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| http://www.gilder.com/ | Issue 260.0/August 18, 2006
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HEADLINES:
- The
Week / Broad Wings
- Friday
Feature / Dog Day Good News
- Friday
Blogger Bonus / A Billion
Dollar Question
- Readings /
The Week / Broad Wings
Excerpted from the August 2006 issue of the Gilder Technology Report.
If you watched Tiger Woods’s emotional win at the British Open on ABC, you were
watching content transported on Broadwing’s (BWNG) media network. Ditto
for the World Cup in high definition on ESPN or ABC. The carrier is also
capturing major league baseball in most venues, transporting game content from
stadiums without compression so that the production facility sees it as it came
out of the camera. That’s important if you want to know how the play really
turned out—you may well see the action better than the umpire.
This is one example of how Broadwing is able to leverage
its all-optical network. Competing optoelectronic kludges typically suffer a
little bit of packet loss. Since a video packet contains some 1,400 bytes of
information, a lost packet or two can give you the jitters or even freeze your
screen. If the loss happens to be right where the glove is, you have
butter-fingered pixels. Building on its recent successes, Broadwing has
expanded its media network to 41 cities and is adding more services, such as
personalized television and interactive programming.
Broadwing
had more good news during its quarterly conference call. For one thing, the AOL
(TWX) phone deal just got better. As AOL transitions from fee-based to free,
Broadwing’s financial relationship with the nation’s largest instant messenger
provider will remain unchanged while uptake of the new instant messenger phone
service, launched in July, likely accelerates among AOL’s 47m customers. AOL
chose Broadwing to be the primary provider of the entire phone network
infrastructure—one of the largest soft-phone implementations in the
world—because of its soup-to-nuts automated solution, from prequalification to
provisioning to billing to 911 capability.
Beginning
what could well become a protracted boom is converged services, which boasted
30 new customers last quarter alone. Broadwing’s converged network allows
enterprises to merge all their local network applications such as voice and
data onto a single platform using their current network technology, including
Ethernet, frame relay, asynchronous transfer mode (ATM), and digital subscriber
line (DSL). Enhancing Broadwing’s attraction among these typically large
enterprises is that its virtual private network services are now available
throughout most of the world thanks to agreements made this year with
international carriers Global Crossing (GLBC) and Hutchison Global
Communications. Using layer 2 or layer 3 protocols, multinational
conglomerates can now connect offices worldwide with their “own” secure
networks, avoiding the attacks that plague the public Internet.
What
might these new offerings mean for investors over the next year or two? Find out by reading the
complete August 2006 issue of the Gilder Technology Report. Log on with
you subscriber ID at www.gildertech.com today.
|
Gilder/Forbes
TELECOSM Conference |
Friday
Feature / Dog Day Good News
Rich Karlgaard’s “Digital Rules” on Forbes.com: Mix
too much sour headline news with your summer brats and you'll wish the camp
canteen had stocked more Zantac. But don't panic yet. There's plenty of good
economic news to pull us through.
First, let's go straight to the heartburn's source. The
second quarter slowed to 2.5% growth. Job growth sank to the lowest levels
since the third quarter of 2003, according to the Labor Department's payroll
survey. Housing starts have fallen 18% this year. The Fed made its seventeenth
straight hike in June, yet core inflation hit an 11-year high that month. North
Korea fired off missiles with impunity, Iran bankrolled murderous strikes into
Israel--and laughed--and Iraq remains a mess. The Doha Round of trade talks
collapsed. July was the second-hottest July ever recorded, and August brought
another likely al Qaeda airliner bomb plot.
Cold beer, anyone?
Now, we're always in favor of a cold beer, there being
none better than Corona on ice (with a lime wedge). But let's drink to slake
our thirst, not to drown our angst. The U.S. economy is in good shape. The
investment climate is opportune. Consider:
- The second-quarter slowdown
came off of a 5.6% first quarter. The economy has averaged 4% this year.
- Gold
prices are down 11% from May's peak. This contradicts that 11-year-high
inflation report, but remember: Gold is a leading indicator, the report a
lagging one.
- As commentator Larry Kudlow writes: "The bond market is saying the Fed has tightened enough. A model of inflation-indexed bonds now shows the real fed funds rate to be above the real ten-year bond rate. This suggests that money is becoming scarce and that inflation is much less of a threat than it was a year ago."
-
Productivity, profits and investments are all strong. As First Trust
Advisors Chief Economist Brian Wesbury, writes: "Productivity bounces
around from quarter to quarter, but nonfinancial corporate-sector productivity
is up 4% at an annual rate in the past five years. This is why the economy is
so resilient."
Yep--it's the dog days. Everybody feels doggy. But it's
a good time to invest.
See Karlgaard’s complete article for additional
figures from David Malpass:
http://www.forbes.com/business/forbes/2006/0904/035.html
Check out Karlgaard’s blog:
http://blogs.forbes.com/digitalrules
|
A N N O U N C I N G : The
Gildertech Blog |
Friday Blogger Bonus / A Billion Dollar Question
Chris Anderson (8/14/06): This weekend I ran a session at the
“SciFoo” camp (an interdisciplinary meeting of scientists and technologists) at
Google that was focused on an interesting statistical problem in the Long Tail.
I've long argued that the "natural" shape of most markets is a
powerlaw, and that any deviation from that shape is due to some bottleneck in
distribution. Get rid of the bottleneck and you can tap the latent demand in
the market, unlocking the potential of the Long Tail.
The usual example I give is this one, which shows US box office revenues over a
three-year period (2003-2005). Remember that a powerlaw looks like a straight
line in a log-log plot, so the key part of the [chart] is where the real world
data drops off the line
In this case, the explanation for the fall-off is simple. They just ran out of
screens. The carrying capacity of the US megaplex theater network is about 100
films per year, or 300 over three years. Over the same period about 13,000
films are shown in film festivals, although only a tiny fraction of them get
mainstream commercial distribution. But if you can distribute niche films as
easily as the blockbusters, the curve would look like the straight line
predicted by the theory, which is, as it happens, exactly what we see with the
Netflix data.
However, there is another common distribution that looks a lot like a powerlaw
at first, but then deviates from the straight line on its own, even without
scarcity effects and other distortions …
The difference between those two curves is the subject of a lot of
research at the cutting edge of complexity theory, and the simple answer seems
to be that it comes down to the nature of the network effects that create
unequal ("rich get richer") distributions such as the powerlaw
and lognormal in the first place.
To see the accompanying charts and more articles on the long tail
of the Internet, check out Chris Anderson’s “Long Tail” blog: http://www.thelongtail.com/
|
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impressive long-term gains, Gilder’s tech portfolio is up 232% Subscribe to Gilder Technology Report and Get the
Next Tech Winner! |
Readings /
Karlgaard
blog: Democrats’ War On Wal-Mart
http://blogs.forbes.com/digitalrules/
Kudlow:
Alive And Kicking
http://article.nationalreview.com/?q=YjIxNDVlYmZhZjI4ODk3ZDMzMjViZjdhMTE3NjMwZjA=
Wesbury:
Don’t Try So Hard, Have Faith
http://www.ftportfolios.com/Retail/research/viewresearcharticle.aspx?id=136
The
Fed’s “Economy Rule”
http://article.nationalreview.com/?q=MTZjYjk0ZjM4YTM0YTY5YjkzN2RkMTViMjk1ZTdhZTM=
Philips
Could Sell Stake In LCD Joint Venture
http://www.eet.com/news/latest/showArticle.jhtml?articleID=192201556
Dell,
AMD In Deal For Chips
http://www.siliconvalley.com/mld/siliconvalley/15305063.htm
Friedman’s
Follies
http://article.nationalreview.com/?q=MWEwZWU5MTNiNDFmODZmN2Y0OTdkYmJjZDZhZWU1Mzk=
Putting
Google-Fi To The Test
http://www.wired.com/news/technology/wireless/0,71616-0.html?tw=wn_index_4
Supply
And Innovation
http://www.aei.org/publications/pubID.24795/pub_detail.asp
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