I've got a column in today's National Post about how efforts by Canadian wireless carriers to jump-start Wi-Fi are flawed because the business model – if there ever was one – is slowly disappearing. My thesis is there just aren't enough people willing to pay a premium price for the convenience of surfing the Web and checking e-mail at a coffee shop or restaurant. With free Wi-Fi hot spots, Blackberries, Treos and cheap Internet cafes, you can easily get an Internet/e-mail fix without paying $9.95 an hour or $20 a day for Wi-Fi access. Given this little rant, I found it intriguing to stumble across a story on Engadget about a cafe in Seattle that has turned off its free Wi-Fi service on the weekends because 90% of its seats who taken by people spending hours surfing the Internet. Although it has only been a couple weeks, revenue is apparently up and staff are happier. In another Luddite trend, there are a number of stores in Montreal – particularly bakeries for some reason – that have started to ban cell phone usage. It seems the proprietors were getting pissed off with loud wireless conversations and distracted customers. Now if they can institute laws banning cell phone usage in automobiles, that would be a huge step in the right direction.

For all you BitTorrent users out there, the party's been officially raided! Yesterday, U.S. Immigration and Customs Enforcement came down hard on Elite Torrents, which was distributing the latest “Star Wars” movie before it hit movie screens. ICE agents seized the network's main server and took its Web site offline. It's encouraging to see the movie industry has adopted the same legal, heavy-handed approach as the music industry. It's based on the idea that if you can't take advantage of new technology, then you try to bash it legally into submission…Bad technology, bad technology!! It puzzles me why the movie industry hasn't been more creatives in using the Internet as a new distribution vehicle. It's had six years to look at what happened to the music industry, which had its pants between its legs as Shawn Fanning and Napster danced into the spotlight. Sure there are a few movie download sites but these efforts on baby steps rather than something bold and ambitious. With proper digital rights management technology, the movie industry could kick some serious business Torrent ass by setting up a super Web site – i.e. www.movies.com – where it could sell 10s of thousands of movies on a download or streaming basis. Of course, this model makes too much sense for the set-in-it-ways movie industry to readily adopt. In the meantime, you can expect a lot more raids and – surprise, surprise – lawsuits against downloaders.

Andy Abramson picked up on a Reuters story out of Paris in which Skype CEO Niklas Zennstrom suggests the company could be cash flow positive this year. Again, this leads one to believe SkypeIn and SkypeOut are generating healthy sales, and that Skype is becoming more of a telecom carrier every day. Zennstrom said Skype has 1.4 million fee-paying clients. Andy has a good take on Skype:
“I'm rooting for Skype but the financial world is a dangerous place and people remember what you say, and forget what is unimportant. This claim is a big, bold statement, and one everyone will be watching to see if it comes true.”

The question of who's going to succeed Ted Rogers as Rogers Communication Inc.'s CEO may have become a little more clear yesterday when the company's wireless domo, Nadir Mohamed, was also given responsibility for the cable division. Ted is 71-years-old and apparently plans to retire in three years, so it makes sense to give the well-respected Mohamed more responsibility. At the same time, Ted shows no signs of slowing down and, given he controls the publicly-traded firm, he'll probably never really retire. By promoting Mohamed, Ted does two things: he gives a senior executive a good reason to stick around – other than giving him more cash – and he gives himself an opportunity to back away a little more from day-to-day operations. When it comes to succession plans, my take is Ted will stick around as long as he can – the 2008 retirement plan will likely be bumped or eliminated – until his son, 36-year-old son Edward, is ready to take the helm. If you're Edward Rogers, you are probably happy to have someone like Mohamed running the big show as it will let him learn while staying somewhat out of the spotlight.

It's difficult to get excited about any part of 8X8 Inc.'s fourth-quarter results. While revenue nearly doubled to $3.9-million from a year earlier, the Internet telephony company's losses soared to $7-million from $1.5-million. The company attempts to cover this bad news by pointing out the number of subscribers rose to 57K from 40K, while it has $31.8-million of cash. Let's be honest: 17K subscribers is what Vonage is attracting every two weeks, while 8×8's cash position was buoyed by a stock offering. It is readily apparent that 8×8 is a company struggling to catch the VOIP wave. The challenge, however, is investors have yet to caught the VOIP bug. If you look at the recent performance of publicly-traded VOIP companies, very few have done well. 8×8 shares have tumbled by about 50% so far this year – cracking the $2 level today. While 8×8 may have the best VOIP service – according to TomsNetworking – it's not attracting enough customers to make it anything more than a marginal player in a market that is seeing growing competition from cablecos.

I'm somewhat amused by the news that Friendster CEO Scott Sassa plans to resign today after less than a year on the job. Friendster's biggest problem was it never had a vibrant business model. It was a quasi-cool, communications tool developed by Jonathan Abrams to help people meet new friends (in other words: it was a dating site for people who did not want to be seen as using a dating site). The big difference between Friendster and Match.com was that Friendster really had no obvious way to make money beyond banner ads and AdSense because its users weren't willing to pay for a service they were getting for free. When I met Abrams a couple years ago, he had this strange “I know something you don't because I work in Silicon Valley” attitude – clearly fueled by investment from some large VCs. Turns out Friendster couldn't find the secret sauce to turn users into revenue. Friendster was an example that investors often to fail to learn fundamental lessons. It was a classic dot-com that somehow emerged a couple years after the party was over. The best scenario for Friendster would have been its purchase by Google or Yahoo for its users but that didn't happen, which should tell you a lot about the company and the market.