Economy Changes Shopping Behavior

Vertis Communications Vertis Communications says U.S. adult consumers might be changing their physical world and online shopping habits in response to economic conditions.

One might expect further adjustments as higher gas prices start to change behavior as well.

Some 64 percent of consumers say they are shopping closer to home. About 59 percent are combining trips while 51 percent say they are cutting back on luxury items.

About 40 percent say they are making fewer purchases of $100 or more.

About 36 percent buy larger quantities of staples when they shop.

About a quarter are doing more research before buying and 13 percent say they are buying more online, perhaps to save money, perhaps to save gas.

in the US in January and found that 13% of respondents actually planned to buy more goods online as a result of current economic conditions.

Social Media, Text, Email Advertising Up Next 3 Years

More than three-quarters of marketers surveyed by Eloqua say they will increase their social media spending during the next three years. A full 74 percent said they plan to increase their direct email spending while about two thirds will spend more on mobile texting and SMS.

Respondents were bullish on online ad spending overall, with nine out of 10 saying they would continue to increase their direct online ad budgets.

The spending increases are likely to come at the expense of print ads, since 55 percent of respondents say they will probably decrease print ad spending in the next three years.

Bresnan Wins Huge Contract: Proves Thesis

Many executives in the competitive local exchange carrier industry do not believe cable operators will achieve much success in the commercial markets, aside from the very-small business that requires as many as eight voice lines and not much more.

Those executives include some of the most-successful, best-respected CLEC operators in the business. But they still might be wrong.

The State of Montana Information Technology Services Division and the Montana University system has selected Bresnan Communications as a provider of statewide data transport services for Montana’s state agencies, local governments, universities and schools.

We are talking about a network with 568 locations, serving 23 different government agencies, 14 college campuses, 40 local government entities and courthouses.

I've maintained for some time that cable operators would prove in their commercial organization in the very-small business space before beginning to move up the value chain. Bresnan's win proves they can do it.

Tell Telecom Regulators How to Make the Internet Better

Sound off. Let government regulators know “How can the Internet make the world a better place?” Post your comments at www.youtube.com/futureinternet.

YouTube users can share their opinion with the leaders and opinion shapers attending the Organization for Economic Cooperation and Development "future of the Internet" meeting in Seoul, Korea on 17-18 June 2008.

The best videos uploaded to www.youtube.com/futureinternet will be shown to ministers and VIPs at the event. They will be invited to react as well and their answers will be uploaded on YouTube during the meeting.

In Seoul, all participants, including government ministers from more than 40 countries and hundreds of global leaders from international government organisations, business, the Internet's technical community and civil society, will be encouraged to submit their own answers at a dedicated YouTube booth on site.

Global Bandwidth Consumption Grows 63% in 2007

International bandwidth grew 63 percent in 2007, which just about matches the 50 percent annual growth in bandwidth use reported by SureWest Communications, an independent telco, as well as other broadband access providers.

For buyers of global bandwidth, it appears aggregate prices were "stable," as industry watchers note, meaning a decline of 10 percent or in some cases 20 percent on capacity prices. Global bandwidth, especially on well-supplied routes, tends to decline over time as buyers consume more optical products that offer lower price-per-megabit ratios.

However, prices are opaque, and pace of price changes varies dramatically—by route, by service provider, and by bandwidth product, TeleGeography notes. There can be quite a lot of price variation even on a single route, and for a single product, as these prices for London to Paris indicate.

Mobile Social Networking Forecast

In-Stat forecasts over 229.5 million mobile subscribers globally could be using mobile social networking services by 2012. Blogging, photo and video sharing, location-based socialization services, games, SMS, and IM will eventually be combined to afford the mobile user the entire social networking experience from a handset application, In-Stat says.

Carriers will benefit from wider use of data plans, to be sure. But the more important insight probably is that the handset becomes the focus of attachment. The mobile handset will simply become an extension of the user in most aspects of life, In-Stat argues. If so, carrier brands will be less important than the handset brands.

"The critical issue most mobile social networking site and application developers struggle with is how to make money with their services," says Jill Meyers, In-Stat analyst. "There are three primary methods of revenue generation for mobile social networking applications- advertising, subscription services, and premium upgrades."

Little of that potential revenue is available directly to network service providers, though. And it remains unclear whether social networking actually is the foundation for a revenue stream or simply a really important feature.

Digital Savvy Dangers

Research from Scarborough Research shows that early adopters are different from other consumers. "Digital savvy" consumers use more technology and have more money, than the typical mass market consumer.

Cable operators never make the mistake of getting hung up worrying about early adopters. Everything they do is tuned for the average consumer, the sort of "other side of the chasm" customer technologists have to learn to deal with to achieve real mass market success.

It is important to note what sorts of experiences are getting traction, of course. It's just a different matter to tailor those experiences for the great mass of consumers who will not put up with much inconvenience when using new applications and services.

Lots of entrepreneurs fail when they don't clearly understand the differences between the bleeding edge early adopters and the real mass market.

Email Still Tops for Adult Consumers

Two-thirds of adult respondents said they preferred e-mail for communicating with businesses, say researchers at Ipsos.

Just as many—and this might be the important part—say they expected to continue preferring email five years from now.

The issue is how other younger age cohorts will adapt to the email-centric culture prevalent in business. One suggests they'll adapt quickly, even as they push for use of additional tools.

TiVo to Rent Disney Movies

TiVo says its subscribers will soon be able to rent Disney movies through their DVRs, as part of a service offered in conjunction with CinemaNow, NewTeeVee reports.

Content will be offered in both standard and high definition and will be available for a 24-hour rental period.

"Large" Suite Does the Job

Not all of us enjoy messing around with technology; backing up files, restoring software, tweaking application settings, defragmenting our hard drives and so forth. In that regard, I ran a scan using Large Software's "PC Tune-Up" suite on my XP machine.

The Suite quickly found about 504 problems, most of them said to be "serious" or "moderately serious." The dashboard information was clear, intuitive and the scan seemed to run faster than I recall other similar suites operating. Again, this was not a controlled test, so I can't speak to how other programs might have performed.

I will say the application executed much faster than I was expecting, especially in the defragmentation phase of the tune-up.

As service providers look to avoid "dumb pipe" status, supplying enterprise, peformance optimization would seem a logical place to extend the range of services such as anti-virus, firewall and anti-spam functions many Internet service providers now supply as an integral part of the access service.

The other thing is that some services are more "logical" parts of service bundles. An enriched software experience that improves Web and Internet performance probably will be seen by users as a logical extension of basic access.

Also, as the actual user experience migrates beyond a service provider network interface (a router in a small business setting, IP phones in an enterprise or mid-sized business setting or the PC in a consumer application, service providers of necessity will be seen as the "entity to call" when something isn't functioning properly.

If you can't avoid the calls to your customer service center, you might as well extend service and support to the actual end user device. Most of us by now have discovered the "dueling applications" problem when loading any new software. A hosted approach should eliminate that problem.

That's not to say I experienced a single issue using the downloaded version of the software. Set-up was completely uneventful and the application executed better than I expected. The observation is simply that distribution as part of a bundled "access" service would make sense.

Lots of us just want to do things. We don't want to be system administrators. This should help.

Average Capacity Prices Dropped 10 to 20% in 2007

The average price of wholesale circuits in most major markets dipped 10 to 20 percent in 2007, according to TeleGeography. For many, that would be considered price stability.

As price declines have moderated, international bandwidth demand has remained strong, growing at a compounded annual rate of 52 percent over the past five years, TeleGeography adds.

But revenue growth remains elusive for many wholesale network operators, the company says. A key reason lies in bandwidth buyers' changing purchase patterns: they simply are substituting bigger pipes for smaller pipes, paying more money in aggregate but at lower prices per megabit per second of capacity.

Companies that may have purchased a few 155 Mbps STM-1/OC-3 circuits five years ago are now opting for 2.5 Gbps or 10 Gbps wavelengths. These large circuits are far cheaper in terms of the price per Mbps of capacity than the smaller circuits.

"The effective price per megabit per second of capacity sold is falling a lot faster than nominal circuit prices, themselves," says TeleGeography Research Director Robert Schult. "Carriers need to sell ever larger volumes just to maintain stable revenues."

Which Devices Will Drive Mobile Web?

Given a choice between believing what people say they will do and evidence of what they have done, I've always found it is more helpful to believe what they have done is a better predictor of what they will do in the future.

So consider a bit of survey data which seems to have the ring of authenticity and some purchase behavior that might bear on the development of mobile Web devices.

The clear winner in an In-Stat survey of U.S. consumers about preferred mobile Web devices is the smart phone, the research firm says. Nearly half of the respondents said they preferred the smart phone as a mobile Internet device.

Fewer than 10 percent indicated a preference for the capabilities of mobile Internet devices, such as an ultra-mobile PC or a mobile Internet device. In some ways that simply makes sense. The mobile device most people carry is a mobile phone. Given the ability to add Web access from that device, one would expect most people to say that is the preferred, "use every day and everywhere" device.

The issue is that consumers rarely if ever provide decent input on applications or devices they have not seen or used. Survey responses would seem to carry an awful lot of that sort of data.

About one quarter of users like the idea of the ultra-mobile PC as long as it does not involve sacrificing the capabilities of a full-function laptop. But few users have them, at least so far.

Those showing an interest in MIDs were unclear about how they would use these devices or where to buy them. Again, there is a lack of awareness and experience with such devices, which make the feedback less useful.

The main objection for non-users of mobile data technology in general, and smart phones in particular, is that users are skeptical of the benefits of mobile data and view it as a “luxury.”

On the other hand, there is data gathered from Finland mobile operators suggesting very strongly that it is in fact PCs that drive most of the mobile data traffic.

It might be that today's mobile Web users primarily are users with characteristics different from the ultimate base of mobile Web users. That might be the case for 3G data card users and iPhone users, for example.

The point simply is that we won't know what users actually will do until they have ample chance to see and use mobile devices capable of using the Web. There is ample evidence that iPhone users have mobile Web usage profiles astoundingly different from users of other Internet-capable mobile devices.

Enterprise VoIP Winners

Pike and Fischer analysts predict that AT&T, Verizon and Qwest will capture the biggest share of large enterprises as VoIP customers, but will face competition in the SMB space from a variety of new entrants.

The big issue is whether the former RBOCs also will have the same success in the consumer market, despite early dominance by cable operators.

This analyst thinks they will.

Microsoft Expects 50% Mobile Software Growth

Microsoft Corp. expects global unit sales of its Windows Mobile software for mobile phones to grow at least 50 percent per year in fiscal years 2008 and 2009, driven by smart phone demand.

"Fifty percent growth is the minimum," Eddie Wu, Microsoft managing director, told Reuters.

He said Microsoft expects to sell 20 million units in its 2007 to 2008 fiscal year ending in June 2008, and expects to grow at least 50 percent annually over the next two years.

Web 2.0: Features, Not Business Models?

Lots of valuable features do not provide a foundation for fleshed-out business model, many Web 2.0 entrpreneurs seem to be finding.

The shortage of revenue among social networks, blogs and other “social media” sites that put user-generated content and communications at their core has persisted despite more than four years of experimentation aimed at turning such sites into money-makers, the Financial Times reports.

“There is going to be a shake-out here in the next year or two” as many Web 2.0 companies disappear, says Roger Lee, a partner at Battery Ventures. That's just part of the innovation process, as you know if you were part of the Web 1.0 boom of the late-1990s.

But features often are an important and long-lasting effect, even when completely new business models are not built. Email arguably hasn't created a stand-alone business model, for the most part, yet it has radically changed user behavior and expectations.

Social networking appears to be one of the lasting fruits of the current Web 2.0 wave, no matter what happens with most of the companies attempting to make a business out of it.