Sovereign Wealth Funds

Interested in the details about these much talked about and little understood funds? Here’s an outstanding piece in Middle East Quarterly about the investment funds you are hearing more about in the news.

Countries have used sovereign wealth funds (SWFs) as instruments through which to buy assets with their surplus foreign exchange since the 1950s when Norway and Singapore, and soon after Kuwait, sought new strategies to insulate themselves from exchange rate fluctuation. Central banks employed SWFs only as buffers for currency stabilization when countries had little or no international debt and large current account surpluses. Today, SWFs have become quite common. As of March 2007, the United Arab Emirates (UAE) and Saudi Arabia had, respectively, the first and third largest SWFs internationally, and Kuwait ranked sixth.[1] Because of burgeoning oil prices, Persian Gulf sovereign wealth funds have become the preferred investment vehicles of Kuwait, Qatar, and the United Arab Emirates. As SWFs blur the line between public and private investment, however, Western nations worry about the security implications of foreign countries, including Persian Gulf states, acquiring important positions in key industries and companies.

[From Sovereign Wealth Funds: Investment Vehicles for the Persian Gulf Countries - Middle East Quarterly]

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Lessons in Bad UI Design

I went over to PG&E, my local utility company, to setup automatic payment of my bill. I hate bill paying so having stuff get automatically paid is great for me, and better yet is the points I accumulate that turn into Apple iTunes gift cards on a regular basis from using my Apple Visa card.

On a side note, this is the only credit card I have ever had where the company executes really well on their customer service and the points convert into something that is a regular “small luxury”. I haven’t paid for an iTunes purchase in over a year, I keep using the $25 gift cards that the credit card company sends me.

What a frustrating experience the PG&E web site is. On the sidebar under “billing” is an item for setting up an automatic payment, which you use to setup the thresholds like what is the max payment and when to send it. But when you click on “continue” you get an error message indicating you can’t continue until you setup the actual payment details, represented by the “add payment account” link in the top bar. Web users have pretty much been conditioned that “continue” means move on to the next step up until the point at which you want to actually commit a multi-page form, which is then done through something more explicit like “add automatic payment.”

When you click on add payment account you go to a page that has details for adding a check payment from your bank account, no credit cards. In order to setup an automatic payment with your credit card you have to click on the separate sidebar link labeled “pay bill with Visa card” and then “setup automatic payment”. So not only do they have two entirely separate pages for automatic payments, one of them is hidden in a page that suggests “pay your bill NOW with your Visa card.”

Also, you can’t use anything other than Visa for some reason, no Mastercard or Amex.

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Act 2: Buyer’s Remorse

Yesterday I wrote about the Techmeme blogger reaction to Google Sites, basically critical of it because it’s a pattern that is all too familiar: Google comes out with something new or updated and says it’s x or y and A-list blogger first reaction is to throw the company up on their shoulders and take a victory lap. There is little critical analysis.

I have been spending a lot of time in Sharepoint and when I read the various blog posts calling Sites a Sharepoint killer, it was evident to me that most of these commenters had never even seen Sharepoint, much less actually have used it. Sharepoint isn’t a wiki (which is basically what Sites is), so to compare Sites to Sharepoint on the basis of Sites superior wiki-ness begins with a false premise.

Even if Sites were competitively superior to Sharepoint on the basis of product features, that alone would not be enough.

Google’s competitive weakness with regard to Microsoft in SMB and enterprise accounts is partly due to the fact that their apps are lightweight when compared, but is more due to the account control that Microsoft holds as a key asset. Sharepoint is sold into SMB and enterprise accounts as a bundle, an up-sell to existing account, or offered as an incentive to get something else. Google simply doesn’t have the ground operation that Microsoft has, nor quite frankly the resources to build it.

What I mean by this last statement is that Google is starting to come under increased scrutiny with regard to expansion plans. As their search advertising business levels off the level of scrutiny they face will only grow, which means that spending a few billion dollars to build out a true enterprise sales and channel organization, or acquire one, which is likely to take years before returns are seen, is something they are not well positioned to do right now.

In my opinion, their original assumption was that they could flank Microsoft with the Google search appliance straight into IT and end users adopting applications as a guerilla insurgency within the enterprise. That simply hasn’t happened and probably won’t. Search appliance is doing well but those IT groups have little say in what business applications are adopted, and users as well as business decision makers have little incentive to risk going with Google when Microsoft is proven and already there.

Furthermore, the total cost of an application represents a package of associated items, the least of which is the license, so going with Google apps still means you incur support, training, and administration costs. If Google wants to really beat Microsoft in the enterprise then they are going to have to execute a full frontal assault, something they are ill-prepared to do.

I started out this post writing about the lack of critical analysis in the blogosphere, but an interesting thing tends to happen as the day goes on with announcements like this. Below is a snapshot of Techmeme later in the day when a number of bloggers started showing up with a “hold on cowboy” message that does reflect a more sober look at what Google is doing.

Maybe instead of criticizing the lack of critical analysis, I should modify that to suggest it’s a lack of immediate critical analysis that I find troubling. The problem with the blogosphere, like media, is that there is a race to be first rather than to be the most complete. TechCrunch has built a nice franchise on scoops and breaking news, and as a consequence everyone rushes to be a part of that early group.

What does all this mean? Probably not much on balance as my observation isn’t unique or earth shaking, it’s more a reflection on the traditional dynamics of media and PR, as well as human desire for recognition which is played out in the blogosphere with trackbacks and links. One thing that would be pretty cool to see is a trendline that tracks sentiment on particular issue or product launch over time to see if there is any repeating pattern.

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It’s a Bird, It’s a Plane…

Check out this snapshot of Techmeme today. As is typically the case, Google scratches it’s left ear lobe and an entire industry of bloggers kicks into gear dissecting what it means. The NYTimes claims it’s a Microsoft Sharepoint killer while Allen Stern declares they are going after pbWiki. The AP wire report, which also runs in the NYT has a somewhat different view of this, calling it a website builder. Rafe Needleman makes the observation that it’s a nice wiki even though Google never uses the word wiki. TechCrunch also calls it a wiki and quotes a Google exec calling it a “Sharepoint killer”.

So what do we know for certain: it’s a wiki and they are targeting Sharepoint. What is not said? Sharepoint is much more than a wiki, it’s probably more accurately referred to as a portal, and the wiki features are acknowledged by MSoft to be very weak. Microsoft does feature wikis from both Socialtext and Atlassian as add-ons for Sharepoint, lending credibility to the notion that they don’t see themselves as competitive in the wiki space.

Google could in fact take on Sharepoint but it’s going to take a lot more than a better wiki to do it. For starters, I would make Google Sites an OpenSocial container, which should not be too difficult given the fact that the same people were involved in both projects.

Google Apps is in total a threat but at some point Google is going to have to do something more meaningful than the bits-n-pieces act. Dan points out that Google is fighting the stigma of offering lightweight apps, but as long as they fail to release numbers such as how many companies are actually paying Google for premium apps, it’s unlikely that the market will take them seriously. Businesses are not moved by the notion of free apps because buying an application really isn’t the barrier companies face, it’s supporting users and meeting requirements.

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Comcast Stacks F.C.C. Hearing

Consider this: One side in the debate actually went to the trouble of hiring people off the street to pack a Federal Communications Commission meeting yesterday—and effectively keep some of its opponents out of the room.

Broadband giant Comcast—the subject of the F.C.C. hearing on network neutrality at the Harvard Law School, in Cambridge, Massachusetts—acknowledged that it did exactly that.

Comcast spokeswoman Jennifer Khoury said that the company paid some people to arrive early and hold places in the queue for local Comcast employees who wanted to attend the hearing.

[From Comcast F.C.C. Hearing Strategy - Portfolio.com]

As if hiring people to warm seats in the hearing for Comcast employees is better than hiring people who don’t care about the issue to sit in the hearing. Equally unfair would be not allowing Comcast employees to attend a public hearing to begin with but a company willfully attempting to suppress the voices of it’s critics in a government hearing is intensely troubling.

Right and Wrong Way to Pitch Me

Two emails from PR people this morning, interesting contrast.

The wrong way is to address it as “Dear Venture Chronicles”. I guarantee I will not pay any attention to your email.

A much better way is to express some degree of personalization, such as “Hi Jeff. Even though you’re in sunny Florida at We Media, I wanted to make you aware of this company’s launch…”

Even though I don’t respond to most PR email, I do pick up interesting companies and news to watch.

GOOG’s Vertical Descent

Not to pick on Rob Hof, but I’m surprised that so many people are just now commenting that GOOG has been in a steady free fall since last December. It’s been my experience that investors are not always herd animals, they really can have moments of insight on where companies are going and vote with their trades, but as is often the case, Silicon Valley likes to herald a rising tech stock market rather than a falling one, unless it’s MSFT in which case the opposite it true.

Also, the comScore data only validates the trend, it’s not the cause of.

I first wrote about this a month ago, but as is usually the case, a picture is worth a thousand words. Noticed the similar slide that AAPL has been experiencing?

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Starbucks Closes for “Retraining”

At least they didn’t call it “re-education,” which sounds kinda creepy. I would give Schultz credit for attacking the problem but I can’t help but think that from a PR standpoint this is not the kind of attention that they need because it focuses attention on the fact that their retail customer service has, broadly speaking, gone to shit. I haven’t been into a Starbucks in at least 5 months because of the service and the quality of the coffee.

The next thing Schultz should do is rip out those automatic espresso machines and go back to the old style manual machines. I don’t want espresso that is the same thing as what I can make at home, I want espresso porn.

CEO Howard Schultz announced the 3-hour closure starting at 5:30 p.m. local time Tuesday to energize 135,000 employees.

[From Coffee break: Starbucks closing for 3 hours today - USATODAY.com]