Here's an argument for Google to acquire Technorati. I don't buy it, though strategically it makes sense -- Technorati got a niche in the industry and it aims to be its leading flag with an obvious exit to an industry gorilla. But not to Google, for the simply fact that Google already has Blogger and hence indexes pretty much a good chunk of the weblogs from around.
What about Yahoo + Technorati + Six Apart? Say by the end of the year?
Tom Foremski over at SV Watcher is reporting from the New Communication Forum about how companies should approach bloggers for getting coverage (heh, building the blogging demand side) and about wikis as online communities. Basic stuff.
And since we're at the blogs chapter don't miss the latest industry figures from Jon Udell (blogosphere subscriptions trends). I will return at those figures soon.
I feel like mentioning them here especially because I have talked to several people considering entrepreneurial ventures and who were not able to answer to the: "where do you want to be 3-5 years from now on with it?" Most of them had rather general answers (make $$), few to none were specifically targeting business/industry related goals. As such, Jeff puts it very nicely in a general frame from a strategic point of view:
"There are 4 possible outcomes, 1) you go out of business and lose all my money, 2) you get acquired by someone, 3) you go public, 4) this becomes a nice little business that is run for cash flow. Obviously #1 is bad, but #4 is bad as well because the only way I'm gonna get my money back is through #2 or #3. Can I predict when #2 or #3 will happen? No. Will either happen if you are executing on your business plan and become an opportunity or threat to other companies (for #3 specifically)? Yes. If it's an A round deal, well then you have more than a couple of years to figure it out, but if you are raising your EEE round of funding, then you better have a good answer for me about how you will achieve #2 or #3 pretty damn quick!
[link]
In a 58bn euro market in 2004 European companies doubled the value of outsourcing contracts awarded since 2002. 2/3 of the contracts were directed to technology outsourcing (i.e. software development) and the rest to BPO (business process outsorucing).
I think that Europeans finally realized that in order to be able to compete with their counter Americans they should look very carefully at the operational efficiencies. That means optimizing the way they run their operations in terms of costs (big fixed costs assymetries with Eastern Europe, former Soviet states or Asia such as labour or rent - and speculating them thereof) while turning to and taking advantage of their own workers for fostering the innovation. I think it's still an early stage though as compared to the guys from across the ocean - that's something the American organizations realized earlier on; it also seems that the yanks kept a relatively constant value of outsourced contracts and apparently have an increased preference for the Indian market.
On a related note you may remember that a while ago GE announced the divestiture of its Indian BPO unit -- apparently it strategically switched most of those operations to Romania. Word in town is that they have already acquired a huge work-in-progress building right downtown across the Government house. They're also looking for and meeting various business partners for accounting or finance services, call centers, and even software development.
Also, as far as I know these days there's a German delegation of IT companies looking for closing contracts with Romanian software companies. A friend of mine who owns a software company as well actually started testing the German market last fall and mentioned that Germans are very interested in the Romanian market. My friend already got his share of deals going on.
So Romania looks kind of hot right now - but I guess that's not because of a suddenly discovered golden mine, it's rather the under-investment compared to most of the Central Eastern European countries from the last 15 years or so. Except for last year when the direct investment from abroad topped some 3.7bn euro.
...or the 1st European Weblogs Awards organized over at A Fistful of Euros. My blog was nomineed at the Southeastern European section along with Histologion, Draxblog, Easth Ethnia and Flogging the Simian. If you would like to vote, click here. Also, that's a good opportunity to learn about very good stuff written all across Europe and not only.
This rumour is all over the blogosphere and the news channels. I am a bit skeptical, that's at least a surprising move, I will be waiting for some official statement though. Check the waves for yourself.
UPDATE: Apparently Google officially dismissed the rumor - it was just analysts speculating a job ad. Om has more.
A while ago Horia asked about the implications of the tax reforms promised and already in place made by the Romanian government. As I've had quite a rough beginning of the year (I hardly can keep up with the news), I think it'd be better to direct you to Matei's lucid analysis on what had happened in Romania in the last 30 days or so from the economical perspective.
Briefly, the income tax was decreased from 25% to 16% and also the employees tax was changed from a three layer range (18-40) to a flat 16% one. Even though it looks like a good measure (and it is) overall the impact on the overall labour taxes is still high on the operational expenses and the monthly cash flow.
Also, for the microenterprises (revenues less than 100k euro and less than 9 employees) the (revenue) tax was increased from 1.5% to 3%. This has made some companies on the 100k euro limit consider switching from micro to the profit tax type of company.
More importantly the dividend tax was increased from 5% to 10% -- the weird thing is (and this is a major governmental hicup me thinks) that the 10% dividend tax is applicable also to the 2004 which doesn't really make sense and is a bit irritating for anybody involved in the business environment. This in spite of initial assurement from the PM himself that the tax would be applicable from the 2005 fiscal year on.
Anyways, in spite of this I am still optimistic and think that we're on the right way for laying a good foundation. On the other hand I read somewhere that Ionut Popescu (the Finance minister) has rough times in finding good people for his team - I also understood that he got pissed as there were some people who were suggested he should take aboard, perhaps that is the reason for him not being present this weekend at the meeting of his party (PNL) and the government members. Time will tell.
For more on the fiscal impact of the tax changes in Romania and for a good understanding of the big picture read the EIU's perspective. Also Cristi put together some links to useful resources.
Is it just me, or Gmail's been very slow lately? Hopefully Google's making tests for the virtual operating system that has been very speculated about.
On a related note I was chatting over lunch with a high school buddy of mine about Google and its potential of beating and eventually becoming the next Microsoft. He was saying that Google is far from being there in spite of the shitload of money it's making for the simply fact that the business model is centered around Ad-Sense only. Besides, he claimed, the new innovative products emerging one after the other are more of a result of the coolness factor and less of an economic analysis. ("wouldn't be cool to do that?") While I tend not to agree with him, there's some consistency in what he says - though this clearly exemplifies chaos management (complexity theory) - and we have several examples of successful companies managed this way. Of course, it all starts from how we define success.
Incidentally last year my friend had an offer from each Microsoft and Google, both declined.
If you have an opinion about it you can throw your two cents under a 4000-word essay form and may be eligible to get some $5000 from The World Bank. Only if you you're young -- err, between 18-25, apparently after 25 you're not young anymore. :) The deadline's on April 15. [link]
While I am not particularly fond of the company (i.e. I spent 30 minutes on *222 to learn some info regarding the international calls and couldn't get hold of any info or an operator - I am still clueless how to get in contact with them) I guess it is worth noting that Connex plays the social responsibility card nowadays, which is quite smart. That comes in a context where the company doesn't have a great image in the market being perceived more as an Orange follower. And no, I am not an Orange customer, I have been using Connex (only) for almost 7 years now.
Also, most of you may have noticed that Connex changed its corporate logo a while ago, decision that started a raving debate over at Wireality among the pros who HAD to have an opinion, be it good or bad. I think it is simply a matter of taste - mine is that I don't like the new logo.
It looks like Gloria Jean's has made it to Romania - they just opened up a store over at Plaza Romania. I am still waiting for the first coffee shop a la Starbucks, where I can quietly sit and have a chat or I simply plug in my laptop to the wi-fi connection (offered for free) and browse or work.
It looks like a far-stretched dream for Romania, but I think we may see it sometimes in the next 24 months. Call me an optimist, but this type of concept not only that is missing from the picture, but the demand in Bucharest is at least high. (of course not empirically, rather from my observations, or lack thereof of such a place where I could go and use my laptop while drinking coffee :)) We do have some coffee shops around but none like this. Of course, it will start like McDonalds did 10-12 years ago - high premium price backed by a superior value proposition. As far as I know there's a success story in Poland where a coffee chain shop of this type had its exit exactly to Starbucks after 3-4 years.
Any entrepreneur willing to take the challenge and make it happen to Romania? Let me know. :)
Over at Business Romania there's an article that probably took some press conference bits of the Romanian cable providers claiming that the introduction of a superior technology (Direct to Home) in the market will probably get more than half million subscribers in the next years or so.
I think this is unlikely to happen for at least two reasons. Firstly the claimed target market is composed of the people living in the villages - regions where by definition the Romanian poverty factor is quite high (I doubt that there will be too many doctors, policemen or mayors willing to pay for the coolness/snubish factor even though they may afford it - 95% to 99% of the people from villages will simply not pay for it). Secondly, the few thousand having holiday houses are not enough, even though the value proposition may be attractive. As such, I just cannot see the consistency of the few hundred thousand customers willing to engage in DTH.
As for the existing customer base willing to switch for the service -- that's a funny thing at least (and sad to strategically consider in this case). The customer service is offered by the same 3 players in the market (RCS/RDS, Astral and UPC) and it is mainly crap. In addition, the value proposition is simply not compelling - 7 euros per 25-40 TV channels. Ah, if you bundle it with decent internet service and sell it for some 15-20 euro I may consider it. My average bill for Zapp used to be around 20 euro and it is VERY difficult to get out from. And decent mobile connection at a resonable price is (used to be) Zapp's strongest selling point.
Most of you may know that last week Basescu gave an interview claiming that PUR's being part of the government is at least immoral given that in Parliament its representatives voted for PSD's leaders (now in the opposition) - Nastase and Vacaroiu as presidents of the two chambers. As a reaction PUR's representatives wanted to step back from the government then they backed from this decision.
I didn't intend to report it at that time since I am not particularly happy about the entire bargaining/blackmailing for positions situation taking place these days and having PUR in the center of attention. However, having discussed the issue with some folks over the weekend I realized that PUR's position is not entirely understood by everybody - or at least the way I think it is going on.
I believe that Basescu's message had a double meaning. For one, he clearly warned PUR that their "immoral" double game with PSD and DA is not to be accepted and the new elections represent a better choice for keeping the governmental program on its agenda. Early elections were the reason for PUR not taking action on Basescu's accusing them of lack of morality, even though they formally had to "consult" among themselves before reaching this predictable conclusion.
The second play of Basescu's declarations is clearly intended to the electors. Something like: "we did a big compromise by accepting PUR in the government for being able to fulfill our economic agenda. PUR is evil and be aware that we made a pact with them only for the national interest. Should they not behave "morally" we would call what's best for the nation's interest - early elections that is"
That's my take on what had happened, I thought it was quite clear but I heard several stories that I'd rank on a scale from funny to idiotic. (i.e. Basescu has no right to claim such things, Tariceanu (the PM) has no power, etc, etc). I believe it was a smart strategic move and I think Basescu has a great strategy team behind. Not only the results were quite obvious, but also at the threat of potential early elections caused by PUR's retreat PSD rushed to claim that they "support the actual government".
More details about this story and PUR over on the FT today's edition. (also quoted by Business Romania)
@rgumente was nomineed and got the top spots in the most professional and most practical categories of this year's Romanian Blogging Awards organized by Gabriel. I am honoured that most of the 103 readers who gave their vote thought along the same lines I am trying to keep this weblog - professional and informative.
I should say that all the nomineed weblogs are at least as good as this one and I believe that's a promise for a year which hopefully and probably will bring us more quality stuff from an increased number of Romanian bloggers.
Without any other comments here are the top 3 places in each of the categories:
Most Professional (9 nominees)
1. @rgumente: 31%
2. Kit.Blog & Business Romania at a tie: 21%
3. Individualism: 9%
Most Amusing (6 nominees)
1. Perfectly Imperfect: 31%
2. Kiddo: 25%
3. Maktaaq & Timbru at a tie: 15%
Most Practical (4 nominees)
1. @rgumente: 37%
2. Prinsea: 27%
3. Romanian RSS Feeds: 18%
Most Provocative (6 nominees)
1. Perfectly Imperfect: 34%
2. Individualism: 25%
3. Presa de ziare: 14%
Most Alternative (10 nominees)
1. Kit.Blog: 18%
2. Seymour's Blog & Perfectly Imperfect at a tie: 14%
3. Individualism: 13%
Best Stories (9 nominees)
1. Perfectly Imperfect: 32%
2. Business Romania: 19%
3. Alice in Wonderland: 16%
Best Photography (12 nominees)
1. Kit.Blog: 22%
2. Troniu: 17%
3. Pseudosite: 11%
Also here is the pdf with the complete list of the nominees and their performance.
Excerpts from London Business School's Financing the Entrepreneurial Business classes taught to MBAs:
- the larger the deal, the less important the management.
- 50% of all acquisitions go bad.
- Inertia is the most powerful force in business.
- The biggest mistake you can make is to not choose the right partner.
- Being an entrepreneur is all about valuing the company correctly and choosing the right partner.
- He who puts money in last owns the problem.
- VCs should always try to get blocking rights; entrepreneurs should never give blocking rights.
- There is only one competitive advantage that's sustainable: scale.
- Every year you should decide if you're going to have a growth year or a consolidation year.
- If I had a pound for every vendor who 'retired for ill health'...
- Marketing people are far more conservative than finance people.
- The more complicated the deal, the more likely the fallout later.
[shamelessly taken from here :)]
...is the main problem to be tackled was Basescu's claim in the elections campaign as opposed to Nastase's poorness level of Romanians. Apparently Romanians do suffer from the chronic bribe syndrome while the $150 or so claimed average salary for the Romanian economy is well-distorted by the 40% grey economy influence. Besides I find it at least strange to wait for the State to increase my wealth level, I'd just expect it to create the proper environment so that I would be able to make money. Just a thought at the morning coffee.
The news of a Mac desktop computer (xMac) targeted at the low end (read cheap) is confirmed by Apple suing the website releasing the rumours. I think it is a smart strategic move, similar to Six Apart with LiveJournal mentioned below - market share grabbing while consolidating its leading position in the specific market segment it operates. I look forward to Steve's speech this month.
UPDATE: Russ has more.
I just returned from a well diserved holiday in Sinaia - I had a great time in spite of the lack of snow.
There is one thing worth mentioning - EXCELLENT customer service wherever I went to - be it the villa, the restaurants, the ski slopes facilities and so on. This is something that came as a surprise since Romanians are not particulary famous for customer service. I should say that I decided to leave on the spot and found accomodation using internet and then simply making a phone call. Not only that it worked like a charm but the people I had dealt with were kind, prompt and professionals. Also the conditions were quite good in most places (well worth the decent value of money) - it gave me good confidence that the Romanian business environment is on the right path.
