In this post, I will look at Verizon with respect to the iPhone and AT&T. An earlier related post on Verizon is available here.
Verizon Communications Inc. (NYSE:VZ) is one of the world’s leading providers of communications services with operating revenue of $88.14 billion in 2006. Its business is organized into two segments: Wireline and Domestic Wireless. The wireless business, operating as Verizon Wireless, is a joint venture formed in April 2000 between Verizon and Vodafone Group Plc with Verizon owning a controlling 55% interest.
For Q2 2007, for its Domestic Wireless segment, Verizon reported revenues of $10.8 billion. Its customer base increased to approximately 62.1 million, a 13.2% increase over last year. Verizon is the largest US wireless carrier in terms of revenue and in terms of customers, it is No.2 after AT&T which has 63.7 million customers. In the quarter, Verizon added 1.3 million wireless customers, less than AT&T’s 1.5 million. The main reason behind this is that Verizon lost about 300,000 wholesale subscribers due to the bankruptcy of its reseller Amp’d Mobile. This is the first time since early 2006 that AT&T has outpaced Verizon. >>>
Web 3.0 formula discussion (4C, P, VS)
Online health portals are targeted at meeting specific user needs. HealthGrades for example provides ratings and profiles of hospitals, nursing homes and physicians to consumers, thereby, aiding the consumer to select the best physician and treatment.
In most health sites, the context is split-up between men, women and children. Sites like NIH.gov offer separate categories for teenagers, seniors and minority groups, as well, which is appreciable. Thus, one can look for specialized articles or health resources for juvenile Diabetes or Alzheimer’s disease. >>>
SM: Did you get started because of pressure from the VC’s or did you feel the market was turning? AA: I thought the timing was right in 2004, so we formed the company in October of that year. What is interesting is when I go back and look at the time of our VCs presentations, and even in 2005, multicore still had not gotten hot even though we had built a tiled multicore processor in 2002. Our VC presentation did not have the word multicore anywhere in it – we called it all kinds of things, but we had not figured out what this new category was going to be called. We called it Tiled Processors, and so on, but the word Multicore only got popular in late 2005. >>>
SM: You were at Zilog, but their focus was not on networking. EB: Right. We attempted to build a business out of the networking developments. When I say we, I say a few friends who all ended up being significant contributors to the networking industry. They are people like Judy Estrin, Joe Kennedy, Bill Carico, people who ended up starting all of these great companies in the late 1970’s and early 1980’s.
We attempted to build a commercial networking business at Zilog, but we were not given the green light, which discouraged the entrepreneurs amongst us. In 1979, Charlie Bass, who was my immediate boss, left Zilog and founded Ungermann-Bass with Ralph Ungermann. This was the first Silicon Valley networking startup. I was supposed to join him except I had started my green card process and I was told by my lawyer I should not change employment in the middle of the process, otherwise it would have to go back to the start. >>>
Online health sites earn majority of their revenues from advertising and sponsorship programs. They also earn revenues by licensing and retailing products through their site.
WebMD (Nasdaq: WBMD), the leading portal for online health, for example, saw its advertisement and sponsorship revenues grow by 45% to $52.4 million and licensing revenues increase by 61% to $19.8 million in Q2 2007 over the June 2006 quarter. In Q2 2007, WebMD’s online services segment adjusted EBITDA increased 56% to $14 million or 19.3% of segment revenue compared to $9 million or 18.2% of segment revenue in Q2 2006. >>>
Business Week has a good analysis of the prospective demise of WSJ’s subscription business under Murdoch’s regime.
“For The Wall Street Journal Online, going free will come at a high cost. The daily financial newspaper is one of the few major publications to successfully charge for access to most of its online content, earning roughly $79 a year from each of its nearly 1 million Web subscribers. Once incentives and other free offers are taken into account, some analysts estimate that the paper will bring in more than $65 million this year from WSJ Online subscriptions alone.” Read more …
Okay, so let’s say, News Corp is ready to write off this $65 million in revenues, with the expectation of amply off-setting it with online advertising revenues. Is that the only way to recover the $65 million in lost revenues? >>>
SM: What came after Alewife and VMW? AA: I did VMW in 1994 – 1995, and in 1996 I came back to MIT. I started the Raw effort in 1996. Looking at processor design, we felt that in another 10 years we would have chips with billions of transistors and we wanted to discover how you would build processor chips in that era.
We came up with a basic multicore design, and we published that design in IEEE Computer in 1997. That was a design we published which had 16 tiles, and they used a mesh interconnect. We got funding from DARPA and began working on the project in 1996. We demonstrated the Raw project, which was a 16 core tiled multicore chip, in 2002. We collaborated with IBM in building that chip. >>>
SM: Where did you go after Stanford? EB: The first company that offered me a job was Zilog. They were the second microprocessor company in Silicon Valley; Intel was the first one. The inventor of the microprocessor, Federico Faggin had left Intel and founded Zilog.
I joined him about 12 to 18 months after he had started the company. There I learned about microprocessors straight from the inventor, so it was absolutely terrific. At the same time I had learned about networking from my visits to Xerox. Within a couple of years, I found myself building more complex microprocessor systems. Zilog was a great learning ground but a poorly managed company. the engineering had absolutely no direction, it was like a play yard. >>>