at&t Says It Will Provide CDN Services

Earlier this year Level 3 caused a stir when it said it would enter the content delivery network (CDN) market with a radical pricing model: essentially offering the quality of service features at no incremental cost to what customers expect to pay for simple IP transit. And if you think about it, that's precisely what a CDN does: provide QoS features on top of dumb pipe. All of which should have, and did, raise fears about the health of the CDN market.

After all, if a contestant says it will give customers for free, what they today pay for, that's disruptive. Most recently, at&t itself said it was getting into the CDN business as well. Which should have caused another shudder: remember Northpoint, Rhythms Netconnections and Covad? They were the three independent providers in the nascent Digital Subscriber Line broadband access market. Of course, when the incumbent telcos decided broadband access was a business they had to "own," they simply moved to do that.

So are Level 3 and at&t a threat to market-leader Akamai? Right now it's hard to say much, beyond the obvious fact that competition is increasing in the space. One issue could ultimately be the size of the market opportunity, the reason for that being that a smallish market will favor specialists, while a large market will favor the larger telcos.

And it is not necessarily simply because scale economies might kick in. It is more a matter that large telcos tend not to do well in market segments that are small. Small markets never get the attention they might deserve in a large organization. So unless the market gets fairly sizable, a large telco simply will not invest enough to keep pace with smaller specialists.

So how big is the market today? As it turns out, that's a guesstimate of sorts.

Some things are hard to count. Unified communications software is an example. People who track these things like concrete measures: ports, servers, licenses sold. So how do you track "presence" features that simply are embedded in the basic functionality of an IP PBX?

Other markets aren't quite that hard to track, but still are fuzzy because mutltiple revenue categories get lumped together in the reporting. Streaming media services, as distinct from application acceleration, provides an example of that sort.

Dan Rayburn,StreamingMedia.com EVP, provides a reasonable way of current approaching the U.S. market size, though. Working backwards from benchmarks, Rayburn suggests the market for CDN services (but not P2P apps) currently is less than $800 million.

Internap's 2007 revenue is about $24 million. Limelight Networks generated about $105 million for 2007 and about $95 million of that was earned in the U.S. market.

Akamai probably generates $400 million to $450 million of its $625 million total revenue comes from their CDN services. Rayburn further guesses that U.S. CDN revenues amount to $300 million.

Level 3 wasn't in the market for much of the year, but might have earned $2 million or so.

VeriSign might have earned about $8 million for the year in the U.S. market.

Mirror Image, CacheLogic, Panther Express, CacheFly and Advection.NET taken together will do about $20 million in the U.S. market.

EdgeCast, CDNetworks and BitGravity combined did about $5 million for the year. Again, these are new services that didn't have a full year of operation to measure.

PEER 1, NaviSite and Ignite Technologies together collectively generated about $8 million.

All other smaller regional service providers providing small and medium sized businesses outsourced video delivery services sold under $20 million in 2007.

Can iPhone Overtake BlackBerry??

Now that I've had a chance to look at Research in Motion's most recent quarterly results, which were robust, one can make a comparison between what RIM did, and what 9to5mac.com expects Apple to announce it has done. Namely, 9to5mac.com expects Apple to announce sales of five million iPhones in February.

RIM sold 3.9 million Blackberries in its most recent quarter across more than 100 carriers and 13 product lines. It isn't an apples-to-apples comparison. The two companies have different quarterly "endings," RIM finishing Dec. 1 and Apple Dec. 31.

Plus, it isn't clear what time period the five million iPhones were sold over. 9to5mac.com does not indicate a belief that all five million were sold in one quarter, and one suspects that isn't the case. Make it 3.5 million or so devices in the quarter.

What is interesting is how well Apple would have done, should it report anything like five million devices over even two quarters, given its early status in the market.

Apple has been selling one model of a GSM iPhone in four countries with just four carrier partners; while RIM, with a huge head start, is sold by more than 100 carriers, and features 13 different product lines.

Firefox Goes Cloud Computing

Firefox has taken a step towards cloud computing by releasing the first version of Weave, a way to blend of the desktop and the Web through deeper integration of the browser with online services.

Basically, Weave pushes browser metadata (bookmarks, history, customizations into the cloud so it can be retrieved and used on any machine. The metadata is transparently reflected everywhere an individual gets online. Weave also will provide a basic framework for easily sharing and delegating access to this metadata to friends, family and third-parties. And it's a Mozilla product so there will application program interfaces for developers.

Mozilla intends to provide the infrastructure and an consistent model for how a user can open up their browser metadata to friends and third-party applications.

Bye Bye TDMA

at&t Wireless and Alltel finally are shutting down their old analog and first-generation cellular (TDMA) networks in February 2008. Verizon Wireless says on its Web site that it will retire its analog network on Feb. 18, 2008, and will not provide analog service after that date.

Almost nobody will notice. The carriers say a million phones out of 250 million in use might be affected. No phone capable of text messaging uses analog technology. No Sprint or T-Mobile phones use analog, either.

Carriers have been telling analog customers about the shutdown and offering them new digital service plans and phones, so it isn't clear that any active users will experience issues. There might be some "phones sitting in drawers" that users keep around for emergency 911 calling, without plans, that could be affected.

But at&t, which had the largest number of analog customers at one time, has been phasing analog out since 2001, and with the high rates of phone replacement, can't still be supporting many users on the older system.

Separately from the analog shutdown, Alltel and AT&T will finish phasing out networks that use a first-generation digital technology known as D-AMPS or TDMA (for Time Division Multiple Access).

Google Growth Uneven

Some observers caution that Google is over-estimated where it comes to innovation. "Not everything Google does succeeds," that line of thinking goes. And of course that is quite correct. Lots of things Google has done have not been runaway successes. Some initiatives have failed, plain and simple. GTalk hasn't caught on, and Google bought YouTube because Google's home-grown video site wasn't getting traction.

Perhaps the implication is that potential competitors shouldn't fear Google as much as they seem to, as Google fails often enough. Perhaps the other way to look at matters is the frequency with which Google does, in fact, succeed, compared to the number of attempts. And given the number of attempts, the more Google fails, the more it will discover things that work.

Sure, Google seems to go off on tangents now and then. Google defends these explorations as attempts to find other really big businesses. Maybe. And maybe Google just goes off on tangents now and then. Either way, the attempt to start new things is going to lead to lots of failures, if Google tries enough new things. Some of us might argue that is precisely what makes Google so fearsome: it innovates so fast for a firm its size.

Still, the observation that Google does not succeed with much of anything outside of search might be premature. Even "search" took a while to catch on. So, no, Google does not immediately dominate "every" market or segment it enters. It experiments. It fails. If it succeeds 10 percent of the time, and fails often enough, it just might discover some significant-sized new businesses.

Christmas Humor

MEMO: December 1st
TO: ALL EMPLOYEES

I'm happy to inform you that the company Christmas Party will take place
on December 23rd at Luigi's Open Pit Barbecue.
There will be lots of spiked eggnog and a small band playing traditional
carols... feel free to sing along.
And don't be surprised if our CEO shows up dressed as Santa Claus to
light the Christmas tree!
Exchange of gifts among employees can be done at that time; however, no
gift should be over $10.
Merry Christmas to you, and your family.
Patty Lewis, Human Resources Director


MEMO: December 2nd
TO: ALL EMPLOYEES

In no way was yesterday's memo intended to exclude our Jewish employees.
We recognize that Hanukkah is an important holiday that often coincides
with Christmas (though unfortunately not this year). However, from now
on, we're calling it our "Holiday Party."
The same policy applies to employees who are celebrating Kwanzaa at this
time.
There will be no Christmas tree and no Christmas carols sung.
Happy Holidays to you, and your family.
Patty Lewis, Human Resources Director
MEMO: December 3rd
TO: ALL EMPLOYEES

Regarding the anonymous note I received from a member of Alcoholics
Anonymous requesting a non-drinking table, I'm happy to accommodate this
request, but, don't forget, if I put a sign on the table that reads, "AA
Only," you won't be anonymous anymore.
In addition, forget about the gifts exchange -- no gifts will be allowed
since the union members feel that $10 is too much money.
Happy Holidays to you, and your family.
Patty Lewis, Human Researchers Director


MEMO: December 7th
TO: ALL EMPLOYEES

I've arranged for members of Overeaters Anonymous to sit farthest from
the dessert buffet and pregnant women closest to the restrooms.
Gays are allowed to sit with each other.
Lesbians do not have to sit with the gay men; each will have their own table.
Yes, there will be a flower arrangement for the gay men's table.
Happy now!?
Patty Lewis, Human Racehorses Director

MEMO: December 9th
TO: ALL EMPLOYEES

People, people! -- Nothing sinister was intended by wanting our CEO to
play Santa Claus!
Even if the anagram of "Santa" does happen to be "Satan," there is no
evil connotation to our own "little man in a red suit."
Patty Lewis, Human Rat Race Director

MEMO: December 10th
TO: ALL EMPLOYEES

Vegetarians -- I've had it with you people! We're going to hold this
party at Luigi's Open Pit whether you like it or not, you can just sit
at the table farthest from the "grill of death," as you put it, and
you'll get salad bar only, including hydroponic tomatoes. But, you know
tomatoes have feelings, too. They scream when you slice them. I've heard
them scream.
I'm hearing them right now... Ha!
I hope you all have a rotten holiday! Drive drunk and die, you hear me?!
The ***** from Hell

MEMO: December 14th
TO: ALL EMPLOYEES

I'm sure I speak for all of us in wishing Patty Lewis a speedy recovery
from her stress-related illness. I'll continue to forward your cards to
her at the sanitarium. In the meantime, management has decided to cancel
our Holiday Party and give everyone the afternoon of the 23rd off with
full pay.
Happy Holidays.
Terri Bishop, Acting Human Resources Director

IBM Blue Cloud: Internet Style Data Centers

IBM’s Blue Cloud is a platform for cloud-based computing, expected to be available to customers in the spring of 2008, supporting systems with Power and x86 processors.

“Blue Cloud" will allow corporate data centers to operate more like the Internet, enabling computing across a distributed, globally accessible fabric of resources, rather than on local machines or remote server farms.

It is, along with Amazon's Elastic Compute Cloud, a seminal step towards network-based computing architectures. Sun Microsystems was ahead of its time in declaring that the "network is the computer." But cloud computing is going to fulfill the prediction.

Call it "software as a service" if you like. The point is that we are nearing an era where resources will be invoked from the computing cloud using a Web browser. Policies still will be needed to authorize use of specific resources, to be sure. But the larger point is that computing, storage and application resources will reside "in the cloud," and be invoked as required by users at the edge of the cloud.

There are all sorts of practical advantages. Distributed or mobile workers can simply invoke their services and information from where they are, using a standard Web browser. Everyone always will have the latest version, the latest patch, the latest version or update.

Computationally intense activities can be handled by clusters of machines designed for such intensity. Storage can be invoked, not carried; used rather than built.

If a developer needs expensive resources, they can be gotten on a sort of "time shared" basis, rather than on a "build your own computing center" basis.

Blue Cloud will be based on open standards and open source software supported by IBM software, systems technology and services.

The interesting speculation is about how cloud computing might change the way enterprises think about their application and storage architectures. Given the massive increase in the scale of IT environments, one wonders how they'll assess the trade-offs between "building data centers" and "renting reources."

Up to this point, the enterprise data center has been the penultimate computing resource. Might the "cloud" surpass even local and networked data centers?

Has the Web Killed Enterprise Intranets?

Between emerging social networking tools and Web browser front ends, it is conceivable that the need for enterprise "intranets" is not so urgent anymore. As the Internet was seen as an external network, intranets were supposed to make internal data bases, information and communication available to enterprise associates.

But email, instant messaging, texting, mobile phones, Saleforce.com and other Web-based tools arguably not allow organizations to do those things without building dedicated intranets.

Instead, we've flipped everything inside out. The big movement now is towards software architectures that allow internal resources to be exposed to users with access to Web browsers.

Airline Exec for Red Hat

Sometime big has changed when a former Delta Airlines COO takes over as the CEO of a technology company like Red Hat.

Red Hat isn’t a little startup trying to convert people to Linux. It’s a business selling to big corporations. It needs leadership used to selling enterprises.Also, if Red Hat can reasonably expect to compete to supply half of the worldwide server market by 2015, it will really have to scale. Companies like Delta are about systems and logistics, the sort of things one needs to really scale.

James Whitehurst, of course, wouldn't be the first non-technology executive brought in to head a technology company. Lou Gerstner transformed IBM into a services company, using a background of RJR Nabisco and American Express.

The choice shows how mainstream open source has become. Red Hat needs to sell to enterprise executives, with huge scale.

Vonage, AT&T Settle VoIP Patent Dispute

Vonage and at&t have finalized the settlement of a dispute between the companies. No details were released. But $39 million had been mentioned earlier.

IP Multicasting Coming?

Not being a "techie," I first became aware of "IP Multicasting" in 2000, when working with some folks developing a streaming media service. As somebody who spent some time in the cable TV business, it made a huge amount of sense. Basically, the idea is that for popular content, say a TV show that millions of people want to watch, one uses multicasting to launch a single stream that all those viewers can watch, rather than millions of discrete streams. Those of you who are network engineers will appreciate the elegance of the way this conserves bandwidth, in the same way that satellites deliver a single stream that millions of viewers can watch. That's the beauty of all multicasting: highly efficient sharing of downstream bandwidth.

Carriers proved resistance to enabling multicasting, however, for all sorts of other reasons, not the least of which was the fear that control over available bandwidth would be lost. But technology journalist Mark Stephens (Robert X. Cringely) argues multicasting is the future of television. Well, at least the future for some sorts of television: the highly-viewed, synchronous sort.

Multicast was built into the structure of the Internet from the very beginning but was generally not turned on because network administrators view it as a resource hog (local storage and resources, not bandwidth, per se).

Cisco long has been a huge supporter of multicast because it requires ever bigger and more powerful routers. That might be true, but multicasting still makes eminent sense as a way to distribute highly-popular video. Sure, there are other sorts of video that have to be unicast because demand is low. But multicasting is quite efficient of bandwidth for highly-popular streams.

Stephens uses a simple example. Say a user wants to see Seinfeld episode 60, and is entitled to do so. That event gets assigned a multicast address.
When the show is made available on a server anywhere on a part of the net that supports multicast, the user receives it. All the routers between here and there look for multicast subscriptions and enable them and the episode is is cached locally.

In order to lower their bandwidth bills, ISPs are trying to take greater control of the way we, their customers, use our "unlimited" bandwidth, says Stephens. But IP multicast offers another tool to do so, and is less bothersome.

Both Comcast and Verizon are rapidly rolling out IP multicast, Stephens notes. The reason is that IP multicast remains a highly-efficient to deliver popular programming, and means most of the linear cable channels. ESPN demands as part of its contracts that much of their programming on MPEG-2-equipped cable systems must delivered at 5 Mbps to 8 Mbps, compared to the 2 Mbps used for most other channels.

Contracts are similiar for premium cable services such as HBO or Showtime.

Internal audience studies at Comcast have shown that 90 percent of the customer base watches 10 percent of the available channels.The problem is that each of use might have a different seven favorites. Also, even if few people actually are watching, cable companies can't turn them off because programming contracts with the studios require carriage.

Multicast solves this problem because it allocates no bandwidth to channels that aren't being watched. It's an interesting business issue: the signals are "carried" but maybe not "broadcast" to consumers who aren't actually "tuned" to the channel.

IP Multicast is an alternative to P2P, in other words.

Has Apple Sold 5 Million iPhones?

Cleve Nettles at Mac9to5 thinks so. Nettles expects Apple to say so in January, at Macworld. The issue is how those sales relate to the announced goal of selling 10 million iPhones. Some people recollect Steve Jobs, Apple CEO, promising sales of 10 million phones in calendar year 2008 alone. Others seem to think he meant 10 million by the end of 2008, in total.

Rivals at Nokia and Research in Motion probably aren't excessively worried either way, given the installed base of devices each of those firms has, and the number of new devices they ship every month. Of course, Apple has a distinct advantage. It gets recurring revenue from the sales of each of its phones.

RIM and Nokia do not. So one iPhone sale is worth a lot more revenue than the sale of a new BlackBerry or Nokia handset.

Cable Targets Small Business

The coming year is when we see just how formidable U.S. cable companies will be in the small business communications market. To be sure, many veterans of the business communications market don't think cable will much of a factor in the enterprise market. Maybe not. That's not where cable companies are going to focus, which is the small business customer.

Comcast Corp. apparently plans to spend $3 billion to sign up 20 percent of small companies in its territories by 2012. Time Warner Cable Inc. is also pursuing businesses with fewer than 1,000 employees. And Cox Enterprises has been signing up lots of business customers for years.

Phone companies dominate the $25 billion annual market, which can generate profit margins about 10 percent higher than services offered to consumers or enterprises.

On the other hand, large telcos don't generate nearly as much money from phone lines and calling as they used to. In fact, small business lines provide only about five percent of at&t's revenue these days.

Cable providers, with less than five percent of the small business market, may seize one-third by 2012, saus Sanjeev Aggarwal, AMI-Partners VP.

So two things are going to happen. In some cases telcos will cut their own prices to match the discounts cablers are expected to offer. They'll keep share but sacrifice margins. Or, telcos can simply accept the loss of some share to maintain margins for a while longer.

Anticipating the onslaught, Verizon and at&t seem to be prepared to cut prices and bundle services to keep small-business customers who sign up on contracts.

Verizon offers 20 percent off Internet access for companies taking unlimited local and long-distance calling plans for one year. Customers buying voice services from at&t pay roughly 40 percent less with an annual Internet service contract.

About 54 percent of AT&T's small and mid-sized-business customers in areas where cable may compete have might already have signed new contracts, some observers suggest.

Blogging Tops New York Times, Sort of...

According to ReadWriteWeb, a five-year-old bet was settled recently. The bet, between New York Times executive Martin Nisenholtz and Web 2.0 Founding Father Dave Winer, was about blogs topping the New York Times in Google search results for the top five news stories of 2007.

Rogers Cadenhead has done the tabulation and found that Winer, and blogging, have indeed won. Sort of, ReadWriteWeb notes.

According to the Associated Press, the top 5 news stories of 2007 were Chinese exports, oil prices, Iraq war, Mortgage crisis and the Virginia Tech killings. Obviously this is a list for US news markets and not the entire world.

Today, a Google search for those terms brings up a blog higher than the New York TImes for Chinese exports (Blogging Stocks 19th vs. NYT 20th), Iraq War (a blog was 17th, NYT 20th) and Virginia Tech killings (Newsvine coverage of the AP's top stories of the year is 9th in Google vs. the Times at number 30.) So blogs topped the Times in 3 out of 5 top stories.

Wikipedia, however, ranks higher than both blogs and wikis according to Candenhead.

The three blogs that topped the Times in the Google results in question don't tell such a simple story. Two are stories from the AOL-owned Blogging Stocks and one is from social news site Newsvine, now owned by MSNBC.

Mobile Web is About the Big Brands

You'd be hard pressed to find a more significant year in the U.S. mobile business than the one that is passing. We witnessed the entry of a major consumer and computer electronics retailer--Apple--into the mobile business. We saw the emergence of an unprecedented revenue model for the iPhone.

We saw Google put together an open source community around Android that includes tier-one mobile service providers. We saw Google make at least an opening bid for actual spectrum, and cement development deals with Sprint and Clearwire for WiMAX handsets.

We saw the Federal Communications Commission mandate an "open networks, open devices" regime for the 700-MHz C block spectrum, the best quality mobile spectrum yet to be made available, because of its wall-penetrating abilities signals in the 700-MHz range possess.

We saw Verizon Wireless declare its support for "open" networks as well. Taken together, all the developments signal the emergence of the mobile Web. And that is going to create new space for contestants, including the most-popular Web brands.

That is not to say networks are unimportant. It is to say that now handsets and brands become much more important in the wireless business. That's a huge change.

Word of Mouth, Internet Key for Breaking News

Even though television plays a key role in alerting and updating people about big news stories, the initial awareness often comes by word of mouth or the Internet.

After the April 16 Virginia Tech massacre, Frank N. Magid Associates polled Millennials; Gen Xers; and Baby Boomers about how they first got the news.

Television coverage was the primary source to which all three groups turned for information on the shooting spree, but nearly a quarter (23 percent) of the adult Millennials first learned about the story on the Internet, compared with 19 percent of Gen Xers and 16 percent of Baby Boomers.

About 29 percent of Millenials heard about the Virginia Tech story by word of mouth, which includes text messaging.

In fact, in all three target demos, word of mouth was the number one source of alerts to those who weren't at home.

On the other hand, 37 percent of Millennials first learned about the story from TV, as did 43 percent of Gen Xers and 50 percent of Boomers.

Who Will Sue Google for Incorrect Traffic?

Spain's top media company Prisa said Monday it had taken legal action against Nielsen for miscounting traffic to its ElPais.com Web site as well as readers of its newspaper.

Prisa said its Internet arm Pisacom and El Pais were suing Nielson "based on the damage caused by the unjustified downward revision in the number of unique visitors of ELPAIS.com during the current year."

"The lawsuit argues that due to the serious negligence on the part of Nielson in its measurement of audience figures for ELPAIS.COM, El Pais and Prisa suffered serious damages due to lost advertising this year."

Data from marketing firms like Nielsen are important in determining the amount websites charge for advertising, with sites with high viewing figures being able to charge higher fees to sponsors. Networks sometimes have such disputes with the firms doing the counting.

One has to wonder when somebody will sue Google for mishandling a search ranking.

Is Google the New Microsoft?

Is Google the new Microsoft? Some people think it is on the way; others say there is no chance of such an enduring dominance. For regulators, the question is thornier. Every competitive market sooner or later turns less competitive, for very simple reasons: users flock to great products and stop using or buying the less-good products. Over time, that naturally creates market dominance, and that in turn ultimately draws in regulators to prevent excessive market control.

But regulators have to define what markets are in the first place, define the relevant competitors, then quantify the impact and propose remedies. Let's assume the relevant market in this case is "search." Ignore for the moment the fact that neither Google nor any of the other contestants ultimately will operate in such a narrowly-defined segment as "search."

Sometimes, regulators, users and markets get the "dominance" thing wrong. Some of us can remember very-serious discussions about how to "control" the browser market, as that was deemed essential to "control" of Internet experiences. As it turns out, the browser was not central to "control." Then Microsoft proposed an Internet identification system called "Passport." Regulators were concerned that Microsoft could become the "toll keeper" to the Internet if the identity scheme were massively adopted.

For starters, it didn't get such adoption. In broader terms, the Internet itself grew so fast that it is questionable whether any single identity system could be said to "dominate" the Internet.There was competition after all.

All that said, regulators have ruled that Microsoft has a monopoly in desktop operating systems, that Microsoft has abused its monopoly position and that consumers therefore were harmed, though not necessarily in the opearating system market but in "ancillary" markets that might have developed more competitively.

So the issue is whether Google is becoming, in search at least, the equivalent of Microsoft in the operating system area. Curiously, Google will be charged simultaneously with being a "monopolist" over information and at the same time essentially a leech as it "creates no new information of its own." Google will be called an "information gatekeeper" even as it continually tries to devise better ways for users to find the very information it is supposed to be "gatekeeping."

The issue with that line of thinking is that Google doesn't "own" or "control" the information. What it "controls" is a user preference for its algorithms and search results. If Google interferes with the value of search results, users will go elsewhere. There arguably are more issues about paid local search. But the analogy there is probably "phone books" rather than search. Phone books are in the paid local search business. What Google wants to do is provider a better paid local search experience.

There probably are better-grounded objections in the privacy area. Google will know lots about its users. But that's something other Web application providers, entertainment and access services provider also are racing to capture. Privacy is a legitimate issue. The conflict between search and advertising models built around search seem less legitimate. Think of Google as media. Media always have had business models based on ad support for content. Google's privacy issues in that regard will not be different in kind from the issues other media will face as well.

To be sure, every era of computing has been lead by new companies. So some company, some day, will be acknowledged to have become that new leader. At some broader level, one wonders whether any such company will have "control" of the Internet and the Web the way Microsoft once controlled desktops.

So far, most consumers say they haven't even heard of "online versions of desktop productivity suites," for example. That isn't to say things will always be that way; just that domination of adjacent markets on the Web will be quite difficult.

Business Broadband: Cable Modems Significant

Businesses use all sorts of access technology, if a recent Aethera Networks poll is to be believed. As you might guess, more than a quarter of business users have Time Division Multiplex access while more than a third use Ethernet of some sort.

You might not be surprised that more than a quarter use cable modems or Digital Subscriber Line, especially business-class DSL. What is interesting is that cable modem technology shows up in such surveys of the small business space. In fact, at least some business owners tell me they replaced T1 lines with cable modem service, and are happy they did.

What Disruption Looks Like: Newspapers

So what would disruption of the global telecom industry by IP communications look like? It's a hypothetical question, for a couple of reasons. The newspaper industry, for examnple, has been in a lingering decline in readership and ad revenue for decades. Nothing spectacular, year over year: just a steady, decades-long decline.

The telecom industry has seen something like that only in the twin areas of rates per minute charged for long distance and number of wired access lines in service. The long distance data is different from what one sees in the newspaper business in that volumes have skyrocketed even as prices have dropped. There is no such elasticity in the newspaper market.

The parallel between newspaper and telco fortunes is most similar in the area of access lines, where there might even be something like negative elasticity developing: "drop the price and people buy less." But the analogy doesn't fit very well precisely because, unlike the newspaper industry, the global telecom business has developed a huge replacement business for wirelines, namedly wireless services.

In fact, global telco revenue has been climbing steadily almost without a break for more than a century.

At the same time, telcos have discovered data services in addition to voice, broadband Internet access, entertainment video, ringtones, music and game downloads and other smallish businesses. The point isn't "smallishness." The seeds of tomorrow's business already are planted.

Newspapers have done nothing of the kind.

Last year, McClatchy, a U.S. newspaper chain, acquired Knight Ridder. To help pay down debt, McClatchy sold the Star-Tribune of Minneapolis in March for $530 million. Even with an added tax benefit of $160 million, the sale price amounted to only about half of what the company paid for the paper in 1998.

And then in November, the company took a $1.37 billion after-tax non-cash impairment charge, partly to reflect a further decline in the value of its newspapers.

The company's share price recently was $12.75, down more than 80% from the 2005 peak. The decline leaves McClatchy, the nation's third-largest newspaper publisher by daily circulation, with a market capitalization of barely $1 billion.

There is one sliver of hope: McClatchy has a position in the online classified advertising market, though newspapers collectively have lost their hoped-for lead to the likes of Craig's List.

McClatchy acquired a 14.4 percent share of CareerBuilder.com, as well as a 25.6 percent stake in Classified Ventures, the parent of Cars.com and Apartments.com.

The issue is how much success McClatchy and other major newspaper chains are going to have in the local online advertising business. Compared to the telecom industry, the newspaper industry is well behind the curve in cultivating new businesses, even if small.

One is tempted to say it is a shift of consumption to the Web that is responsible for the newspaper decline, but that's not entirely correct. Newspaper consumption began its decline long before the Web existed, so one has to blame television-based news. A shift of information consumption to the Web simply is accelerating a trend already in place.

Ubiquitous Online Communications

If you needed any reminding, email and instant messaging now is quite widespread in North America, Japan and Europe, as broadband penetration also has become a typical experience. Use of social networking sites still has a ways to go, except in Canada, where usage seems unusually high.

UK Leads in Digital TV

The U.K. is well ahead of most other European countries in its use of digital media, by some measures. By the start of 2007, more than 76 percent of U.K. TV households were receiving digital TV services, a rate higher than other Western European countries, Japan or the United States, for example.

According to Ofcom, U.K. adults also spend more time on social networking sites than other Europeans. Two in five U.K. adults regularly log on to these sites, clocking up an average of 23 visits and 5.3 hours each month.

In the U.K. market, 33 percent of users send picture messages via their mobiles and 16 percent use them to connect to the Internet. About 10 percent of U.K. adults use mobiles for e-mail.

Ofcom also believes that online advertising in the United Kingdom accounted for 14 percent of total advertising revenues in 2006, passing magazine advertising for the first time and registering more than total spending on outdoor, cinema and radio advertising combined.

Advertisers in the U.K. market also spend more money per consumer on Internet advertising than any other country, at £33. According to Ofcom, this is twice as much as France, Germany and Italy combined.

Online advertising revenues generated in the U.K. market in 2006 also beat the combined totals of Germany, France and Italy at £231 per head.

More Online Video Viewing, in All Age Segments

More viewers are turning to the Internet to supplement their traditional entertainment viewing habits, says Harris Interactive. In the past year, YouTube has widened its lead as a one-stop site for online video viewing.

Search and content providers, as well as online community sites, also have gained some ground on the video viewing front while TV network sites are holding their own as well.

While the incidence of online video viewership has increased overall in the past year (81 percent versus 74 percent), YouTube is by far enjoying the greatest increase.

Approximately two-thirds (65 percent) of U.S. online adults say they have watched a video at YouTube, compared to 42 percent at the same time last year, with the strongest gains among those over age 25.

Over 42 percent of YouTube viewers say they visit the site frequently, up from 33 percent last year. Just over two in five U.S. adults have watched videos on a TV network site (43 percent vs. 41 pecent).

While online video viewing declines with age for most sites measured, including YouTube, the incidence of online viewing on TV network and news sites remains consistent across age groups ranging from 18 to 64.

While interest in online video viewing is becoming more commonplace across older age groups, it is virtually ubiquitous among the under 30 set.

Yahoo, America Movil 143 Million Sub Mobile Search Deal

Yahoo and Latin America's top mobile phone company America Movil said on Thursday they have struck a deal to provide mobile Web services to 16 countries in Latin America and the Caribbean.

Yahoo's oneSearch service will be the default on America Movil's wireless carriers' portals. Yahoo plans to offer localized versions of oneSearch for each region, and said other Yahoo services may be added in coming months.

The partnership is the largest of the 21 search deals Yahoo has announced this year with mobile phone operators, the Sunnyvale, California company said.

Mexico City-based America Movil has 143 million wireless subscribers. Yahoo's broadest previous deal was with Spain's Telefonica SA, covering up to 100 million subscribers in several European and Latin American markets.

HD-DVD Format Wars Continue, Prices Drop

The good news for consumers is that high-definition DVD prices are falling. The bad news is that the format war still isn't over. As was the case with BetaMax and VHS in videotape recorders, consumers now have to choose between incompatible formats. Personally, I'm just going to wait until the war is over. I've been through enough of these technology standard battles to instinctively avoid buying "eight track," "BetaMax," or just about anything proprietary in the consumer electronics space. Of course, I don't care enough about video to adopt early, in any case, so I might be odd in that regard.

Sony's "Blue-ray" players are selling for under $300, while Toshiba's "HD-DVD" player is available for $200.

The edge right now seems to be on Blu-ray's side. since Thanksgiving in the U.S., Blu-ray discs account for 72 percent of the high-definition discs sold, while HD-DVD has 27.4percent of the share over that same time period. So maybe Sony can win a major format war for once.

Right now, Walt Disney, 20th Century Fox and Metro Goldwyn Mayer support Blu-ray DVDs, while Universal (GE) has sided with HD-DVD. Warner Bros. supports both players.

Studios obviously hope the new format will spark higher DVD sales, which are highly profitable, but whose sales have started to slide.

We shall see. The download market and on-demand video streaming have to be taken into account, this time around. And with users opting for increased mobile or PC screen video, it isn't an absolute certainty how big the market might be for high-definition DVDs. It's great for big screen displays. But lots of viewing now takes place on all sorts of screens where the advantage is small, if much of an advantage at all. For downloaded video, in fact, less information, which means faster downloads, probably is more important.

New Truphone Supprted Devices

Truphone's mobile VoIP service now is supported on five new handsets: the Wi-Fi-equipped Nokia N95 8G, Nokia N81, Nokia N81 8G, Nokia N82 and Nokia E51 models. Truphone also is freezing its rates until the end of February, so Truphone calls will be free to landlines in 40 countries, and to mobiles in the U.S., Canada and elsewhere, until March.

Mobile Web: Not So Useful Yet

The mobile Web might be the future for a goodly portion of user activity in the future. But it isn't quite there yet, Accenture says.

Japan Mobile Market: Different than Europe

The Japanese mobile market long has been seen as a trend-setter for mobile applications elsewhere in the world. As Accenture looks at the market, that remains the case. Japanese users simply do different things, with different levels of intensity, than users in Western Europe, for example.

Mac Users do "Think Different"

The NPD Group says consumers who own Apple Mac computers are much more likely than PC users to pay to download music. According to NPD, in the third quarter of 2007 half of all Mac users had paid to download music tracks from sites like iTunes, but just 16 percent of PC owners had done so.

And while Mac users were more likely to pay to download digital music than their PC-using counterparts, they were also more likely to purchase CDs.

“There’s still a cultural divide between Apple consumers and the rest of the computing world, and that’s especially apparent when it comes to the way they interact with music,” says Russ Crupnick, NPD Group VP. “Mac users are not only more active in digital music, they are also more likely to buy CDs, which helps debunk the myth that digital music consumers stop buying music in CD format.”

According to NPD’s consumer panel data, unit-volume sales share for Apple computers increased from nearly six percent in 2006 to almost nine percent between January 2007 and October 2007.

Overall, more than 32 percent of Mac users report purchasing CDs in the third quarter of 2007, compared to just 28 percent of PC users.

In addition to purchasing CDs and downloading music, Mac users are also more likely to listen to music and watch videos on their MP3-players and computers.

While 34 percent of Mac users had uploaded music to their MP3 players, just 16 percent of PC users had done the same. Mac users are also much more likely to listen to music files on their computers (56 percent) than are PC users (31 percent).

Qwest Really Isn't Interested in IPTV

Qwest Communications International Inc. no longer will pursue cable franchise agreements with Colorado cities or build community-wide TV service in areas where it's recently won franchise approval. That's more confirmation of Qwest's strategic direction in video, which is to rely on its partner DirecTV for linear TV services.

Though Qwest plans to upgrade its broadband capacity in 10 major markets and 10 smallers ones in the company's 14-state service area, that is solely for the purpose of broadband-based services other than entertainment video.

Qwest still supports the idea of statewide television franchises. But it won't seek such a franchise.

Nokia N96: N95 in a New Shell?

This image, from Mobile-Review.com, strike some people as looking like an N81, but larger. To others it resembles an N95. No specs available yet, it seems.

Digital TV Transition: Not Y2K

In February 2009, all over-the-air analog TV broadcasting will be shut off. Some observers are concerned that consumers aren't acutely aware of the coming changes, resulting in massive disruption of the TV experience on the day of the analog broadcasting shut off.

Maybe not. The only potentially-affected customers are those who rely solely on over-the-air signal reception. Customers of cable, satellite or telco TV services won't have to do anything. To be sure, cable, satellite or telco TV providers will have to supply a new digital decoder if one is not already in place. But the point is that the providers will take care of their own customers, and that's 85 percent to 90 percent of all TV viewers.

Of those customers who have over-the-air connections, those who have bought TVs with digital tuners will not notice anything other than universally-better pictures. So the real issue lies with a single-digits number of viewers who have analog-only tuners.

By the time the transition nears, every mass market electronics retailer will have taken steps to push the sale of digital decoders. So this will not be anything like a feared "Y2K" event.

Low Awareness of Google Apps?

In a recent survey, NPD asked PC users whether they had heard about online, browser-based office productivity applications like Google Docs & Spreadsheets or other similar Web-based apps.

About 94 percent say they never have heard of Web-based productivity suites. About half of one percent have substituted Web-based productivity suites for desktop software such as Microsoft Office.

Google Docs and Spreadsheets perhaps is the most visible of the Web-based suites. But apparently a long ways from being a mainstream application.

EComm: The Trillon Dollar Market

I usually don't "plug" conferences. But EComm, to be held in March, is an exception, in part because it is a "bottoms up" meeting being organized by people in the IP communications business, not by a well-established conference producing organization.

The other reason is that I am primarily a "content" person, most interested in the intellectual capital being created at such meetings, not the important but more pointedly commercial aspects of trade shows. I respect the folks over at STL (Telco 2.0) for this reason as well.

Lee Dryburgh, who is pulling this together, shares a perspective on what is happening in the trillion-dollar-annual-revenue telecom business. "The first wave of the democratization of communications was market liberalization," Dryburgh notes. "The second wave was VoIP."

"Yet VoIP as a standalone product is not viable long term (consumer attraction is drifting away from "standalone telephony") and VoIP is unlikely to ever be highly profitable," he insists. "In short, VoIP is something 90s which has had little consumer success since."

"The third chapter onwards is far more exciting and profitable," Dryburgh believes. "It is this chapter onwards that eComm seems to track, promote and highlight."

"The third chapter takes VoIP as one building block of many to be fused together into "application experiences"; largely social applications or business efficiency products (or both)."

I happen to agree with him, and lots of us do. You should really check this out:

http://www.ecommedia.com

(I apologize for this not being a hot link, but I have never been able to figure out how to do that, despite following the instructions. Just a dumb end user problem.)

Or click on the new "Related Article" field at the bottom of the post. I've had to play with the HTML, which, as a Mac person, I really hate. I need to enhance it a bit, but that might take me a year...really....

If the future of the global telecom industry is a concern you share, be there.

FTC Okays Google DoubleClick Buy

The U.S. Federal Trade Commission will not try to block Google's acquisition of online ad-serving vendor DoubleClick, the agency said Thursday.

The commission voted 4-1 to approve the deal after an eight-month investigation. "After carefully reviewing the evidence, we have concluded that Google's proposed acquisition of DoubleClick is unlikely to substantially lessen competition," the majority wrote in a statement.

The commission downplayed concerns brought by some privacy groups. Privacy concerns are "not unique to Google and DoubleClick," and "extend to the entire online advertising marketplace," commissioners wrote.

Melancholy End for Think Secret

Apple and Think Secret have settled their lawsuit, reaching an agreement that results in a "positive solution for both sides," though one might question the broader implications. Think Secret has in the past published rumors about upcoming new Apple products, and Apple is a notoriously secretive company in that regard. Apple has sued to force Think Secret to reveal its sources.

As part of the confidential settlement, Think Secret was not forced to reveal the sources of information it published. But part of the agreement also is that Think Secret no longer will be published.

The decision represents a "positive" outcome for Nick Ciarelli, Think Secret's publisher, only to the extent that the financial damage from losing such a lawsuit would have been catastrophic. "Positive" for Apple in that Apple reins in "leakers" and media outlets.

There's nothing wrong with Apple's obsession about secrecy. It's a time-tested and successful "buzz marketing" tactic, and Apple plies it better than any other company. But the "chilling" effect on media is palpable. That isn't to say there are not some circumstances where revealing a source is socially desirable. As a rule, though, lots of "news" that actually is socially desirable is the result of somebody "leaking" something.

It's good that Nick still has a life. It's good that no Apple "leakers" will be prosecuted or "persecuted." I still respect Apple. It's just too bad it had to come to this.

Video Will Not Follow Music Disruption Model

There’s a big difference between the music and the video businesses. Music executives unsuccessfully fought the advent of digital distribution. But media and entertainment industry executives overwhelmingly believe that online distribution of TV shows is an opportunity, not a threat.

Video content creators will embrace online distribution, rather than trying to "kill" or "cripple" it, as music executives did.

Of the 100 executives surveyed recently by Accenture, 70 percent agreed that online distribution of TV shows is more of an opportunity than a threat, given its ability to extend the reach of its programming to a much wider audience at a relatively low cost
compared to traditional broadcasting or physical distribution.

“Technology will continue to alter the distribution landscape, allowing people to access content on their own schedule, wherever they are, in all kinds of ways,” says Leslie Moonves, CBS CEO. “Companies that can combine world-class content with powerful national and local distribution will have the competitive advantage.”

If that is the case, broadband service providers will have some role to play. “We see a big transition moment in the industry,” says Accenture managing consultant consultant Diego Mora Ovideo. “Our telecom clients have many questions about the main battleground.”

“A big question mark is how to change the corporate DNA and business structure to really compete,” he says. In large part, that is because the ecosystem is changing.

“Value is shifting away from simple access,” says Mora Ovideo. And there’s a big shift in Europe that North American carriers will have to confront at some point. “To change their DNA, some are looking at “netco” and “servco” models.

You might call this structural separation or functional separation. Sometimes voluntarily, sometimes involuntarily, telcos are creating distinct organizations to handle retail sales and networks.

“Either there is a formal division into a network business unit and service business units, or sometimes separate organizations are created, without a formal separation of business units, Mora Ovideo says.

“It would be very difficult to think the current business model, skills and mindset will work in the new world,” he adds. Different backgrounds and skills and mindsets are required.

And such reorganizations are being conducted even though the amount of new revenue to be earned from new service offerings is necessarily all that large at the moment. “It isn’t about current volume, but building a position for the future,” he says.

“We must move fast enough o position and have a significant role”, is what service provider execs are saying, he notes. A few leaders like Apple, Nokia, News Corp. and Google are moving very fast, and our clients are moving slower, on purpose, to focus on fixed mobile convergence, substitution and other issues, he says. In the media space, service providers will build partnerships, Mora Ovideo says.

“There’s urgency to act fast,” he says, even though over the next two to three years access will remain the main revenue source.

Some incumbents also are moving to disrupt themselves, accelerating the change, in the voice area. As you would expect, the more aggressive moves often are made by smaller incumbents, who have more to gain from disruptive moves. ‘Absolutely, the weaker incumbents in a market are more likely to launch attacks,” he says.

“In any event, within four or five years, voice will not drive revenue,” he notes.

On the media and content front, 62 percent of executives look to “new platforms” as being the most important key to growth, while 31 percent say “new content” will drive growth, and seven percent say “geographic expansion” is the key growth lever.

Of these new platforms, online and mobile are seen as the key platforms, with a combined 43 percent of execs citing online as most important. Online portals were seen as key by 17 percent of respondents, while 13 percent think social networking sites will be important. About 13 percent think e-commerce sites will be key.

Mobile platforms were seen as key by 17 percent of respondents.

Most think (53 percent) of executives surveyed think “short form content” offers the
largest opportunity for “new content,” with “long form” or “full length” video content (greater than 60 minutes) garnering 11 percent of responses.

Video gaming” was viewed as a key growth area by 13 percent of executives. About 57 percent of respondents think “consumer-based competition” or “user-generated” content is the biggest threat to the media business, while 46 percent also are worried about “piracy or IP theft.”

Still, 68 percent of respondents believe that they will be able to harness user-generated content to create revenue within one to three years.

About 70 percent of respondents also think that social media is a natural evolution of today’s business but will be an evolutionary development. About a quarter of respondents think social media will be “revolutionary” in its impact.

More than 90 percent of the executives said that their companies would become
involved in social media over the next 12 months.

Teens: Social Media, Not Email

Some 93 percent of teens use the Internet, and more of them than ever are treating it as a venue for social interaction. Those of you around children and teens know that much of their social life is programmed and scheduled. To a greater extent than used to be the case, their lives are restricted for safety reasons. Social networking is a substitute for "hanging out" in the physical world with friends.

Despite the important of email for adults as a major mode of personal and professional communication, it is not a particularly important part of the teen communications pattern.

Only 14 percent of all teens report sending emails to their friends every day, making it the least popular form of daily social communication on the list researchers at the Pew Internet and American Life Project found.

Even among highly-connected teens who have access to multiple communication modes, just 22 percent say they send email to their friends daily.

The Pew Internet & American Life Project has found that 64 percent of online teens ages 12-17 have participated in one or more among a wide range of content-creating activities on the internet, up from 57 percent of online teens in a similar survey at the end of 2004.

About 39 percent of online teens share their own artistic creations online, such as artwork, photos, stories, or videos, up from 33 percent in 2004.

About 33 percent create or work on Web pages or blogs for others, including those for groups they belong to, friends, or school assignments, basically unchanged from 2004 at 32 percent.

Some 28 percent have created their own online journal or blog, up from 19 percent in 2004. About 27 percent maintain their own personal Web page, up from 22 percent in 2004.

About 26 percent remix content they find online into their own creations, up from 19 percent in 2004.

The percentage of those ages 12-17 who said “yes” to at least one of those five content-creation activities is 64 percent of online teens, or 59 percent of all teens.

It isn't rocket science to suggest that social networking is a fundamental trend, not a fad, as some seem to think.

Mobiles as Lifestyle

It's been a pretty significant year for the U.S. mobile industry and its users. First, a computer and consumer electronics company essentially dictated a new business model and took device usability to a different level.

Second, a shift to mobiles as "lifestyle" devices has accelerated. The expressiveness of design now is as important, if not more important, than device functions and features.

Third, a shift to "open networks" began, and even-faster innovation will be the result.

The lifestyle focus, in turn, will help drive mobile ad spending. That's partly because the mobile Internet is emerging, and partly because video, audio, games and entertainment are a bigger part of the "lifestyle" than the "work" device.

That, in turn, means many more ad-supported features, as is the case for the broader Internet and Web.

First Steps at Sprint

New CEO Dan Hesse says his first priority will be to tackle the customer-service problems and customer defections that have plagued the company in the past year.

An internal Sprint document recently disclosed described the company's "inferior results" in customer service. It pointed out that Sprint resolved just 53 percent of problems on the first call, compared with 71 percent for T-Mobile USA, despite Sprint having nearly three times as many customer service reps.

One would expect no less. Hesse is viewed as a highly-competent manager, and this is the sort of problem a good manager can fix. But later, recall that Hesse was the pioneer of AT&T's "Digital One Rate" plan, which introduced flat-rate pricing to U.S. wireless consumers in the late 1990s. That one move revolutionized mobile pricing in the U.S. market.

Once he gets the churn and customer service problems under control, we'd be watching for more innovation from Sprint than one typically sees.

Media, Voice, Mobile, Broadband Tipping Points

In a historic first, online media companies collectively will sell more ads in local markets this year than such individual hometown media as newspapers, broadcasters and yellow pages, says Borrell Associates. That's a tipping point, a stage of development when critical mass for some new phenomenon is reached.

Five years ago business phone systems hit a tipping point: most new systems were IP-capable. A couple years ago another tipping point was reached and new phone systems mostly are IP-only. These days most new phone sales are for IP systems.

Likewise, Internet usage and access hit similar tipping points earlier this decade. Most people now use the Internet, and that wasn't true 10 years ago. Also, there was a tipping poin when broadband caught and then surpassed dial-up access as the dominant access medium.

Then there was some tipping point reached where access speeds accelerated beyond the "affordable mass access in the hundreds of kilobits per second range" to "affordable mass access in the megabits per second range."

You can see tipping points for text messaging and mobile phone use as well, even though it is only within the last decade that most people started carrying mobile phones and only within the last five years that most younger users began texting heavily, dragging older users along with them.

One watches for tipping points for all sorts of practical reasons, including evidence that it now is time to restructure the way marketing, sales, production, business models, distribution, industrial design, menus and all sorts of very practical things get done.

And the point is that all media are approaching tipping points of their own, and for reasons largely analogous to how communications is changing because of Moore's Law, IP, peer-to-peer, cheap storage, optical fiber, wireless and Web services.

In the newspaper local advertising area, a new tipping point appears to have been reached.

Online-only media companies will have claimed 43.7 percent of the $8.5 billion spent in 2007 on local advertising, usurping the long-time lead of newspapers. While newspapers three years ago controlled 44.1 percent of the local market, they will capture only 33.4 percent of sales this year.

The growth of the online media companies “came mainly at the expense of newspapers and yellow pages publishers,” who have lost a combined 19.6 points of local advertising share in the last three years, says Borrell.

Having spent some time working at newspapers, as well as at publishing companies with multiple products, a concrete way to view tipping points is the impact on structuring of sales forces.

Typically, newspapers and other local media try to build their online businesses by selling new media to their legacy customers. Sometimes they try to use a single sales force to sell online and legacy products. That doesn't work, long term.

In fact, it doesn't quite work even short term, as sales forces direct their behavior to where they can make the most money, and that never is in the emerging businesses.

So one winds up with a strategy akin to launching a Boeing 777 into the air by rolling forward slowly on a long runway. No matter what you do, you crash at the end, because there never is enough runway if you don't get your airspeed up pretty quickly.

Companies that rely on their legacy sales forces to sell the new products--even though it seems logical--will crash their planes at the end of the runway. The only way to succeed is to cut the cord. Build separate sales teams with separate incentive structures; not "converged" sales teams.

One does not "incrementally" jump a very wide ditch. One leaps. One makes it or not. But it can't be done incrementally and slowly.

IBM, Cisco Eat Own Dog Food

Cisco, touting the power of telepresence, really is pushing for use of telepresence inside its own organization. Likewise, as IBM touts the value of Web-based tools for enteprises, it is rolling out Web 2.0 technologies such as blogs, wikis, mashups and virtual reality technologies to help its employees be more productive.

IBM's Metaverse virtual reality software is one of these areas. Apparently some 2,200 IBM staffers are testing ways to collaborate with colleagues in the Metaverse.

Ackerbauer said IBM staffers leverage IBM's internal virtual conferencing application through Web services to have online meetings in 3D.

BlackBerry with Touch Screen?

Ray Sharma, GMP Securities analyst, says the next generation of BlackBerry devices will target two markets: the touchscreen and feature phone segment.

"We believe that the screen will possibly include a tactile response mechanism akin to the Nintendo Wii controller," says Sharma. "We also believe that the device will have differing hard key positions as well as programmable keys."

"We believe that the new touchscreen BlackBerry will be positioned at the high end of devices with a C$450-C$500 carrier per unit price."

"The device will feature a half VGA (roughly equivalent to an iPhone) that will be written on a new generation operating system," Sharma says.

How do People Use Their Smart Phones?

The Nokia Smartphone 360 survey shows that mobile users spend an average of 48 minutes per day on their smart phones, says iLocus. About 12 percent of the time is spent on making voice calls while messaging consumes 37 percent of user time; multimedia 16 percent; PIM 14 percnet; Games four percent; Browsing eight percent.

Browsing accounts for 72 percent of data traffic while entertainment accounted for four percent of the traffic in 2006. That pattern changed in 2007, though, with entertainment grabbing a sharply greater share of time spent with the mobile device.

In 2007, browsing represented 44 percent of time spent; entertainment 26 percent. Messaging increased from 11 percent of the data traffic to 21 percent year over year.

Nokia assumes that messaging traffic increased because users were sending photos using multimedia messaging service, while entertainment traffic increased due to increased podcasting.

Usage also peaks at different times of day. Music usage peaks at around 8 am and then again at 6 pm, suggesting music gets used when users are commuting. Voice usage peaks around 4 pm to 5 pm. Browsing peaks at around 10 pm.

Obviously mobiles are being used at home in the evening for browsing, and the question is why the home PC is not used instead.

Nokia assumes that the mobile phone is using Wi-Fi to download Internet content. According to Nokia, podcasting also is a later-in-the-evening activity.

About 47 percent of outbound calls are made on the move. About 29 percent of outbound calls are made from home. About 24 percent of outbound calls are made from the office.

About 35 percent of packet data is consumed when users are on the move. About 44 percent is used at home and 21 percent is used at the office.

Data traffic use increased from 6 mbytes a month in 2006 to 14 mbytes a month in 2007.

Wi-Fi or wireless LAN connections accounted for 31 percent of data use while mobile access accounted for the rest of use. WiFi sessions were longer with an average session duration of 4.5 minutes.

About 31 percent of the respondents used instant messaging. Some 38 percent of respondents listen to music at least once a week. Some 47 percent of the panellists say that mobile is now their primary music player.

About 59 percent are regular gamers. "Snake" and "Card Deck" are the most popular games. About 81 percent of users regularly use browsers, and the typical user visits two sites a week.

Mobiles Displacing Landlines in Africa

Mobility increasingly is the way human beings talk, though in many cases the use of Subscriber Information Management (SIM) cards might outpace the propagation of devices.

The substitution of cell phones for landlines is increasing across Morocco, Algeria, Sudan and Tunisia, for example.

In Mauritania, the number of SIM cards per landline was 29 in 2006, compared to 14.7 in 2005, which is the highest rate among the seven countries of Algeria, Egypt, Libya, Mauritania, Morocco, Sudan and Tunisia.

In 2006, Egypt and Libya counted the lowest ratio of SIM cards versus number of
landlines, respectively, at 1.7 and 4.9. In Libya, 2006 marked the year whereby SIM card numbers topped landlines.

Enterprise iPhone, Courtesy of Avaya

Avaya's one-X Mobile client software, expected to be available in Europe in the first quarter of 2008, will enable the iPhone to be integrated into most enterprise IP telecommunications networks.

From the first quarter of 2008, an easy-to-use, downloadable interface will convert mobile devices from Apple, RIM, Palm, Motorola, LG, Nokia, Samsung, Sanyo, Sony Ericsson and others into another endpoint on the corporate network. From the iPhone, users will have iPhone-optimized access to the Avaya one-X Mobile interface, making the iPhone their personal remote control for enterprise communications.

Increased Online, Event, Direct Marketing in 2008

According to BtoB magazine's 2008 Marketing Priorities and Plans survey, 60.1 percent of marketers plan to increase their overall marketing budgets next year predominantly in online, events and direct, despite the softness in the overall economy. Some 29.6 percent plan to keep budgets flat, and 10.3 percent plan budget decreases.

Last year, 62.6 percent of respondents said they planned to increase their marketing budgets in 2007; 29.4 percent said budgets would be flat, and eight percent said they planned to decrease their marketing budgets.

In 2008 the primary marketing goal is customer acquisition, cited by 62.4 percent of
respondents, followed by:

Brand awareness (19.3%)
Customer retention (11.7%)
Other objectives (6.6%)

Of those planning budget increases next year:

27.8% plan a 5% to 9% increase in spending
24.6% plan a 10% to 14% increase
12.7% plan a 20% to 24% increase
10.3% plan an increase of less than 5%

The biggest budget increases will be seen in online marketing, with 79.1 percent of marketers planning to boost their online budgets next year, up from last year, when 75.6 percent of marketers said they planned to increase their online budgets in 2007.

BtoB's survey found that the average percentage of the marketing budget spent next year on online marketing will be 33.8 percent, up from 26.5 percent in 2007.

Among the online areas that will see increases next year are:

Web site development (74.0%)
E-mail (70.1%)
Search engine marketing (64.3%)
Video (39.5%)
Webcasting (39.1%)
Banners (36.4%)
Sponsorships (29.6%)
Social media (26.2%)

Event marketing will see a spending boost in 2008 with 49.5 percent of marketers planning budget increases in this area, as will direct mail with 49 percent of respondents planning to increase their direct budgets in 2008.