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Bill Owens' First 100 Days

When Bill Owens took the helm of Nortel in late-April, you knew he had a number of huge challenges ahead. A little more than 100 days later, you have to give him credit for taking dramatic moves to re-invent the telecom equipment maker. Rather than moving slowly, the decision to eliminate 3,500 employees and fire seven more executives indicates that Owens is serious about put the company back on solid footing. The big problem ahead in the health of the telco market. If carriers and cablecos don't start spending more money on equipment, all of Nortel's moves will fail to bear fruit. This should continue to make Nortel an fascinating story for the next year to 18 months.

Ultra-fast DSL

If the folks at the University of Toronto and Carleton University are onto something, DSL at 400 to 500 megabytes/second could be on the horizon. According to an article in the latest issue of Nano Letters, a scientific journal, DSL routers could be souped up using a new polymer material that could be integrated into optical switches. Just imagine how much more music all those pirates could download!

Wireless Spam Gets Spiked

In what can only be regarded as a much-needed and logical move, the Federal Communications Commission approved rules earlier this week banning companies from sending spam to wireless devices without consent from the person receiving it. The decision should hopefully keep the wireless world from being inflicted the curse of spam and, more important, save wireless users a whack dough if you are charged on a “per byte” basis.

Google's IPO

There has been plenty written about the proposed of Google's impending IPO but what about the company's ability to continue its stature as the Web's ultimate search engine? There have been many proponents – including myself – that there are a growing number of search rivals already on the scene or poised to enter the market. The contenders include Microsoft, which is upgrading its search tools, and smallers players such as Teoma and Vivisimo. That said, Google has become the default search choice, and it will take something significantly superior to knock it off. Frankly, I haven't seen anything even remotely intriguing. The question, however, is whether Google's strength as a favorite search engine will be enough to maintain its financial growth. If the answer is “no”, Google investors could find themselves searching for “Internet hype” and discover the company's IPO tops the list.

Nokia's Troubles

A little while ago, I talked about how Nokia was struggling to keep up with rivals such as Samsung, LG, Sony Ericsson and Research in Motion. Nokia's poor second-quarter results suggest the Finnish giant has yet to get a handle on the reality its mobile devices just aren't cool as those made by competitors. It's as simple as that. What is Nokia's response?: They plan to lower prices. Sounds like a desperate move. Perhaps one of the most intriguing comments about Nokia was made to the New York Times by META Group analyst Peter Firstbrook, who said “I'm disappointed they still have not come up with a BlackBerry killer. They're not coming up with interesting high-end phones.”

Ride P2P tsunami or risk being swept away

For all the talk in North America these days about the downloading of free music, there has been little attention about how peer-to-peer technology is evolving and moving into new business markets.
Perhaps the most intriguing is the use of P2P networks in the online gambling industry. While online gambling is already a multi-billion dollar business — despite intense opposition from the U.S. government — it is beginning to adopt P2P technology to give gamblers even more tools to make “transactions”.
At the forefront of this emerging trend in North America is Toronto-based 1x Inc., which will launch new software called BetBug in the next few weeks.
Much like P2P software lets people exchange music online, BetBug will make it a snap for gamblers to connect with each other without using a middleman — otherwise known as a bookie.
Let's say, for example, an ardent Portuguese soccer fan wanted to place a bet on his team winning the recent European championship. Rather than use a bookie, the Portuguese fan could have used a service such as BetBug to find gamblers who wanted to back Greece. After finding the best price, the Portuguese fan could have made a P2P bet with the Greek backer.
When the game finished, the winning party would have paid a small commission to the e-commerce payment provider, which in turn, would have paid a royalty to the P2P exchange.
“This is a natural evolution for sports betting,” said Anthony Novac, 1x's president. “The interesting thing is the more tech-savvy people are fascinated with taking P2P to the next level, whereas gambling experts see it as a phenomenal product that adds value to the user; while legal experts say 'wow you have taken it around the [U.S.] Wire Act'.”
For online gambling houses, P2P technology is a threat and an opportunity. As middlemen, they do not want to see customers migrate to other services. At the same time, they will have to be flexible and offer P2P tools as complementary services.
Another benefit for gambling houses could be reduced expenses. Instead of having to handle transactions on their own or leased computer servers, they can simply provide branded payment services to generate commissions and build relationships.
This model that could also be adopted by auction giant eBay Inc., which has to operate and maintain large server farms to handle millions of transactions. If eBay decided to incorporate P2P technology, it could expand its offerings and lower costs.
In many respects, the gambling and pornography businesses are online vanguards that capitalize on new technology to bolster business. It was the pornography industry that jumped on the VCR, the Web, e-commerce and DVDs. As a result, it should not be a big surprise that it is the most profitable online sector.
Given how effectively the gambling and pornography industries have gravitated to the Web, there have to be important lessons for the music business. So far, P2P has savaged sales, while services such as Kazaa continue to thrive despite legal campaigns launched by groups such as Recording Industry Association of America.
Is there a way the music industry can take advantage of P2P technology rather than fall victim to it? This is a daunting question, given the music industry still has plenty of work to do when it comes to traditional e-commerce transactions. The simple fact a super site with millions of titles and an easy to remember name such as www.music.com has yet to materialize is evidence of the industry's inability to get its act together.
There are, however, indications P2P is gaining a little traction within the music business. Kazaalite.com, an off-shoot of Kazaa that became popular because it did not contain spyware, is offering a $5 a month service that gives subscribers unlimited access to music, movies, software and television programs, as well as unlimited technical support.
Kazaalite also has a premium version of its software for $25 that lets subscribers download and view DVD-quality movies. All of this downloading, Kazaalite offers, is apparently 100% legal.
Kazaalite is far from perfect and likely far from legal but Intercosmos Media Group Inc. does deserve credit for trying to create a P2P business model by setting itself up as a software middleman.
Perhaps the music industry could establish itself as the P2P clearinghouse for music by offering a service that ensures files are legitimate, high-quality and virus-free. Instead of fighting the P2P trend, the industry should try to exploit it, and find ways to encourage consumers to purchase other products, including CDs and DVDs.
Maybe this proposition is not doable and/or not viable, but it is time for the music industry to experiment with new tools and services to stem the P2P tsunami. Perhaps senior music executives should come to Toronto and spend some time with the 1x management team, which seems to have discovered a way to make P2P pay.