Monday, August 10, 2009
Dear Friends, you are living through one of the most significant paradigm shifts of all time. Before writing, knowledge was easily lost. After writing took hold, knowledge was kept, but mostly by the few. After the printing press was invented, knowledge was more easily retained and acquired, but it has remained far more expensive than necessary. Internet 2.0 will make knowledge instantly available and cheap to acquire. The world will never be the same.
Flurry, a mobile analytics company, just delivered a detailed report about one of the Internet 2.0 break outs that occurred this year. In the area of application software for mobile devices, over 200 Google Application projects and over 1,000 Apple projects started during the month of July. The compounded monthly rates of growth were 30% for Apple 50% for Google!! In January the Apple/Google distribution was about 90%/10% and in July it was about 78%/22%. Google is catching up quickly even though the current start rate is 5 to 1.
The Apple head start includes millions of handsets in place and more than 65,000 applications. Indeed, Apple sold more than one million 3G handsets the first weekend they were available. The Google phone is only a year old, but version 1.5 is being deployed around the world at break neck speed. China has proven to be a difficult market for many vendors but Google recently made a deal with the largest phone company in China.
The power of some of these applications is incredible. In some instances, a modified iPhone with software can be taken to the hinterlands where it can do the work of million dollar medical machines and transmit the results to where they are needed! Many an American is using their iPhone for multiple mundane uses, but real benefits are being received. I am among the 97% who has not upgraded to a smart phone. I am biding my time. Verizon has announced that it will offer a Google (Android) phone soon. I hope to have an Android 2.0 phone within a few months. While I like the family plan I am on with Verizon, I will switch if necessary.
Another break away has been in progress at both Facebook and FriendFeed. A couple of years ago, analyst Liz Gannes wrote that FriendFeed is a "Facebook news feed for the whole web". Since then, FriendFeed's developers have been in hyper drive. They have proven their ability to innovate at break neck speed. Facebook, which now has more than 250 million users and which is hosting more than 1 Billion new photos per month, just bought FriendFeed!
Marilyn and I will never forget a day back in the 1990's when we mailed a $10,000 payment on a condo. It was just when people were most upset with AOL because extraordinary growth made it almost impossible to get connected from about 3 in the afternoon until 10 at night. Marilyn and I realized that we should put the $10,000 into AOL shares. Instead we made the required payment and entered a fictitious $10,000 purchase in a pretend portfolio. A year or two later we spent $11,000 upgrading our office computers and realized that we should have bought Dell shares instead of Dell computers. By this time the $10,000 of AOL shares had split and risen, risen and split and was valued at over $600,000. We felt that we had to have the computers in our business and once again made a fictitious purchase. After the account valued exceeded $3,000,000 we deleted it. The account was worth over three million dollars long before the big spike run-up that occurred before the crash.
Facebook and Friendfeed are seeing AOL/Dell growth rates. The reason Facebook purchased Friendfeed, lock stock and barrel, was to acquire their software engineers! Facebook is facing off against Google. While Facebook has been adding social network "customers" at hyper speed, Google has been putting together a series of huge puzzles. Recently, with the frames in place, Google has been filling in the centers of the puzzles. Tools are rapidly being added to allow the millions of users of free Google Blogging software to connect with their readers and fellow bloggers in a "social network" way. At the same time, tools are being added to allow millions of users of free Google Reading software to connect with their friends in a "social network" way. More importantly, Google has already announced its planned replacement for email.
The Internet growth over the next few years is going to be similar to what happened with AOL, Yahoo, Dell and others during the 1990's. For example, when the mail service is cut significantly, there will be a stampede into electronic payment systems. PayPal, Google Checkout, Amazon Payments and Apple iTune will all see huge rates of growth.
The All Purpose Reader
The all purpose tablet will be at the front and center of the paradigm shift. Keep your eyes peeled, there are many devices well past the drawing board stage. Due to price considerations, specialized readers are leading the way, but many more sophisticated machines will follow. The flurry of activity is going to last for probably 5 years or more.