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Google and Sprint sounds like a logical play

Posted January 31st, 2012 in Broadband, Google, Sprint, T-Mobile USA, wireless communications and tagged , , , , by Alton Drew

A couple posts ago I shared the idea of Apple buying T-Mobile. What would really be an act of charity would be Google buying Sprint. Talk about putting a company out of its misery. Shares of Sprint have been falling for six months and this company needs a parachute. It waged a successful legal/regulatory campaign against the AT&T,T-Mobile merger, but looks like it may be in need of some help itself.

Here is a quote from an analysis by Morningstar:

“We believe this strategy is correct, but execution has failed thus far in one critical area: financing. That Sprint needs to raise capital isn’t a surprise, given the steady debt maturities it faces during the next few years. Sprint’s initial reluctance to clearly lay out its funding needs and continued uncertainty around Clearwire CLWR have caused the market to lose faith in management. Backed into a corner, the firm was forced to accept costly terms on its recent $4 billion debt offering. Sprint should now have the financial resources to work through Network Vision, but the firm still has little room for error.”

Google definitely has resources and could be Sprint’s white knight. In addition, keeping Sprint viable is good for public policy reasons because it keeps another choice for mobile broadband access in the game.

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Antitrust war brewing in the Twittersphere?

Posted January 12th, 2012 in Google, Internet, Internet search, Twitter, antitrust, social media, social network and tagged , , , by Alton Drew

CNBC’s Julia Bornstein brings her insights to whether Google is favoring its Google + social network when consumers search the web for “@usernames”. Twitter, according to Ms. Bornstein, argues that Google suppresses the “@” sign during a consumer search, and instead sends the consumer to one of its Google search options.

The antitrust question maybe, is Google using its dominance in search to elevate its options over Twitter’s.

On the surface it seems a big what to do about nothing. If I’m that hard up to do a search for someone’s Twitter handle, I’d go to Twitter and do the search. Consumers have that option if they have problems with Google.

Hopefully the FTC or the Justice Department will find that they have other things to do.

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Time to abandon our history of making the wrong technology popular

Last September, I attended the annual National Association of Black Owned Broadcasters (NABOB) conference in Washington, DC. The keynote speaker at the luncheon was Neil Golden, senior vice-president and chief marketing officer for McDonald’s USA. During his speech, he shared an important observation. McDonald’s had determined in its marketing research that minority consumers enjoyed games of chance while white consumers enjoyed games of strategy. Mr. Golden’s point in sharing this information was to explain the success of some of its urban promotions including its popular scratch off games.

I think this view can be applied, to a very limited extent, to how we as minorities view the use of technology. From computers to cell phones, to high speed connections, these technologies were introduced to make work more efficient and profitable. Their entertainment value would come later as they were offered to the masses. While I wouldn’t describe technology’s use by the mass consumer market as chance, the early use was strategic.

I’m also suspect of a recent description of minorities as the demographic that makes technology popular. This was the premise of a recent article in NewsOne by Johan Thomas. Mr. Thomas set out to describe why blacks make technology popular. His rationale was that we adopted technology such as pagers as social tools, turning them into fashion accessories, and experimented with them while innovating their use and looks.

I believe that we popularize new technology that is affordable; I’d dare say technology that supports cheap entertainment. We won’t take a chance on broadband because, while it can be used to deliver entertainment, that delivery system is far from cheap. Yet we see all around us the application of broadband technology to productive use.

Just look at your online media companies in which I would include Facebook and Google. Look at how other going concerns use broadband for research and transmitting data. We have to ask ourselves are we taking a chance missing out on profit and employment by not being strategic in how we get broadband into more hands and how we become more effective with it.

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Apple would be a better acquirer for Yahoo! Than Google, Microsoft

Posted October 23rd, 2011 in Google, Microsoft, Yahoo, antitrust, private equity and tagged , , , by Alton Drew

Hard to miss a post in The Wall Street Journal reporting on Microsoft and Google’s play for Yahoo!, the troubled Internet portal. Microsoft, according to the report, wants to help finance part of a bid by a private equity firm to buy Yahoo! Google has allegedly spoken to two private equity firms to help them finance the purchase of Yahoo! As well.

As if the U.S. Department of Justice doesn’t have its hands full with its lawsuit to stop AT&T from purchasing T-Mobile USA. Any whiff of a horizontal merger between Google and Yahoo would have advertisers crying foul, with allegations of any joining creating a rise in online advertising rates. The relevant market (galactic) and the relevant product (online advertising and Internet search) are obvious.

A better player for Yahoo! would be a company that has a less horizontal relationship and an appreciation for building a social community around its product. A company like Apple. An Apple combination would be more vertical in nature. Apple could argue that it is merely acquiring another platform through which it can sell some content and definitely its hardware. Yahoo would just be an expansion of its stores.

Apple can also argue that it’s not in the search engine business. It’s at the mercy of a Google algorithm just like any other product provider.

Granted, there will be a couple snickers at the suggestion that Apple is at the mercy of a Google algorithm.

An Apple-Yahoo! combination will benefit Yahoo! by propping up Yahoo!’s value and keeping the regulators away.

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Do we really need government intervening in the advertisement market?

Posted September 21st, 2011 in Google, Government, Government Regulation, Internet, free speech and tagged , , , , by Alton Drew

Sounds like Expedia, Nextag, and Yelp need to create their own version of “Mad Men.” According to The Wall Street Journal, the companies will be on Capitol Hill today ganging up on Google, and making their case that the Internet’s biggest search engine unfairly diverts search engine consumers to its online properties while forcing Expedia, Nextag, and Yelp below the consumers eyeball levels.

Sometimes I believe these companies are so locked into “the cloud” that they are oblivious to the rest of their environment. Rather than seeking out innovative methods of competing, the allegedly sophisticated companies would rather have the government intervene thus making a competitive market look more like a regulated utility industry.

Forcing a middleman like Google to behave the way you want them to is a waste, and I don’t see how government intervention is going to aid competition. Competitors are not guaranteed survival.

Rather than look at Google primarily like a competitor, these companies, and the government, should look at Google like Whole Foods. If you want a higher eyeball level, pay a higher shelf fee.

In addition, whatever happened to going directly to the consumer. If Expedia, Nextag, and Yelp value their services that much, maybe it’s time for them to do some more old fashioned face time with the hotels and airlines.