July 2004

This whole Real-Networks v. Apple flap over the iPod has me scratching my head. On the surface it’s the age-old fight we always see when one company makes money by giving away the razors and selling the blades and another company tries to “free load” and sell their own blades. What confuses me here is that Apple makes most of its profit from selling the razors (iPods), and very little from selling the blades (songs on their iMusic site). (Their Q3 revenue on iPods was 3-4 times their revenue from the iTunes Music Store, and my unfounded guess is that the profit margin is also a lot higher than the estimated ten-cents-on-the-dollar they make on each $0.99 iTunes sale.) That’s one of the things I’ve always liked about Apple’s digital-hub strategy — unlike Sony, they don’t have to be all schitzo about whether they’re an electronics company or a content provider.

So assuming they expect to remain the portable-player market leader based on the merits of the iPod’s design rather than format lock-in (bad assumption?) then why get bent out of shape that someone else is trying to make their product better?

Users of the Netscape Calendar service had an unpleasant surprise this morning: a note informing them that the service was no longer available and that Netscape apologizes “for any inconvenience this may cause.” Small consolation for my coworker who lost access to all his appointments, upcoming talks and meetings for the coming year. A call to Netscape was equally helpful — they were sorry, but quickly pointed out that this had been a free service and that their Terms of Service agreement clearly stats they can discontinue it at any time without warning. When asked why they didn’t warn customers in advance, the support person made some comment about how when they warned people in advance about changes to their email service they got lots of complaints, so this time they didn’t want to warn anyone. And no, there isn’t any way for him to recover his data. Eit.

I’ll leave speculation as to why Netscape took this action and what it means about the health & direction of the company to others — for me there are two lessons to be learned here. One is that even a trustworthy good-guy company like Netscape can be bought up or go bankrupt without warning. In the end our valuable data is our own responsibility, and we need to insist on the ability to keep and store local copies of our data in non-proprietary formats. This is exactly why a friend of mine refused to use her Gmail account until she installed PGtGM, a program that lets her keep local backups of her Gmail archive.

The second lesson is for companies who provide Web services: even if you think of yourself as a good guy company and always have the customer’s interests at heart, you won’t be trusted — and shouldn’t be trusted — without real safeguards in place to insure us in the event that you go belly up or turn to the dark side. Even the nicest Web-service company takes collateral damage when someone in the industry does wrong. You need to assure us that our data is safe and is owned by us, not just through words, but by enacting strong legally-binding assurances in your Terms of Service & Privacy Statement, by giving us the ability to export our data, by embracing open standards, and in many cases by making your software open source so we can still use and modify it if you go away. If you do these things and play right by us, we’ll gladly use your service and often either subscribe to your premium service or click on your banner ads. If you don’t, we’ll equally gladly shift over to your competitors who do.

Micro Persuasion has re-posted an interesting article from a public-relations industry newsletter: It’s Time to Take Blogs Seriously — and Maybe to Develop One of Your Own.

Some highlights:

“To those people who still think that blogs are ‘loose cannons,’ I’d say that they should embrace the revolution, or become cannon fodder,” says [Shift Communications principal Todd] Defren.
…

Some of the rules [Microsoft blogger Robert Scoble] suggests in his manifesto should be followed by anyone who wants to run a corporate weblog:

• Tell the truth
• Post fast on good news or bad
• Use a human voice
• Have a thick skin
• If you screw up, acknowledge it
• If you don’t have the answers, say so
• Never lie
• Never hide information
• Link to your competitors and be nice to them

…

“The empowering nature of the Internet will allow users to blog with or without corporate permission,” Defren says. “The blogger who is encouraged with tools, freedom, and a few simple rules-of-the-road becomes a valuable advocate for the company. The blogger whose ambitions are repudiated simply sets up shop at home and spends their free time gossiping about the company’s embarrassing hiccups.”

All sounds like good advice — and much nicer for those of us on the receiving end of their messages than the alternative “always be sincere, whether you mean it or not” line we sometimes get.

After interminable waiting, Verizon has finally officially announced they’re going to start carrying the Treo 600.