January 2010

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ZDNet Australia logo: click for Patch Monday episode 27

Following the allegedly-Chinese attacks on Google (and 33 other corporations), and following Hillary Clinton’s assertive speech on Internet Freedom, online espionage is in the news — and it’s my topic on the Patch Monday podcast this week.

My guests are Mark Goudie, who heads the forensics practice at Verizon Business in Melbourne; and Ajoy Ghosh, security executive with Logica in Sydney.

You can listen below. But it’s probably better for my stats if you listen at ZDNet Australia or subscribe to the RSS feed or subscribe in iTunes.

Please, let me know what you think. We now accept audio comments too. Either Skype to “stilgherrian” or phone Sydney 02 8011 3733.

OK, so I was wrong. Very wrong. And Citi was right, perhaps even conservative with their estimates of Google’s revenue turnaround.

The other day I was sceptical that Citi’s analysis showed Google suddenly reversing three years of declining revenue growth. They predicted that the revenue growth for 2009 Q4 would be 16%.

I scoffed. I figured the fat red line (right) was a more appropriate projection of the data in the graph.

Well, Google’s actual Q4 revenue growth was 17%. That’s the green dot.

Bastards.

Now Bob Bain, who actually knows how to read these numbers, has found a more detailed review. He points out that while net profit was allegedly up fivefold, Google did write off a billion dollars as “impairment of equity investments” last year. I don’t know what that means, but it sure sounds like it’d make last year look a bit wobbly.

Now, check this chart of Google’s share price for the last two years.

Broadly speaking, it shows the share price dropping as the global financial crisis kicked in, and then recovering. Apart from that tiny little downturn in the last week or two, Google’s share price is back up to where it was two years ago.

Lessons?

  1. The stock market is a long term investment, unless you really want to immerse yourself in the crazy world of the day traders.
  2. When it comes to the stock market, I haven’t the faintest fucking idea what I’m talking about, and you should ignore me.

Any questions?

Since my last post on this subject two months ago I’ve seen a substantial drop in advertising material in my letterbox. While I haven’t complained to the perpetrators who continued to ignore the “no advertising material” sign, let’s list them for posterity.

The new guilty parties are: 3 Mangoes Thai; Arthur, a builder; Australia Wide Tax Solutions; Bus Stop Espresso; Caldo Pizza; Domino’s Pizza (yet again, twice); Chadwick Plumbing; Civic Video; Essence of India restaurant; Green Ecovations: Hot’n’Spicy Thai; James Wilson Pest Management; Just Screw It (carpenters!); L J Hooker (the real estate agent, again); Lat-Dior African Eatery; Moon Koon Chinese Restaurant; Notes Live Music Restaurant and Bar; Patrick Coughlan, electrician; Pavarotti Gourmet Pizza; Ray White Real Estate; S & W Building Services; San Remo Pizza; Smiles (a dental clinic); Stanmore Natural Health; Steve’s Budget Gutter Cleaning; Thingk Baby [sic]; Urbane Inner West (another real estate agent); Yoga To Go.

I still want to know why real estate agents figure so prominently. And I still want to know why Domino’s customer service people never reply to their emails.

It’s no secret that the high-growth venture-capital-driven Internet industry is a hype-laden circus of misinformation. But today’s Chart of the Day from Silicon Alley Insider (right) really takes the biscuit.

Here we see that since Q3 of 2006, Google’s quarterly revenue growth has steadily declined from a cancerous 70% year-on-year to under 10% for the last three quarters.

Now there’s nothing wrong with an 8% growth rate. That’s pretty much up there with China, for instance. And the only countries growing faster than China are starting from a very low base. Think of such economic powerhouses as Angola, Bhutan, Rwanda and Timor-Leste.

OK, I know countries and companies aren’t the same thing, but that’s not my point.

Look at the bottom right of that first graph.

Citi reckons that Google’s growth in the next two quarters will increase in a more-or-less straight line that’s even steeper than that most recent quarter-on-quarter increase. Based on fucking what, Citi? That’s the only quarter showing growth in the entire chart!

Surely this second graph is a more realistic projection based on the data available.

There’s precisely zero science here. I just grabbed the straight-line tool in my graphics program and drew in a red line by eye. I certainly couldn’t be arsed doing this properly with, you know, mathematics. But…

Honestly, which of these “projections” looks more realistic to you?

As I say, there’s no science here. Perhaps we can add some analysis.

What factors might be affecting Google’s potential for increased revenue growth?

On the plus side:

  • Google is operating in a marketplace which is still growing, and perhaps even growing faster than last year as we emerge from the global financial crisis. Then again, so is everyone else.
  • Google’s got a new product line coming out, those Android phone thingamabobs, and people are wetting themselves to get one. Well, at least until Apple reveals their new toy next week.
  • Google pwns the Internet.
  • What else?

But working against that:

  • Google is subject to increased competition, especially from Microsoft’s Bing and related products and services.
  • Rupert Murdoch is up to something, although admittedly he might not have the faintest idea what he’s doing.
  • Every market eventually reaches a plateau. The key bullshit image of the first dot.com boom was the classic revenue projection of a start-up: exponential growth continuing forever. Well, here in rich white Western countries, all the folks who are using the Internet are pretty much there already. There might be more volume of data, but the amount of attention span you can sell to advertisers ain’t going to rise so much.
  • What else?

We also need to remember that these are revenue figures, not profit. And that’s my core point. Simplistic “Oooh, aah!” gawking over one numerical measure without context is wankery. Why do we let analysts get away with it?

All that said, I’m no financial analyst. What would I know? So if you know better, set me straight. There’s a “Reply” box below…

Oh, and Google’s Q4 revenue figures will be announced tomorrow. So we’ll have one more real data point then. Stand by.

Crikey logo

Despite all the news about Google being, it is alleged, hacked by attackers in China, from an Australian perspective China probably isn’t our main problem.

I made this point in Crikey‘s lead story yesterday, quoting a security consultant at a leading outsourcing firm.

Australian attacks targeting the private sector have come from other so-called ‘friendly countries’. Which country is a problem closely correlates with business competition in the particular sector…

You could pick any one of our major trading partners and I could tell you a story about a sophisticated and well-executed attack sourced from that country. Examples at the top of my mind include Japan, Canada, US, India and France.

The story is free to read. Do click through.

ZDNet Australia logo: click for Patch Monday episode 26

Privacy issues on the Patch Monday podcast this week.

Contactless EFTPOS and credit cards that allow you to make payments without a signature or entering a PIN, and the vast honey pot of personal data that is Google. It’s not just Gmail, but everything else.

My guest is the Chair of the Australian Privacy Foundation, Professor Roger Clarke.

You can listen below. But it’s probably better for my stats if you listen at ZDNet Australia or subscribe to the RSS feed or subscribe in iTunes.

Please, let me know what you think. We now accept audio comments too. Either Skype to “stilgherrian” or phone Sydney 02 8011 3733.

British Airways Corcorde G-BOAC at Manchester Aviation Park. Photo by Ian Britton, © FreeFoto.com.

Do we really think we can just bolt some sort of “government 2.0 module” onto steam-era bureaucracies and magically bring them into the 21st Century?

Sure, our governments served us fairly well in the 20th Century, at least in the West. They beat the bad guys in WWII, brought us through the scary Cold War and delivered health and prosperity our grandparents would have found unimaginable.

Not to mention Windows ME.

But times are changing. We’re starting to notice that things don’t work as well as they used to. We’re spending taxpayers’ money bailing out economies only to have bankers suck out more bonuses anyway. Conferences intended to agree on Climate Change action produce… well… nothing concrete. Sydney’s suburban railway network is slower than in the 1920s!

Having invested so much time and money on these institutions, though, we’re reluctant to let them go.

This is the sunk cost fallacy.

The Concorde is the classic example. Long after it must have been clear to the French and British governments that no-one was going to buy this aircraft, they continued investing in it simply because they’d already spent so much and didn’t want to lose those “sunk costs”. Yet those costs were gone, no matter what. To continue spending was irrational.

The same happened in the Vietnam War, where US President Lyndon Johnson kept committing thousands of troops after he’d realised the cause was hopeless and America could not win.

Afghanistan, anyone?

I’ve written before, in Risk, Fear and Paranoia: Perspective, People!, that change is being held back by, well, fear and paranoia. But this morning I stumbled across Umair Haque’s The Builders’ Manifesto. He’s got it in one.

20th century leadership is what’s stopping 21st century prosperity.

Read the rest of this entry »

“There needs to be a special word for the combination of a cheap fake tan and fat thighs.”

I expressed that view on Twitter early this evening. Thanks to @SophieAG I now know there’s already such a word: Snooki.

This class act’s name is Nicole Polizzi (pictured), though she goes by the nickname “Snooki” and “stars” in an MTV reality TV program called Jersey Shore.

Watching the trailer tells you everything you need to know.

According to The Hollywood Gossip:

She fake-tans and acts like a bit of a skank. Then again that sums up the whole cast, so what are you really gonna do. That’s just what she does…

Nicole has made headlines already … for having brown skin. Like for real brown. Not tanned, like she’s been rolling in the mud or something. Yech.

Apparently Snooki is such a skank that advertisers have pulled out of the series.

Snooki’s response?

“I just have one thing to say to Domino’s, Dell, UNICO and all the other haters out there: Fuck you! If you don’t want to watch, then don’t watch.”

Snooki added: “Just shut the hell up! I’m serious… Fuck you!”

UNICO, the Italian-American organisation that claims the show perpetuates negative stereotypes, plans to keep pressuring sponsors to boycott the show.

“She is not an embarrassment to Italian Americans. She is actually an embarrassment to the entire human race!!!!” UNICO said of Snooki in a statement.

Apparently Snooki’s idea of the ideal man is the Guido stereotype.

Given the monumental appropriateness of naming an entire sub-class of humanity after this woman — and I do mean sub-class — other suggestion faded in comparison.

Read the rest of this entry »

I continue to get blown away by the quality of material coming from Middle Eastern media network Al Jazeera.

I’ve just watched the latest Listening Post podcast and have learned more about Yemen in a few minutes than from a lifetime of watching, reading and listening to Australian media.

And fascinatingly, this is how Listening Post presenter Richard Gizbert explained how you can take part in the program.

We are now closing in on four thousand viewers following us on Facebook and Twitter. They check in to find out what stories we’re working on and in case they want to weigh in as one of our Global Village Voices. If you’d like to do the same, just go to either of those sites and search us out. Or you can get in touch with us the old-fashioned way on email. We’re at listeningpost@aljazeera.net.

Yes, that’s right. Email is now “old-fashioned”. Love your work, guys.

ZDNet Australia logo: click for Patch Monday episode 25

Amongst the goodies at the huge Consumer Electronics Show in Las Vegas last week, Intel announced new processor chips that scale down to 32 nanometres — and that’s the topic for this week’s Patch Monday.

The chips are faster and use less power, sure. But what else does it mean? My guest is Benno Rice, a freelance systems architect based in Melbourne who’s particularly interested in embedded systems — so he knows about processor chips.

You can listen below. But it’s probably better for my stats if you listen at ZDNet Australia or subscribe to the RSS feed or subscribe in iTunes.

Please, let me know what you think. Feedback very, very welcome. And do let me know if there’s any topics I should cover, or guests we should interview.

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