Microsoft has decided to withdraw its unsolicited offer to acquire Yahoo!. The offer started at US$ 31 a share, valuing Yahoo! at US$ 42bn. Later this offer was increased to US$ 33, or roughly US$ 46bn.

Microsoft shareholders, be happy about this outcome. It did not make sense in the first place. It was a reaction to the fact that Google is the de facto standard for web advertising, where Microsoft has tried to play catch up for some time with few successes so far. So why would Microsoft make a US$ 42 or 46bn bet on Yahoo! when it knows that most acquisitions fail? It makes even less sense when considering the following: Read more

Last week I was presenting at u-Home Global Summit 2008 in Seoul, Korea. The topic for the conference was home networking and IPTV. It was a very promising conference, because essentially, it showed that certain ISPs have a very mature view on IPTV, at least on the need for open interfaces.

I will explain this in further detail in an upcoming Premonvision report, but here is the main issue: IPTV needs open standards and open interfaces.

The challenge today is that most IPTV solutions are proprietary or closed. For example many ISPs have developed IPTV middleware in-house, while others have gone down the routes of Siemens' Myrio, or MIcrosoft's Mediaroom. However, the challenge with these middleware platforms, just to take some examples, is that in the long term they will cause more problems than they solve.

Think if DVB-T (Digital Video Broadcasting Terrestrial, which is the de facto digital public broadcasting standard in Europe, and other countries) was implemented differently in every single country (some would argue though that DVB-T struggles from poor implementations, but that is another discussion), and that there would be even different DVB-T implementations by the local broadcasters. This would have created a mess for everyone in the video industry. TV set manufacturers and essentially anyone that makes a product with a TV tuner in, would need to have different products for the different broadcasters in the different countries.

How is this relevant? Information and content will flow between more and more devices in the future, that no matter what kind of restrictive DRM schemes are put into play, will happen. More and more devices will be able to network and connect. Finally, consumers will want access to information and content on a wider range of device platforms than (what is possible) today.

How is this relevant to IPTV? Simple: IPTV is a platform ISPs that is a long term bet, and therefore needs to be a robust platform that can change with the market dynamics in the coming 10 years.

That is why the telecommunications providers should stop copying the walled garden solution from the cable industry, and instead focus on delivering services when and how their customers want it, instead of within the confines of a set top box or any other type of ISP provided consumption device.

The future home is networked where services run across device platforms. ISPs that aim for the services market with walled gardens will be face the consequences of building road blocks in a market that is going more and more open. When even the US cable industry is now making progress on working with device vendors for access to cable TV services, it is puzzling to see so many ISPs go down the walled garden routes. Read more

Just hours before Apple is set to release its latest quarterly earnings, it decides to steal the march, and announces the acquisition of P.A. Semi, a fabless semiconductor house that focuses on the PowerPC architecture. P.A. Semi is a fairly small company, about 150 people, and puts its main efforts into the low power desktop PowerPC market. The deal supposedly closed at $278m.

So, why would Apple decide to buy a design house? Some of the theories are:

1. Reduced cost for IC for its iPod & iPhone products by adopting in-house developed IC. This makes less sense since P.A. Semi focuses on products such as dual core, 2GHz PowerPC chips with 5-13w power consumption. In other words, it would be pulling out your cannon to kill a bird.
2. Acquiring a design house will help Apple in the software market, due to better software products. This is probably true, however, it is dangerous to acquire a design house only to tap into the staff's IC design knowledge to make better software. After all, the engineers could just walk out the door and go elsewhere or start their own firm again.
3. Ditching Intel and the x86 platform. To me this sounds too unlikely. If Apple decided to switch back to PowerPC, it could create some nasty challenges with ISVs that have been working on their x86 transitions. If Apple could ditch x86, and get away with it, I am sure they would. Then Apple could do more benchmarketing against Windows PCs. Then again, with all the issues around Vista and the lack of interest in the operating system, does Apple need more ammunition?

But, what else could there be?

1. Apple wants to breath life back into Power, and does so by acquiring P.A. Semi. Expect Apple PCs to not only be equipped with Intel x86, but also with PowerPC once again. I would assume there will be more details about this in a few hours, but also at the World Developer Conference in June this year. Apple has a tight grip on its supply chain, and strengths its grip by designing its own PowerPC chips. This move would fit into computers aimed at markets with lower computing power needs, such as MacBook Air.
2. Following 1, a next step would be to switch Apple TV to the same Power architecture, while at the same time they add new features that make it more compute intensive.
3. Increase the power effiency and adopt the architecture for iPhones/iPods/other embedded devices. This could in the long term be successful, but sounds hard to accomplish given the entrenchment of ARM processors in this market.

The next few months will prove more insights as to where this is going, and it now looks more likely that Apple will use two processor designs for its compute intensive products going forwards. Read more

These are just some of my thoughts on the Google App Engine which was announced at the Google Fire Camp on Monday April 7, 2008.

The Google App Engine allows third party web developers to develop and run their web applications on Google services. Google has a powerful infrastructure, and making this available to third parties makes sense.

Google is all about organising content for its end users, and selling that knowledge to third parties (advertisers). This has worked very well on the PC platform (hence Google's position today), and has made its ways over the world of mobile devices as well.

Now, there are many interesting aspects of this for the PC platform and mobile devices, however what I find most interesting (and also because I am doing a presentation next week on Internet services and device platforms, where I outline the possibilities of Google setting up a web services clearing house) is the impacts this could have on Internet connected consumer electronics devices and how these devices access web services.

Envision the following scenario (this is pending on how exactly Google App Engine develops over time):

1. A web TV provider, such as Lovefilm.co.uk, AcTVila in Japan, or Amazon (Unbox) uploads their services to Google App Engine
2. Google App Engine standardises certain processes such as billing and payment (which I believe is not covered by Google yet).
3. Web application developers populate the engine
4. Consumer electronic vendors use the Appe Engine as their platform for web services instead of making individual arrangement with each and every provider. This also helps bring down the development cost of Internet connected devices

The consequences

1. Google gains access to what has so far been proprietary web services. Given that everything is hosted at Google, on standardised Google servers and databases, Google can (easily) scan and index all web applications, and how these are used by end users. These are databases of information that Google has normally not had access to. This is a huge coup for a company that lives on collecting, scanning, and indexing information.

2. Google can now sell an integrated advertising platform for web application providers. Think video downloading services or video streaming services and how Google can use its existing advertising platform to target users on the App Engine. While you download the lastest blockbuster movie, Google serves you with a movie trailer that it  picks based on its knowledge of your consumption pattern.

Could it happen? Well we will see how the Google App Engine develops over time, but I would be surprised if it is not on the schedule over at Googleplex..... Read more