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Why the WiMax Deal Is A Disaster, Part II (Or, How Craig McCaw Snookered Eric Schmidt


The more I learn about the $3.2 billion deal announced earlier this week to salvage Clearwire’s and Sprint’s WiMax businesses by merging them together, the more I am convinced that someone got snookered. And that someone was Google CEO Eric Schmidt. Maybe he just can’t say “No” to visionary billionaires like Clearwire chairman Craig McCaw. Or maybe McCaw got Intel CEO Paul Otellini to lean on his buddy Schmidt. Otellini himself pledged $1 billion of Intel’s money towards the venture because he has made a big bet at Intel on selling WiMax chips. He also happens to sit on Google’s board. I don’t know if any of the above happened or not.

What I do know is that Google came reluctantly to the table and that for a long time the deal was being blocked internally at Google for some very good reasons. The main reason is that WiMax as Clearwire is deploying it is not a very good replacement for mobile broadband services. It is, above all, a fixed wireless solution. What it replaces is wired broadband services to homes and offices delivered through cable and DSL. That is how Clearwire is selling it today.

But to get Google (and Comcast and Time Warner Cable) to put up the cash, Clearwire had to promise it would build out a richer mobile broadband service as well. This is why Google invested—to bring the broadband Internet to mobile devices (some of them hopefully running the Android operating system). And it is why Comcast and Time Warner Cable invested. They don’t need a replacement for cable broadband to people’s homes. They need a wireless offering to fend off AT&T’s and Verizon’s incursion into their television market. (It’s all about who has the better bundle). Everyone is enthralled with this idea of WiMax as a disruptive wireless mobile broadband alternative. Even Neal Cavuto couldn’t stop waxing about the wonderful wireless future that this deal represents.

I wish that it were true. But here are a few problems, in addition to the ones I laid out in my earlier post:
  1. Clearwire and Sprint have not yet proven that WiMax is a viable business even for fixed wireless. Clearwire lost $727 million last year, nearly five times more than its total revenues. And it is projected to lose increasingly more over the next couple years during the expensive growth phase of its business. Moreover, the uptake of the service in the 50 or so cities where it is available has not been so great. That is because, unless you live in a rural area with no other broadband alternative, it is trying to solve a problem that doesn’t exist. At this point, most people in the U.S. can get broadband at their home just fine through cable or DSL.
  2. WiMax hasn’t proven itself elsewhere either. Even in Korea, which has had WiMax for two years and is supposed to be a broadband paradise, consumers are not clamoring for WiMax. There are only about 150,000 WiMax subscribers in Korea, well below initial expectations.
  3. Before you can turn Wimax into a mobile broadband service, you need mobile WiMax equipment. Cell phones, laptops, and other devices with WiMax chips in them are a long way away. Intel is ready to sell those chips, but device makers are not going to put them in their gadgets until enough consumers want them. And most consumers are going to wait for a WiMax network to show up that they can access both where they live and when they travel. So there’s a chicken and egg problem there.
  4. Clearwire doesn’t know how to act like a mobile company. It doesn’t have a mobile business plan. It has a fixed wireless business plan. In order to make WiMax truly mobile, you need to build out a network dense enough to cover subscribers as they move from one place to another. That is simply not the case today, even in the markets where Clearwire operates.
  5. Sprint is conflicted. To deal with roaming and coverage gaps, Clearwire would need to use Sprint’s 3G cellular network as a backup. That would require another chip in each device, which would make them more expensive than competing devices from AT&T or Verizon. Also, it would require Sprint opening up its 3G network to Clearwire and, by extension, Google. That’s not going to happen.
  6. WiMax is not a global standard. Here in the U.S., WiMax is built on 2.5 GHz spectrum. Overseas, it is built on 3.5 GHz spectrum. That makes it harder for equipment manufacturers to achieve teh scale they need to make money from WiMax devices and network equipment.
  7. McCaw may be a visionary, but sometimes he doesn’t see so clearly. Yes, he built what is now AT&T Wireless and sold it for $11.5 billion. But after that he also was responsible for Teledesic and XO Communications—two massive failures that cost investors billions of dollars. Clearwire was about to join those latter two before Schmidt & Co. came to the rescue.
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Facebook To Lift 5,000 Friends Limit

Facebook will soon remove a limitation that restricts users to no more than 5,000 friend connections, someone close to the company told us this week.

There are stories around why the limitation exists at all. The official reason is that Facebook wants to make sure that people only add “real” friends to their account, and the restriction is on the high end of the number of friends that any one person could reasonable have. The unofficial (and actual) reason: scaling problems made this necessary. I’ve heard this directly from Facebook employees, as have others.
But those scaling issues have been resolved, we hear from our source, and the cap will soon be lifted.

Facebook says that “less than 1,000″ users have 5,000 friends today. There are around 70 million active Facebook users, so the number of users who are affected is around one thousandth of a percent. But a disproportionate percentage of bloggers and press are at the limit, so the issue tends to get a lot more attention than it otherwise would.
High profile blogger Robert Scoble is among the 1,000 Facebook users who’ve hit the cap, and has complained about the restriction in the past.

Facebook says that they “Pages” feature is meant for people and brands that want to have a lot more “friends” than are allowed via normal accounts. An example is Barack Obama’s Facebook page, which currently shows 820,000 supporters.

But for many people, being a friend is much different than being a fan, and the level of interaction allowed is also significantly different. And the new Friends List feature, which allows users to classify and group friends, makes organization easier anyway.

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Early Adopters Still Spend More Time With Microsoft Than Google, Facebook, or Skype.


When early adopters sit at their computers, what applications and websites do they use the most? The answer: Microsoft Outlook, Microsoft Office, and MSN Messenger—just like most everyone else. At least according to data from RescueTime, the productivity app that monitors the amount of time a user spends on every application on his desktop. The Y Combinator-funded startup has given us an exclusive look at the usage data they’ve compiled from over 30,000 users (most of whom are early adopters). This data represents real-life usage on a huge scale, totaling 475,190 man-hours.

Gmail, Facebook, and Skype make strong showings, but still lag behind Microsoft’s desktop apps. Microsoft Websites, however, are nowhere to be seen. All of this suggests that among early adopters, desktop apps still rule, but Webtop apps are gaining ground in terms of what they use every day. After Outlook and Word, Gmail is the third most-used application, Facebook is No. 6, Google search is No. 10, iTunes is No. 11, and Skype is No. 16.

If you add up all of Google’s apps and sites, they take up 17 percent of the time this group spends on their computers. But Microsoft’s apps collectively take up 41 percent of their time, so Google still has some catching up to do.

Here’s the disclaimer: This data is by no means scientific. It represents mostly early adopters, but these are the people who are supposed to figure out what’s useful before the rest of us do. They are the canary in the coal mine. The data also has an international slant, with only 40% of users in the US (a total of 60% are English-speaking). About 35% of the users are on Macs, a rate over three times higher than the international estimate of 10% Mac market-share.

Here’s a breakdown of the top 20 applications and Websites, ranked by the overall time spent in each.

The Top 3


The top of the list is dull. Outlook stands tall with 12.4% of all the time spent on a computer, with MS Word(9.4%) and Gmail(6.6%) rounding out the top three. No surprises here.

Chat


In the battle for chat-client supremacy, MSN Messenger comes away with a whopping 4.14%, more than twice as much as the next leading client. Adium’s high performance is indicative of the high proportion of Mac users (it is easily the best client on the Mac).

Websites


Facebook holds a surprisingly strong lead over other websites, with nearly three times as much usage as Wikipedia’s English site. Also notable is Twitter.com’s usage (this is the site itself, not the API, which reportedly sees ten times more action). Digg is more popular among this group than the NYTimes.com, and gaming site Kongregate makes a strong showing as well. TechCrunch comes up right beneath YouPorn (NSFW), which isn’t such a bad place to be in.

In all, RescueTime users spent 44.6% of their time using communication services, beating out work-related apps by a large margin. The trend is probably much worse for the typical user, as RescueTime users are more likely to try to stay on task (in theory, at least).



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AOL Offers Free Phone Calls on Mother’s Day Weekend

Call Your Mom, Call Your Friend’s Mom, Even Call Your Mother-in-Law, All for Free Using the AIM Call Out Service

DULLES, Va.--(BUSINESS WIRE)--As a special gift this Mother’s Day weekend, AOL announced that calls made using the AIM Call Out service (http://call.aim.com) on Saturday, May 10 and Sunday, May 11 will be free. Users must set up an AIM Call Out account and add at least $5 in non-refundable call credit to get started. Users can then make as many calls as they want to more than 200 countries and will still have $5 to spend at the end of the free calls weekend.

WHEN: Users can make free calls between 6 a.m. EDT on Saturday, May 10th and 4 a.m. EDT on Monday, May 12th.

HOW: Users must have a free AIM screenname and use version 6.5 or higher of the AIM service which can be downloaded for free at http://www.aim.com. Once users launch AIM they just click on the telephone icon at the base of the AIM Buddy List to get started.
Users can talk with their moms using a headset or with a microphone and speakers. Users can also make phone-to-phone calls using the Web Connect feature within AIM Call Out. Users simply enter their phone number and then the phone number of their mom. In a few seconds, their phone will ring and then connect them to their mom’s phone.1

RESTRICTIONS: Users will not be able to make free calls for the duration of the promotion to Myanmar, Ghana, Egypt, Brunei, Comoros, Croatia, Morocco, Oman and Zaire. Users will continue to be charged for calls to satellite services including Inmarsat, Thuraya and Iridium.

About the AIM Call Out Service
AIM Call Out is a pay-as-you-go outbound voice calling service built right into AIM that lets users make calls to landline and mobile phones. AIM Call Out offers low per-minute rates with no connection fee or monthly charge. Users pay for call credits in increments as low as $5. For a listing of long distance rates AIM users can visit http://call-out.aim.com/rates.
 
Posted by Jeff - 4 comments

 

Hotmail Users Can Now Improve the World Effortlessly

Microsoft’s i’m Initiative, which launched in March 2007, has expanded to include Hotmail. The program donates a portion of the ad revenue generated through Hotmail and Messenger to any of ten worthwhile causes.

I like the basic premise behind the i’m initiative - it’s an opt-in and fairly unintrusive service that just puts an extra i’m-specific advertisement at the end of your emails, or an i’m icon next to your buddy list name. The more email and messages users send, the more money Microsoft donates to the charities of those users’ choices.

Microsoft so far attributes more than 20 million new downloads of Messenger to the campaign, in addition to increased usage of all Windows Live offerings such as Live Search and Hotmail. Since March 2007, the campaign has donated about $1.4 million to charity.

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911 tragedy in Calgary reveals perils of VoIP

TORONTO AND CALGARY — An ambulance was dispatched in response to a 911 call about a toddler in distress, but the Internet phone service said paramedics went to the address it had on file – a home in Mississauga – not the new home in Calgary where the distraught family waited in vain for help.

The child died before an ambulance sent to the right place could get him to hospital Tuesday night.

The family of 18-month-old Elijah Luck spoke out Thursday about their ordeal accessing 911 emergency services with their telephone company Comwave, which uses voice-over-Internet-protocol technology.

Their nightmare highlights the sometimes serious problems that can occur with VoIP providers' emergency services.

“We lost our little baby,” Elijah's aunt, Sylvia Luck, said Thursday. “We can't get him back. But we want to give this awareness to people so this doesn't happen to them.”

VoIP is a relatively new technology that many companies ranging from small upstarts to large cable operators have used to break into the phone market. While it has similar features to phone service from a conventional provider such as Bell Canada or Telus Corp., 911 on VoIP works differently.

The “basic 911” service that many VoIP customers have puts them in touch with a call centre that takes down their address and contacts the closest emergency response centre. That's because subscribers are identified by an IP number rather than geographic location. If calls are disconnected, the VoIP provider gives the customer's last known address, which, in the case of the Luck family, was in Mississauga.

Traditional phone providers' enhanced 911 service sends location information on customers directly to emergency services.

The family's ordeal shows that more work is needed to educate consumers about how VoIP emergency services work, said Mark Goldberg of telecom consulting firm Mark H. Goldberg and Associates Inc.

Read the full story here.
 
Posted by detn8r - 3 comments

 

AIM Advanced {FB} Beta Release

Hello Everyone,

I would like to say hello and introduce myself a bit. My name is Tuankoi, I am new to this forum, decided to sign up since I've viewed a few cool threads on "aim" related content. I am an avid aim user and I have become more actively involved in aim related content since I've recently had more time available.

I have been working on and off on a plugin of mine called AIM Advanced which adds a ton of cool new features to AIM, started it and finished up a lot in mid Feb. but unfortunately, I have only recently been able to finish up a proper installation app. and testing. Originally, I started it as a plugin for a few friends with the first feature being my "Fight Bot" in an attempt to add a better alternative to aim fight. But now I have decided to let everyone enjoy the laughter as there may be plenty of people who would enjoy this and a lot more of the features I have developed.


Above is a screen shot of the FightBot feature which I have developed, more info can be found here or at my storage site at tuankoi.com.

Anyways, I like this site and what I've read and I am looking forward to contributing much more interesting work for the aim community, and I hope you also enjoy the plugin :)
 
Posted by Tuankoi - 1 comments

 
 
 
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