Here is the latest conversation I had with money manager Andrew Horowitz…. new insights for anyone who invests in anything. This week the market goes through gyrations because of both China and consumer confidence numbers.

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  1. Jim says:

    I’m pretty sure there were two big reasons for Oracle to buy Sun:

    1: Eventual creation of database blade plug and play servers for hot swapping of grid databases;

    2: Oracle’s applications uses Java fairly extensively, and for the past ten years they’ve always had issues with javasoft not rushing oracle-centric issues through the patching process. Owning the company tends to give you more of a leg up on fixes. They’ve also been integrating it into the database fairly extensively, which gives them even more reasons to own the development process.

    As for android, I suspect Google is gunning more for building business oriented OS use. Once you get the system integrated into phones and laptops, the next step is desktops and servers. Once they get to servers, they have a great way to integrate into the business serving model and branch out for consulting and development.

    Not to mention, they are a huge user of databases, server OS and web software. Wouldn’t it be easier to always have in house OS development for all their servers and customers?

    I also suspect that a very good way for them to go is to build embedded Android chip systems and then do a “more secure” push to sell them.

    Wouldn’t the OS/software model work much better if the OS was always purchased as a chipset and never updated by software? Certainly would be harder for virus makers to make system level changes if they have to pop a chip in order to compromise the system.

    But perhaps I’m giving Google too much credit for thought.

  2. deowll says:

    #1 You aren’t giving them enough. They make money by selling adds many of which are targeted based on what they know about the user.

    When the Iphone came along it became clear to them that a lot of web surfing was going to end up being done on mobile platforms. They could track the actions of Iphone users but that was about it.

    They created a free phone OS that allows them to track the location of the user as well as their browsing habits for even better targeted adds. You want to know where the nearest fast food joint or gas station is? No problem.

    Apple on the other hand has rigged Safari so it can block web adds and will allow Apple to sell Iadds or their ap writers to sell Iadds which means they are cutting into Google’s cash flow and trying to grab the revenue source that supports most web sites at least partly.

    Google has bought themselves some protection from this by creating android which is having very large numbers of phones activated each month.

    What is Google getting out of Android? Directly not much but it keeps somebody like Apple from being able to shut them out of the mobile platform add revenue market and they can better target adds to meet their customers needs. That is worth a lot of millions to them in and off itself and the value is only going to grow.

  3. chris says:

    Yes. First, as it gets later into summer it gets closer to when all the historical crashes tend to happen. Not scientific, but it wears on the mind of traders.

    What we are living through now is a debt revulsion. Everybody who previously desired unlimited loaned money has already been served. Everyone who isn’t already broke has realized that that path isn’t a good one. If the total isn’t increasing it is contracting, because there are forces in both directions.

    These structures, like the great depression, tend to come in two waves. After the first people convince themselves it isn’t a systemic problem. Big rally, yeah!

    Then everyone gets that a large bunch of that outstanding debt isn’t coming back. We still haven’t gotten to that point yet.

    I am not a gold bug, and don’t think that gold is a good historic store of value. I do think moving towards the safer end of your strategies would be a good thing.

    A note on longer term tech investments: 3D TV is going to go nowhere. The real path is to even higher resolution displays. Non-console games can already run higher resolutions than 1080p. HDTV is a set thing because of cable, but cable is going to lose to fiber eventually.

    Display companies already make screens with higher pixel densities than HDTVs. No reason to think that is going to stop.

    Whichever display companies are the first to abandon 3D are the ones to watch. They will just be repurposing a computer monitor, but consumers have a history of buying a BETTER product. 3DTV is a solution looking for a market, and that is a great path to the dustbin.


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