“It’s a scheme they have in America where the bank buys the house and you rent it from the bank.”
That was my father-in-law at a cocktail party in Athens, Greece, explaining the concept of a mortgage to group of older European guests. Until very recently, American-style mortgages were virtually unknown in Greece and many other countries.
The explanation seemed quaint to me. That is until the sub-prime mortgage crisis. Traditionally, in places like Greece, you might borrow 20% of the purchase price of a house, but certainly never the 80-90% we do here. In much of Europe, property passes down inside of families. And the rest of the world, generally speaking, does not love debt the way we do. Though in some places they’re catching up fast. Along with Big Macs and cigarettes, our credit-card habit is another unhealthy export.
The crisis in the mortgage industry has made me sensitive to another phenomenon: a new dot-com-ishness in the air. Money is flowing again from VCs. The M&A engine is torqued up. Tech consultants’ rates are up at $175 an hour. These consultants are turning down good gigs, or requiring two- and three-month commitments, telling their clients they can get more across the street. People in stable jobs are saying they can make more on the free market as consultants. Does anyone remember 2001 anymore? Or are we all packing our camping rolls, off again to pan for gold?
I believe in startups. I think many good companies went out of business in 2001 simply because they had the financing rug ripped out from under them. I have not heard my father-in-law explain dot-com investing. But if he did, I imagine it would go something like this: “It’s a scheme they have in America where they invest in small companies so that some people can get rich. But then they close them because they don’t really like running companies in America. Just starting them.”
Dot-Deja-Vu?: (Business Week) Facebook valuied at $10 billion. RockYou $500 million. TechCrunch $100 Million. Total revenues for all of these sites combined is under $200 million. Silicon Valley is on a gradiose acquistion binge. CIQ: Some say the values will pan out this time. Online advertising, immature in 2000, is now a viable business model. Maybe right. But the dot-comishness in the air is disturbing.
P&G Online Only Soap: (NYT) The inventor of the soap opera re-invents the soap opera. CIQ: We are very optimistic about online-only and mobile shows. We’re also curious: How will the content change. Shorter? More closeups? Better writing? (Please, better writing.)
Hachette Plans Digital Books: (Yahoo!) Hachette Book Group USA is developing an program to make their books digitally browsable and searchable online. The books will also be accompanied by “widgets.” CIQ: As publishing seems to be preparing for the eReader world, it would be nice if the gadget makers could provide a good one.
Portals are the New Networks: (Forbes.com) By aggregating content and audience, the big four, Yahoo!, Google, AOL, and MSN, “are becoming this generation’s power hubs for news, commanding the attention that the networks did in their heyday.” CIQ: This fact still receives less attention than Katie Couric’s job switch.
New Measurability Standards for Print: (NYT) Ad measurement firm Starch is introducing new parameters into its reporting on print advertising. They include techniques to help determine how advertisements in magazines and newspapers affect the purchase behavior of consumers. CIQ: We can’t help but wonder how much this move was driven by pressure from the ultra-measurable online ad space.
Publisher’s Jitters in Frankfurt: Attendees at the Frankfurt Book Fair told surveyers what they thought were the biggest the challenges and threats facing the industry:
— Digitization (53 percent)
— Increasing globalization (24 percent)
— User-generated content (22 percent)
— Territorial rights battles (15 percent)
e-Books and Audiobooks lead the list of major areas of growth. CIQ: We are very impressed with those publishers converting their backlists to XML to face the digital future. We’d like to see someone put a big catalogue of OEM content on an eReader to promote adoption.
Google Phone: (NYT) Some call it a phone. Some call it an OS. This story describes the GPhone as a kind of “open-source operating and Web-browsing software that would compete with Microsoft’s Windows Mobile.” CIQ: We would love to see an open-source phone plaform. And, our advice based on the iPhone experience we recently had: Get the typing part right.
Big Four on Acquisition Binge: (LA Times) To compete with the New York Times, independent blogs, and others, AOL, Yahoo!, MSN, and Google have been on an acquisition binge. Collectively they have spent $10B. CIQ: Content, these days, is a very rich queen.