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Indian Chips

Posted on Friday, Apr 7th 2006

Here is a wonderful article by Betsy Corcoran on India’s budding chip design industry. It traces Cadence CEO Mike Fister as he visits various customers in India. Betsy points out that the geographical mix of Cadence’s customer base is changing, as India emerges as a major chip design hub.

Indeed, this is a trend whose seeds were planted way back in 1984, when Texas Instruments set up its first off-shore development center in India. The man behind this move was Dr. Pallab Chatterji, then a Vice President of R&D at TI, Dallas. Today, TI has 1,200 chip designers working in their Bangalore center.

Intel and ST have more. Intel has 2,500 in Bangalore and ST has 1,525 in Noida. So far, the hubs of chip design are in Bangalore, Noida (near Delhi), and Hyderabad.

But remember my Team of Twenty One thesis? The rest of India is still relatively virgin territory for chip design. Pune has a bit, and LSI Logic has just set up in Calcutta. Kanpur has a fabulous IIT, and so do Madras (Chennai), Bombay (Mumbai) and Calcutta (Kharagpur). BITS Pilani is a good engineering school in the North, as are universities like Jadavpur and ISI in Calcutta.

Besides, there are 1,346 degree engineering colleges in India with annual student intake of 440,000 students plus 1,244 polytechnics with annual intake of 265,000 students.

This is what I would do, if I were Cadence: I would do a JV with Apollo Group around Online Training on Chip Design using Cadence Tools, and simply lock up the Indian engineering education market.

[For additional reference, please read my previous article: Online Colleges: Staggering & Growing Numbers].

Featured Videos

Netflix vs Blockbuster

Posted on Wednesday, Apr 5th 2006

Wow, I just saw this news item that Netflix has sued Blockbuster and is demanding that Blockbuster shuts down its online DVD rental service.

Wedbush Morgan analyst Michael Pachter, who also is an attorney, said it was unclear whether Netflix’s challenge to Blockbuster’s online service would be upheld by the federal court.

“It’s my opinion that it won’t be,” Pachter said. “Blockbuster detrimentally relied on their silence as consent. If in fact (Netflix) feels so damaged they should have sought injunctive relief before Blockbuster rolled out its service.” [Reuters]

I am not sure I agree, nor do I claim to know what has been the level of correspondence between the two companies.

All I can say is that, indeed, Reed Hastings innovated fundamentally on the DVD rental category, and deserves some credit / protection for that. I am also happy to see that he did file process patents in the first place, and that two of those have now been granted.

Venture Capitalists always tend to ask whether the IP in a company is defensible. What we are seeing these days is that some of those startups have survived and blossomed, and are in positions to defend their IP. Furthermore, they now have the wherewithal to benefit from their innovation.

Don’t you think this is good news?

TVi vs Microsoft: What Can YOU Learn?

Posted on Tuesday, Apr 4th 2006

Few months back, I reported on the Microsoft vs TVi patent infringement case over Autoplay.

In October 2005, the case was settled in one of the largest pre-trial settlement that Microsoft has ever concluded.

Terms are confidential, but I will try to benchmark the deal.

Here are some prior cases and their settlement terms: Microsoft has settled antitrust cases with Be Inc., ($23 million), Immersion ($27 million), Intertrust ($440 million), Novell ($536 million), Eolas ($521 million? $640 million? not settled yet?), and Real Networks ($761 million) in the past.

[Note: I am watching, also, the words “pre-trial patent settlement”, because the Eolas case went into trial, and Real Networks was an Anti-Trust case, not Patent. I am not sure, therefore, what the denomination of this settlement is, even range-wise. However …]
The reason I find this deal interesting is that it validates a reasonable way to make money off defending Intellectual Property and innovation, and today, the legal service providers have developed the expertise to defend such cases. In Peter Redford’s Autoplay case, the lawfirm representing TVi was Robins, Kaplan, Miller & Ciresi L.L.P. Ron Schutz, Chairman of RKMC’s Intellectual Property practice, led the litigation.

There are mixed feelings out there about companies making money off suing others, rather than building products and businesses. In this case, however, TVi was just about to launch a product based on the Autoplay technology in 1995, when Windows ’95 was released, and No. 3 amongst its top features was Autoplay. TVi’s product roadmap had to undergo a quick cancellation, and a long and tedious battle to fight Microsoft had to be launched.

RKMC took this case as a contingency suit, which is the only way a little company like TVi could afford to go after Microsoft. The actual lawsuit did not get filed until 2002, and the final settlement took 3 more years to come through.

If you want to learn more about the long and winding road that led to this watershed settlement, (especially if you have some fundamental IP to defend yourself) consider attending this event: How to Take On Microsoft and Win where I will be interviewing Peter, and he will be doing a Q&A session with the general audience.

You can also ask questions at the Comments section at this site, and Peter will answer, to the extent possible, and without violating his confidentiality agreement with Microsoft.

ps. If you are looking for examples of companies built with the IP Licensing business model, look up Tessera (Nasdaq: TSRA).

Video FAQs

Food, The New Phenomenon

Posted on Tuesday, Apr 4th 2006

I just wrote about CNet’s acquisition of Chowhound.

(Jim Leff is visiting later this week, and we’re to try Guatemalan food in San Francisco on Friday night.)

Lo and behold, now we have Reader’s Digest acquiring AllRecipes.

Some traffic details:

From a recent press release: “Ringing in the New Year, Allrecipes.com, the world’s leading community recipe site for home cooks, will remember December 2005 as the month the company logged an all-time high of 9.1 million unique visitors to the Web site, according to their internal log files. Nielsen//NetRatings backs up this growth reporting a 25 percent increase in unique visitors to the site and 42 percent growth in page views over 2004.

With this unprecedented traffic, Allrecipes.com became the second most popular Web site in its category, behind only Foodnetwork.com. Nielsen//NetRatings also confirmed that Allrecipes.com’s traffic surpassed that of other popular consumer sites including ABC.com, iVillage.com, CondeNet.com, BetterHomesandGardens.com and Oprah.com. This capped off a history-making year for the company.”

See why Reader’s Digest paid up the $66 Million? More than 15 Million annual visitors, more than 1 Million registered users … not a bad base for RD to start building their online story!

Online Colleges: Staggering & Growing Numbers

Posted on Thursday, Mar 30th 2006

Here is a great article from WSJ on changes in the higher education legislature that starts making the for-profit college / university category more and more attractive, especially in the online format.

Last year, for profit education companies generated about $17 Billion in revenues. This number has grown steadily from $10 Billion in 2001, and there is reason to believe, that it will continue to go up. While we celebrate the $10 Billion online advertising market, we hardly pay attention to this quiet revolution happening in Education.
Companies like Apollo (Nasdaq: APOL) also need to start tapping into the education requirements of the emerging markets, for the International opportunity is also enormous.

India, for example, cannot satisfy the need for engineering education at the moment. Anybody who knows engineering of any decent calibre and is qualified to teach, is fast lured away from academia into highly paid industry careers.

KK Sengupta, an education entrepreneur I met in Kolkata this January, told me that there are 1,346 degree engineering colleges in India with annual student intake of 440,000 students plus 1,244 polytechnics with annual intake of 265,000 students. The teacher shortage in these colleges is severe, and a lot of very old professors are teaching obsolete material.

If I were Apollo Group, I would go do deals with all these colleges and convert them into University of Pheonix satellite campuses, and deploy online training abundantly and unapologetically.

I don’t know much about the situation in China, except that the Government there is very keen on online education, and is already trying to bridge shortfalls via online endeavors.

Net net, I think, online education is a great category, and especially as the Net-savvy MySpace-Facebook generation comes of age, the category will become increasingly more compelling.

Looking For An Unsolved Problem?

Posted on Wednesday, Mar 29th 2006

The web, more than anything else, showcases Content. And Content is produced in one language, but often, consumed in many. Hence, one of the most popular web services categories is Language Translation.

There are 3,339 sites on the web that provide some sort of language translation services, according to Alexa. It is a heavily manual task, and if you have experience with Google’s translation service, you probably know that automated translation produces garbage.

The most visited sites in all ‘Translation’ categories, just to give you a flavor of the popularity of these services, which, presumably, confirms demand, are:

1. Worldlingo
www.worldlingo.com – Alexa Rank: 2,014

2. ProZ.com
www.proz.com – Alexa Rank 6,232

3. Lingo24
www.lingo24.com – Alexa Rank 15,306

4. Language and Translation
www.foreignword.com – Alexa Rank 15,591

5. Applied Language Solutions
www.appliedlanguage.com – Alexa Rank 20,581

6. TRADUguide
www.traduguide.com – Alexa Rank 22,540

7. Trusted Translations
www.trustedtranslations.com – Alexa Rank 25,228

8. Betranslated
www.betranslated.com – Alexa Rank 37,651

9. TranslatorsCafe.com
translatorscafe.com – Alexa Rank 40,929

10. SDL International
www.sdl.com – Alexa Rank 64,276

Your opportunity: a Tranlsation SaaS.

Google Does Joga

Posted on Tuesday, Mar 28th 2006

As the Net buzzes with news and speculation of Facebook’s acquisition offers, check out Joga for a preview of the kind of advertising directions Google is experimenting with. It is also, needless to say, one of their spins on social networking, it is their answer to Yahoo! Groups, and it is also one of their User-generated content plays.

“Joga is an online community created by Google and Nike for anyone anywhere in the world who shares a love for soccer, the world’s most popular sport. Joga is about getting to know your fellow fans; creating games and clubs; accessing athletes from Nike; and enjoying video clips and photos (you can even upload your own). You can strengthen existing friendships and begin new ones, join a wide variety of professional athletes and soccer communities, and even create your own to discuss soccer, exchange tips on the coolest moves, browse through various pitches worldwide, and plan your next game.” … reads the introduction.

Joga is today’s top mover upwards on Alexa, showing a sudden and enormous spike this week.

I like this strategy from Google. This is really the way to do it, and I applaud the move towards branded communities co-sponsored with their advertisers, while folding in social networking and user generated content into it.

Great!

Chowhound Becomes CNet

Posted on Friday, Mar 24th 2006

CNet recently made a very smart acquisition called Chowhound. I had somehow missed this acquisition, and Rafat Ali did not report it on Paidcontent.org, so I guess he missed it too.

Chowhound is a grassroots community for serious foodies, and my friend Leslie Huang has helped them with their accounting for a while. It has been a very, very difficult business to run, and as you will read in the interview below with Jim Leff, the founder, they have been running this operation in the red for about 9 years.

Some statistics:

Alexa Rank: 4,499 .
Reach per Million Users: 120 .
Unique Monthly Visitors: 800,000 .
Impressive numbers?

Listen to this: Zagat’s Alexa rank is 5,255, which means Chowhound is more popular than Zagat.

I have to say, I am thrilled to see this outcome for them. Over the years, Leslie has kept us entertained with new restaurant ideas that she garnered from Chowhound, and many of them were absolutely awesome, unique adventures. Sam Lok, a hole in the wall on Jackson Street, comes to mind as one that was so off-beat and authentic, that it drove my Chinese friend, Joey, visiting from Boston over New Years a few years back, into fits of ecstasy!

Here is an interview with Jim Leff, the founder. I had the pleasure of meeting him once at a Chowhound dinner in Chinatown, San Francisco some years back.

Well, congratulations, Jim, well done!