Yahoo is wooing IBM technical talent, reports the New York Times.
Beginning in the mid-1990’s, the researchers at I.B.M. spent several years developing an Internet search engine, called Clever, employing a series of algorithms to improve the quality of the retrieval results. While that project has concluded, the I.B.M. researchers have continued other work in the field.
Prabhakar Raghavan joined Yahoo last week as head of research. Prabhakar Raghavan, a computer scientist who once led the Clever effort, joined Yahoo last week as head of research. He left I.B.M. in 2000 to become a vice president and chief scientist at Verity, a maker of search and retrieval software for corporations; he was later named chief technical officer.
Yahoo said that another search-technology researcher, Andrew Tomkins, had recently been landed from I.B.M., and that negotiations were under way with several others there. Yahoo executives said they expected more hiring.
In an effort to compete with the hype-prone Google and it myth about extraordinary innovation absorption capacity, Yahoo is now doing its own army building in the technology realm.
The other area, however, where Yahoo stands to gain a great deal of mileage by cleaning up, is Usability. It looks like that opportunity is not going unnoticed, either:
So far, Google has received much of the attention for its ability to consume impressive numbers of new Ph.D.’s to fuel its research projects. But Yahoo has recently joined in the arms race and is hiring high-profile researchers, including Larry Tesler, an Apple Computer veteran who recently went to work at Yahoo’s headquarters here. Mr. Tesler, a pioneer in user-interface design, is focusing on the usability of Yahoo software.
Between Yahoo and Google, I still like the former, despite the latter’s sky-high stock prices and current halo-effect. Long time back, Microsoft won against IBM and Apple (and many others) with a Fast-Second strategy. Yahoo may not be at the fore-front of innovation anymore, but some of the properties they have – especially My Yahoo! , Yahoo! Groups, and HotJobs – could be interesting leverages, IF they spend the cycles to figure out how to take those to their true potential.
Now, with the focus on better technology and usability, they can, if they augment Product Marketing next.
Last week, I was in Jerusalem for a day. My guide, Mishi, was a knowledgeable man with a Masters degree in comparative religion. As we walked through the streets of the old city, he walked me through 10,000 years of history – religious and political – and led me through the sites and monuments that stand as testimony to that colorful past.
Judaesm, Christianity, Islam – three monotheistic religions hold Jerusalem as their source, hence the place is full of pilgrims. A Christian mother holds her new born against the stone on which Jesus was laid after the crucification, and weeps. Facing the Western Wall, numerous solemn Jewish faces pray earnestly, waiting for the arrival of the Messiah. At the Mosque of Omar, Mishi points out the spot where Mohammed stopped and disembarked from his horse on the way to his conference with God.
I had to stop and think for a moment, and put in perspective our frustrations – we the children of the Internet generation – our search for The Next Big Thing! The Internet is really only a 10-year old phenomenon. It has touched lives in massive ways. And yet, it will take a long time yet, before the full impact of the Internet gets woven into the fabric of society and business. Remember, the Telephone was invented in 1875-1876 by Alexander Graham Bell, and yet, even today, remote villages in developing nations have only just started reaping its benefits.
Perhaps a sacrilegious analogy (not my intent), but the way we pray and search for the Next Big Thing, is a bit like waiting for the arrival of the Messiah! The Christian Messiah, Jesus, came 2005 years back. The Jews do not even accept Jesus as the Messiah. They have had a much longer wait.
Should our horizon be expanded somewhat, beyond the 10-15 years, that we have recently become accustomed to?
“Hoping to pave a new path to its popular Web site, Yahoo Inc. has acquired Konfabulator, a tiny software maker that provides a computer platform for monitoring the weather, stock prices and a wealth of other customized information without opening a Web browser.
The acquisition, for an undisclosed price, gives Yahoo access to a toolbox of mini-applications – known as widgets – that have built a cult following since Palo Alto, Calif.-based Konfabulator first introduced them for Apple Computer Inc.’s Macintosh in 2002.”
Good move by Yahoo.
Om and I were talking this weekend about the next set of trends. Om wrote Did Silicon Valley build its own 747? and I commented: To derive the next big thing, Silicon Valley would need to change its traditional “solution in search of a problem” mode of innovation, and switch to understanding the applications that people are interested in … in response.
Yahoo! Konfabulator should pay a lot of attention to what widgets people want, because mosquito conditions in a certain area, I am afraid, is not exactly a killer app. However, finding the right clothes from the private desktop of big, fat women may well be one!
Twenty-First Century’s best venture is the Harry Potter franchise. Starting with a great set of thrilling stories, J.K. Rowling’s marvelous boy-hero has started off a whole generation of youngsters on paths of reading, courage, friendship, adventure, and Rowling herself, on a path of great riches.
Traditionally, Venture Capitalists did not finance content plays. But if you look at the numbers, one begins to wonder whether or not they should start … books, music, films, toys, games …
“The global popularity of the books, films and games is estimated to have made the Harry Potter brand worth $1bn. More than 265 million copies of the books have been sold in 200 countries. Author J.K. Rowling, whose rise to fame in itself is a marketing executive’s dream, is reputedly now Britain’s wealthiest woman [not Queen Elizabeth]. Waterstone’s booksellers estimates that on the first day of its release, the Half-Blood Prince will sell at least two million copies in the UK and more than 10 million worldwide. Meanwhile, supermarket giant Tesco estimates that it will sell 300 copies a minute when the book finally goes on sale in the early hours of Saturday morning. ”
“The new Harry Potter book has beaten sales records on both sides of the Atlantic, selling almost nine million copies in its first 24 hours. Harry Potter and the Half-Blood Prince sold 6.9 million copies in the US and more than two million copies in the UK, beating all previous Potter records. Estimates from Nielsen BookScan revealed 2,009,574 copies of Half-Blood Prince had been sold within 24 hours of release. US sales of the sixth Harry Potter book have generated more than $100m (£57m) in revenue across the weekend – more than the combined box office sales of hit films, Charlie and the Chocolate Factory and The Wedding Crashers. ”
The first weekend’s sales numbers came out ahead of forecasts. Wonder how many ventures claim such performance?!
ps. Half Blood Prince, the new Harry Potter book is the best yet of this series!
I wrote an earlier piece called What’s After Starbucks? in which I speculated about entertainment business opportunities modeled after Starbucks.
Today’s Wall Street Journal article At Starbucks, a Blend of Coffee And Music Creates a Potent Mix talks about how Starbucks is impacting the sale of carefully selected music CDs and reviving careers of musicians who had faded into oblivion.
“After receiving a commitment that Starbucks would help Concord license the album, “Zucchero & Co.,” from its Italian distributor, Mr. Barros signed the artist. The 14-song album, which pairs the singer with a lineup of stars including Eric Clapton and Luciano Pavarotti, went on sale at thousands of Starbucks locations and other retail outlets this month.
Mr. Barros knows how powerful a boost from the coffee chain can be. Last summer, his independent jazz label joined with Starbucks to produce and distribute “Genius Loves Company,” a collection of duets between the late Ray Charles and performers such as Norah Jones. Helped by the biographical film, “Ray,” and attention about his death, the record sold nearly three million copies — about a quarter at Starbucks stores — and in February won eight Grammys. No new Ray Charles release in decades had come close to that sales level.”
Perhaps, a natural extension would be to start having live-music and dancing at Starbucks cafes as well, with carefully selected musicians, in carefully selected musical genres!
“As a limited partner, Powell will offer strategic advice to KPCB and its portfolio companies, but he will not participate in the firm’s day-to-day activities. “I don’t consider that I’ve taken a full-time job,” Powell told the San Francisco Chronicle, but added, “Don’t think of me as sort of a board member who’s there on a quarterly basis to sit in a meeting. Think of me as an adviser who’s always available.” Powell’s understanding of defense contracting and government budgeting are sure to prove a boon to KPCB as it sharpens its focus on security and defense start-ups.”
Sure, Defense contracts are a lucrative area for KP to target via Powell. But is there something more than what meets the eye? John Doerr has long had his little finger in Politics. US Education is his greatest passion, evidenced in his New Schools Venture Fund endeavor. Perhaps, continued hob-nobbing with the political stalwarts also starts to position John Doerr for a Cabinet level role in the not-so-distant future, especially in the Education realm.
Whatever it is, bridges and cross-pollination between the business world and the political leadership of the world is eminently desirable. It would be refreshing to see some business leaders with the reputation of getting important things done take on political responsibilities, while politicians cash in on some dough using their connections via the business world.
Need Help With Calculus? Tutors Coach U.S. Students Online — From India is an article from the Wall Street Journal.
Tanu Basu lives in Boston, but when she wants extra coaching in math, the 16-year-old American gets online and spends an hour reviewing calculus with an Indian teacher who is based in a suburb of New Delhi.
Enter the next phase of outsourcing: online math education. Not only does the U.S. increasingly lag behind other countries on international math scores, it’s also short of qualified math teachers. This could make it tough for America to improve its grade and retain the competitive edge that keeps good jobs at home.
Nearly 40% of U.S. high schools reported difficulty filling math openings this year with qualified instructors, according to the American Association of Employment in Education.
Career Launcher (Founder: Satya Narayan) charges between $20 and $30 an hour, with rates rising for more complex material, on par with U.S. companies like tutor.com and e-Sylvan.com. Of these, e-Sylvan is the online tutoring arm of the highly successful Sylvan Learning franchise that has not been quite so successful in its online incarnation, that I view as a strong LBO opportunity.
Most of Mr. Satya’s 300 tutors don’t have education degrees, but they all have a bachelor’s degree, mainly in math or physics from Indian universities. Many also have graduate degrees. He pays $8 to $10 an hour — a fortune in India. Career Launcher recently began offering online tutoring to U.S. college students for $35 an hour — which is more costly than many U.S. online services. “You find very few companies offering college-level tutoring because of the lack of teachers,” says Mr. Phadke. “But here in India, we have so many Ph.D.s and people doing doctorates, so we think we can actually charge a premium.”
Leveraging the Indian labor arbitrage model is not the only opportunity for eSylvan, of course. Breaking away from the shackles of Sylvan would give them the ability to focus on more profitable and lucrative segments like Private Schools where the students are motivated, the teachers are not unionized, and the Sylvan franchise-owners are not ruffled by eSylvan stealing away their students.
Sylvan, of course, has benefitted enormously, from the No Child Left Behind (NCLB) Act, to the extent where the Act has been called “Sylvan Act”. Underperforming public schools often spend good chunks of their Supplemental Education Services (SES) budget on Sylvan. The public school teachers are a highly unionized bunch, who would demand the death of eSylvan if they found out that their jobs are being outsourced. It is no surprise that the two US clients of Career Launcher that are currently outsourcing have requested anonimity!
I would venture to guess, one of them IS indeed eSylvan, and when NEA (National Educators Association, one of the two main Teacher’s Unions in the US) finds out, they will throw a fit!
And if it isn’t it ought to be, or else the business is not viable!
Venture Wire reports: Software giant Oracle Corp. said it agreed to acquire retail software maker ProfitLogic Inc. for an undisclosed sum – its second acquisition in the retail software sector this year – as it bolsters its challenge to publicly traded SAP AG. Oracle and SAP, bitter rivals in the $9 billion business -management software market, have made the retail industry a primary battle ground, because of strong growth potential and the lack of a clear leader. The purchase of ProfitLogic follows the acquisition of Retek, which Oracle bought in April for about $669 million after outbidding SAP. A closely held company with about 250 employees, ProfitLogic makes software that analyzes sales data in order to help retailers better promote and price their wares.
The next acquisition for Oracle, therefore, ought to be Manhattan Associates (MANH). It’s a well-run company hadquartered in Atlanta, GA, specializes in Warehouse Management systems and the likes, claims the who’s who of the retail business as customers, and is quite a cheap deal @ $600M Market Cap. [2004 Sales: $215M; Gross Margin: $125M; Operating Margin: $93M; Net Income: $22M].
Wonder what all the extra Enterprise Software sales people in the market ought to retrain for, as Ellison’s chariot continues to run over them!
[For additional analysis, read this Business 2.0 article:
The logic of ProfitLogic.]