Office Mac Scramble

I installed Office Mac, and ignored the warning to shut down other applications – after all it’s a Mac right, so what could go wrong?

Well – No right Turn took a turn for the worse:

my pc

and the astute observer will notice similar but less dramatic issues on the TVNZ article below.
I restarted Safari and everything seems fine now.

I do find that a vast majority of the issues I have with my Macs are caused by Microsoft Office or Windows, running in Parallels.  This was the main reason why I upgraded to the new Office Mac, which looks slick but still doesn’t use F2 to edit in a cell.

office mac

Office Mac 2008 also lacks VBA, so it’s goodbye to macros. (I’ll use Windows Office for complicated spreadsheets). Entertainingly there is still an option inside Excel to disable macros when loading, and it is set to “yes”.

TVNZ begins to get it right, but still plenty wrong

By abandoning paid content on TVNZ OnDemand, TVNZ’s Jason Paris demonstrates that he gets it. Jason’s a smart guy, and it seems that the people have spoken – by watching ad-supported content and staying away from the paid content.

tvnz

Well done – a good step.

Of course Jason et al are seriously constrained by obsolete copyright restrictions, and so were probably unable to ask me for money by selling actual content, rather than just renting it. If I could download episodes, a la iTunes, then I could have been convinced.

But then again, any time you ask for money, it’s a pain, whereas watching a short ad is much easier for us all to endure.

Of course enduring TV advertisements isn’t something we like to do these days – as the ad/program ratio ceased to make sense years ago. So I can only hope and encourage TVNZ and advertisers to keep the length of those ads to a minimum – the current 30 second maximum is far too much to sit through online – there is plenty of other stuff to do.

There are a few more issues with TVNZ On Demand to resolve. Foremost to me sitting in Perth, and wanting to feel connected to NZ, is why the heck can’t I watch the 6 O’Clock news?

tvnz

I initially suspected that is because many of the foreign sourced news items are licensed to NZ only, and that to get a global license would be cripplingly expensive.

But then again – I cannot even see a TVNZ video of an interview by Paul Holmes with Sir Ed Hilary back in 1996. Nor can I see anything else.

Now that is just ridiculous, and TVNZ surely loses tens if not hundreds of thousand of viewers and dollars by constraining foreign IP addresses, and TVNZ’s mandate surely includes broadcasting the best of NZ to the world. The Government should be thinking about ways to bring the diaspora back home – and this is one weapon.

Next however, is that the content is embedded inside a proprietary website and flash player. We can’t do much with that. Unleash it. Let us download programs to our computers, ipods and phones so we can watch and re-watch it at leisure.

Indeed TVNZ On Demand could achieve the desired goals of disseminating their great content, and making revenue from it, by partnering and placing all their content on YouTube.

and so they have.

(I told you Jason was a smart guy)

youtube  There are a few good Fair Go stories..
youtube

But sadly the overall execution is not there yet, constrained I imagine, by that horrible copyright problem. There are only 211 videos uploaded, which is bugger-all when many of them are merely articles from a news broadcast.

youtube

OneNews itself isn’t even there, so we can forget about following today’s Kiwi-oriented news on YouTube. But we can only imagine at the vast depths of videos available to TVNZ that would be fantastic to place up on YouTube.

Here’s one – the Ed Hillary obit from TVOne.

So – some recent great steps by TVNZ, but I suspect the next steps involve an army of lawyers and lobbyists rather than the few people and technology required to upload that vast library on to YouTube.

TVNZ please hurry up – we already have real broadband in the rest of the world, and viewers are waiting.

How to launch a start-up: HowCast sets the standard

First – Be ex Google and youTube employees, and arrange a deal with YouTube to split revenue attracted by your range of instructional wikis and videos.

Next, attract $8m in first round VC funding, and cut deals with MySpace, Joost and ROO*

Be sure to include a community aspect, particularly if there is a way to make money, or to get starving students to perform videos that were your idea.

and finally, get yourselves on uber-blog Techcrunch.

oh – and one last thing. Make one of your first products about sex:

 

*ROO Group Inc. (OTCBB: RGRP) through its 100% subsidiary ROO Media Corporation, is a global service provider enabling businesses to leverage their digital media assets and provide an enhanced user experience.  

(I think that means they do video for corporates)

Big Deals: Summary

The Yahoo and Rio Tinto deals have one thing in common, besides being abnormally large.

They are both being initiated by new CEO’s where the predecessor has just departed.

This makes it  seem that they are trying to stamp their own mark on their companies, and that is perhaps true.

It is probably likely that at least one of these deals were thought of before the previous CEO left, and this information  should emerge with time.

So it comes down to the real motivation. Are these deals really value adding, or are they merely ego boosting?

I’m happy that the Rio/BHPB combination is value accretive. It’s a logical combination that has some pretty well understood and easily gained synergies. The post merger plan will be relatively simple and quick. Marius Kloppers inherits a well oiled machine, one that he had a substantial part in building, and one that can absorb Rio Tinto’s assets.
I’m not at all confident that the same applies to Microsoft and Yahoo. It’s perhaps 10 years too late for this deal – and better deal right now could have been a leveraged play at market leader Google. CEO Steve Balmer has run an increasingly complex and increasingly poorly performing business. He should be looking to clean up his own house before embarking on a buying spree.

Big Deals: Microsoft and Yahoo

OK – so I’m almost always picking the bearish side for investments, but this one seems pretty clear. It’s a case of a lousy company buying a lousy company.

First let me explain what the implicatons of that are, and secondly lets breifly look at why Microsoft and Yahoo will be a hard combination to execute.

Part of  the Evergreen work (essentially In Search of Excellence with numbers) we conducted at McKinsey was a piece by  Prof. Habir Singh, who studied M&A’s, alliances and JV’s for the companies covered in the Evergreen analysis.

There were 160 companies in the Evergreen work, with qualitative and quantitative data from 10 years collected, structured and analysed for all of them. We defined ‘winner’ and ‘loser’ companies using total return to shareholders versus peer companies, but really it didn’t matter what financial measure you used.

The results from Habir’s piece of work were simple – Great companies do more frequent, lower value and higher value creating deals. They are generally more active in M&A and JV’s than loser companies, and far more likely to buy companies worth 20% or less of their own value. Loser companies take on bigger targets, and are likely to have associated eating disorders.

Almost all of the winner’s deals were value creating, while loser company deals were almost always neutral or value destructive.

In summary – loser companies that tried to buy their way out of trouble by buying other loser companies still lost.

Mre recently Habir features in this article, which asks why do 50-80% of mergers fail. REflect on that number for a second. That’s right, most mergers fail.

According to Sikora, the kinds of problems companies face with mergers range from poor strategic moves, such as overpayment, to unanticipated events, such as a particular technology becoming obsolete. “…

…many analysts view clashing corporate cultures as one of the most significant obstacles to post-merger integration.

… Harbir Singh, who has done extensive research on mergers, says that the crucial distinguishing factor between success and failure in a merger is a sense of objectivity on the part of executives — a “realistic outlook” that needs to be maintained from the initial transaction through the entire integration process. The danger, it seems, is when executives “fall in love” with the idea of the acquisition, wanting it to work no matter what the cost.

So – back to Microsoft and Yahoo.

Microsoft used to be a great company – they attracted the best employees, made a bunch of millionaires, and were really the place to be.

In latter years the mojo has long gone, and the bureaucracy has kicked in. The disaster that is Vista summarises what happens when great people are poorly led and managed. Once forlorn  Apple is now Microsoft’s nemesis, along with Google.

Meanwhile Yahoo is in trouble as well, and the same Google is causing a lot of the trouble.

By combining the two companies analysts have pointed out that the new share of the search market will be 30%. But that’s a declining 30%, and more importantly leaves unanswered a myriad of technology questions.

And therein lies the problem. There is considerable overlap between the internet aspects of Microsoft’s business and Yahoo. The logical thing to do in such a combination is to kill one version of each product – say Hotmail/Yahoo Mail – and keep the other.

Is this really adding value to customers, or is it just taking out a competitor to gain a larger market share and to reduce costs? (That’s not to mention the issues that YahSoft woud have with migration of accounts.)

The problem here is the post merger management to consolidate the two companies is going to be tremendously difficult. It’s difficult because there are few real synergies, and it is difficult because both are performing poorly right now.

So although recent weeks have been bad, I’m pretty happy being short Microsoft right now.  If the deal goes through then I’ll beef up that short position becasue there are serious indigestion problems ahead.

Big Deals: BHPB and Rio Tinto

BHP Billiton is a great company, and yes, I am consulting to one of their plants at the moment.

Despite their size, they are able to run over 100 businesses in 25 countries (be they mines, smelters, refineries or new projects).

And they run them well. Check out their latest production report, and note how often you see words like “record levels of production”. (Kwinana Nickel Refinery, where we’ve spent the last 7 months, gets a “performed at near record levels”.

Rio Tinto also has a large and diverse set of assets, and is also known as a very good operator, with a similar culture to BHP Billiton.

Meanwhile BHP Billiton has a successful track record of adding significant new businesses to their own, such as the WMC purchase which added Western Australia’s Nickel, Olympic Dam’s Uranium and other properties. These plants now form a solid part of BHP Billiton, and are producing well.

That said, it is going to be harder to swallow Rio Tinto than WMC. Rio has about 50-80 operations (it’s hard to define what an ‘operation’ is for either company) to BHP Billiton’s 100, but the nature of the industry makes it easier.

Essentially each (well most) operation is an independent business, with a very clear mandate to find, mine, smelt or refine a basic commodity. Sales and marketing is simple when you produce commodities, as you can sell directly to the market at daily (say LME quoted) rates, or lock in lonfer term contracts based on LME prices. Indeed BHP Billiton seperates their sales and marketing functions from operations. So an operation just needs to focus on efficiently producing whatever they produce.

The operatons, in both businesses, are glommed into product groups, auch as “Aluminium” or “Stainless Steel Materials”. These sometimes have sub-groups reporting to them, as, for example, Nickel West reports through to Stainless Steel Materials at BHP Billiton. Rio has a handful of groups, with more structure underneath, it seems, while BHP Billiton has more “CSG’s” (Customer Service Groups) at the top level.

Combining Rio and BHPB’s assets will be simply a matter of taking the Rio assets and placing them into the appropriate BHP Billiton CSG’s. They’d need to add on  one or two new CSG’s to cope with Rio products such as such as salt, borates and talc, but that is easy enough.

At the asset level there would be little change in personnel, but above the assets you’d expect to see a bit of movement as senior people jostle for fewer positions.

There’ll also be excellent opportunities for synergies, as the firms often mine in a similar geographical area, and would be able to combine transport and the like. Those synergies can be captured on the ground by the plants working together, although one can imagine several dictates coming in from on high.

Overall the greatest thing about this combination is that it does not add complexity, just scale. The assets can still be run independantly, the average size of a business unit will not change, and the senior corprate structure can be manipulated to ensure that the number of assets looked after by any one group is not too large.

Both company’s share prices are largely a reflection of underlying commodity prices, and the effect of a movement in those prices is probably greater than the impact of the merger. However I’d be looking for some sort of stuctured investment going short on a basket of other companies in similar commodities (or the commodities themselves) and long on Rio/BHPB. That’s once the merger happens.

Will it happen? Who knows, but the numbers and synergies stack up and BHP Billiton boss Marius Kloppers seems like a very determined and patient man.

Two great companies combining – a good thing.

AOL Australia launches. Whatever

Apparently it is the third try for AOL to launch in Australia. Here’s the Beta website:

aol oz

It looks a lot like Yahoo7’s website:

yahoo7

Can’t really see the point myself – AOL have no lock in downunder so unless the website is associated with a source of traffic then it just seems irrelevant.

That’s a shame as AIM is huge in the USA, an iChat on the mac works with AIM but not (I believe) with Microsoft’s chat.  AOL is few too many years to late, and with a less than compelling offer, on the surface anyway.

eBay makes fundamental changes – enough?

Massive changes today announced for eBay’s economic model, in response, I take, to the increasing power of Amazon and Google.

  • Listing fees down 25 to 50%, especially for bigger sellers

  • Gallery is free

  • final value fees (commissions) are up – 8.25% under $25, which is up from 5.25% and huge. Most sales are in this range, and it forms part of the commison for sales greater than $25. For the next range, $25 to $1000, commission rises from 3.25% to 3.5% – a very big increase in revenue terms for eBay. (US figures)

  • Big sellers that have high buyer feedback ratios get 5 to 15% commission fee discount.

Those four changes take apart the existing economic model and put it back together. Reducing listing fees increases items listed (Trade me already has zero listing fees).

Zero Gallery cost means every item can have a photo displayed in search, and this will natualy increase sell through rate anyway.

Final value fees are where the bulk of revenue should come from – after all when you’ve just sold something you are more likely to understand the value of paying a fee. Increasing these can make eBay a fortune, and they have covered concerns of big sellers (who look hard at these fees) by offering discounts.

These changes aim, therefore, at increasing listing numbers, sell through rates and final value fees. I’d expect eBay are anticipating a decent overall lift in revenue from this.

They have also played with the feedback system:

  • Sellers can’t make negative  comments about buyers

  • Buyers that are suspended/kicked out have their negative comments removed

  • Time to write feedback reduced to 60 days from 90

  • Sellers can block certain members  from buying

  • Order in search results is adjusted for buyer feedback ratio

  • Feedback percentages will include repeat buyers –  currently only one from each unique buyer counts.

Overall this helps big sellers (they don’t leave negative feedback anyway) and should makes eBay a friendlier place – i.e. a higher positive/negative feedback ratio. Again, these are fundamental changes to a foundation of eBay’s success.

Overall? Send as much money as you can to the USA and buy eBay stock. It is stupidly low right now, they have a globaly diversified income stream and these changes should do it well.