Friday, September 19, 2008
Thursday, September 4, 2008
A Printer That Won’t Blemish a Stylish Workspace
The lowly printer has long been hidden under our desks, thoroughly out of sight. Epson’s new Artisan 800, however, is easier on the eyes than the traditional gray box.
This glossy black inkjet printer looks more like a sleek piece of modern furniture than a boxy peripheral. It supports Wi-Fi printing and includes a swiveling touch panel and a 3.5-inch L.C.D. screen for viewing pictures before printing them.
The printer can produce graph and college-ruled paper on the fly and also print labels onto inkjet-compatible optical discs. It prints 38 pages a minute in black and white and can print an 8 by 10 photo in 50 seconds. It includes a scanner and copier with a resolution up to 4,800 dots per inch. The Artisan 800 costs $300 and will be available later this month. Of course, owning an attractive printer brings its own problem: do you have the desk real estate to display it?
A Magazine for the Rich (and Lucrative Ads)
SELLING any print advertising these days means sailing against the wind, but as some categories battle a gale, the safest harbor is in ads for luxury consumer products.
Enlarge This Image
Mark Lennihan/Associated Press
Removing microphones after introducing WSJ. Wednesday were, from left, Ellen Asmodeo-Giglio, its publisher; Michael Rooney, Dow Jones chief revenue officer; Tina Gaudoin, WSJ. editor in chief; and Robert J. Thomson, managing editor of The Journal.
That is the theory behind WSJ., the new magazine from The Wall Street Journal, which was unveiled to reporters on Wednesday and will be delivered to many subscribers on Saturday.
It joins an increasingly crowded field of magazines unabashedly celebrating wealth and consumption, all trying to take advantage of the healthiest part of a shrinking print advertising pool. And it is the latest in a series of bids by The Journal to capture a bigger piece of the consumer ad market and lessen its traditional dependence on ads aimed at businesses.
At just over 100 pages, the first issue of WSJ. has 51 advertisers, mostly of the type publications covet: high-end makers of clothes, handbags and other accessories, with brand names like Hermès, Audemars Piguet and Dior. Executives at The Journal said that some had signed on for two years.
•
“And 19 advertisers are new to The Wall Street Journal,” said Michael Rooney, chief revenue officer of Dow Jones & Company, the division of the News Corporation that publishes The Journal.
In this climate, 51 advertisers is “a very solid number, a respectable number,” said Roberta Garfinkle, senior vice president and director of print strategy at TargetCast TCM, a media agency.
“It’s a smart move on The Journal’s part to go after that luxury retail marketplace that they really haven’t had,” she said, despite the growing number of magazines chasing essentially the same ads. “What remains to be seen is their execution.”
The Journal starts with a major advantage in that it can offer advertisers the wealthiest readership of any American newspaper. An even more affluent subgroup of subscribers will receive the magazine, Mr. Rooney said, with an average household income of $265,000.
Out of The Journal’s domestic Saturday circulation of about 2 million, 800,000 copies — those sold by subscription or at newsstands in 17 large markets — will include WSJ. In addition, 160,000 copies will be distributed on Fridays overseas. The magazine begins as a quarterly, with plans to go monthly next year.
Executives would not say how much The Journal had invested in WSJ. or when the company expected it to break even.
For several years, advertising for luxury goods has outpaced mass-market and business-to-business ads, and a number of publishers have tried to capitalize on that trend, including The New York Times, which introduced T, a style magazine, in 2004.
As the economy has struggled over the last year, the divide between high-end ads and others has widened. Ad pages in United States magazines fell 7.4 percent in the first half of 2008, according to the Magazine Publishers Association, but some categories appealing to affluent consumers — high-end apparel and other retail, and hotels and resorts — were roughly flat.
•
Newspapers have fared worse, with advertising revenue down almost 8 percent last year, and about 13 percent in the first half of 2008. The Journal does not make figures public, but executives there have said that ad revenue is down sharply this year.
In this decade, The Journal has taken several steps to broaden its identity as a publication primarily about business news, read mostly by men, to win more consumer ads. It added the softer Personal Journal and Weekend Journal sections, and in 2006, began publishing on Saturdays.
Since being taken over last December by News Corporation and its chairman, Rupert Murdoch, the paper has put greater focus on general-interest news, including politics and international news.
WSJ. resembles How To Spend It, the weekend magazine of The Financial Times, a Journal competitor, with slightly less focus on consumption — though there is plenty of that, from canine couture to face cream to trench coats. It aims a bit more for features articles, with items on, among other things, business executives, philanthropy, feuding over the America’s Cup and the workout regimen of Gov. Sarah Palin, a piece planned well before she became Senator John McCain’s running mate.
Tina Gaudoin, editor in chief of WSJ., said her magazine was less about how to spend it and more about “how to live it.”
Reflecting the magazine’s high style, its unveiling was held at the Pierpont Morgan Library over a breakfast that included smoked salmon, caviar and raspberry parfait, with a digital slide show and executives reading from teleprompters.
Robert J. Thomson, managing editor of The Journal, poked a little fun at the pomp, saying, “This being convention season, histrionics are the order of the day.”
Mr. Thomson, like Mr. Murdoch, likes to take a few shots at the competition, in keeping with the rough-and-tumble of British newspapering — he was the editor of The Times of London — and Wednesday was no exception.
Referring to the industry’s woes, he said, “We don’t have the fetid air of failure at Dow Jones,” and proceeded to take a veiled swipe at T magazine. And as for the magazine of The Financial Times, he said, “How to Spend It is like a BMW 3 series, and this is a BMW 7 series.”
Enlarge This Image
Mark Lennihan/Associated Press
Removing microphones after introducing WSJ. Wednesday were, from left, Ellen Asmodeo-Giglio, its publisher; Michael Rooney, Dow Jones chief revenue officer; Tina Gaudoin, WSJ. editor in chief; and Robert J. Thomson, managing editor of The Journal.
That is the theory behind WSJ., the new magazine from The Wall Street Journal, which was unveiled to reporters on Wednesday and will be delivered to many subscribers on Saturday.
It joins an increasingly crowded field of magazines unabashedly celebrating wealth and consumption, all trying to take advantage of the healthiest part of a shrinking print advertising pool. And it is the latest in a series of bids by The Journal to capture a bigger piece of the consumer ad market and lessen its traditional dependence on ads aimed at businesses.
At just over 100 pages, the first issue of WSJ. has 51 advertisers, mostly of the type publications covet: high-end makers of clothes, handbags and other accessories, with brand names like Hermès, Audemars Piguet and Dior. Executives at The Journal said that some had signed on for two years.
•
“And 19 advertisers are new to The Wall Street Journal,” said Michael Rooney, chief revenue officer of Dow Jones & Company, the division of the News Corporation that publishes The Journal.
In this climate, 51 advertisers is “a very solid number, a respectable number,” said Roberta Garfinkle, senior vice president and director of print strategy at TargetCast TCM, a media agency.
“It’s a smart move on The Journal’s part to go after that luxury retail marketplace that they really haven’t had,” she said, despite the growing number of magazines chasing essentially the same ads. “What remains to be seen is their execution.”
The Journal starts with a major advantage in that it can offer advertisers the wealthiest readership of any American newspaper. An even more affluent subgroup of subscribers will receive the magazine, Mr. Rooney said, with an average household income of $265,000.
Out of The Journal’s domestic Saturday circulation of about 2 million, 800,000 copies — those sold by subscription or at newsstands in 17 large markets — will include WSJ. In addition, 160,000 copies will be distributed on Fridays overseas. The magazine begins as a quarterly, with plans to go monthly next year.
Executives would not say how much The Journal had invested in WSJ. or when the company expected it to break even.
For several years, advertising for luxury goods has outpaced mass-market and business-to-business ads, and a number of publishers have tried to capitalize on that trend, including The New York Times, which introduced T, a style magazine, in 2004.
As the economy has struggled over the last year, the divide between high-end ads and others has widened. Ad pages in United States magazines fell 7.4 percent in the first half of 2008, according to the Magazine Publishers Association, but some categories appealing to affluent consumers — high-end apparel and other retail, and hotels and resorts — were roughly flat.
•
Newspapers have fared worse, with advertising revenue down almost 8 percent last year, and about 13 percent in the first half of 2008. The Journal does not make figures public, but executives there have said that ad revenue is down sharply this year.
In this decade, The Journal has taken several steps to broaden its identity as a publication primarily about business news, read mostly by men, to win more consumer ads. It added the softer Personal Journal and Weekend Journal sections, and in 2006, began publishing on Saturdays.
Since being taken over last December by News Corporation and its chairman, Rupert Murdoch, the paper has put greater focus on general-interest news, including politics and international news.
WSJ. resembles How To Spend It, the weekend magazine of The Financial Times, a Journal competitor, with slightly less focus on consumption — though there is plenty of that, from canine couture to face cream to trench coats. It aims a bit more for features articles, with items on, among other things, business executives, philanthropy, feuding over the America’s Cup and the workout regimen of Gov. Sarah Palin, a piece planned well before she became Senator John McCain’s running mate.
Tina Gaudoin, editor in chief of WSJ., said her magazine was less about how to spend it and more about “how to live it.”
Reflecting the magazine’s high style, its unveiling was held at the Pierpont Morgan Library over a breakfast that included smoked salmon, caviar and raspberry parfait, with a digital slide show and executives reading from teleprompters.
Robert J. Thomson, managing editor of The Journal, poked a little fun at the pomp, saying, “This being convention season, histrionics are the order of the day.”
Mr. Thomson, like Mr. Murdoch, likes to take a few shots at the competition, in keeping with the rough-and-tumble of British newspapering — he was the editor of The Times of London — and Wednesday was no exception.
Referring to the industry’s woes, he said, “We don’t have the fetid air of failure at Dow Jones,” and proceeded to take a veiled swipe at T magazine. And as for the magazine of The Financial Times, he said, “How to Spend It is like a BMW 3 series, and this is a BMW 7 series.”
Friday, August 8, 2008
Yahoo to Let Users Switch Off Customized Ads
Yahoo announced Friday that it will allow users to turn off the customization of advertising on the pages of Yahoo.com. The opt-out option should be available at the end of August, through Yahoo’s privacy center, the company said.
Yahoo already allows users to opt out of customized ads that it serves on other companies’ pages. This tweak would stop the company from serving ads based on a user’s behavior on Yahoo’s own pages.
The company made the announcement as part of a response to a letter about privacy that was sent last week by four House members. The top congressmen at the House Committee on Energy and Commerce sent letters to 33 Internet and telecommunications companies, including Yahoo, Microsoft, Google and AOL, asking them to detail their privacy policies. The committee asked for responses by Friday.
Yahoo’s response to the House letter (below the press release, here) was somewhat predictable, but provided some interesting details about its behavioral targeting. It is experimenting with links on targeted ads that say things like “what is this” or “about this ad.” These take users to a page that explains the targeting. Opting out is not very common: in July, 75,000 users visited the opt-out page within Yahoo’s privacy pages (Yahoo said it could not estimate the total number of users who had opted out). And Yahoo said it has an internal group, the Ad Council, that reviews requests from advertisers to determine whether the topics they want to target are too sensitive — for example, if they include certain medical terms.
I’ll be writing more about the Congressional interest in online advertising for Monday’s paper.
Friday, July 4, 2008
Google Told to Turn Over User Data of YouTube
—A federal judge has ordered Google to turn over to Viacom its records of which users watched which videos on YouTube, the Web’s largest video site by far.
The order raised concerns among YouTube users and privacy advocates that the video viewing habits of tens of millions of people could be exposed. But Google and Viacom said they were hoping to come up with a way to protect the anonymity of the site’s visitors.
Viacom also said that the information would be safeguarded by a protective order restricting access to the data to outside lawyers, who will use it solely to press Viacom’s $1 billion copyright suit against Google.
Still, the judge’s order, which was made public late Wednesday, renewed concerns among privacy advocates that Internet companies like Google are collecting unprecedented amounts of private information that could be misused or fall unexpectedly into the hands of third parties.
“These very large databases of transactional information become honey pots for law enforcement or for litigants,” said Chris Hoofnagle, a senior fellow at the Berkeley Center for Law and Technology.
For every video on YouTube, the judge required Google to turn over to Viacom the login name of every user who had watched it, and the address of their computer, known as an I.P. or Internet protocol address.
Both companies have argued that I.P. addresses alone cannot be used to unmask the identities of individuals with certainty. But in many cases, technology experts and others have been able to link I.P. addresses to individuals using other records of their online activities.
The amount of data covered by the order is staggering, as it includes every video watched on YouTube since its founding in 2005. In April alone, 82 million people in the United States watched 4.1 billion clips there, according to comScore. Some experts say virtually every Internet user has visited YouTube.
Google and Viacom said they had had discussions about ways to further protect users’ anonymity, but as of Thursday evening the two companies had yet to agree on how to do that.
“We are investigating techniques, including anonymization, to enhance the security of information that will be produced,” said Michael D. Fricklas, Viacom’s general counsel.
Mr. Fricklas said Viacom would not have direct access to the data, and that its use would be strictly limited by the court order. Viacom would not, for example, chase down users who had illegally posted clips from “The Colbert Report.”
“The information that is produced by Google is going to be limited to outside advisers who can use it solely for the purpose of enforcing our rights against YouTube and Google,” Mr. Fricklas said.
In a letter sent Thursday, Google’s lawyers pressed their counterparts at Viacom to accept a more limited set of data. “We request that plaintiffs agree that YouTube may redact user names and I.P. addresses from the viewing data in the interests of protecting user privacy,” wrote David H. Kramer, a partner at Wilson Sonsini Goodrich & Rosati.
In a response, a Viacom lawyer wrote that Viacom was “committed to working with Google” on the privacy issue.
Interestingly, Google has rejected demands by privacy groups for more stringent protections for I.P. address records, saying that in most cases the addresses cannot be used to identify users. Yet Google argued that YouTube viewing data should be kept from Viacom, in part, to protect the privacy of its users.
Judge Louis L. Stanton of the Southern District of New York, who is presiding over Viacom’s lawsuit against Google and YouTube, referenced Google’s past statements on I.P. addresses to conclude that its “privacy concerns are speculative.”
“It is an ‘I told you so’ moment,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center, an advocacy group in Washington.
Other privacy advocates said they welcomed Viacom’s commitment to limit its use of the information, but they remained concerned about user rights.
“Users should have the right to challenge and contest the production of this deeply private information,” said Kurt Opsahl, senior staff lawyer at the Electronic Frontier Foundation, an online civil liberties group.
That right is protected by the federal Video Privacy Protection Act, Mr. Opsahl added. Congress passed that law in 1988 to protect video rental records, after a newspaper disclosed the rental habits of Robert H. Bork, then a Supreme Court nominee.
Mr. Opsahl also said that even records that did not include a user’s login name and I.P. address might be able to be associated with specific people.
In 2006, after AOL released for research purposes the search records of thousands of anonymous users, reporters from The New York Times were able to track down one person by analyzing her search queries. Mr. Opsahl said anonymous viewing habits may similarly yield clues about the identity of viewers.
Viacom wants the viewing data in part to help it determine the extent to which YouTube’s success was built on the popularity of copyrighted clips that were illegally posted to the site. Outside experts say that without the data it would be virtually impossible to pin that down.
Judge Stanton agreed that the information could help Viacom make its case. “A markedly higher proportion of infringing-video watching may bear on plaintiff’s vicarious liability claim, and defendants’ substantial noninfringing use defense,” he wrote.
The order raised concerns among YouTube users and privacy advocates that the video viewing habits of tens of millions of people could be exposed. But Google and Viacom said they were hoping to come up with a way to protect the anonymity of the site’s visitors.
Viacom also said that the information would be safeguarded by a protective order restricting access to the data to outside lawyers, who will use it solely to press Viacom’s $1 billion copyright suit against Google.
Still, the judge’s order, which was made public late Wednesday, renewed concerns among privacy advocates that Internet companies like Google are collecting unprecedented amounts of private information that could be misused or fall unexpectedly into the hands of third parties.
“These very large databases of transactional information become honey pots for law enforcement or for litigants,” said Chris Hoofnagle, a senior fellow at the Berkeley Center for Law and Technology.
For every video on YouTube, the judge required Google to turn over to Viacom the login name of every user who had watched it, and the address of their computer, known as an I.P. or Internet protocol address.
Both companies have argued that I.P. addresses alone cannot be used to unmask the identities of individuals with certainty. But in many cases, technology experts and others have been able to link I.P. addresses to individuals using other records of their online activities.
The amount of data covered by the order is staggering, as it includes every video watched on YouTube since its founding in 2005. In April alone, 82 million people in the United States watched 4.1 billion clips there, according to comScore. Some experts say virtually every Internet user has visited YouTube.
Google and Viacom said they had had discussions about ways to further protect users’ anonymity, but as of Thursday evening the two companies had yet to agree on how to do that.
“We are investigating techniques, including anonymization, to enhance the security of information that will be produced,” said Michael D. Fricklas, Viacom’s general counsel.
Mr. Fricklas said Viacom would not have direct access to the data, and that its use would be strictly limited by the court order. Viacom would not, for example, chase down users who had illegally posted clips from “The Colbert Report.”
“The information that is produced by Google is going to be limited to outside advisers who can use it solely for the purpose of enforcing our rights against YouTube and Google,” Mr. Fricklas said.
In a letter sent Thursday, Google’s lawyers pressed their counterparts at Viacom to accept a more limited set of data. “We request that plaintiffs agree that YouTube may redact user names and I.P. addresses from the viewing data in the interests of protecting user privacy,” wrote David H. Kramer, a partner at Wilson Sonsini Goodrich & Rosati.
In a response, a Viacom lawyer wrote that Viacom was “committed to working with Google” on the privacy issue.
Interestingly, Google has rejected demands by privacy groups for more stringent protections for I.P. address records, saying that in most cases the addresses cannot be used to identify users. Yet Google argued that YouTube viewing data should be kept from Viacom, in part, to protect the privacy of its users.
Judge Louis L. Stanton of the Southern District of New York, who is presiding over Viacom’s lawsuit against Google and YouTube, referenced Google’s past statements on I.P. addresses to conclude that its “privacy concerns are speculative.”
“It is an ‘I told you so’ moment,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center, an advocacy group in Washington.
Other privacy advocates said they welcomed Viacom’s commitment to limit its use of the information, but they remained concerned about user rights.
“Users should have the right to challenge and contest the production of this deeply private information,” said Kurt Opsahl, senior staff lawyer at the Electronic Frontier Foundation, an online civil liberties group.
That right is protected by the federal Video Privacy Protection Act, Mr. Opsahl added. Congress passed that law in 1988 to protect video rental records, after a newspaper disclosed the rental habits of Robert H. Bork, then a Supreme Court nominee.
Mr. Opsahl also said that even records that did not include a user’s login name and I.P. address might be able to be associated with specific people.
In 2006, after AOL released for research purposes the search records of thousands of anonymous users, reporters from The New York Times were able to track down one person by analyzing her search queries. Mr. Opsahl said anonymous viewing habits may similarly yield clues about the identity of viewers.
Viacom wants the viewing data in part to help it determine the extent to which YouTube’s success was built on the popularity of copyrighted clips that were illegally posted to the site. Outside experts say that without the data it would be virtually impossible to pin that down.
Judge Stanton agreed that the information could help Viacom make its case. “A markedly higher proportion of infringing-video watching may bear on plaintiff’s vicarious liability claim, and defendants’ substantial noninfringing use defense,” he wrote.
Friday, June 27, 2008
Bill Gates Is Retiring
Bill Gates is retiring, sort of. He is still only 52, and he is going off to spend more time guiding the world’s richest philanthropy, the Bill and Melinda Gates Foundation. He will still be Microsoft’s chairman and largest shareholder, but Friday is his last day as a full-time worker at the software giant, marking the unofficial end of his career as a business leader.
Friday will be Bill Gates’s last day as a full-time worker at Microsoft, the software giant he founded with Paul Allen in 1975. He attended an event unveiling Windows 95 in August 1995.
In 1978, the original 11 members of Microsoft: standing in back row, from left, Steve Wood, Bob Wallace, Jim Lane; second row, Bob O’Rear, Bob Greenberg, Marc McDonald, Gordon Letwin; front row, Bill Gates, Andrea Lewis, Marla Wood and Paul Allen.
Readers' Comments
"Mr. Gates' legacy at Microsoft is not necessarily technological innovation but business acumen. "
David G. Ward, Groton, CT
Read Full Comment »
Post a Comment »
And what a career it has been. Mr. Gates has been an animating force behind the personal computer revolution, helping to build a huge global industry and engineer blockbuster products like Windows and Office, used every day in offices and homes around the world.
The Harvard dropout was the wealthiest person on the planet for years — worth more than $100 billion in 1999 — though his fortune is now about half that because of the decline of Microsoft’s shares and his continued donations to his foundation, which is focused on global health and education.
Despite his success, Mr. Gates is moving on as the company he co-founded in 1975 is struggling to find its way. The center of gravity in technology has shifted from PCs to the Internet, altering the old rules of competition that were so lucratively mastered by Microsoft.
For millions of users, mobile devices like cellphones are beginning to edge out PCs as the tool of choice for many computing tasks. And Google, the front-runner in the current wave of Internet computing, has wrested the mantle of high-tech leadership from Microsoft.
Although Mr. Gates will spend one day a week at the company, it will be up to his successors, led by Steven A. Ballmer, the chief executive, to master the challenges of the Internet or watch Microsoft’s wealth and stature in the industry steadily erode. “Bill’s legacy is Windows and Office, and that will be a rich franchise for years to come, but it’s not the future,” said David B. Yoffie, a professor at the Harvard Business School.
Still, the Gates legacy is impressive. In addition to the software itself, Mr. Gates and his company have fundamentally shaped how people think about competition in many industries where technology plays a central role. Today, there are more than one billion copies of the Windows operating system on PCs around the world.
Industry experts and economists say that Windows is not necessarily the best or most admired software for running the basic operations of a personal computer — Apple’s Macintosh can claim the most devout fan club. But Mr. Gates grasped and deployed two related concepts on a scale no one ever had in the past: the power of network effects and the value of establishing a technology platform.
Put simply, the network effect describes a phenomenon in which the value of a product goes up as more people use it. E-mail messaging and telephones are classic examples.
A technology platform is a set of tools or services that others can use to build their own products or services. The more people who use the tools, the more popular the platform can become.
Mr. Gates took advantage of both notions and combined them to build Microsoft’s dominance in PCs, spreading its influence with computer makers and software developers.
Today, there are many thousands of software applications that run on the Windows platform, not just word processing and spreadsheets but also the specialized programs in doctors’ offices, factory floors and retail stores — a very broad network on a nearly ubiquitous technology platform.
“Gates saw software as a separate market from hardware before anyone else, but his great insight was recognizing the power of the network effects surrounding the software,” said Michael A. Cusumano, a professor at the Massachusetts Institute of Technology’s Sloan School of Management.
That, Professor Cusumano added, was the essential difference in the paths of Microsoft and Apple, the early leader in personal computing. Apple, he said, focused on making outstanding products alone, while Microsoft nurtured a growing ecosystem of outside software developers who use, and are dependent on, Microsoft’s technology.
The result, he added, is that, while Apple continues to make outstanding products, more than 90 percent of personal computers run Microsoft software.
In the early years, it was unclear how much Mr. Gates was pursuing each opportunity as it came, as opposed to carrying out a grand strategy. He certainly had large ambitions. When he was a Harvard undergraduate, Mr. Gates lamented that so many of his fellow students pursued a “narrow track for success” instead of being willing to “take big risks to do big things,” recalled Michael Katz, a Harvard contemporary who is now a professor at New York University.
In a Harvard Business School case study, published in 1994, Mr. Gates spoke of Microsoft’s strategy in terms of network effects and technology standards that, combined, enabled the company to command markets. “We look for businesses where we can garner large market shares, not just 30 or 35 percent,” he said.
In the past, Microsoft has beaten back challenges and vanquished rivals, even when it came late to markets, as it did in the first wave of Internet technology. Mr. Gates’s shrewd 1995 decision to embrace Internet browsing technology and attack the early leader, Netscape Communications, started a pitched antitrust battle with the government. “But he extended Microsoft’s hegemony for a decade,” said Mitchell Kapor, a longtime rival.
However, Microsoft is lagging badly in current round of Internet competition and, analysts say, is facing more formidable challengers this time — notably Google.
Microsoft’s share of Internet search in the United States is less than 10 percent, while Google holds more than 60 percent and Yahoo has about 20 percent. And search is only part of the new platform on the Web, which includes social networks like Facebook and MySpace and Internet-based alternatives to traditional desktop software, including e-mail messaging, word processors and spreadsheets.
Traditional desktop software — and the technology standards Microsoft controls there — matter far less when more software is accessed with a Web browser and delivered over the Internet from vast data centers run by Google and others. The new approach is known as “cloud computing,” and the business model behind it is typically to sell online advertising and software services.
At Microsoft, there is scant sign of panic, despite its trailing position and its failed bid to buy Yahoo for $47.5 billion as a catch-up strategy. Microsoft sees an evolution in computing, not a disruptive revolution that will imperil the company, said Craig Mundie, Microsoft’s chief research and strategy officer.
Mr. Mundie said Microsoft is preparing for a widening world of both cloud computing and “client” machines, not only personal computers but also cellphones, cars, game consoles and televisions, all running Microsoft software.
“The next big platform is the union of the clients and the cloud,” he said.
Friday will be Bill Gates’s last day as a full-time worker at Microsoft, the software giant he founded with Paul Allen in 1975. He attended an event unveiling Windows 95 in August 1995.
In 1978, the original 11 members of Microsoft: standing in back row, from left, Steve Wood, Bob Wallace, Jim Lane; second row, Bob O’Rear, Bob Greenberg, Marc McDonald, Gordon Letwin; front row, Bill Gates, Andrea Lewis, Marla Wood and Paul Allen.
Readers' Comments
"Mr. Gates' legacy at Microsoft is not necessarily technological innovation but business acumen. "
David G. Ward, Groton, CT
Read Full Comment »
Post a Comment »
And what a career it has been. Mr. Gates has been an animating force behind the personal computer revolution, helping to build a huge global industry and engineer blockbuster products like Windows and Office, used every day in offices and homes around the world.
The Harvard dropout was the wealthiest person on the planet for years — worth more than $100 billion in 1999 — though his fortune is now about half that because of the decline of Microsoft’s shares and his continued donations to his foundation, which is focused on global health and education.
Despite his success, Mr. Gates is moving on as the company he co-founded in 1975 is struggling to find its way. The center of gravity in technology has shifted from PCs to the Internet, altering the old rules of competition that were so lucratively mastered by Microsoft.
For millions of users, mobile devices like cellphones are beginning to edge out PCs as the tool of choice for many computing tasks. And Google, the front-runner in the current wave of Internet computing, has wrested the mantle of high-tech leadership from Microsoft.
Although Mr. Gates will spend one day a week at the company, it will be up to his successors, led by Steven A. Ballmer, the chief executive, to master the challenges of the Internet or watch Microsoft’s wealth and stature in the industry steadily erode. “Bill’s legacy is Windows and Office, and that will be a rich franchise for years to come, but it’s not the future,” said David B. Yoffie, a professor at the Harvard Business School.
Still, the Gates legacy is impressive. In addition to the software itself, Mr. Gates and his company have fundamentally shaped how people think about competition in many industries where technology plays a central role. Today, there are more than one billion copies of the Windows operating system on PCs around the world.
Industry experts and economists say that Windows is not necessarily the best or most admired software for running the basic operations of a personal computer — Apple’s Macintosh can claim the most devout fan club. But Mr. Gates grasped and deployed two related concepts on a scale no one ever had in the past: the power of network effects and the value of establishing a technology platform.
Put simply, the network effect describes a phenomenon in which the value of a product goes up as more people use it. E-mail messaging and telephones are classic examples.
A technology platform is a set of tools or services that others can use to build their own products or services. The more people who use the tools, the more popular the platform can become.
Mr. Gates took advantage of both notions and combined them to build Microsoft’s dominance in PCs, spreading its influence with computer makers and software developers.
Today, there are many thousands of software applications that run on the Windows platform, not just word processing and spreadsheets but also the specialized programs in doctors’ offices, factory floors and retail stores — a very broad network on a nearly ubiquitous technology platform.
“Gates saw software as a separate market from hardware before anyone else, but his great insight was recognizing the power of the network effects surrounding the software,” said Michael A. Cusumano, a professor at the Massachusetts Institute of Technology’s Sloan School of Management.
That, Professor Cusumano added, was the essential difference in the paths of Microsoft and Apple, the early leader in personal computing. Apple, he said, focused on making outstanding products alone, while Microsoft nurtured a growing ecosystem of outside software developers who use, and are dependent on, Microsoft’s technology.
The result, he added, is that, while Apple continues to make outstanding products, more than 90 percent of personal computers run Microsoft software.
In the early years, it was unclear how much Mr. Gates was pursuing each opportunity as it came, as opposed to carrying out a grand strategy. He certainly had large ambitions. When he was a Harvard undergraduate, Mr. Gates lamented that so many of his fellow students pursued a “narrow track for success” instead of being willing to “take big risks to do big things,” recalled Michael Katz, a Harvard contemporary who is now a professor at New York University.
In a Harvard Business School case study, published in 1994, Mr. Gates spoke of Microsoft’s strategy in terms of network effects and technology standards that, combined, enabled the company to command markets. “We look for businesses where we can garner large market shares, not just 30 or 35 percent,” he said.
In the past, Microsoft has beaten back challenges and vanquished rivals, even when it came late to markets, as it did in the first wave of Internet technology. Mr. Gates’s shrewd 1995 decision to embrace Internet browsing technology and attack the early leader, Netscape Communications, started a pitched antitrust battle with the government. “But he extended Microsoft’s hegemony for a decade,” said Mitchell Kapor, a longtime rival.
However, Microsoft is lagging badly in current round of Internet competition and, analysts say, is facing more formidable challengers this time — notably Google.
Microsoft’s share of Internet search in the United States is less than 10 percent, while Google holds more than 60 percent and Yahoo has about 20 percent. And search is only part of the new platform on the Web, which includes social networks like Facebook and MySpace and Internet-based alternatives to traditional desktop software, including e-mail messaging, word processors and spreadsheets.
Traditional desktop software — and the technology standards Microsoft controls there — matter far less when more software is accessed with a Web browser and delivered over the Internet from vast data centers run by Google and others. The new approach is known as “cloud computing,” and the business model behind it is typically to sell online advertising and software services.
At Microsoft, there is scant sign of panic, despite its trailing position and its failed bid to buy Yahoo for $47.5 billion as a catch-up strategy. Microsoft sees an evolution in computing, not a disruptive revolution that will imperil the company, said Craig Mundie, Microsoft’s chief research and strategy officer.
Mr. Mundie said Microsoft is preparing for a widening world of both cloud computing and “client” machines, not only personal computers but also cellphones, cars, game consoles and televisions, all running Microsoft software.
“The next big platform is the union of the clients and the cloud,” he said.
Monday, June 9, 2008
Smartphones Now Ringing for Women
If recent history is any guide, roughly a third of the people snapping up Apple’s new iPhone are likely to tote it in a purse.
In a big shift for the phone industry, women have emerged as eager buyers of not just iPhones but of all so-called smartphones — BlackBerrys, Treos and other models.
In the last year the number of American women using smartphones more than doubled to 10.4 million, growing at a faster pace than among men, according to Nielsen Mobile, which tracks wireless trends.
The trend is mirrored in sales of the iPhone. In October, nearly one out of four owners of the iPhone was a woman, according to Nielsen. By March that number rose to one in three. The iPhone model announced Monday, with faster Internet access and mapping features, may accelerate the shift.
Smartphones are cheaper now — as little as $99 for the petite BlackBerry Pearl — and are better designed. Women have been using them for years in business, of course, but many are finding that the phones can also help manage their families’ hectic schedules and keep them in touch with friends.
“You are not seen as a geek anymore if you have a smartphone,” said Carolina Milanesi, research director at Gartner Group, a research firm. “Women, including wives and mothers, need to keep track of their busy lives, too.”
The phone makers and service providers increasingly see women as the path to the entire household. According to Verizon Wireless, 71 percent of women make the decision about their family’s wireless choices, including phones and service plans. (Smartphones require data plans that can cost $30 or more a month.)
As a result, smartphone makers are beginning to market specifically to women. Research in Motion, based in Waterloo, Ontario, has taken out ads for its BlackBerry phones in Elle, Martha Stewart Living and Oprah Winfrey’s magazine O.
Lina Caputo, a part-time teacher from Waterloo, said her husband, who runs a networking company that is not connected to RIM, gave her a second-hand BlackBerry a year ago so they could better manage their two sons’ schedules.
“It was a nightmare with the four of us,” Ms. Caputo said, ticking off a list of her sons’ after-school activities, including soccer, hockey and swim practices. “My sons have about 10 hours of sports. It got to be too much. It was confusing.”
Ms. Caputo said she and her husband regularly sync their calendars. She uses the phone to send e-mail to her husband when she gets home safely from a snowy trip, and to keep in touch with close friends who regularly gather at a local coffee shop. When six of them went to Las Vegas for a “girls’ weekend” in February, five of them brought their BlackBerrys so they could keep track of one another and their children back home.
Ms. Caputo is no longer using her husband’s hand-me-downs. On Mother’s Day he bought her a new BlackBerry Pearl, one of the company’s best-selling phones. “I don’t equate it to getting a vacuum or a blender,” she said, when asked if she would have rather received flowers or chocolate. “Besides, my girlfriend got a red one for Valentine’s Day.”
David Christopher, the marketing chief of AT&T’s wireless division, said women were less likely to be wowed by fancy gadgets. Instead, as smartphones have become sleeker, smaller and cheaper, they have become more appealing to them.
“Now they are small enough to be in your purse or pocket,” Mr. Christopher said. “Design does matter.”
Competitors have been working hard to catch up to Apple in the design department. This month Sprint, a unit of Sprint Nextel, will begin selling the Instinct, a touch-screen device created by Samsung that shares many features with the iPhone. And this summer R.I.M. is adding the BlackBerry Bold, which, like the iPhone, runs on a faster mobile network.
Nielsen’s research shows that women are more price sensitive than men and half as likely to care about whether they have used a specific brand before. Still, more traditional pitches do have their own appeal. RIM and Verizon Wireless were successful last Valentine’s Day with promotional events for a pink BlackBerry Pearl. Even then, picking the right hue was tricky.
“We picked a shade of pink that fit in all kinds of settings — not too flashy,” said Mark Guibert, vice president for corporate marketing at RIM. “It was the only color that was purely driven by the female audience. Years ago the market was much more focused solely on function. Now there is more focus on lifestyle.”
In a big shift for the phone industry, women have emerged as eager buyers of not just iPhones but of all so-called smartphones — BlackBerrys, Treos and other models.
In the last year the number of American women using smartphones more than doubled to 10.4 million, growing at a faster pace than among men, according to Nielsen Mobile, which tracks wireless trends.
The trend is mirrored in sales of the iPhone. In October, nearly one out of four owners of the iPhone was a woman, according to Nielsen. By March that number rose to one in three. The iPhone model announced Monday, with faster Internet access and mapping features, may accelerate the shift.
Smartphones are cheaper now — as little as $99 for the petite BlackBerry Pearl — and are better designed. Women have been using them for years in business, of course, but many are finding that the phones can also help manage their families’ hectic schedules and keep them in touch with friends.
“You are not seen as a geek anymore if you have a smartphone,” said Carolina Milanesi, research director at Gartner Group, a research firm. “Women, including wives and mothers, need to keep track of their busy lives, too.”
The phone makers and service providers increasingly see women as the path to the entire household. According to Verizon Wireless, 71 percent of women make the decision about their family’s wireless choices, including phones and service plans. (Smartphones require data plans that can cost $30 or more a month.)
As a result, smartphone makers are beginning to market specifically to women. Research in Motion, based in Waterloo, Ontario, has taken out ads for its BlackBerry phones in Elle, Martha Stewart Living and Oprah Winfrey’s magazine O.
Lina Caputo, a part-time teacher from Waterloo, said her husband, who runs a networking company that is not connected to RIM, gave her a second-hand BlackBerry a year ago so they could better manage their two sons’ schedules.
“It was a nightmare with the four of us,” Ms. Caputo said, ticking off a list of her sons’ after-school activities, including soccer, hockey and swim practices. “My sons have about 10 hours of sports. It got to be too much. It was confusing.”
Ms. Caputo said she and her husband regularly sync their calendars. She uses the phone to send e-mail to her husband when she gets home safely from a snowy trip, and to keep in touch with close friends who regularly gather at a local coffee shop. When six of them went to Las Vegas for a “girls’ weekend” in February, five of them brought their BlackBerrys so they could keep track of one another and their children back home.
Ms. Caputo is no longer using her husband’s hand-me-downs. On Mother’s Day he bought her a new BlackBerry Pearl, one of the company’s best-selling phones. “I don’t equate it to getting a vacuum or a blender,” she said, when asked if she would have rather received flowers or chocolate. “Besides, my girlfriend got a red one for Valentine’s Day.”
David Christopher, the marketing chief of AT&T’s wireless division, said women were less likely to be wowed by fancy gadgets. Instead, as smartphones have become sleeker, smaller and cheaper, they have become more appealing to them.
“Now they are small enough to be in your purse or pocket,” Mr. Christopher said. “Design does matter.”
Competitors have been working hard to catch up to Apple in the design department. This month Sprint, a unit of Sprint Nextel, will begin selling the Instinct, a touch-screen device created by Samsung that shares many features with the iPhone. And this summer R.I.M. is adding the BlackBerry Bold, which, like the iPhone, runs on a faster mobile network.
Nielsen’s research shows that women are more price sensitive than men and half as likely to care about whether they have used a specific brand before. Still, more traditional pitches do have their own appeal. RIM and Verizon Wireless were successful last Valentine’s Day with promotional events for a pink BlackBerry Pearl. Even then, picking the right hue was tricky.
“We picked a shade of pink that fit in all kinds of settings — not too flashy,” said Mark Guibert, vice president for corporate marketing at RIM. “It was the only color that was purely driven by the female audience. Years ago the market was much more focused solely on function. Now there is more focus on lifestyle.”
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