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Courseware & Insight at the Intersection of Tech & Strategy by Prof. John Gallaugher, Carroll School of Management, Boston College

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The Week in Geek – Sept. 6, 2007

New iPods and iPhone Price Cuts – Apple to Dominate Location-based Advertising?
iPhones are now $200 cheaper, and two-month-old 4GB iPhone is dead. Apple is offering a $100 credit to anyone who bought an iPhone, but several of the earliest adopters are loudly grumbling about the quickie price cut. The move came as a surprise. July reports showed the iPhone outselling all other smartphones as well as the hot LG Chocolate – gaining a 1.8% of the US market. But while Apple beat everyone in July, the firm moved fewer iPhones in a month than they did in just the two days after its June launch. This new price pushes the iPhone below the key $500 value well before the holidays. And the device gains a new sibling, the iPod Touch – basically an iPhone without the phone. Like the iPhone, this ‘wiPod’ is a pocket Mac running OSX and sporting WiFi (just 802.11 b & g, not the super-fast n version in new Macs). Users can surf the web with the Safari browser, there’s an icon for YouTube videos, but apparently e-mail & IM software isn’t included (yet?). A wireless version of iTunes has also rolled out, allowing users to buy songs directly from the device wherever there’s a hotspot, Apple also announced a partnership in which WiFi iPod users entering a Starbucks can buy any songs played in-store with just the tap of a finger. The feature rolls out in NYC and Seattle Starbucks by Oct. 2nd, then nationwide over the next two years. The 8GB iPod Touch is $299, 16GB is $399 (the same price as an iPhone). The rest of the iPod line was also refreshed. New colors for the shuffle, the new Nano is shorter and wider, with a 2″ screen that displays video. And hard drive iPods are now called ‘iPod classic’, sporting a new metal case, and a high-end model with a 160 gig drive.

Commentary: The partnership with Starbucks is probably the biggest news of the day, but one which all early reports seem to have minimized. It speaks to Apple’s future role in location-based marketing, and if Apple rolls out software so that others could support this, it could be huge. Imagine the revenue possibilities that exist when 100 million new iPod users can get messages tailored to their locale: coupons, info on specials and promotions, museum guides. While many municipalities are struggling with plans to rollout citywide WiFi, here’s another scenario: retailers begin offering free WiFi en-masse in order to tap into the iPod ‘channel’. Apple’s move blankets the world in WiFi and sets the standard for pocket promos.

Software Via the Net: Microsoft in Cloud Computing
This summer Bill Gates said “When you think storage, think Windows Live“. Storage is lock-in and yields a potentially huge strategic advantage. Get a person to use your platform to store something, whether its files under windows, music under iTunes, or photos in Picassa, and you’ve got a barnacle-customer that’s tough to pry away from your firm. With this in mind, Microsoft offers a new suite of Windows Live software aimed at welding customers to Redmond. The new apps include an updated electronic mail program, a photo-sharing application and a blogging tool (even though I’m a Mac user, I’ve been using LiveWriter for Windows to write the WiG for several months now, and I love it). Microsoft will give away some services, photo-sharing and disk storage, while charging for others like its computer security service and a series of business-oriented services aimed at small and medium-size organizations. Microsoft’s recently announced SkyDrive online storage service and its FolderShare service are being folded into Windows Live, too, although not in the first release. Useres testing SkyDrive get 500 MB of free Internet storage. FolderShare syncs multiple computers – even Macs!

Introducing the Google Phone
Scott Kirsner claims several Boston-area VCs and entrepreneurs have seen prototypes of Google’s phone and are keeping mum under NDA. Kirsner has uncovered that much of the work on Google’s phone is being done in Cambridge, headed by Rich Miner, an exec the firm acquired when Google bought the stealthy startup Android a couple years back (another Android founder, Andy Rubin, remains on the West Coast. Rubin co-founded Danger, the firm behind T-Mobile’s Sidekick). Having a significant Google product developed in greater Boston is huge for an area that has been a far distant number two when compared with the innovativeness of Silicon Valley. An influx of Google culture to Kendall Square is great news. The link above also has a neat video that shows wireless innovation happening in the Hub, including a ‘talk to text’ feature that converts spoken words into text messages & search.

NBC Leaves Apple for Amazon
The peacock network left iTunes, allegedly because it wanted to raise prices beyond Apple’s limit of $1.99 for TV shows. The contract wasn’t set to expire until December, but Apple has stated it will prematurely axe NBC shows later this month. Now it seems NBC has agreed to sell shows on Amazon for the same price it offered them on iTunes. What’s up with that? This is great news for Amazon – it brings additional attention to the steadily improving Unbox. But cutting off Apple seems like a very bad strategic decision on NBCs part, given that the network has recently taken to offering free copies of shows (like the forthcoming Bionic Woman) as a promotional tool to gain fans who will tune in to commercial broadcasts. Unbox videos will play on Windows, but not Macs, iPods, or iPhones. Why limit coverage? And did the firm really think the price point on per-episode download is, as some reports have suggested, closer to $5 than $2?

Secrets of a Teen’s Internet Success
Catherine Cook started MyYearbook.com when she was a sophomore – in high school! The site run by the now 17 year old is making millions in annual revenue from advertising, attracts more than 3 million monthly visitors, and in ’06 raised $4.1 million in venture funding from U.S. Venture Partners and First Round Capital. Cook hopes to turn MyYearbook into the largest teen media company online, buoyed by a new user-generated magazine and tools that let high schoolers challenge each other to online voting duels. While she was accepted at BC, she sadly decided on becoming a Hoya instead of an Eagle. We won’t hold this against her as we host Catherine’s visit to my classes on Friday, Oct. 5th.

Loss of Records at Monster.com Reveals Peril of Online Personal Data
Moster.com was victim to a monsterous hack. Before the scheme was uncovered last week by researchers at Symantec Corp., con artists had filched legitimate user names and passwords from recruiters who search for job candidates on Monster. Then with access into the Monster system, the hackers grabbed resumes and used information on those documents to craft personalized ”phishing” e-mails to job seekers. If the recipients took the bait, hackers then installed spyware or other malicious programs on victims’ PCs. Even if the phishing attempt wasn’t successful, the names, addresses and other details on the resumes are still lucrative to the bad guys. A server in Ukraine used in the scheme held 1.6 million entries. Because of duplications, Symantec said those files actually held personal information for ”several hundred thousand” job seekers. Another antivirus firm, Authentium Inc., said it parsed the same data and counted 1.2 million people. Security experts suggest that job seekers provide only minimal details about themselves on job sites, and then reveal deeper information only for queries that prove to be legitimate. A good lesson to keep in mind if you’re thinking about revealing your life on Facebook, too!

Amie Street Closes Series A Funding Led By Amazon
Last Spring another of BusinessWeek’s “Best Young Entrepreneurs“, Elias Roman, dropped by my classes to talk about co-founding Amie Street. The spiffy site, one of the favorites of Web 2.0 super-blogger Mike Arrington, just closed their Series A round of venture funding, led by Amazon.com. Amie Street also launched a site redesign this summer, signed a series of new music partners, and recently surpassed 100,000 tracks on the site. Good luck, guys!

Wikis Pay Off in Classroom
Kudos to my colleague BC Prof. Jerry Kane, whose pioneering wiki work at Boston College was profiled in ComputerWorld last month. We’re currently using Ross Mayfield’s SocialText, exposing some 600 freshmen (including nearly everyone in the School of Management) to the power of “we”. My wiki for this semester is online. As always, comments are most welcome!

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The start of the semester marks the 10th anniversary of the Week in Geek. Boston was recently named America’s Bloggiest City. Given that the term “blog” wasn’t coined until after the WiG started, I suppose that makes the Week in Geek one of the first blogs in town. Thanks to all who have supported our efforts. Are you a BC alum, student, parent who blogs? Boston College Magazine would like to hear from you. Page 3 of the current issue of BCM asks for you to drop them a note at http://www.bc.edu/bcm. And tell ’em the WiG sent ya!

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