What Are Twitter and Facebook Worth?

7 04 2010

Assuming they were for sale that is.  The San Francisco Chronicle quotes sources giving a wide range of valuations on these two companies:

  • Facebook:  From $5 Billion to $35 Billion
  • Twitter:  From $656 Million to $1.5 Billion

Why the wide range in valuations?

First, you look at the more traditional methods of valuation:

  • Current and projected revenue streams.
  • Current and projected profit streams.
  • Market share.  Let’s face it, if you aren’t #1 or #2 in a “network effect” business, you are no place at all in your market.
  • Growth.  Especially such that it would move the company to a #1 or #2 position at some point in the future.

Then, you get into the more interesting area: Synergy.  Synergy is probably the most abused term in the history of corporate acquisitions.  Surveys show that planned synergies between companies rarely happen.  The vision has to turn into execution and that is where the ball often gets dropped.

When Synergy Fails

  • GM and Hummer.  GM has failed to sell of this business and is now quietly shutting it down – at great loss.
  • AOL and Bebo.  AOL paid $850 million for social networking site Bebo.   AOL has been discretely shopping the business and may shut it down in the next month.
  • The Grandaddy of Them All:  AOL and Time Warner.  Stockholders lost more market value on this “merger” than on any other in the history of the universe!

When Synergy Actually Works

  • Cisco does an amazing job of acquiring young companies and integrating them into their strategy.  The Flip acquisition looked like a head-scratcher, but is key to their strategy of communications, collaboration and video today.

Google was able to integrate its intelligent advertising business with YouTube and to monetize the huge audience YouTube that brought to them.  If you think of YouTube as a video search engine, then they were probably the second biggest search engine (to Google itself) at the time of acquisition.

AOL and Time Warner on the other hand were culturally at war from day one, never integrated their businesses in any meaningful way, and the rest looks like something from a disaster flic.





Cisco Borderless Networks

25 03 2010

I attended the Cisco Borderless Networks launch last week and found it to be a really interesting and informative event.  Here is why this is not just esoteric network stuff, but will make the lives of network users easier and more productive.

Borderless Networking, Cisco’s term for their cloud computing architecture, goes way beyond just networking. In this architecture, the network itself becomes the platform for application services. Cisco’s version of the architecture includes the following:

  • Networking
  • Data Center
  • Virtualization
  • Communication and Collaboration
  • Video

What is really interesting is that Cisco has delivered management and policy tools across the product line at the same time it was rolling out new products (see below for more).

Borderless Networks is a different style of computing. In the old style, businesses built and managed a set of applications such as Financials, Logistics, HR, Supply Chain, ERP, etc. and surrounded it with a firewall to keep the “bad guys” out. That no longer works because you could only be fully productive if you were inside the corporate firewall.

Today, there are a lot of people outside of the corporate firewall who need access to corporate data and applications. For example:

  • Traveling and mobile employees. Example: Sales people.
  • Work-at-home employees
  • Consultants
  • Supply Chain supplier/partners
  • Channel Partners

In the new style of cloud computing, the network itself becomes the platform for computing and applications are presented as “services” on the network available to anybody, anywhere, anytime on any device. The obvious challenge here is to deliver these services with a high level of security, and that is a lot of the focus of the Borderless Networks architecture.

What do we mean by security?

  1. Authentication: the network needs to identify who you are.
  2. Authorization: once the network knows who you are, the network needs to establish what things you are allowed to do. Can you access a particular application / service? Are you allowed read-only privileges, or are you allowed to modify data? Which data?
  3. Location Aware: The network will allow different privileges depending on where you are located and the security of your access method.

The key thing is that cloud computing is new with very few established industry standard defining what the term means. This will take years to play out.

Who is going to deliver Cloud Computing?

  • Enterprises: Forward-thinking enterprises are moving to a cloud computing architecture for a lot of reasons, but the main on is to improve employee productivity and better integration with partners.
  • Service Providers: Companies such as Google, Salesforce.com, and NetSuite are delivering applications as services over the Internet today.
  • Cloud Computing Platforms: Other companies are operating computing platforms “in the cloud” and selling compute power, storage, networking bandwidth, etc. to companies who want access to applications without owning and operating all the complicated infrastructure underneath. Examples: Google, Amazon.com, Salesforce.com.

The important thing is that Borderless Networks and Cloud Computing are not just relevant to business users. They are widely used by consumers today who use cloud applications such as Gmail, Google Apps, Picassa, etc.

What Was Interesting about the Cisco Borderless Networking Announcement?

Actually, quite a lot. Cisco announced a refresh of practically all of its routers and switches, but interestingly, that was not the main focus of the discussion. What was more interesting (and emphasized) was that the new products were rolled out while at the same time implementing Borderless Network features called AnyConnect across its product line:

· Device Management: Cisco MediaNet knows what device you are accessing the network services with and can manage your interactions with the services in terms of the bandwidth and video capability of your device. Cisco can now construct video conferences with people using a wide variety of video capabilities from Telepresence, to desktop Web conferencing to smart phone video conferencing. They say they can support the 19 main types of video protocols in a mixed fashion.

· Security: Cisco announced TrustSec security management across its product line.

o Your Identity and security credentials follow you on the network. You do not have to keep logging into different applications and different network access point.

o The network is intelligent and knows when to prompt you to ask if you want to transfer from one access device to another. Such as when you walk into your office with a smart phone. The session is transferred with full security credentials, no additional login required.

o Multi-hop network security.  This has been a big problem for years.  In cases where the end-to-end network security solution involves multiple hops between network routers, there has been a problems with passing security credentials.  Cisco has a solution for multi-hop environments that will make secure access for mobile and wireless users much more robust.

o Cisco is working with Intel on MaxSec, a technology to extend the multi-hop security architecture to Intel devices on the network.

· Energy Management: Cisco has implemented EnergyWise energy management across its product line using Power over Ethernet (PoE). The network can power itself down and also devices attached to the network using PoE.

How Does This Change My Life?

There are a lot of technologies converging and integrating here to create a platform for network services. What this means for the consumer of services is:

  • You will log in once and your security credentials will follow you.
  • The network will be intelligent, allowing you to transfer your sessions between devices seamlessly.
  • Collaboration will become easier to use and more integrated with other applications.
  • Video will become more widely used for communication and collaboration.
  • Video Conferencing will become a lot easier to use. It is really fun and productive today, when it works, but there can be complications. It is getting easier.
  • End Users will soon be working is a world where public services from Google, Amazon, Salesforce.com and private services from their employers work together in everyday productivity.
  • These changes will provide a big productivity boost to companies, schools and countries that implement them.

John Chambers spoke at the end of the session and said that he believes that Video is the new “killer application” for cloud computing: It is how we will work and how we will collaborate.

Cloud Computing has a long way to go before it reaches maturity, but this is a big step forward towards defining an architecture that is compelling and useful to IT departments, Service Providers and end users.

Resources:

Cisco Borderless Networks





Convergence and Social Media: Why Do We Care?

13 11 2009

Network Convergence

A lot has been written over the past few years about “technology convergence.” The problem is that there are many different technology convergences going on with different meaning and impacts for enterprise customers.   Let’s talk a bit about a couple of convergences and their impact enterprise social media.

Cloud Computing Convergence

Cloud computing convergence  is the coming together of three key technologies:

  • Server Hardware. These are the big computers with all the blinking lights mounted in racks in the back room. They do all the heavy lifting in the software application world.
  • Networking. These are the big routers and switches that handle enterprise IP network traffic.
  • Virtualization. This is software technology that applies a layer over server hardware and network equipment, allowing system administrators to manage their data centers as if it were a single giant pool of resources, assigning tasks to groups of computing or networking resources.

What’s happening is that network routers are becoming so powerful that vendors such as Cisco are adding general-purpose server blades to them in order to enable them to run software applications. That puts Cisco in direct competition with their former alliance partners HP and IBM. HP is retaliating by investing in their own HP ProCurve networking products and by acquiring 3COM. IBM has quickly moved to form alliances with Juniper Networks and others.

The convergence of these technologies is what is enabling a platform for a “cloud computing” architecture where hardware and networking resources become on large virtualized pool of resources organized to provided on-demand services over the Internet when and where they are needed.

  • For cloud computing service providers like Google and Salesforce.com, it means they can provide services to their community of users over the Internet to anybody who has a browser.
  • For enterprises, it means they can either purchase services from service providers or move their internal IT architectures to a “cloud computing” model to make their key services and data available to their mobile employees, partners, and customers as appropriate.

The bottom line for users, is that cloud computing service providers and enterprises are increasingly moving to a service provider model where their services are made available, on-demand, in a secure manner over the Internet to their mobile employees, partners and customers.

Networking Convergence

For years, we have all been using data over the Internet. Now, we are seeing more traffic from voice and video as well, all traveling over the same IP network. A high percentage of voice traffic still travels over carrier’s proprietary networks, but more traffic is moving to the “free” Internet every year.

Vendors like Skype have offered very low cost voice and video conferencing capability over the Internet for years.

This week’s announcement that Google acquired Gizmo5 immediately makes Google a serious competitor in that space.

The Impact to Social Media

There are a number of immediate impacts to Social Media that we will see in the very short term.

  • With data, voice and video running over the same IP networks, it will become much easer to integrate those services in interesting ways.
  • Social Media will not be limited to text and stored video. Network convergence will expand Social Media in the realm of real time communication with voice and video.
  • The “Cloud Computing” model will enable both enterprises and service providers to offer Web services inexpensively with high reliability and security.

So, what does this mean for Enterprise Social Media Marketing?

  • First, it will make you personally more productive. You will be able to access an increasing array of services, regardless of your location, to help connect with other people and to do your job more flexibly and better.
  • Second, it will provide new and better-integrated ways for you to communicate with your customers. Some quick examples:
    • When you want to communicate with somebody, there will be a rich array of options from short text messaging to full video conferencing.
    • Click on a name in an email or blog to talk to that person. No looking up numbers and dialing.
    • Drag & drop contacts to set up a video conference.
    • Ad hoc Video “Tweet-ups.”
    • Very direct customer feedback o products and product direction.
    • The quantity, quality, and velocity of customer feedback on your company and products will increase dramatically
  • Third, the companies that are the leaders today in Social Media may not be the leaders in 2 years. There is much market disruption and change yet to come.

For social media marketing, the relationship between vendor and customer is becoming less a matter of broadcasting the corporate message and much more of a two-way social interaction over an increasingly rich set of communication styles. The technology convergence trends are key enablers of this change.





Social Media and Internet Telephony

29 10 2009

Internet TelephonyThe time is fast approaching when Internet Telephony will become a part of social media. In very short order, we are going to have a vast array of communications options in addition to what we have today to connect with people, leading to a much richer and more useful Internet communications experience.

The first step will be simply having Internet Telephony integrated into current social media. To continue a conversation by “phone” you would only have to click on a live link where someone’s name appears.

But, there will be a lot more functionality than just inexpensive phone calls.  Some examples:

  • Presence: this will tell you if a person is available online and their status.  Are they available, busy or currently on the phone?  Very helpful in figuring out the best way to communicate with a person.
  • Identity: will provide secure connections if you need that for business communications.  Anonymity has its place but business social media conversations may also require strong identity and authentication.
  • Voice Messaging: will be a part of normal Internet calls.
  • Voice Conferencing: if you want to have a conference with more than one participant.   MMORG players are doing this today either within their games or using Skype.
  • Web Conferencing: allows the inclusion of presentations, shared whiteboards,  and media in conference discussions. (Example: WebX)
  • Video Conferencing: will enable live video of the participants. Many laptops come with built in vide cameras and microphones today.
  • Telepresence: will enable zero-latency, life-like conferencing. A near real-life experience. HP (Halo) and Cisco Telepresence offer this today. For a significant price.
  • Instant Messaging: IM will be integrated as one of the universal communications mediums.
  • Mobile Phone Support: this will offer the ability to move a call from you desktop, or landline seamlessly to a mobile phone during a call.

How do we know all these things will happen? Everything I am talking about here is available today for business users from vendors such as:

  • Microsoft Office Communicator
  • Cisco Unified Communications
  • IBM Lotus
  • Avaya Unified Communications product line
  • ShoreTel Unified Communications product line
  • And coming soon, Google. Google Voice and Google Wave are just the first steps in the strategy.

The “big prediction” here is not about technology. That already exists. The prediction is that this technology is going to move rapidly into the consumer space and integrate with Social Media for a richer and more powerful overall communications experience.

There are big changes coming to social media with a great deal of potential to disrupt the current market leaders with new functionality and technology.





Adobe Offer to Buy Omniture

16 09 2009

CNET reported this morning that Adobe has offered $1.8 Billion or $21.50/share to purchase Omniture, a leading Web Analytics company from Orem UT.  CNET Article. A check of the Omniture.com  Web site shows the reported acquisition by Adobe as the top news item of the day.

Later in the day, the Wall Street Journal reported the rumor that Microsoft (Bing) and/or Cisco may be interested in Omniture as well and that this story may be far from over.   WSJ Article.

Whatever the final outcome, this activity shows two things:

  • Web Analytics would be a nice fit with Adobe’s Web creation and management tools.
  • Web Analytics is rapidly becoming a very hot space, particularly for companies that can extend their analytics products or services to include social media.
  • Prediction: We will see more acquisitions of Web Analytics companies this year.

For Marketing Professionals: Watch this space.  Your choice of a Web Analytics tool or service has never been more central to your marketing strategy.








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