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July 22, 2005

Wifi Nation...

Wifination_1_1 Click on this graphic from the most recent edition of Business Week.  What you will see, and what many continue to deny, is that Metro-scale Wifi isn't a theory, its a reality.  The networks are live.  They perform way better than EVDO or any cellular alternative.  They are cheaper to deploy.  AND, there is huge momentum around more and more networks. 

This is classic "Innovator's Dilemma" type disruption.  And the incumbents should start to embrace it instead of trying to pass laws to make it illegal. 

Resistance is futile...and denial is typically a poor business strategy.

Posted by Bill Gurley on July 22, 2005 at 10:26 AM | Permalink | Comments (6) | TrackBack

July 19, 2005

Do VCs Help in Building a Technology Platform?

Here is an interesting article on whether or not Microsoft’s “.Net” technology is attracting the interest of the venture capital community.

As a platform company, Microsoft has reaped huge benefits from the formation of vibrant application opportunities on top of its OSes.  In the 80’s, the Microsoft desktop OS was the breeding ground for such successful application companies as Lotus, Borland, Adobe, and many more.  Many of these companies were very successful stand-alone public companies.  In the 90’s, many enterprise software startups were successful by betting early on Microsoft NT.  IPO’s resulted here as well.

Venture Capitalists look to the public markets for clues on where to go next.  There is no point in investing in technologies that don’t lead to liquidity events.  What the article stresses is that the majority of VC money these days is being spent on top of the Open Source platform rather than the Microsoft’s .Net platform. 

It’s not clear to me if this is because (1) VCs are making a conscious bet on the future success of the Open Source platform, or if (2) VCs have recognized that Microsoft tends to move up the stack quickly eating up these application opportunities, and have therefore turned to a platform that is seemingly more benign.  It is also unclear what impact this will have on the overall staying power of the Microsoft platform.  Rapid and fervent application availability certainly reinforces, fortifies, and protects any platform play.

Posted by Bill Gurley on July 19, 2005 at 08:54 PM | Permalink | Comments (4) | TrackBack

July 12, 2005

DVD Glut

I can't help but wonder if the recent news at Dreamworks and Pixar is in some way related to the Internet, Tivo, and other disruptive technologies.  Could it be that people are watching Shrek 2 on Tivo and saving that on Tivo for future viewing?  Could it be that other activities, such as Internet usage, is infringing on DVD time?

There is another big issue.  Why, in 2005, are we creating "inventory" of a digital good that can then be returned and cause an earnings miss?  Why not VOD, or at least "print on demand" at Best Buy and Tower Records.  Or at the very least, only recognize revenue on sell through.  This seems like a 1980 problem raising its head 25 years late.

Perhaps Amazon can solve the problem...

Posted by Bill Gurley on July 12, 2005 at 10:10 AM | Permalink | Comments (14) | TrackBack

DISCLOSURE: The information contained Above the Crowd has been obtained from sources believed to be reliable but is not necessarily complete, and its accuracy cannot be guaranteed. Any opinions expressed herein are subject to change without notice. The author is a general partner of Benchmark Capital, a venture capital firm in Menlo Park, Calif. Benchmark Capital and its affiliated companies and/or individuals may have economic interests in the companies discussed herein. © J. William Gurley 2005-2006. All rights reserved.