Every day I see some great coverage of one tech company or other. In recent times Apple has received much of the positive press following its launch of the Shuffle and the new iMac mini. Indeed Jobs grinning face on the cover of Fortune was a tremendous piece of PR. Yet for all this great PR, confidence in the tech sector, at least from Wall Street, is still lacking. Looking at the sales of the top tech players such as IBM, Microsoft, Intel, HP, Dell, Oracle, Apple and Cisco, you see some impressive improvements in sales and profits overall. Indeed sales growth of over 10% is the norm. Yet if you chart the stock prices of these players for the last year you see IBM, Microsoft and Oracle all down around 5% on the year, HP down 12% on the year; Intel down 20% and Cisco down 25%. Only Dell and Apple have shown improvements. Dell is up 25% and Apple almost 300%. What does this tell us? Does the market think the rest of the tech industry stinks? Not if you read the analyst reports. Most of the major tech stocks are listed as a buy… yet nobody is clearly buying.
The conclusion you have to draw here is that following the bursting of the dotcom bubble, the market doesn’t trust the tech sector in general. The accepted wisdom seems to be that the industry is still overvalued and rather than going through a wholesale correction, the market is letting the tech stocks gradually slide into to the right price range as their earnings improve. Of course the other way of looking at it is to say the tech industry, which is the most competitive industry on the planet, needs to do better PR not for each company but for the industry itself. The tech industry is huge and will get a heck of a lot bigger in the next decade. Growth rates may not be in the 100% range but it will outgrow the GDP of every developed nation of that I’m sure. With such a healthy long term outlook the market ought to be backing the industry. In the coming months the larger tech companies should, in my view, start to consider doing PR not just for themselves but the industry at large. Perhaps then Wall Street will start to pay some positive attention.
This weekend’s UK business press broke the news that Incepta (Holding company for the Citigate agencies) and Huntsworth a sizeable UK holding company also in the PR space, are in advanced talks to merge. The merger could create a group with a market cap of around 200m sterling. There is tremendous commercial logic in such a transaction. Both companies have suffered from being ‘too small’ in the eyes of the UK stock markets and have often been encouraged to ‘get big.’ It’s therefore interesting to see the media and analysts be less than enthusiastic about the proposed deal. It’s also puzzling to see the stock prices of both firms go if anything backwards. I guess it shows that when the market gets what it wants, they want even more.
As the blogging phenomena takes off it’s great to see all the tech players salivate as they imagine a vast new piece of Internet real estate being built. Indeed their eyes positively pop at the opportunity of owning land where the user has to do all the construction. All they have to do is figure out how to collect the rent. For the communications pros the interesting challenge is how to work with a community that is pure in thought and is keen to protect the blogsphere from becoming commercial. Of course we all know that if the blogsphere has real commercial value then it will get exploited by big business just like everything else. The challenge is of course how to take advantage of the blogsphere so that we don’t destroy its value. Right now the value of the blogsphere is that enables anyone at any time to post commentary or perspective on anything. The discussions such information create and the transparency it promotes for companies and organizations is tremendous. Will this continue? Right now few companies effectively track the blogsphere, thus enabling issues to bubble and for truth to emerge long before an affected company takes action. That will change in the next few months. Tools such as Technorati’s will enable all companies to monitor what’s said and take action. Over time blogs will find it harder to attack companies, people or organizations. To use the real estate metaphor, as soon as someone sticks up a building they’ll get surrounded by skyscrapers thus blocking out the view. Do I expect this to kill blogs? No. Instead Blogs will evolve. Just like the media the blogsphere is starting to replace (for some people at least), the blogsphere has already created its heroes. These heroes are creating a new form of media, where discussion and community are central. Over time the blogsphere will evolve from a world where content is created randomly across a broad and often new playing field, to a place where content is channeled and where people can easily join communities and discussion. Of course some will argue you can do this now. I’d argue that it’s still way too hard and that the very nature of the blogsphere today means we’re still marking out the territory. Only once the infrastructure is in place will the real blogsphere come to life and boy will that set up some interesting communications challenges.
So Carly has gone and HP has a bunch of questions to answer. Will it truly remain one company or will it get carved up in ways that will excite the investment bankers and in the short term Wall Street? Will there be any, albeit subtle shift in strategy as people internally try and position themselves for whomever will become the new head of the business or businesses?
Forbes have published like crazy on this news today as have many other business publications. CNBC even had a special always on HP ticker. Interestingly I overheard lots of chatter on this in a coffee shop in HP’s home town, Palo Alto today. Most were shocked by the news. The general feeling seemed to be that Carly had got through the truly tough period. And while HP’s stock has hardly performed well under her leadership, neither it seems have any of the other major tech stocks during the same period. In other words, they can’t say she’s managed Wall Street any worse than anyone else has. If anything the chattering masses of Palo Alto were more concerned about how rudderless this news might make the company while the search for a new CEO went on. One guy put it well when he said: “if you were a big corporate customer weighing a deal between HP and IBM right now, you’d be a fool to go with HP. You have no idea what business they’ll be in in six months.”
So confusion is going to reign for some time as I gather the board’s decision was only reached late yesterday. This has left HP with a stand-in CEO. I’m sure HP will perform its day to day duties just fine but customers, especially big ones, care about the future of a business and with a stand in at the helm, that is going to make a lot of people nervous for some time to come.
It might sound odd to write a piece for a blog that in effect says blogging isn’t that great but that’s exactly what I need to do. I’ve recently been spending a lot of time on blogs and on the Internet researching the blogging phenomena. Blogging is of course still in its infancy. Tools to create blogs are now easily available. Tools to find blogs are starting to appear, though they’re far from great. Indeed the technology around blogging is not my beef. My beef is with the content and unreliable nature of that content. First there is the frequency issue. Most blogs don’t get updated that frequently, mainly because most blogs are written by real people with real lives and they simply don’t have time to keep them populated with gripping content. Second, there is the reliability of the content. Blogging’s greatest asset is its weakness. There is no policing of the content which means anyone can write pretty much what they want and it’s unlikely there’ll be any problem even if they’ve made some huge factual error. If you translated these issues and put them into the traditional publishing world, you’d have chaos. Imagine a magazine that came out when its editor felt like it. Imagine that same magazine never checked its facts and went simply from memory. It frankly wouldn’t work and any magazine that tried to run that way would either die a natural death or be litigated out of existence. The only reason this isn’t yet a major issue for blogs is that people put out the content for free. Of course if it’s free then you can argue you get what you pay for. But of course we all know that we need blogging not to be second rate journalism but liberated journalism. We want it to provide a fresh perspective and to create dynamic new communities (I’m not altogether sure I know what a dynamic new community is btw – but it sounds good). I truly think some blogs are doing this but they are the exception rather than the rule. Perhaps that’s the price we have to pay. Perhaps those of us who want to hang out in the blogsphere need to accept that there will be a ton of poor blogs (this one included) and a few great ones. My worry with this situation is that sadly under these circumstances we will only attract the truly dedicated to our world. The rest will take the easy route and sign up for MyYahoo as their trusted source for content, and who’d really blame them.
As President Bush stood up to address the nation and those parts of the world that are interested in his views on the State of the American union, my mind quickly turned to other things. Most notably the irritating crashes I had been experiencing a few minutes earlier on a travel web site (which will remain nameless but let’s just say it’s a big one). I thought then about the first time I really started using the Internet using a dial up connection. I remembered the first iteration of MSN and how.. terrible it was. As my mind drifted away from the President and the incessant clapping, I thought about how I use the Internet today versus even five years ago. Like many, I’m now hooked. My Treo has a terrible web capability – but I still use it. I get depressed when I can’t access email and my wife goes insane when instead of using a newspaper I insist on using the Internet to find out what movie’s are playing. For birthdays, holidays etc I use the Net to shop for all those people that are miles away so I don’t need to think about shipping anything. For travel I wouldn’t dream of calling a travel agent unless I was stranded somewhere. Put simply the Net has become a part of my life. I can’t put an absolute percentage on it but my best guess is that at least 50% of my work life involves the Internet and about 10% of my private life. That’s a lot given my parents spent zero time on the Internet when they were my age (for obvious reasons). So did the technology that is changing society even get a mention in the President’s State of the Union speech? I don’t think so, but then I did rather switch off for most of it. I do remember thinking that it was probably a good thing that the government doesn’t have to run the Internet. If they did it would no doubt be heading for bankruptcy by 2052.