Sun Valley Day 1: As moguls roll in, let the shmooze-fest begin
On the first day of the mogul fest, the parade of arrivals on the steps of the Sun Valley lodge did not disappoint. Disney CEO Bob Iger smiled for the cameras while later, Warren Buffett stayed in his car while someone checked in for him.
Some of the braver execs who approached the media were Discovery CEO David Zaslav who, for the second year in a row talked up Oprah Winfrey’s struggling OWN network and said Oprah herself would be landing in Idaho soon to attend the event organized by investment bank Allen & Co.
“OWN”s looking great really showing a lot of growth, growth in day time, growth in prime time. Oprah is coming. She’s going to be here,” said Zaslav to the journalist scrum. “The network is making a ton of progress.”
He added that on a couple of Sunday nights, when Oprah appears on it, it becomes the No. 1 or 2 network for women in the U.S.
Of course, OWN is finally growing albeit from a fairly low point after disappointing for the first year and a bit. And as the pressure has ratcheted up to meet ratings targets it has strayed somewhat from its Oprah-esque uplifting message into more traditional reality and celebrity TV fare. Interviews with Whitney Houston’s daughter and Kim Kardashian and Kanye West have become staples in a bid to boost its numbers.
On the tech side, Jack Dorsey, Twitter co-founder and now the CEO of payments system Square told reporters he was working on taking Square beyond the United States. “We just keep building,” Dorsey said.
The whole world is going to play together: Zynga founder
“Do you want to play Atari?”
Mark Pincus is sharing an inscription from his high school yearbook with a roomful of journalists at his company Zynga’s San Francisco headquarters.
The purpose of this event, called Zynga Unleashed, is to reveal the roadmap of one of Silicon Valley’s fastest growing companies – but right now Pincus is looking back.
“I spent my youth trying to get everyone around me to play games,” he continues. “But somewhere between high school in my first job, games stopped happening. I think that video games were too complicated for the people around me and I couldn’t rationalize sitting and playing alone.”
The narrative Pincus is spinning omits a few twists and turns: the overseas stint, Harvard, the Washington years and the failed social network. He jumps right into the chip factory, five blocks down the road, where his multibillion dollar gaming company got its start five years ago.
“I set out with a small group of people to make gaming free, social and accessible. And something that would bring my friends and family back to play,” he relates, pressing a clicker that keeps the slides moving.
Ouya: A hackable, $99 gaming console is in the works
Innovative games on mobiles and tablets are the rage these days as console makers and traditional video game publishers scramble to keep gamers hooked. But a new startup is embracing the openness of mobile and Internet platforms and developing Ouya, a $99 gaming console for the television with software and hardware that is designed to be hacked.
The Android-based console is being built by a project founded by Julie Uhrman, a former executive at video game website IGN. Microsoft Xbox veteran Ed Fries is an advisor and Yves Behar of design firm Fuseproject will design the console. The device will include a controller with a touch pad and a free software development kit.
“The current console market is closed, it’s expensive to develop and it’s expensive to buy games. And we really wanted to turn that idea on its head by creating an open game console where it was inexpensive and affordable for gamers both on console side and game side.” Uhrman said.
The team hopes Ouya will bring innovation to the good old video game console by attracting “indie” or independent game developers and makers of Triple-A game titles in a bid to capture the imagination of casual and core gamers alike.
Moreover, all the games will be free-to-try. That means developers can pick any plan to monetize their offerings like micro-transactions through sales of virtual goods or subscriptions, as long the gamer can try the game at first for free. The game developer-Ouya revenue split will follow the standard 70-30 model.
With an undisclosed investment from individuals that include video game developer Brian Fargo of inXile entertainment and Internet entrepreneur Jay Adelson of the social news site Digg so far, Ouya hopes to raise $950,000 on crowd funding site Kickstarter on Tuesday. Funds will help complete product development and get initial game development rolling.
Adele close to the unheard of: 10 million albums sold
Adele, the soulful British songstress, has broken all kinds of records with her hugely successful sophomore album ’21′ since it was released in the US in Feb 2011. The album, which picked up 6 Grammys this year, was by far and away the biggest selling album of last year with 5.8 million copies sold. And in 2012, at the halfway mark, despite endless plays in supermarkets, gyms and your dentist’s waiting room, it’s still burning up cash registers, moving another 3.7 million units through the end of June, or more than four times the next best-selling album (Lionel Richie’s Tuskegee in case you wondered).
Combined, “21” has sold 9.5 million copies in 15 months, putting it just 500,000 copies shy of the magical 10 million-mark. That’s unheard of in today’s music business. To put that figure in perspective, consider that the most recent album to cross the 10 million sales threshold was Usher’s “Confession,” which only broke that barrier this year. “Confessions” was released eight years ago, in 2004!
In fact, overall album sales for the first half of 2012 were down 3.2 percent, according to Nielsen Soundscan, as fans buy fewer and fewer albums — probably in favor of streaming and other forms of entertainment away from music.
From our story this week:
U.S. album sales for the first half of 2012 slumped after seeing growth last year, while digital track sales rose, according to music sales figures released by Nielsen SoundScan on Thursday.
At mid-year 2012, album sales were down 3 percent from 2011 at 150.5 million units sold over the last six months. Digital song sales, however, notched a 6 percent rise with 698 million tracks downloaded since January.
Overall music figures for physical and digital album and single sales showed a 4 percent increase, with 853.2 million sold so far in 2012.
That makes what Adele has been able to achieve all the more remarkable.
Protecting Twitter from its own hubris
Twitter created a bit of a stir late last week by cutting off LinkedIn. Ostensibly this was to project a consistent look and feel for tweets as the company adds features like threaded conversations, which LinkedIn didn’t convey. People who have accounts on both services will no longer have their tweets appear on their LinkedIn profile pages. It’s hard to know how much these updates will be missed on the business-minded network, which distinguishes itself by hosting a more focused conversation than “anything goes” Twitter. But the practical effect is that if you want to be heard in both places you’ll have to repeat yourself, unless you choose to do all your updates from LinkedIn, which still feeds one way to Twitter. More likely, you won’t because it’s too much of a bother.
Bad for LinkedIn. Much worse for Twitter.
Twitter’s ability to pipe in to other networks is a big reason for its popularity, and in doing so it has aggrandized other networks. All this has been, to the outside observer, symbiotic: People like to share their tweets everywhere they hang out; networks benefit from all that chatter and Twitter gets its hooks into everything.
In cutting off LinkedIn, Twitter doesn’t seem to be adopting the “first taste is free” business model it has previously practiced. That’s what creates addicts who can then be charged through the nose. Now Twitter seems to be calculating that isolationism is a shrewd business strategy, that it has less to lose by pulling back on sharing agreements than the networks it drops.
I think this is a path to ruin. As I tweeted (of course) after the LinkedIn news: “Twitter’s value is its integration with other networks. Cutting them off is like being on the wrong side of history.”
It wasn’t the first time Twitter had alienated collaborators in a bid to hone its destiny. When it acquired Tweetie two years ago, Twitter absorbed one of its most popular third-party clients. Third-party developers – as Tweetie’s Loren Brichter had been – were chilled. They realized that their free reign was temporary. They helped give Twitter access to a huge pool of customers, but Twitter always held the power.
I think the calls to create a subscription option for regular users who wished to protect their archive, have better searching and opt out of advertising (and other minor benefits) was mooted within about 3 months of Twitter existing.
Although they dismissed it at the time, if 10% of the customer base had taken up the subscription option, even at a $2 cpm option, that would have by now proved to be a considerable income earner, putting them in a far more solid financial position, on top of the ad revenue.
As someone who primarily uses a Private account, I have always loved Twitter but I hear more dissent daily, and as someone who doesn’t want to use FB as a primary mode of communication, I wish they’d sort themselves out so I and we have to move on.
Sheraton becomes a sommelier
Say you’re planning a business trip. If you knew you could get a very good glass of wine at your hotel at the end of the day, would that influence which hotel you book?
The people at Sheraton are betting that it will.
Earlier this year, Sheraton began holding “Sheraton Social Hour” events at a number of hotels, and 130 more Sheraton branches around the globe will add the social hours this week. From 5 to 8 PM, usually Tuesday through Thursday, Sheraton residents will be able to sample a selection of high-quality wines. At the larger Sheratons, such as New York’s, eight wines will be on offer, four scoring a Wine Spectator rating of 85 or higher and four scoring 90 or higher.
The Social Hour is also a media branding opportunity, since Wine Spectator is a partner in the program. “It’s the first time we’ve done something like this,” said Gloria Frazee of Wine Spectator.
Sheraton officials acknowledge that they’ve been looking for ways to spruce up their brand. At the high-end of the hotel market, customers distinguish between hotels by personally-tailored amenities, or by the level of service associated with a Ritz-Carlton or Four Seasons. At the low end, price and location can help sway choices. In the vast middle, the choices often appear commoditized; most good-sized cities are bound to have chain hotels in the same strategic locations, with rooms priced in roughly the same range on travel sites.
And hence the Social Hour. The idea is not entirely new. Some hotels in northern California and other wine-producing regions have long offered wine happy hours, usually for free and always with wines from a specific area. But three things set Sheraton’s effort apart: 1) They’re charging for the wine–$5 for a 2 oz. sample pour, and $13-$19 for a 6 oz. glass—meaning that the future of the Social Hour won’t depend on the promotional whims of individual vineyards; 2) no one’s ever tried this on a global scale of several hundred locations; and 3) the selection offered at Sheraton is hard to match.
At a typical Social Hour, for example, Sheraton guests will be able to sample a Beringer Knights Valley Cabernet Sauvignon 2009, with a powerful nose and robust finish—and a Wine Spectator rating of 91. Whites on offer include, from Washington State, Eroica Chateau Ste Michelle 2010, an unusually smooth Riesling. The wine was developed with the cooperation of the estate of Dr. Ernst Loosen, a legendary Riesling producer from Germany’s Mosel region.
Killing them softly
This piece originally appeared in Reuters Magazine.
As the embodiment of all that is great and good about Silicon Valley, Marc Andreessen is surprisingly unassuming. He is the earnest, clean-cut Midwestern boy made good, the state school grad who built a better mousetrap—the Web browser—and saw the world beat a path to his door. If being on the cover of Time magazine at age 24 ever went to his head, he didn’t show it. Andreessen simply did what great entrepreneurs are supposed to do: start new companies, again and again. His subsequent ventures never achieved the notoriety of his first, Netscape Communications, but they put to rest any suspicions that his early triumph was a fluke.
Over the years, Andreessen has earned great respect around Silicon Valley as a true visionary who understands where the technology world is going. He sits on the board of leading companies such as Facebook, Hewlett-Packard, and eBay, and serves as a mentor to up-and-coming entrepreneurs, notably Facebook CEO Mark Zuckerberg. And he’s a nice guy to boot, unpretentious and always excited to engage intellectually on technology, finance, company creation, and just about any other topic. What Andreessen has not done, though, is the one thing required for admission to the top tier of the Silicon Valley pantheon: build and lead a great company that defines the technology landscape for generations. Think of Apple, Hewlett-Packard, Intel, or Microsoft, and you will also conjure up the names that head any list of great technology industry leaders: Steve Jobs, Bill Hewlett, David Packard, Bob Noyce, Andy Grove, Gordon Moore, and Bill Gates.
Andreessen’s response to such observations is that he has no desire to run a big company. “I’m not psychologically wired for it,” he says. “All the people and process aspects of it, I can force myself to do but I don’t really like. When I was in management I never really loved it. I found it very stressful.” But even though he might sometimes claim to like nothing better than curling upwith a good book, Andreessen still has big goals. One might even say he is out to show that the very particular type of Silicon Valley role-player that he embodies—the entrepreneurial technologist whose strength is vision rather than management—can be just as influential as the Fortune 500 CEO.
The vehicle of his ambitions is a venture capital firm, Andreessen Horowitz, which he launched in 2009 with his longtime collaborator, Ben Horowitz. In less than three years, Andreessen Horowitz has shaken up the venture world by raising $2.7 billion and adopting an unconventional approach that includes big, expensive bets on relatively mature companies like Facebook and Twitter, along with a startling volume and variety of smaller deals. Venture investors play a singular role in the unique business culture of Silicon Valley, and the great ones are powerful and revered figures in their own right. But Andreessen Horowitz aspires to create a new type of venture firm, one that puts the technical founder in the driver’s seat and provides a host of services beyond mere dollars.
As with any startup, success is hardly assured. It’s rare that new firms break into the top tier of venture capital, and rivals grumble that Andreessen Horowitz is moving recklessly fast and will never be able to generate the fat investment returns that the blue-chip venture firms often achieve. The specter of the great dot-com bust of 2000 also looms large. For now, though, Andreessen is in his element, indulging his endless intellectual curiosity even as he orchestrates deals and proselytizes about how “software is eating the world.” With Horowitz, he has an intimate business partnership that, by all accounts, is exceptionally effective. He works near Stanford University, out of a gleaming office complex on Sand Hill Road that was built by his wife’s father, a prominent real estate developer. (His wife, Laura Arrillaga-Andreessen, teaches philanthropy at Stanford and is the founder of two nonprofits; the family foundation is just next door.)
Google enters the tablet wars with a small, safe bet
Google took another bite at the hardware apple with the announcement Wednesday of the Nexus Seven tablet. The tablet, very wisely, is not looking to compete with Apple’s iPad – the indisputable leader — but rather the smaller, cheaper tablets from Amazon and Barnes & Noble. Outside of the iPad monolith, the Kindle Fire and Nook Color have been the most competitive entrants (albeit modestly) since Apple created the market in 2010.
Google’s Nexus Seven is a safe bet and, especially given Microsoft’s (sort of) foray into tablets, not entirely unexpected from the search and advertising giant.
And that’s why Google is smart to go after a part of the market where Apple doesn’t compete — the iPad is a “full-sized” device of 9.5 inches that starts at $500. There’s no reason to believe Apple is interested in making a 7-inch model, a size the late Steve Jobs derided. But both Amazon’s Kindle Fire and the Barnes & Noble Nook Tablet are 7-inch models that retail for $200, the same as Google’s Nexus Seven. By going after less-entrenched – but still huge! – companies, Google’s success doesn’t have to be measured against Apple’s. It can start small – literally – and see if it makes inroads against two companies still trying to make inroads themselves.
Avoiding direct competition with the iPad also lets Google avoid comparison with Apple’s significant app advantage. Apple benefits from a seemingly endless supply of third-party apps (actually 225,000), which makes the iPad a digital Swiss Army Knife, an all-purpose mobile tool that is very often a replacement for a laptop.
The other small, less dexterous tablets come from content companies that realized that building a tablet was just a good way to put up a better storefront in the digital age. Both the Kindle and the Nook Tablet are tied to reading, and buying, books. They are meant to be more robust alternatives to smaller, lighter, cheaper e-ink e-readers and as such are modest conceptual upsells. The Kindle also is a streaming platform for Amazon’s smallish but respectable film library. Most important, it is tied to a retail universe where most things Amazon sells are one click and two days away from arriving at your doorstep.
Video streaming, file sharing — bad for network security, good for security business
Palo Alto Networks, the network security company, that modernized the firewall with its web application inspection took a look at what people do at work by analyzing Internet traffic in over 2,000 organizations.
Seems a lot of people watch videos.
In fact, Palo Alto’s semi-annual application usage and risk report says the bandwidth used by streaming video more than tripled to 13 percent from 4 percent in December 2011.
And that’s before the Euro 2012 Soccer Championship, the 2012 Olympics and the U.S. elections.
Apart from productivity issues and more money spent — a third of every dollar — on enterprise bandwidth for streaming video or filesharing — it opens the door for security breaches.
What has been dubbed ‘likejacking’ is essentially when a piece of malware gets downloaded as a user clicks to watch a video link forwarded by a friend.
“The risk of video as bait is more significant than ever before because of the elevated level of trust that social networking has established,” the report showed.
Blue Jeans Network’s chipping away at Cisco with video technology
Blue Jeans Network, a small rival of network equipment giant Cisco, is taking John Chambers by his word.
Cisco CEO Chambers’ mantra that video is the new voice all depends on how easy and simple it is to start a video call.
Blue Jeans, which claims it is the leader in making video services work together, says its new browser access technology does just that. (http://bluejeans.com/works-with/browser.)
All it takes is a browser and camera to join video meetings or audio connections thus allowing technology, which is often proprietary, to work with services that are often not compatible, its CEO Krish Ramakrishnan said.
So callers on Skype can hook up with people using Polycom for example
Video calls and meetings have yet to see widespread adoption beyond the corporate boardroom but new services and software are enabling a high-speed Internet connection and a standard desktop computer, smartphone or tablet can provide quality similar to expensive systems.
Blue Jeans says it connects everyone regardless of the systems used.
