U.K. Already Heading for "Double Dip" Recession, Will U.S. Follow?

Some people continue to insist the U.S. economy is not headed into another recession, creating a "double dip" recession. Others say a new recession is coming.

We can't say yet, but there's bad news from the United Kingdom, where the "Retail Health Index" already shows business activity dropping, which if replicated for the entire U.K. economy, would trigger a formal recession condition. UK Retail is now firmly back in recession says Retail Think Tank 

So far, the U.S. economy has not actually fallen for one full quarter, let along two, but it is growing at a historically weak level, compared to past recessions. And some already think the U.S. economy is headed for a double dip.

"Amid all the absurd posturing over raising the debt ceiling comes some real news—and it’s very bad," says the New Yorker. "According to new government figures, the economy has hardly grown at all in 2011."

"The recovery that began in early 2009 is now officially stalled," the New Yorker says. "Some economists will quibble, but I think it is fair to say that the dreaded double-dip recession is at hand," argues John Cassidy.

When healthy, the American economy grows at an annual rate of close to three per cent. The Commerce Department’s latest report on the gross domestic product shows that between April and June 2011, it expanded at an annual rate of 1.3 per cent, and between January and March it grew at an annual rate of just 0.4 per cent.

The first-quarter figure is particularly stunning. Previously, the Commerce Department had estimated growth in the period at 1.9 per cent. Some think there will be a similar downward revision to the second-quarter figures.
Read more here.

it may turn out that we’re already in one, according to a pair of economists at Moody's Capital Markets Research Group. Read more here.

U.K. retail executives expect the trend to continue in the third quarter. The most recent quarterly reports from a number of European telecom providers also could suggest economic softening.

U.S. Steps Up Probe of Nortel Patent Deal

Apparently the U.S. Justice Department thinks there might be anti-competitive implications in the recent sale of Nortel patents to a consortium of firms including Apple, Microsoft and Research in Motion, the Wall Street Journal reports.

A consortium of six companies last month paid $4.5 billion to acquire a portfolio of 6,000 patents auctioned by the bankrupt Canadian telecom equipment maker Nortel Networks Corp. Google had made an initial bid of $900 million.

The Wall Street Journal says some observers were "stunned" at the sales price, which has raised Justice Department concern about what return the bidders expect on the investment.

U.S. Steps Up Probe of Nortel Patent Deal - WSJ.com (subscription required)

Recently, some Android handset manufacturers reportedly have agreed to pay Microsoft $5 per device in licensing fees, perhaps raising speculation that Google's rivals think they can impose more costs on Android handset manufacturers. http://ipcarrier.blogspot.com/2011/07/patent-issues-for-android-growing.html.

The Nortel patents cover an extensive array of mobile-related functions, especially related to fourth-generation mobile networks and devices, apparently. http://ipcarrier.blogspot.com/2011/05/nortel-nears-libuidation.html

Wired Looks at Who Wins Social Media Wars

How Big a Deal will 4G Wholesale Be?

In 2016, ABI Research forecasts that there will be 103 million 4G wholesale subscribers, served by mobile virtual network operators (MVNOs) that buy capacity and services from a facilities-based provider and then retail services under their own brand names.

ABI Research estimates there were about 3.8 million 4G wholesale subscribers in 2010.

Other forecasts suggest lower adoption. Separately, Ovum forecasts that global MVNO connections will reach 85.6 million by 2015, and revenues are expected to be $9.5 billion. In other words, ABI Research believes there will be more 4G MVNO customers than Ovum believes will exist in the entire MVNO market, including the much-larger 3G market.

Over the next five years, new MVNO markets are expected to open up in South and Central America, Asia-Pacific, and in the Middle East. However, there are still regulatory and market challenges to overcome before these markets can offer an environment that can sustain MVNO activity.

Therefore, Ovum expects the bulk of MVNO connections and revenue growth from 2010 to 2015 will come from established MVNO markets in Western Europe, Asia-Pacific, and North America.

How Big a Deal will 4G Wholesale Be?

Why You Should Switch to GMail

Application Usage Rules of Thumb

"One fairly common 'law of web and mobile physics' is the ratio of registered users or downloads to monthly actives, daily actives, and max concurrent users (for services that have a real time component to them), says venture capitalist Fred Wilson. "I call this ratio 30/10/10 and so many services that we see exhibit it within a few percentage points here and there."

What Wilson sees is that, for most providers, 30 percent of the registered users or number of downloads (if its a mobile app) will use the service each month. About 10 percent of the registered users or number of downloads (if its a mobile app) will use the service each day.

The maximum number of concurrent users of a real-time service will be 10 percent of the number of daily users.

A VC: 30/10/10

Mobile Has To Re-Think The "Ad"

Necessity is the mother of invention, and that is likely to be true for mobile advertising as well. Because of constraints on-screen size, display ads will not be the preferred or logical format, many would argue. That might explain why there is so much activity around e-commerce, coupons, promotional messages and other "non-traditional" marketing and advertising formats being tried in the mobile business.

Mobile Has The Opportunity To Re-Think The Ad

A Brief History of Apple Not Buying Things

For years, Apple has confounded the rest of us by not buying things that it should clearly be buying. Not purchasing other well-known companies is so core to Apple’s strategy that it must have a whole department devoted to non-mergers and un-acquisitions, whimsically argues Harry McCracken, editor of Technologizer

It's just part of Apple's culture, as making and integrating acquisitions is part of Cisco's culture, or how some other companies seem to make acquisitions whose value is destroyed after the acquisitions.

So a recent speculation that Apple might buy Barnes & Noble would likely wind up being the latest rumor not to prove accurage.

A Brief History of Apple Not Buying Things

Microsoft Spoofs Gmail

 Microsoft is sparring with Google about email privacy.

The purpose of this spoof video, apparently, is position Office 365 as more secure in the email area.

Why 'Apps' Will Not be a Major Opportunity for Telcos

To give you some idea of how hard it actually is for a large communications carrier to create a new line of business that has a meaningful impact on revenue, consider an analysis Tristan Louis at TNL.net recently conducted.

He took a look at valuations and implied average revenue per user for some of the leading Internet companies, including Pandora, LinkedIn, Groupon, LivingSocial and Zynga.

His analysis suggests it is possible to generate between $3.57 and $4.58 per user per year. By the same token, it could be possible that a user is worth between $106.46 and $126.24 over the user’s lifetime to a publicly traded web 2.0 company.

But assuming such deals were contemplated, you can see the problem. Even if a telco could somehow create enough value for any of these services to create a role in the revenue stream, the net result is that the effort is more trouble than it really is worth.

Assume an average of $4.25 annual revenue per user. Assume a telco could create enough value to warrant a revenue share of five percent of gross revenue. That would imply annual incremental revenue of 21 cents a year, or less than two cents a month, per subscriber.

If one assumes a large telco has to see a top-line revenue opportunity of roughly $1 billion to bother chasing the opportunity, one typically has to assume revenue potential in the dollars a month per subscriber range, ranging in many cases from $10 to $20 per user, per month, to be reach that level of significance.

Why 'Apps' Will Not be a Major Opportunity for Telcos

Application-Aware Charging Grows on Mobile Networks

Some 32 percent of mobile operators already are offering application-aware charging models, a new study by Allot Communications suggests. 'Our findings show that operators have responded to this challenge (differential demand imposed by growing video bandwidth consumption) by implementing usage and application-aware charging models and service plans,' Allot says.

Application-Aware Charging Grows on Mobile Networks - Carrier Evolution

Telcos Invest in Cloud, Immediate Return not the Issue

Communication service providers committed almost $8 billion to cloud-related pursuits in the first six months of 2011, but recent acquisitions won’t boost cloud revenues overnight and service differentiation remains poor, according to Informa Telecoms & Media. That finding is not terribly surprising, given the relative newness of the business and the cost of investing in facilities.

Informa estimates that the typical provider generates less than five percent of its enterprise revenues from annuity cloud services. That sounds like a small amount, but can be quite significant for a large provider. Some might point out that text messaging revenue only accounts for about five percent of Verizon Wireless revenue, but it is a quite-important revenue source.

Telcos Invest in Cloud, Immediate Return not the Issue - Carrier Evolution

Google Buys IBM Patents to Ward Off Lawsuits

Google has purchased 1,000 technology patents from International Business Machines Corp. as the Web-search giant stocks up on intellectual property to defend itself against lawsuits. The patents involve the "fabrication and architecture of memory and microprocessing chips," computer architecture including servers and routers and online search engines, among other things. Read more here. (subscription required)

Some might argue the litigation-heavy U.S. business climate is stifling innovation. There have been continual patent infringement lawsuits filed recently in the mobile device space, for example. Read more.

Amazon Uses Streaming Video for "Content Marketing"

Amazon.com has some advantages as a content marketer. Like other retailers of "content" or "entertainment" products, it can use trailers, book reviews and descriptions as content marketing vehicles. But unusually, even for a content retailer, Amazon has the ability to give away professional content as part of a direct revenue model.

Amazon Prime is a membership service that, for $79 a year, gives Amazon customers free shipping on their purchases as well as no-extra-charge access to the Prime Instant Video streaming library. The Amazon Prime membership is a revenue-generating loyalty device, which provides clear incentives for members to keep buying from Amazon.

Pursuant to that strategy, Amazon.com added a new licensing agreement with NBCUniversal Domestic TV Distribution that will allow Amazon Prime members to stream select Universal Pictures movies through Prime Instant Video. This deal with Amazon will bring the total number of Prime instant videos to more than 9,000 movies and TV shows in the summer fo 2011.

Sometimes it is harder to see the tie between content marketing and a firm's revenue model. There is no such obscurity in the case of Amazon Prime Instant Video.

Amazon Adds More Content

Five Lies About Social Media Marketing

Social media has caused businesses to set up, or to feel they have to set up, Facebook Pages, Twitter accounts and blogs to connect with as many customers as possible. Waylaid somewhere along the way, however, were the fundamentals of public relations, marketing, corporate communications and sales, giving way to erroneous assumptions about how businesses should manage their social marketing, some would argue.

Among the five biggest misconceptions is the notion that somebody other than you knows "social media," and is qualified to give you advice, argues Mikal E. Belicove is an "Entrepreneur" magazine columnist.

That might seem a "harsh" judgment, but for most smaller and start-up businesses, it is true enough.

The problem is that the art form still is developing. Some people have more experience, it is true, but at this point we all are still experimenting.

Perhaps one analogy is parenting. Some do it very well, almost instinctively, while others have to work at it. But humans wouldn't have been around very long if "parenting" were really so difficult that it had to be "outsourced" or conducted only by specialists. Some amount of common sense is needed, but social media is a tool like any other. Parents learn to be parents by doing it. Social media is like that, as well.

Also among the five top myths is the notion that social media, though "new," also represent "new media." As Belicove argues, all successive generations of media are new for a while. Then they just become "media." The implications are that social media can be approached just as any other medium can be: a tool.

Five Lies About Social Media Marketing