Harry Chen Thinks Aloud

Many consumers stayed on the sideline when it comes to purchasing a high definition DVD player. The battle between Toshiba and Sony, HD DVD vs. Blu-ray, is coming to an end.

Sony wins. Blu-ray beats HD DVD.

Toshiba, the main force behind HD DVD, is expected to drop it’s HD DVD production in the near future. This IHT article gives a quick overview of the situation and offers few interesting facts.

• It only took 2 years for Toshiba to “give up” on the standard that it tries to push. In the past video tape format battle, Sony waited 10+ years before abandoning its Betamax format.
• Blu-ray accounted for 93 percent of next-generation DVD hardware sales in North America (reported in January 2008).
• Toshiba may have lost the battle. But, some analysts embrace the company’s quick move to adopt a winning standard, and upgrade the company’s stock rating to “buy/high risk” from “hold/high risk.”

Mozilla Foundation announced its 2006 revenue: $66,840,8550. This result represents a 26 percent increase from its 2005 revenue. The financial state of the Foundation looks bright in the short-term. However, some analysts have concerns about it’s long-term outlook.

Here is the problem. In 2005, about 85% of the organization’s revenue comes from Google, which pays royalty fees to have Google search services integrated in the open source Firefox browser. Google’s contract with the Mozilla Foundation is to expire in November 2008. So far, no words from Google whether it wants to renew the contract. Analysts worried that Google may abundant the relationship and go on to implement its own browser strategies independent from Firefox. As a result, Mozilla could face a big drop in its revenue after 2008.

I think Mozilla can live well beyond 2008. First, if Google decides to end its contract in Nov. 2008, there is simply other potential clients to replace Google, e.g., Yahoo! and Ask. Second, Firefox can offer other kinds of royalty licensing to web business, such as EBay, Netflix, and Amazon. The Web is an important computing platform. It’s definitely worth paying to have your business displayed in the default page of the worlds’ second most popular web browser. Third, if Mozilla Foundation does run out of cash to operate, I’m sure some Silicon Valley VC will be happy to take over the organization and run it, perhaps, under a different business model.

Mozilla is here to stay, either with or without Google.

The concept of self-branding is nothing new. Politicians brand themselves to get voted; movie stars brand themselves to get public attention. In the age of Google, YouTube and Facebook, self-branding is an important skill that every career-driven individuals must pay attention to.

I came across this concept twice in the past few days. First time, when reading the bookmark “The World is Flat” by Thomas L. Friedman. Second time, when reading the article “Creating Brand You” by Diane Brady in the BusinessWeek magazine. What has gotten my attention is that in the age of Internet, self-branding is a strategy that is no longer exclusive for the rich and powerful, but also is available to anyone who has an Internet connection and knows how to use a mouse and a keyboard.

What is Self-Branding?

Think yourself as a product. Self-branding is to use branding tools (e.g., strategies, tactics, communication messages, blogs, photos and videos) to maximize your own image. “Brand You” defines who you are, how you are great and why you should be sought out. Self-branding is to create your reputation in a targeted population — which may be your colleagues, potential clients, future employers etc.

Why is Self-Branding Important?

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Both Google and Yahoo! went through the millennium bubble burst. However, years after, the business of those companies seem to have gone into two different directions. Google’s stock price has risen more than 500%, and the price of Yahoo!’s stocks is nearly unchanged.

So what business discussions have contributed to the success of Google and the failure of Yahoo!? Conrad de Aenlle in this IHT article explains…

The strength of Google has been to take complicated technology - a superb Internet search engine - and build an uncomplicated business around it: selling advertising aimed at consumers based on Google’s understanding of their needs and wants, gleaned from their search patterns.

Yahoo is a jack of all trades - a communication medium, aggregator and distributor of news and entertainment - and it has not mastered many of them, Weiner said. “Yahoo is attempting to become a broadcasting platform, creating original content, cutting deals with film studios and TV networks,” he said. “None of that has really panned out.

A simple answer to the question is this…

It takes more than great technology to make a great technology company.

When it comes to building a successful technology company, while technology and innovations are important, but the company’s operation and execution are even more important.

Source: Why Yahoo! came up short

VTT Technical Research Centre of Finland recently published a technical report on social media and its business models. In this report, the authors surveyed several social media companies and products, and concluded that while online advertisements, e.g., via Google AdSense and Yahoo! Publisher Network, continue to be the most popular business model for social media companies, there are alternative business models for making money.

I highly recommend this report to readers who are interested in the business aspect of social media. It did a good job in explaining social media concepts and its relationship with Web 2.0 and other technology derivatives (e.g., swarm intelligence and mash-ups). Key issues associated social media are also discussed, which includes user behaviors (active v.s. passive), user identity, copyright, mobility, trust and spams.

In the rest of this post, I highlight the existing and emerging social media business models that are discussed in this report.

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Mozilla Foundation is a non-profit organization. It depends on people donations and contracts to operate it’s daily business — pay for developers, marketings etc. Since 2004, with the success of its Firefox browser, Mozilla has grown into a very successful open source organization, and a very profitable one.

The revenue of Mozilla Foundation increased from $6 million in 2004 to $52 million in 2005. A large portion of this increase is due to a special agreement with Google. The company pays Mozilla more than $100 million to have Firefox’s default page to display the Google search page.

In 2005, a new for-profit Mozilla organization is created, which is called Mozilla Corp. A key task of the new organization is to manage tax and other issues related to the Google contract.

Here are couple interesting questions to think about:

1. When the survival of an open source organization (e.g., Mozilla) is depended on special arrangements and agreements with a for-profit company (e.g., Google), can it continue to function independently without being influenced by any business objectives of the for-profit company?
2. Should Mozilla share wealth with thousands of people who have contributed to its open source projects? If so, how?

Source: Firefox faces the costs of success

These days investors of the stock market are happy because the Dow is at its all time high. However, US consumers are not very happy because of rising energy costs, grim housing markets and possible inflation and stagflation crisis.

This situation looks odd to many people. If the US economy is doing well, shouldn’t it benefit both investors and consumers (remember the age of dot-com)? If the US economy is not doing well, how is it possible for many companies to report record earnings?

Answers to these questions can be found in Robert Reich’s podcast — Wall Street’s up, Main Street’s down.

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Harvard Business Online launched a new web site that is full of useful management and business analysis resources. An official announcement can be found here.

Items on Harvard Business Online that I enjoy:

• HBR IdeaCast: breakthrough ideas and commentary from leading thinkers in business and management
• Innovation & Entrepreneurship: sub-topics includes disruptive innovations, disruptive technologies, entrepreneurship and innovation
  
• Discussion Leaders: blog posts by leading thinkers in business and innovation (Tom Davenport, Tammy Erickson, Eric McNulty, Larry Prusak, Michael Watkins, Bob Sutton and Gillian Corkindale)

Source: Bob Sutton