Is The Second Dotcom Bubble Underway?

Some would argue there are 10 tell-tale signs that a technology bubble is building. Insert "social networking" for "New Thing," for example.

You can make your own decisions about how well the logic works for "cloud computing," "mobile payments" or "tablet computing." So far, by my reckoning, those other trends have not yet created "bubble" logic, but could. Keep in mind that the last Internet bubble, which began in 1995 or 1996, actually was a couple of bubbles, both Internet and telecom. It is possible there were be a couple of bubbles this time, if in fact a bubble is building.

But it also is fair to note that bubbles build because people really believe something "really big" will result.

1. The arrival of a “New Thing” that cannot be valued in the old way. Dumb-money companies start paying over the odds for New Thing acquisitions.

2. Smart people identify the start of a bubble; New Thing apostles make ever more glowing claims.

3. Startups with founders deemed to have “pedigree” (for example, former employees of New Thing companies) get funded at eye-watering valuations for next to no reason.

4. There is a flurry of new investment funds catering for startups.

5. Companies start getting funded “off the slide deck” (that is, purely on the basis of their PowerPoint presentations) without actually having a product.

6. MBAs leave banks to start up firms.

7. The “big flotation” happens.

8. Banks make a market in the New Thing, investing pension money.

9. Taxi drivers start giving you advice on what stock to buy.

10. A New Thing darling buys an old-world company for stupid money. The end is nigh.

Is The Second Dotcom Bubble Underway? Ten Telltale Signs | paidContent

Is iIt 1996 All Over Again?

Some entrepreneurs now starting mobile app and other firms were in primary school in 1996, when a wave of Internet innovation built, culminating in a great bubble and bust in 2001.

But there are ample enough signs that a decade later, we are likely seeing another great wave of innovation.

Will mobile applications and the technologies that support them change the way people communicate, get information and do business to the degree that the web did starting in 1996?

Some think so. Others are likely reminding themselves what happened last time.

For Mobile Apps, It’s 1996 All Over Again

Twitter Conflict with 3rd-Party Developers Heats Up

Twitter has recently been squeezing third-party developers since 2010, when it began buying and internalizing formerly independent applications that build on Twitter, and arguably making it harder for third parties to provide important functions Twitter believes are "core" features.

In that regard, Twitter recently shut off access to its service by several Twitter client applications provided by UberMedia. UberTwitter, Twidroyd, and UberCurrent were shut off from Twitter, said Bill Gross, CEO of UberMedia.

There are limits to "openness," it appears.

Statement from UberMedia Regarding Twitter’s Suspension of Service to UberTwitter, Twidroyd and UberCurrent | Business Wire

Mobile Hotspot an Early "New" 4G Application and Revenue Driver

Though the feature also is becoming something more common on 3G networks, the "mobile hotspot" feature has become an early "4G" application differentiated from what 3G has offered in the past. As important as 3G "PC dongles" have been as a driver of mobile broadband revenue for mobile service providers, the 4G mobile hotspot seems to play a similar role for 4G. 

You can argue about whether a mobile hotspot is markedly different from a PC dongle, but there is one important difference. A mobile hotspot eliminates the need to buy a tablet from a particular carrier. Just buy the tablet you want, get the Wi-Fi-only version, and use the mobile hotspot for on-the-go connections in the same way that a PC dongle can be used to support on-the-go notebook service. 

Sprint to Add LTE in its CDMA Spectrum?

Neither Sprint nor Clearwire executives have been too shy about saying they both could switch to Long Term Evolution for fourth-generation services, rather than using the WiMAX platform. In fact, if either firm wants to benefit from LTE ecosystem experience curves, they would have to. It is a foregone conclusion that the LTE ecosystem, from base station solutions to handsets, is going to eclipse the WiMAX ecosystem in relatively short order.

But network transitions of that sort can be messy in the interim, as the operator has to continue to support existing users and devices that operate on the older platform, while adding new users to the next-generation platform. If Sprint intends to shift to LTE on its fully-owned spectrum, that means adding LTE to the network now running CDMA.

Clearwire has other options, as it can light a separate LTE network alongside its existing WiMAX network.

In an interim period, while lots of users continue to use CDMA gear, Sprint would likely introduce new devices that support both CDMA and LTE. There are some cost considerations, but it is an approach mobile operators and suppliers are quite familiar with.

That move would need to be made at some point even as Sprint continues to use Clearwire facilities, as the CDMA network itself will have to be entirely replaced at some point by a 4G solution.

Sprint Looks Poised to Enter an LTE Future - PCWorld

Intuit Extends GoPayment No Monthly Fee and Free Credit Card Reader Offer

Intuit has extended its offer of GoPayment, its credit card processing service for mobile devices, with a free credit card reader and no monthly fee.

Intuit first offered GoPayment with a free credit card reader and no monthly fee in early January. Due to a high level of demand, Intuit will continue the offer indefinitely so that the smallest of small businesses, such as dog walkers, nannies and jewelry makers, can affordably start processing credit cards on their mobile phones. Since the initial offer, Intuit has more than tripled the number of customers signing up for GoPayment each day.

Intuit Extends GoPayment No Monthly Fee and Free Credit Card Reader Offer

Unintended Consequences of "Consumer Protection"

Debit card transaction fees charged by debit card issuers to retailers would decline by about $12 billion under provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The law contains an amendment appended by Senator Richard Durbin, (D-IL) that sharply limits the fees debit card issuers can charge to retailers for use of those cards. Some have estimated losses of about $12 billion annually to card issuers, with the logical consequence that those institutions will raise fees and charges for other services to recoup the lost revenue.

The law sounds good, to some, as it promises lower transaction costs for retailers, who some believe might pass some of the savings along to consumers. Those of you who follow business to any extent will realize the logical unintended consequence, however. Debit card-issuing firms are not simply going to take a $12 billion hit to top-line revenue, but will look elsewhere to recoup those losses. And end to "free checking" and higher fees, plus new fees, will be the unintended consequence.

The rules will allow some legislators to posture about "doing something to help consumers and retailers." What also will happen is that consumers will find themselves paying additional costs elsewhere, wiping out the "savings." No rational executive running a debit card operation would do any less.

Assuming the losses can be recouped over time, one also has to expect job losses and less-generous working conditions and compensation. The $12 billion revenue hit will be immediate; the replacement revenues will take time to create. In the interim, costs will have to be attacked. So the other "unintended consequence" will be job losses.