fiftylinkslater

Fiftylinkslater's got a brand new home at www.fiftylinkslater.com.

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Despite iSuppli's announcement a few days ago that put the Kindle 2's gross margin at 50%, media has given it little fanfare, mostly pushing out sanitized reiterations of the same report; surprising, considering that 50% is not only double that typically found in consumer electronics, but also more than twice what Amazon has been earning in recent years.

The iSuppli teardown demonstrates Kindle's success of course, but its implications are wider. Fifty percent margins imply that a sub-$300 device is already easily within Amazon's reach. Even if the company were to go as low as $260--which I'd imagine would be much too low, but illustrative of the flexibility at hand--it'd earn a 30% margin, healthy for the industry and much better than average Amazon. With greater scale as the Kindle goes mass, Amazon would earn back margin previously forfeited.

This points toward a much higher likelihood that a sub-$300 Kindle will hit the market in Amazon's next iteration, in which the company might even begin price discriminating, selling Kindle 3 at the higher price we're used to and Kindle 2 at much lower levels. That the device only makes up 1% of Amazon's revenues today in light of heavyweights like B&N, Hearst, and News Corp all threatening to enter the hardware space, only point toward that same direction.

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SPB launches Mobile Shell v3.0 today. I love how, spurring from WinMo's deficiencies, comes about an industry of modular OS overlays just to make the Microsoft operating system more bearable.

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If you don't know Google Insights yet, I suggest you get to know it. It spits out time-series graphs based on search term popularity. In this week's experiment, we pit five All-American staples (apples, bananas, oranges, strawberries, and pineapples) against each other, finally putting to rest the question of fruit superiority.

Thanks to heavy seasonal pie-baking, apples triumph in this five-fruit face-off.

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Arriving in ebbs and flows, reason vs. counter-reason, expostulation against Google seems to be what it's about these days. One of the most recent ones has centered around monetization difficulties at YouTube and Google's overpayment for the Internet property:

"No matter Google's $116 billion market cap: a half-billion dollar loss on a single property, even one as large as YouTube, is a bitter pill to swallow." Silicon Alley Insider, Apr '09 / ". . . Why pick on poor Yahoo? . . . Two and a half years ago, Google paid $1.65 billion for YouTube . . . The 2008 payoff: about $90 million in ad revenue -- which might (but probably won't) cover the costs of copyright-infringement litigation and certainly won't cover bandwidth charges." AdAge, Mar '09

But at the marrow of Google's success is its willingness to seed perennial loss leaders--resource-demanding businesses but rarely awe-lacking--religion it has publicly spouted since its '04 IPO:

"We have always believed that building a trusted, highly-recognized brand begins with providing high-quality products and service that make a notable difference in people's lives . . . Today, we use the quality of our own products and services as our most effective marketing tool, and word-of-mouth momentum continues to drive consumer awareness and user loyalty worldwide."

To be sure, YouTube's still in the doldrums--Credit Suisse estimates half a billion in operating loss this year--but YouTube has reach, a rough 100 million uniques and 40% of all online vids viewed in the US, making it a remarkable marketing tool for Google. Is it possible that we've been focusing too much on run rates and not enough on the goodwill that these cash burners generate? Goodwill that eventually turns into physical, here-and-now dollars? To demonstrate, I've mapped Google's marketing spend proportional to its size against competitors, Yahoo! and Microsoft for simplicity: Google consumes 2-3x less.

That's $3 billion on sales and marketing salvaged every year, I imagine largely from Google-aura. Compare that with the $1.7 billion shelled for YouTube or the expected $0.5 billion loss this year. During 47:12 of Stanford's ETL session in February, Tim Draper, founder of Draper Fisher Jurvetson, thinks YouTube's goodwill generation is worth $14 billion; shocking, but probably not that far off.

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It's finally here and it only works on Windows. Eat it, Mac.
Speaking of jam, go see "I'm New" on ThruYou's site.

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I believe in a workplace utopia somewhere out there where it's giggly dolphin-riding, every now and then, the way the woman in the CareerBuilder ad made it look in the CB Superbowl ad. (Go ahead, it's worth another view.) Reality feels much different, of course, most of us drudging through work in indifference, which I give half-credit to a school system that has gotten pretty efficient at herding students into just a handful of off-the-shelf silos, regardless of varied personalities or interests. The rest I'm attributing to indolence and inaccessability. There is, in fact, no shortage of inspiring jobs out there, but it requires massive amounts of organized information for ease of discovery. You can't find what you want if you don't know what's out there, and I argue that there's just too much we don't know. Most companies I can think of off the top of my head seem to focus on matchmaking, not discovery; and this is certainly true of recent Internet stars--e.g., LinkedIn, Xing.

Just how important is this opportunity? If some simplifying assumptions are made--for instance, here I assume that better job satisfaction leads to some (voluntary?) willingness to work harder and longer, which then leads to economic growth--you can see the ballpark impact we're dealing with here. It's big. And all I've done is increased productivity by 1% and work hours by 30 minutes a week, ceteris paribus. I don't think that's unreasonable. As usual, more to come on this.

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It's time you get to know me. I'm buying some gold bullion and it's gonna make me hoodrich.

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Weekend achievements and things in-the-works:

• Broke it off with Chrome. Back with Firefox
• Picking up our new cat Omar on Thursday
• Buying myself a 999.9, 1-Troy kg gold bar
• Modeling out the right sigmoid curve for smartphones
• Comped up an ad campaign for models who don't got it so good and deserve better
  

   

Click here to download:

Fanbase_Update.zip (60 KB)

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