2 phones, we’re told. Sadly, this is only available for Android 2.2 and later. And these voice actions are only available in U.S. English for now. Google promises other languages will be coming shortly.

See more in the video below:

http://techcrunch.com/2010/08/12/google-voice-actions/