ImaginativePRO Blog

STUDY: THE FAST GROWING HISPANIC MARKET HAVING HUGE EFFECT ON ALL FOOD AND BEVERAGE CATEGORIES

Statistics confirming the overall growth of Hispanics within the U.S. population and their spending power are readily available and frequently cited, but quantifying the Hispanic market's impact on specific consumer goods categories and industries can prove more elusive.

A new analysis of Census Bureau and Bureau of Labor Statistics Consumer Expenditure Survey data for 2005 to 2008 by Latinum Network sheds light on the true monetary impact of the Hispanic market on the food and beverage and restaurant industries.

Latinum, a for-profit business network that helps brands market to the Hispanic market through collaboration, networking and research, currently has more than 30 major marketer company members. The group presented its analysis during a recent Sanford C. Bernstein investor conference call.

Some of the findings:

• Between 2005 and 2008, new Hispanic spending offset 84% of the decline in real demand across the entire food, beverage, and restaurant industries. Total U.S. food sales grew by $15 billion (to $469 billion), beverage sales grew by $1 billion (to $114 billion), and restaurant sales declined by $19 billion (to $325 billion), for a combined loss of $2.9 billion (-0.003%). Within that total, sales generated by non-Hispanic consumers declined by $17.7 billion, or 2.4%, while Hispanic consumer sales rose by $14.8 billion, or 18.

• Hispanics represent the sole growth market within many key food, beverage and restaurant categories, and the primary demographic growth opportunity for a $566.7 billion majority of the restaurant and F&B industries.

Specifically, Hispanics represent 85% to 100% of real-growth opportunity for the restaurant industry (which had $325.4 billion in total sales in '08), as well as for at least 20 declining or stagnant F&B categories (which had combined sales of $241.3 billion in '08). Hispanics generated $4.9 billion in new sales for the restaurant industry, and $4.3 billion in new sales for the declining/stagnant F&B categories between 2005 and 2008.

Among the stagnant F&B categories, compound annual sales growth among non-Hispanics ranged from zero to -2.9%, while CAGR among Hispanics ranged from 3% to 12%.

For example, cracker sales declined by 0.1% among non-Hispanics, but rose 12% among Hispanics; fish/seafood declined 1.3% among non-Hispanics, but rose 10.2% among Hispanics; and candy/gum declined by 1.7% among non-Hispanics, but rose 8.2% among Hispanics. Health/ wellness concerns drove beef sales down (-1.2%) among non-Hispanics, but ethnic preferences produced a category gain of 3% among Hispanics.

• In addition, Hispanics represent 20% to 85% of real-demand growth opportunities among growing F&B categories that represented another $245 billion in sales in 2008. For these categories, Hispanics generated $5.9 billion in new market value, or about 20% of growth, between 2005 and 2008.

For example, frozen meals are the highest-growth food category among Hispanics (30% CAGR, representing $645 million in sales between '05 and '08, versus 18% growth among non-Hispanics). Within the growth categories, Hispanics also generated particularly significant dollar sales gains within poultry, pork, tea, fats/oils, fresh vegetables, ham, miscellaneous prepared foods and noncarbonated fruit drinks, among other categories.

In addition, alcoholic beverage sales rose 2.2% among Hispanics during the period, compared to a decline of 0.8% among non-Hispanics.

• Within the restaurant industry, 2005-08 compound annual sales growth among Hispanics was 5.2%, versus -2.5% among non-Hispanics. And while Hispanics have tended to prefer low-cost convenience over full service, that may be changing, according to Latinum.

Among Hispanics, price-adjusted CAGR grew in every category between '05 and '08, including breakfast/fast food (8.1%), breakfast/full service (1.8%), lunch/fast food (3.3%), lunch/full service (8%), dinner/fast food (3.1%) and dinner/full service (2.3%). In particular, Hispanics are increasingly likely to eat out during the work day. In contrast, among non-Hispanics, CAGR declined in every category but breakfast/fast food, which was up a mere 0.4%.

While growth in Hispanic households and population is the primary factor, the contrast in spending trends between Hispanic and non-Hispanic markets is also being driven by differences in ethnic preferences, economic and cultural integration, and demographics, points out Latinum co-founder and principal David Wellisch.

To win Hispanics' loyalty, brands must make "authentic appeals to their unique behaviors and tastes through distinct products, channels, messaging and marketing strategies," Wellisch stresses.

COMMENARY:  Those are some rather impressive statistics about the hispanic market.  Hispanics represent the fastest growing demographic in the U.S. 

Many grocery chains have responded to the growing hispanic market by increasing their product offerings.  Wal-Mart has actually opened hispanic stores catering specifically to the tastes of the hispanic market. 

You see the influence of the hispanic market everywhere: breakfast burritos at many of the major fast food chains.  The rapid increase in the number of Mexican restaurants. The Chipotle and Pollo Loco chains have been a chief beneficiaries.

Packaged goods manufacturers often print their packaging in both English and Spanish. 

Courtesy of an article dated April 9, 2010 appearing in MediaPost Publications Marketing Daily

COMSCORE: ASK.COM AND BING INCREASE THEIR MARKET SHARE IN FEBRUARY AGAINST GOOGLE

 

Analysts report search market performance gains from unexpected sources -- Ask and Yahoo -- this week. This represents the first time for Yahoo in more than a year.

Ask.com's market share in search rose from 3.7% in February to 3.8% in March, remaining stable for the past year, according to comScore. Core search volume rose by 8.5% from the prior year, up from 0.7% year-on-year growth in February. The network's U.S. search volume rose 8.0% year-on-year in 1Q versus 8.8% growth in the fourth quarter.

Market share varies slightly depending on the data firm. Experian Hitwise reports that Ask.com had the highest gains, rising 21% to 3.44% in March, sequentially. Yahoo Search and Bing received 15.04% and 9.62%, respectively. Yahoo rose 3% and Bing declined 1%, compared with the prior month.

Still, Ask isn't the only search engine to capture new growth. Although Barclays Capital's Douglas Anmuth says it's too early to confirm that Yahoo's share has "stabilized," the analyst remains "encouraged." Data firm comScore delivered the positive news that Yahoo inched up 0.08% in February to 16.89% of searches in March. Yahoo lost roughly 3.1% market share since last year.

Meanwhile, Yahoo did experience a setback. The Sunnyvale, Calif. company confirmed Thursday that Ari Balogh, chief technology officer and executive vice president of products, will leave the company for personal reasons. Broadpoint AmTech Analyst Ben Schachter believes Balogh, who drove product initiatives and restructuring Yahoo's infrastructure, remains instrumental in the potential turnaround for the company.

Although Balogh would not return from sabbatical in June for personal reasons, "the loss of his leadership is likely to be a blow as he was highly regarded both internally and externally," Schachter writes in a research note. "His loss is a negative for Yahoo."

Schachter has concerns about the recent loss of Yahoo employees, such as ad sales exec Joanne Bradford. He says high turnover throughout the organization makes Yahoo's turnaround more challenging.

The exodus of Yahoo execs aside, Microsoft Bing's market share rose from 11.5% to 11.7%, but the pace of its share gains have slowed, according to Schachter, citing comScore numbers. Bing's March share gain represented its lowest basis point increase since Bing was launched in June, 2009, but the bottom line is that Microsoft continues to take share, pointing to its marketing and cashback programs as having a positive impact.

It appears that Ask, Bing and Yahoo gained in March at the expense of Google. Google domestic core search market share fell slightly to 65.1% in March from 65.5% in February, according to comScore. Google grew March core search volume by 10.1% year-on-year, slightly below 14.3% growth in February. Google domestic core search volume growth of 13.6% year-on-year in 1Q is below 4Q's 19.9% year-on-year increase.

COMMENTARY:  I weaned myself off of Google in 2009.  Don't miss it anymore.  For my money, Bing is a better search engine.  

Courtesy of an article dated April 9, 2010 appearing in MediaPost Publications Online Media Daily

ANGELS LOSE THEIR TASTE FOR STARTUPS, 35% OF ANGEL MONEY WENT TO STARTUPS, DOWN FROM 45%

There's good news and bad news about angel investing. On the bright side, investments have stayed fairly stable in the angel-investing world as compared with venture capital's recent decline. On the bad-news side, a new study from the Center for Venture Research shows a substantial proportion of angels have recently lost their taste for investing in startup companies.

The Center reports angels invested $17.6 billion last year, down about 8 percent over 2008. The decline came because angels were hedging their bets more, looking less at seed-stage or startup companies and more at companies at the expansion or growth phase. In 2008, 45 percent of angel money went into seed funding and startups, and that shrank to 35 percent last year.

Message: If there's a way to portray your company as a bit more established and under way, that's apparently a better message to send angel investors in today's rocky economy.

As far as sectors, investing in industrial and energy companies saw a boost last year. Angel investing continued to be dominated by software, which got nearly 20 percent of the funding. Not surprisingly, there wasn't much interest in financial-services companies, which got just 5 percent of the angel cash.

Be warned if you're interested in angel investment that mergers and acquisitions featured in more than half the exit plans executed last year. That usually means business owners selling the company to someone else to get the money to pay angels off. 

Recession-era bad news: 40 percent of the angel's exits took place with the company they invested in going into bankruptcy. Just a reminder angel investment is no magical guarantee of startup success.

COMMENTARY:  Interesting data, but not surprising from my vantage point. Although I have my network of angel investors, many have become more risk aversive, looking for uniquness, proof-of-concept, successful business models, large markets, a compelling value proposition and generating cash flows.  

If you are a startup without a proof-of-concept, still in the early development stage, an entrepreneur or inventor without a prototype or no website, that does not have skin-in-the-game, your venture is very unlikely to get funded.  Recently a VC friend of mine prepared a term sheet offering to invest $250,000 in a startup venture with a very unique and compelling idea, although there were no revenues.  That's the exception rather than the rule and shows how VC's can say one thing, and do something else.  Go figure.

Another VC turned down a startup experiencing significant growth in revenues, because he didn't have confidence in business model, there were numerous competitors and there were no barriers to entry.  This describes a lot of successful middle market businesses.  This particular VC invested primarily in technology startups, but he mentioned he was looking at middle market.  He got middle market.  Go figure.  So frustrating.    

Courtesy of an article dated April 8, 2010 appearing in Entrepreneur.com

APPLE'S STEVE JOBS ANNOUNCES NEW APPLE IPHONE 4.0 OS AND IAD EMBEDDED ADS FOR APPS

Days after launching the iPad, Steve Jobs this week unveiled highlights of the soon-to-be-released next-generation iPhone operating system that includes a new multi-tasking feature and a way for developers to put ads in their apps.

The changes are critical for the Cupertino company to keep its innovative edge amid an increasingly competitive landscape, as the iPhone faces challenges from Google, Research In Motion's BlackBerry and Microsoft. The company's "town hall" meeting with media, analysts and developers was as much about keeping the iPhone cultural buzz alive as a continued courting of developers who provide apps for the company's devices.

"This is a software paradigm," Creative Strategies analyst Ben Bajarin said. "The platform that wins will be the one that is most attractive for developing robust apps."

iPhone 4.0 keeps the company ahead of the pack, he added.

The iPhone 4.0 operating system will be available for the iPhone and iPod Touch this summer. An iPad version will be released this fall. Some features, like multi-tasking, will be available only on the iPhone 3GS and third-generation iPod touch (late 2009 models with 32GB or 64GB), and any new iPhones Apple launches later this year.

For consumers, the biggest change is multi-tasking. With iPhone 4.0, users will be able to listen to Pandora, the customized radio station app, while, say, surfing the Web. They can chat with friends with the Skype phone app while scanning other programs to look for a place to eat. They can run a GPS app while listening to music.

"It really changes the way you use the iPhone," Jobs said. "You bounce around apps with tremendous fluidity."

Jobs said Apple delayed rolling out the expanded multi-tasking feature because it usually creates a drain on the battery and makes the device sluggish.

"We were not the first to this party, but we will be the best," Jobs said.

The other major addition to the operating system's new capabilities — and perhaps the most transformational — is the iAd feature, which will enable developers to embed sophisticated ads in their apps. Most apps today rely on banner ads; when people click on them, they are taken to a Web site and out of the app.

With Apple's platform, "Your ad keeps you in your app so you are more likely to click on them," he said.

For example, Jobs showed off a mock ad for Nike in which consumers can build their own shoe, using an app, before ordering a pair from within the app.

Apple will take a 40 percent cut of all advertising developed with iAds, the standard rate for the industry, Jobs said.

"It's all about helping our developers make some money with advertising," he said. "We think most mobile advertising really sucks. We thought we might be able to make some contributions."

"It takes mobile advertising to a higher level, that's for sure," said Chetan Sharma, an independent wireless industry analyst. "If the user engagement is high, the revenue from the app is high."

Other changes include a folder feature to help organize apps, such as games or news; new e-mail features, including a universal inbox; Game Center, a social networking game platform that will enable users to play games with their friends and other iPhone users; and the iBooks bookstore app that comes with the new iPad. There is also improved data encryption to protect sensitive company material for business users. And consumers will be able to "gift" apps to friends and family.

Jobs, Apple's marketer in chief, continued to pitch developers, whose apps help distinguish the iPhone, iPod touch and iPad.

He said Apple has sold 50 million iPhones and 35 million iPod touch devices, adding, "If you are a software developer, that is a plum market to go after."

There have been 4 billion downloads from the App Store, which lists 185,000 apps.

Jobs also said that as of Thursday, Apple has sold about 450,000 iPads, up from more than 300,000 on launch day Saturday. He said the company is having difficulty meeting demand as stores run out of iPads.

"We are making them as fast as we can," he said. "Evidently, we aren't making enough and we are trying our best."

The Apple co-founder also revealed how much the iPad means to the company and, specifically, to himself.

"Even though we've been using these internally for some time and working on it for a few years, you still have butterflies in your stomach the week before, the night before introduction, (the) launch," Jobs said during a question-and-answer session after the presentation. "You never know until you get it into your customers' hands and they tell you what they think."

"I've gotten a few thousand e-mails so far from people I've never talked to before out there, telling me how much they think this product will change their life," he said. "We think when people look back some number of years from now, they'll see this as a major event in personal computation."

COMMENTARY:  I like the new multi-tasking capability that is built into the new Apple iPhone 4.0 operating systemm  Much needed and certainly keeps Apple ahead in the smartphone category.

The iAd feature that is built into the new iPhone operating system will be a boom for developers, but as a consultant and technology analyst, I have to ask myself, do we need iPhone apps with embedded ads?  Better put, do we want app developers to stuff mobile ads down our throats?  I think not, just speaking for myself.

Apple gets to keep 40% of the revenue from those iAd ads embedded into new iPhone ads,so this is obviously good for the company.  A powerful way to lock in advertisers and monetize the iPhone to a higher level.

I am playing devil's advocate with a strong hint of sarcasm, but as a consumer I don't like mobile or online ads, banner's, links, buttons, whatever the form. Most consumers would prefer not to click those damn things.  

However, It has been demonstrated that iPhone users click more of those ads, and account for approximately 40% of all mobile ad clickthroughs.  I have written about this in my previous blog posts.  This is no doubt the central reason Steve Jobs added iAd to the new Iphone 4.0 operating system and soon on the new iPad.  

Are all Apple evangelists suffering from the same malady, which I refer to as the "lemming syndrome". The theory goes like this: No matter what Steve Job and his product designers come up with, they will buy it like hypnotized lemmings.   I ask you.  Do you want to be constantly bombared with an ad that follows you throughout an application, everytime you use that app?  I thought the whole purpose was to reap the benefits and enjoyment of the app, not view damn mobile ads.

There are more than 130,000 Apple iPhone ads, just how many of those apps will imbed mobile ads, remains to be seen.  Keep in mind that advertisers are paying for impressions (i.e. eyeballs), or how many times a consumer views an ad per day, week, month.  Some apps have huge user bases, but the majority, probably 95% do not.  So the effectiveness, ROI, if you will is just not there for the average iPhone app. You are scattering mobile ads across thousands of apps.  

The advertiser will have to enlist thousands of Apple app developers to embed their ads so that cumulatively, you can generate the impressions that you could attain from one mobile ad appearing on the homepage of MSN, ESPN, MySpace, YouTube, etc.  

Trust me, app developers are going to make peanuts from those ads.  The only app developers that will make significant revenues will be the developer's of popular apps like Farmville, to name a few.  

Okay, I give Steve Jobs and his new product development team kudos for developing iAd, but the only game changer that I see is Apple. They are really the ones who stand to win--ad dollars, that is.  

Courtesy of an article dated April 10, 2010 appearing in the Contra Costa Times              

U.S. WIND ENERGY ENDED 2009 WITH RECORD 10,000 MWs OF ADDITIONAL CAPACITY, 35,000 MW TOTAL

 

Forget about 10,000 for a bit and focus on a small number, like 1.8.

The American Wind Energy Association (AWEA) yesterday released its annual report for the industry in the United States. Wind had a record year in 2009, as reported here and elsewhere many times in recent months. About 10,000 megawatts of capacity were added last year, bringing the total to 35,000 megawatts.

The press conference covered a lot of the usual ground about wind's year: the lifeline from the stimulus, the record construction, manufacturing jobs needed to support the industry and a call for a national renewable energy standard.

But as I've done here in the past, I'd like to focus on some of the important items left out of press releases and coverage, and concentrate on significant developments that may get lost when all the attention is given to the "big numbers."

Back to 1.8.

"We reported 1.8 percent of generation and we're closing in on 2 percent," said Liz Salerno, AWEA's director of industry data and analysis. Wind's share was 1.3 percent in 2008, so even a modest growth in 2010 should surpass 2 percent.

Now, 1.8 or 2 percent doesn't sound like a lot. But consider this is an average and maybe it's time to ask if wind is approaching critical mass. In a place like Iowa, the answer is pretty clear. Iowa is interesting as a model of large wind penetration, with 14 percent of electricity demand in 2009 served by wind energy, with some predictions that the amount will top 20 percent this year.

Renewables, nationally, are at 10 percent of the electric generation mix. And new plant construction, last year at 39 percent of the total, puts wind only behind new natural gas plants. So the trend line is pretty clear.

There's one caveat in these numbers that renewables folks don't mention much. While clean energy is racking up these impressive gains, they are occurring in a business climate when all demand for electricity is off by perhaps 5 percent over the past three years due to the recession.

Even so, with little coal capacity added and new nuclear generation years away, wind will continue to grow. The question remains, by how much?

COMMENTARY:  I agree that wind energy will continue to grow, but China will dominate the industry.  China has already dominated solar, and wind is next.  However, wind power is only generating 2% of the US electrical needs, a paltry amount by any measure.  10,000 megawatts is a lot, but regular hydro and nuclear generate gigawatts, and lots of them.  The DOE proptup wind energy in 2009 due to the recession, but many experts are predicting a shakeout now that federal support has ended.

Courtesy of an article dated April 8, 2010 appearing in RenewablesBiz

APPLE FINALLY UNVEILS THE RUMORED IAD MOBILE ADVERTISING PLATFORM

Apple Thursday unveiled its rumored "iAd" mobile advertising system, with CEO Steve Jobs touting it as "a new kind of mobile ad," capable of delivering the emotional impact of TV advertising within applications.

Jobs laid out Apple's push into mobile advertising as part of a presentation in San Francisco previewing the forthcoming version of the iPhone operating system which will offer 100 new features including multitasking and iBooks -- the new iPad bookstore -- as well as iAd.

Apple signaled its broader ambitions in mobile with its $275 million acquisition of mobile ad network Quattro Wireless, which specializes in in-app advertising and provided the foundation for the company's new mobile ad platform. The Quattro deal followed on the heels of Google's $750 million bid for rival mobile ad network AdMob and opened up a new front in the companies' mobile turf war.

Although Apple is making its first foray into mobile advertising -- and advertising of any kind -- Jobs was characteristically brash in dismissing industry efforts within the category to date. "Most of this mobile advertising really sucks, and we thought we might be able to make some contributions," the CEO told the crowd of developers assembled for the much-anticipated sneak peek at iPhone 4.0.

What he promises with the iAd is the emotional resonance of high-end TV advertising combined with the interactive nature of the Internet to provide engrossing ads within applications across Apple devices including the newly released iPad without requiring users to exit an app.

With users spending 30 minutes per day using apps, Jobs projected delivering 10 ads per day per device, adding up to Apple serving 1 billion a day by year-end. (More than 185,000 apps are available in the App Store and more than 4 billion have been downloaded to date.) By comparison, Quattro before its purchase by Apple was serving 4 billion impressions a month, while AdMob delivers more than 10 billion a month.

Through the iAd network, Apple will handle ad sales and ad-serving while giving developers a 60% cut of revenue -- a smaller share than the 70% split that has previously been standard in Apple revenue-sharing agreements with developers.

During Thursday's presentation, Jobs highlighted in-app ads for "Toy Story 3," Nike and Target, showing units that functioned like mini-apps within apps offering a host of interactive options. The Toy Story ad, for instance, presented a menu offering things like video clips and theater locations, while the Target ad allows users to create a shopping list within the app.

Jobs emphasized that the ads were created with HTML5, the latest version of HTML Apple is pushing as an alternative to Adobe's Flash, the technology powering most Web video and rich media ads. Despite the lack of support for Flash, developers welcomed Apple's plunge into advertising with the iAd system.

"A lot of companies offer interactive ad units. However, Apple will create a quality standard and make it much more polished," said Lilly Gold, cofounder of app development firm IntuApps. "They will attract many more companies to advertise, which will in turn mean more revenue."

The smaller 60%/40% revenue split also wasn't viewed as a hurdle to developers embracing the platform. "The predicted growth of mobile advertising revenues will likely more than make up for this decrease," noted Dominique Jodoin, president and CEO of app developer Bluestreak Technology.

Companies like Medialets and Crisp Wireless that create rich media ads for mobile apps also applauded Apple's mobile ad initiative. "Apple's done more to move the needle in the brand community for mobile advertising than anyone else, and that was before they owned an ad network," wrote Medialets CEO Eric Litman in a blog post. "Now that they're promoting rich media units on a grand scale, we're convinced that the flow of dollars into mobile ads -- across all platforms -- will only increase."

First impressions among agency executives were more mixed. Phuc Truong, managing director of Mobext U.S., Havas Digital's mobile marketing unit, said Apple had taken Quattro's ability to serve ads within apps "to a whole other level" in terms of interactivity without leaving an app. "So it's a more seamless environment for advertisers and another way for creative people to think about delivering brand messages," he said.

But Paul Gelb, manager of emerging media for Razorfish, wasn't as impressed, noting that the ability to serve ads that people can interact with inside of apps has been around for some time. He was disappointed Apple didn't open up the door to mobile Web-based advertising with iAd. "That seemed like the thing that was missing," he said. "It's still a significant difference to Google where you can buy across all platforms and search from a company that has years of experience in an ad-based model."

Gelb questioned how quickly Apple, completely focused on building hardware and software for the last three decades, could pick up the ad business. But with Google's purchase of AdMob for now stalled by an ongoing Federal Trade Commission investigation, Apple may have more time to steal a march on its chief mobile rival. Earlier this week, The Wall Street Journal reported the agency may be preparing to block the deal on antitrust grounds. For its part, Google has pointed to Apple's acquisition of Quattro and the launching of the iAd network to show competition is robust in the emerging mobile ad space. Google and AdMob combined would have an industry-leading 21% share of the mobile ad market, compared to 8$ for Quattro, according to an IDC estimate.

Apple's long-awaited introduction of features like multitasking for third-party applications in iPhone 4.0, so people can use more than one program at time, could also help to boost its parallel ad efforts. The new software will also include Game Center, a set of APIs allowing developers to create apps with the ability to invite friends to play a game or start a multiplayer game.

iPhone 4.0 is set to launch this summer and will be compatible with the iPad and newer versions of the iPhone and iPod touch.

COMMENTARY:  With the acquisition of AdMob, and now Quattro Wireless, the folks who wrote the software for iAd, it appears like Apple is serious about mobile advertising.

I just crackup at Steve Jobs' liberal use of the word "sucks" to describe his competitors, whether they are smartphones, music players, or tablet computers, and now mobile advertising companies. If you read the book "Inside Steve's Brain", you will know what I mean.  You definitely, and most assuredly, do not want to be "Steved". 

Apple could soon dominate the market for smartphones, and these three additional pieces--Quattro Wireless, AdMob and iAd--are the pillars for Apple's grander goal of dominating mobile advertising.  Now I got it.  

Never underestimate Steve's brain. It is a living, breathing, creative, game changing and innovative monster that has reshaped Apple for good.  These digital advertising companies, and Apple's highly successful digital product lineup, are at the crux of Steve's "digital hub" a grand strategy that began with the release of the Apple iPod.  My, my we have come such a long way.

Apple is now truly a "digital communications and entertainment" giant.  Will acquiring a telecomm be next?  

Courtesy of an article dated April 8, 2010 appearing in MediaPost Publications Online Media Daily    

GOOGLE ROLLS OUT IMPROVED GOOGLE VOICE DESKTOP P2P DESKTOP SERVICE

 

Last November Google acquired Gizmo5, a VoIP service that competed with Skype by making P2P VoIP calls as well as making and receiving calls with POTS (normal landlines) and mobile phones.

Gizmo5 fills some of the holes in the Google Voice product, particularly providing an endpoint for calls. Currently Google Voice users must assign their Google Voice phone number to an actual phone to make and receive calls.

Google never commented on how they might use Gizmo5’s technology. But we’ve confirmed that they have now built a Google Voice desktop application to make and receive calls. From a user perspective, this will let Google Voice users take calls right from their desktop.

When will the new application launch? Possibly soon. Earlier this week Google started testing the application internally. This “dogfooding” of products (as in “eating your own dog food”) is a step that Google and many other companies take before launching something publicly, to iron out any problems that pop up.

COMMENTARY:  I don't have the numbers for Skype desktop usage, but that's where it all started.  However, P2P VoiP is going mobile in a big way and you can find Skype apps available for the Apple iPhone, Blackberry and Android platform mobile phones.   

Verizon recently announced a free Skype-to-Skype service for its mobile phone users.  I am sure AT&T will be, or already has plans for something similar. 

GoogleVice needs to go mobile as well.  After all, it was Google that recently introduced the fast growing Android OS for mobile phones and the Nexus One smartphone, which bombed, largely because Google tried to be the exclusive distributor and sold it on its Google ecommerce site.  

Whether Google will be able to make a noticeable dent in Skype's P2P VoiP dominating market share remains to be seen. 

Courtesy of an article dated April 7, 2010 appearing in TechCrunch 

KARMASPHERE'S APACHE HADOOP SET TO COMPETE WITH GOOGLE'S MAPREDUCE, RAISES $5 MILLION FROM VC'S

Hadoop is one of those buzzwords that pop up frequently in Silicon Valley, baffling all but the people who toil deep in data centers. But that’s likely to change, and a startup called Karmasphere hopes to be one of the reasons.

The software, more formally known as Apache Hadoop, springs from the desire of people to gain insight from large computing jobs that produce staggering amounts of data. This is an area where Google has had huge influence, coming up with ways to spread complex tasks over thousands of small, inexpensive server systems and analyze the information they generate. The technology Google developed to handle these tasks is called MapReduce.

Hadoop is an attempt to emulate the benefits of MapReduce. It was developed by a former developer at Yahoo named Doug Cutting–who named the program after his child’s stuffed toy elephant–and is now at a startup called Cloudera that is a distributor of the software.

Hadoop is already being used by a surprising array of companies, helping them more effectively distribute their computing jobs among servers in their own data centers or public computing services operated by companies such as Amazon.com.

Software companies in the past developed specialized products called data warehouses that helped analyze business data, frequently some time after it was generated. Think about rolling up the tally from a retail chains’ cash registers once a week, or overnight, and running queries against that information to try to glean customers’ actions and preferences.

But the Web is generating even more data, and companies want to analyze it much more quickly so they can change what visitors see on their Web sites. “This is somebody figuring out this morning what they are going to change this afternoon,” says David Liddle, a Silicon Valley venture capitalist who is a veteran of data-analysis ventures.

The appeal of Hadoop is one reason that Liddle, general partner at U.S. Venture Partners, and Ann Winblad, another experienced investor in the field who co-founded Hummer Winblad Venture Partners, are jointly plunking $5 million into Karmasphere, a startup that has developed tools to make Hadoop more accessible.

The closely held company, based in Los Gatos, Calif., is focusing on software for personal computers that it says helps developers create, deploy, debug and monitor applications created with Hadoop that run on servers. While Hadoop is powerful, it is is also “pretty technical and has a tedious learning curve,” says Martin Hall, Karmashere’s chief executive and co-founder.

Karmasphere has already been distributing a free version of its software, Hall says. With the initial funding round, to be formally announced Thursday, the company will work on introducing a commercial version, he says.

What companies ultimately want to do, Winblad says, is to find value in information from business operations that they now don’t have the power to mine, which is sometimes called data exhaust. “It’s not just exhaust anymore,” she says. “It’s truly how you optimize your business.”

COMMENTARY:  I have to admit that this is the first time that I have heard of the term "hadoop".    Unless you are the CTO or senior IT at a large company that has to analyze terabytes of data, you need not worry too much.  None of my clients would ever use it.

It is remarkable the number of pseudonyms used in high-tech, "cloud", "disruptive", "green", "EV", etc.  Now comes along hadoop.  Call it what it is: data mining or business analytics.   Keep it simple.  You are throwing me for a loop, or I meant to say a hadoop.

I just hope that Karmasphere, which has been giving away the software for free, can charge for it when they develop a commercial version.  It is some damn hard to go from FREE to pay me.     

Courtesy of an article dated April 8, 2010 appearing in The Wall Street Journal's Venture Capital Dispatch

COALTEK GOES TO CHINA WITH ITS "COAL-CLEANING" TECHNOLOGY THAT IMPROVES THE QUALITY OF LOW-RANK COAL

Coal is the major source of energy in China, and the country ranks third behind the U.S. and Russia in coal reserves. But much of that supply is low-rank coal that produces less energy, and has a higher ash content than other coals.

Reuters

A woman sits outside her dwelling as smoke billows from chimney stacks of a nearby coal-burning power station in Beijing.

A start-up in Tucker, Ga., believes it has the clean answer for China. CoalTek Inc.’s technology can improve the quality of this low-rank coal by basically zapping it with microwaves. Once the coal is processed, it is both cleaner-burning and more energy efficient.

Chief Executive Officer Chris Poirier said he’s seeing so much demand coming from China that his company needs to establish a subsidiary there to develop projects. The company will source material and technology locally to drive down project costs, Poirier said.

“Over time our plan is to develop a fully functional supply chain in the country,” Poirier said. “we can change the [capital expenses] associated with our proprietary platform by sourcing in country,” he said.

CoalTek is already working with an undisclosed, large Chinese conglomerate to roll out its technology on a scale that will see it eventually treating 10 million metric tons of coal annually.

“We had our first conversations with our partner in early November, and we are now at the point where we are submitting our formal registration documents with the central, provincial, and municipal government authorities,” Poirier said.

The CoalTek China subsidiary will also need sufficient capital to invest alongside its partners in developing new treatment facilities. Poirier didn’t say what size of stakes its China subsidiary would take in projects.

Poirier estimates that the CoalTek subsidiary may need to raise as much as $150 million in financing from venture or private equity investors. CoalTek has raised a little more than $50 million in financing from investors including Draper Fisher Jurvetson, Element Partners, Braemar Energy Ventures, Technology Partners, and Warburg Pincus.

The initial rollout for the company’s first project with the undisclosed conglomerate will be a modest installation for approximately 250,000 metric tons of coal. According to Poirier’s estimates, that project should cost less than $20 million.

However, as the facilities expand to include 10 processing lines for coal sourced in China, Poirier estimates that the total cost could reach up to $50 million. And that’s just the first project.

CoalTek is working in the U.S. as well. According to Poirier, it is building a processing facility slightly smaller than its China installation in a county in Kentucky.

And the company isn’t alone in its bid to clean up China’s coal before it’s burned in factories or power plants in the country. Denver-based, publicly traded Evergreen Energy Inc. signed an agreement with China Power Investment Corp., a state-owned power company in 2007, to develop its own coal treatment process in the country.

COMMENTARY:   How do you produce "clean coal" and help cleanup the environment?   CoalTek's patent-pending electromagnetic wave technology supposedly "produces designer coal" out of low-rank coal (I like that term) and "allows coal-fired power generators to optimize the burn efficiency, increase overall yields, and reduce harmful emissions".   I am so very much impressed.  Forgive me for my sarcasm, but I would like to see some carbon emission and energy efficiency numbers to support these claims.    

My definition of clean technology is just that--clean--and this includes solar, wind, wave, geo-thermal and other sources of renewable energy that drastically reduce or eliminate carbon dioxide emissions.  Coal is the worst possible fuel for generating electrical power, because not only does it produce huge quanties of carbon emissions, but also releases radioactive gases and mercury into the atmosphere poisoning our water supplies, rivers, lakes and oceans.  We need to solve those problems as well.

Unfortunately, coal is very abundant, enough of it is available to supply the world's needs for 150-200 years, but not the solution for cleaning up the environment.  The U.S. needs to get off its oil dependency, and China needs to get off of its coal dependency. 

Courtesy of an article dated April 8, 2010 appearing in The Wall Street Journal's Venture Capital Dispatch

VENTURE VEHICLES, MAKER OF THREE-WHEEL ELECTRIC VEHICLE SHUTSDOWN

So much for tilt and drive—for now.

 

Remember the VentureOne, the three-wheeled tilting electric car that was going to combine the eco-sensitivity of a Nissan Leaf and the fun of a Honda street bike, from Venture Vehicles?

The prototype was a hoot to drive. Unfortunately, the price of seats got in the way.

Venture tried to raise money in mid-2008 with the goal of releasing cars to the market in 2010, said Robert Koch, a partner at NGEN Partners and one of the lead investors, during a hallway meeting during the Agrion Business Network for Energy Conference in Palo Alto Wednesday. When the credit crisis hit, however, it became nearly impossible to get money.

At the same time, the collapse of the auto industry threw the component supply chain into disarray. Suppliers simply stopped producing parts for small manufacturers. Instead of being able to get a driver's seat off-the-shelf, it became a custom order.

"The BOM (bill of materials) ballooned," he said. "That was a very big issue."

Koch also admitted that his firm vastly underestimated the cost of getting a car company off the ground. The firm initially thought it might take $20 to $30 million to get to the early production level. The real price was likely closer to $100 million, a no-go price in an economic crunch. Well, at least NGEN wasn't the first to do that.

The founders of the company have since taken back the intellectual property, renamed the company Versu, and are trying to make a go of it.

COMMENTARY:  I remember reading about Venture Vehicles, but this was before I started my blog, otherwise I would've posted something about them.

I think before it is all over, the electric vehicle landscape will be cluttered with the dead carcuses or dying remains of several EV startups. Funding is a big issue for many of these companies, although there have been soime successes, like Fisker Automotive and Tesla Motors.  I have written about of them in my blog. 

Some of my key, and often igored rules for technology startups are: 

• Never enter a market that is concentrated at the top and dominated by large industry leaders.
• Never try to compete head-on with the industry leaders. They are well branded, have more capital, larger R&D budgets, have conquered the learning curve and have well established dealer networks.
• Never enter a market with a product this is incrementally better. The product must be disruptive and industry defining, a real game changer.  I am not so sure that today's EV vehicles meet those standards.

Unfortunately, I see several "DeLoreans", and I don't believe these EV startups are going to be competitive with the electric vehicles emerging from Detroit and Asia.  The automotive industry is a very capital-intensive and competitive industry. 

To be successful you must produce vehicles for the "middle market", where most of the buyers are.  That's you and me.  These sports car EV markers are delusional.  The sports car market is not that big.  You cannot simply throw cash at it to solve the problem.  It is bigger than the sum-of-the-parts.  

Courtesy of an article dated April 7, 2010 appearing in GreenTechMedia