The Week In Review is a weekly digest of what I found interesting in tech over the last week. It consists of the story of the week, a summary of stratechery articles and links, a huge collection of links that I found noteworthy (plus commentary), and my favorite tweets of the week. I post this weekly at stratechery and email it to the stratechery mailing list (sign up here).
This week was earnings week for Facebook and LinkedIn. On the surface, Facebook did fine, and investors appreciated their successful shift to mobile advertising. The stock is up. LinkedIn had a rougher time; although they beat expectations, their forecast suggested that growth is slowing.
My take is actually the opposite; the trouble with Facebook is that their revenue is completely dependent on advertising. This demands they monopolize user attention and time. But I’m not sure social works that way. The proliferation of messaging apps, photo-sharing apps, Twitter, etc. suggest that social is inherently fragmented.
LinkedIn, on the hand, is driving revenue growth through its recruiter offerings. To my mind that is a far more sustainable growth vector, in addition to its own ads and premium offerings.
It was a great week on stratechery. As always, I greatly appreciate your spreading the word about stratechery and following @stratechery.
Articles | Linked List Items | Other Links Worth Reading | Tweets of the Week
Apple Rejects Google Now; EU to Investigate
Google released Google Now for iOS. Some suggested that this showed how Android was a failure, but I see it as a validation of Google’s strategy. The fact the iPhone has competition means Apple can’t risk competing on the services layer.
If Not for Android, Where Would Google Be?
This was a follow-up piece, and a response to John Gruber. While John focused on Apple’s motivations vis a vis Google Now, I argue that Google acquired Android for the primary purpose of ensuring that no-one dominated mobile. And, in that light, it’s been a success.
Intel has a new CEO, and the situation facing him is not dissimilar to the situation facing Andy Grove in 1987. I argue that the remedy today is the same as it was then: Intel needs to embrace a new identity. In this case, it is the identity of a manufacturer, manifested by the willingness to manufacture other’s chip designs.
Linked List Items
- Thorsten Heins is Not an Idiot, But He May Be a Fool — link — There actually is a plausible explanation for Heins argument that tablets are not a sustainable market, but in that explanation Blackberry is doomed.
- Apple, Open and Learning From History — link — Benedict Evans had a must-read about how the phone market is nothing like the old PC market. I piled on by noting that Apple didn’t lose the PC market to Microsoft; they never owned it in the first place.
- HTC Stalls — link — It’s good to see that HTC’s current CFO and CMO seem to know what they’re doing. Unfortunately, their former ones didn’t. A crash seems imminent.
Around the Web
News & Analysis:
- Shazam Gets New CEO, Gears Up for IPO — link — Shazam is most well-known for their music identification app, but they are making a big push into second-screen advertising
- French Government Kills Yahoo’s Proposed Acquisition of Dailymotion — link — France currently has 21% of all European VC investment; actions like this should cut that considerably
- Cheezburger Cuts 35% of Staff as It Looks to Make Transition From Desktop to Mobile — link — Each content-consumption transition (paper->monitor->mobile) has increased viewers and ad opportunities. Nothing wrong with the former, but the latter has driven the value of said opportunities to zero.
- SoftBank’s Son: ‘Big Mouth’ Ergen Wrong Fit for Sprint — link — This saga is increasingly entertaining. That said, I’m solidly in favor of SoftBank; ideally they can repeat what they did to wireless in Japa.
- Gameloft Announces that They’ve Optimized 10 of Their Titles for Samsung’s New Galaxy S4 — link — An interesting development if it turns into a trend, but I’d wager this was funded by Samsung.
- Asian Chat App Line Passes 150m Downloads Thanks to Growth in Spain and Latin America — link — I remain very bullish on LINE.
- Lenovo-IBM Talks Over Server Business Break Down — link — I think this deal will still happen; IBM is smart enough to know branded servers aren’t worth what they want, and their investors will be pushy enough to make the margins unacceptable.
- Alone Together: Will One Messaging App Rule Them All? — link — Good overview of the current state of messaging by The Verge.
- Adobe to Bring Lightroom-style Photo Editing to Tablets — link — I’ve been making a real effort to move to a web + app workflow; the benefit from having my preferred tools available everywhere outweighs the benefits of using desktop software for me. The one hole has been photos. I use RAW, and adore Lightroom. A cloud-based version would be very interesting for me personally.
- What It Cost Apple Last Quarter to Smooth China’s Ruffled Feathers — link — Apple’s appeasement cost almost 100 basis points in margin. Who knows how much it cost in valuation.
- S. Korea Nears Decision on Google Antitrust Case — link — I am fascinated by this. Samsung is so deeply interwoven into South Korean society that it’s hard to imagine a decision that doesn’t reflect Samsung’s wishes. So what are those wishes?
- Barnes & Noble Puts Google’s Play Store and Apps on the Nook — link — This is the end of Nook. What future is there for a bookseller in being an Android OEM?
- U.S. Cellular Embraces the iPhone After Rejecting It — link — This is why.
- Amazon Appstore Opens in China, Leaps Final Hurdle Before Kindle Fire Launch — link — One interesting factoid in this article is that Google Play doesn’t support payments in China. This isn’t surprising actually; credit cards aren’t very widespread in China. Then again, neither is Google Play.
Charts of the Week (New Section!):
- VOD Usage Survey, April 2013 — link — Interesting numbers from VODProfessional in the UK. Overall video-on-demand is up 50% yoy, and young people and me prefer iOS devices.
- HTC and Samsung — link — Visual evidence of how Samsung is crushing HTC in marketing.
- Big-box Retailers Are Not Helping PC Sales — link — Dell first fell behind HP because of the desktop->laptop transition; customers needed to hold what they were buying, not just order it directly. The same dynamic exists in the transition to touch, but in this case, customers need to use and interact with what they are buying, not just hold.
- Apple: News, Noise and Value — link — A very good overview of Apple from a valuation perspective. I agree with most of this.
- The Strategic Importance of Intel’s New CEO — link — Good background on the new CEO and what’s next, and an interesting aside about Renee James, the new president.
- An Interview with Horace Dediu by the Next Web — link — It’s Horace Dediu, you know it’s good.
- Teens Aren’t Abandoning “Social.” They’re Just Using the Word Correctly. — link — Most people use Facebook for reconnecting with classmates. So why would you use it when you see your classmates every day?
- The Whole Problem Is That There Is No Housing Boom In Silicon Valley — link — Great overview of how poor policy is screwing up the Silicon Valley economy.
- I’m Still Here: Back Online After a Year Without the Internet — link — I have to admit, this retrospective on Paul Miller’s year without the Internet was really good. See also Wes Miller’s spot-on appreciation for Twitter (and he only went without for four days).
- What’s Tylenol Doing to Our Minds? — link — The same pathways that help with physical pain seem to moderate existential distress.
- Hard Knocks: Shanghai — link — This feature about the attempt to establish American football in China was really good.
- Warren Buffett is Bullish … On Women — link — Buffett’s second ever tweet (the first is below) was about the potential for growth that will result from fully utilizing women in the economy.
- Deep Inside Taco Bell’s Doritos Locos Tacos — link — Interesting read; the entire concept was developed without a contract in place.
Tweets of the Week
- “It looks like the USA was well under 10% of Q1 Android sales.” @BenedictEvans
- “Yahoo Weather app is uncharacteristically well designed. Has anyone checked its accuracy?” @counternotions
- “Google Now: Your willingness to give yourself to the machine will make or break how useful the next generation of Internet is to you.” @panzer
- “The Microsoft ad for Windows Phone is highly accurate. In a room full of people, there are only two Lumia owners. http://youtu.be/Z19vR1GldRI” @WhatTheBit
- “To retrace 58% from its $705 highs (as it did in 2007-08), $AAPL would have had to go down to $300. Good thing no one used Twitter back then” @ericjackson
- “I wish $AAPL would stop going up so we can all go back to being normal and smug.” @counternotions
- “Masayoshi Son: “I deliver the results rather than big-mouth.” Well, to be strictly accurate, he does both.” @benedictevans
- “‘BlackBerrys themselves are no longer a good business model.’ —Tablets” @treestman
- “Apple’s $17 billion debt offering receives $50+ billion orders. (folks are seeking “safer” yield wherever they can find it)” @SammyWalrusIV
- “$MSFT trading at highest point in past 5 years. Maybe decline of PC industry should have happened sooner?” @Carnage4Life
- “‘We have to get past the idea that for Apple to win, Microsoft has to lose’ – Steve Jobs. Applies much more to to Google, actually @benedictevans
- “This tweet concludes my year of not using a single ÿ character on the Internet.” @gaberivera
- “How the farm truck acquired the conveniences of cars to become today’s consumer truck could be a good model for PCs” @fmanjoo
- “Trying to figure out why a discussion on ‘flat’ UI would trigger Twitter porn spam. I’m guessing it’s not a good porn site.” @treestman
- “It’s hilarious that @Dailymotion was considered a pirate to be killed and now is an ‘asset of national interest'” @fdestin
- “Good design is far less subjective than those who are bad at design would lead you to believe.” @levie
- “If you’re still against single-payer or public-option health care, I bet you’ve never tried to run your own business.” @marcoarment
- “Facebook Home and Google Glass have much in common: produced in a bubble by people who live in their product & assume everyone else does too” @benedictevans
- “There has to be some measure of irony in Facebook restricting Path’s API access due to privacy concerns, but it escapes me.” @counternotions
- “Warren is in the house.” @WarrenBuffett