The Week in Geek – May 17, 2008

Can a Cellphone End Poverty?
In the ultimate play of Moore’s Law opening up new markets, mobiles from Vodaphone sell for $25. India’s Spice has a $20 “people’s phone” on deck. There are 3 billion people worldwide that don’t yet have a phone, but they will, soon. While it took roughly 20 years to sell a billion mobile phones worldwide, the second billion sold in four years, the third billion – in just two. Today some 80% of the world’s population lives within cellular network range, double the 2000 level. The ITU says that by the end of 2006, 68% of mobile subscriptions were in developing countries.

Why such demand? Mobiles change lives for the better. Think about the farmer or fishermen who can find out crop prices and knows buyers will be at a market, the laborer who was mostly unemployed but with mobile is now reachable by those who have day-to-day work, the mother who can find out if a doctor is in and has medicine before walking three hours with her sick child, or the housekeeper who was “more or less an indentured servant until she got a cellphone”, enabling new customers to call and book her services. A 2005 London Business School study found that for every 10 mobile phones per 100 people, a country’s GDP bumps up 0.5%.

Last WiG we mentioned Mohammed Yunns, the Nobel Peace Prize winner behind the microfinance movement. Microfinance loans helped fuel carrier Grameen Phone Ltd., a firm that has helped over 250,000 Bangladeshi “phone ladies” lift their incomes by helping their communities become more productive. Phone ladies buy a phone on microcredit for about $150 each. The special long-life battery phones allow them to become a sort of village operator, charging a small commission for sending & receiving calls. People are connected if they can’t even afford a phone and whole villages are better off. Grameen Phone now has annual revenues of $1 billion and is Bangladesh’s largest telecom provider. In another ingenious scheme, phone minutes become a proxy for currency. The NY Times reports that a person “working in Kampala, for instance, who wishes to send the equivalent of $5 back to his mother in a village will buy a $5 prepaid airtime card, but rather than entering the code into his own phone, he will call the village phone operator and read the code to her. She then uses the airtime for her phone and completes the transaction by giving the man’s mother the money, minus a small commission.” South Africa’s Wizzit and GCash, in the Philippines, allow customers to use mobile phones to store cash credits sent from another phone or purchased through a post office or kiosk operator. So phones can be used as currency for purchases or payments. Who needs Visa? Vodafone’s Kenyan-based M-Pesa mobile banking program landed 200,000 new customers in a month – they’d expected it’d take a year to hit that mark. With 1.6 million customers by that time, the service is spreading throughout Africa. The ‘mobile phone as bank’ may bring banking to a billion unserved customers in a few years.

Another fascinating trend shows poor spend more for telecom services as their incomes increase than any other category, including health, education, and housing. “What people are voting for with their pocketbooks, as soon as they have more money and even before their basic needs are met, is telecommunications.”-

Inside Microsoft’s War Against Google
Carl Icahn is trying to get Yahoo to bring Microsoft back to the table (the guy’s everywhere – he’s also trying to bring together Blockbuster & Circuit City), but Redmond is on to other things. Specifically, the firm is pushing what it believes is the world’s most sophisticated ad-targeting software, one that can win a share of the growing display ad market. Microsoft feels it has a chance in display ads. It’s getting trounced in search advertising, where Google holds 77% of the market vs. Microsoft’s 5%. Microsoft’s online properties lost $1.5 billion over three years. Microsoft’s 180 person ad sales force is now pushing the firm’s edge, citing particular strengths in targeting ads on remnant space (infrequently-viewed pages several clicks deep), and skills at following clickstream through ad response, customer acquisition, and even customer activity (e.g. did that E*Trade ad produce a higher percentage of active traders?).

Commentary: Balmer has said Microsoft will acquire 20 firms a year for five years. With the mature Windows & Office business gushing $1 billion a month in cash, Microsoft is wise to milk those cash cows to explore markets like SaaS and ad-supported software before others gain big leads. Perhaps instead of shopping in the US, Steve should look to China. China now has more Internet users than any country in the world. And no one knows more than Microsoft that the biggest markets attract the most developers. Not only is there the risk that China giants will crop up with home-grown, out-of-nowhere market changers like Google, Facebook, PayPal, and even Skype (5% of int’l phone traffic, even if it doesn’t gush cash), it’s also important to learn how China’s different. Google doesn’t dominate in China. eBay flubbed its first effort & had to seek a local partner. And Yahoo China is 60% owned by China’s Alibaba. Look to the middle kingdom to learn, diversify, and establish new beachheads in markets that will only grow richer. And DON’T kill those firms the way Yahoo has so many of it’s own acquisitions. Let the successful Chinese firms be fonts of innovation.

With Microsoft, OLPC May Finally Succeed
Speaking of emerging markets and Microsoft: the OLPC ($100 laptop that’s really close to $200, currently) will soon run Windows. Microsoft will offer a version of XP for about $3/box (Windows laptops will be about $10 more & initially require an additional card). A smart move if this can keep millions of Linux-using kids from pushing the penguin as they become skilled. It’s a great move for the OLPC folks, too. Governments that were reluctant to spend coin on training kids in technology used by few desktop consumers in industrialized nations can now see those boxes as a bridge to high-demand skills.

How the RIAA Catches Campus Music Pirates
Ever wonder how the music industry nabs errant students who “share” music? The RIAA contracts a firm called Media Sentry, a sort of bounty hunter that, takes a list of copyrighted songs, automatically runs searches LimeWire, checks a song’s digital fingerprint known as a “hash” to verify it’s a copyrighted tune, then looks at the serving computer’s IP address to see if it’s on a university network. The automated searches bag hundreds of violators a day. Flaged students may receive a threatening “prelitigation settlement letter,” that, as Good Morning Silicon Valley states, comes “with an offer to forget the whole thing in exchange for several thousand dollars and a promise to behave”. The RIAA sees college studnets as soft targets -“The automated takedown notice program we have right now is solely university-focused”.

Stolen Laptop Catches Crooks on Camera
When crooks (pictured) stole the Mac owned by Kait Duplaga, an employee at the Apple store in the Westchester mall, we see that even the bad guys have gotta be geeks, or risk the hoosegow. Duplaga used the “Back to my Mac” feature on her laptop and snapped photos of the thieves, then sent the pics to her e-mail account. “It doesn’t get much better than their bringing us a picture of the guy actually using the stolen property,” Daniel Jackson, the deputy commissioner of public safety in White Plains.

CBS Goes All In
The “Eye Network” acquires CNet for $1.8 billion. This follows a round of several big deals that include HP’s purchase of EDS for $13.2 billion, a deal that would move the firm from fifth to second (behind IBM) in tech services. Comcast has bought Plaxo in a perplexing deal aimed at allowing users to share their love of video with friends. And Intel, Clearwire, Sprint, and Google pledged $14.5 billion in a deal to hasten the rollout of nationwide WiMax (it’ll be neat to see how this plays with Android – the demo I saw this week suggests the platform has the chops to make a real run at the smartphone space).

An Interview with Lenovo’s Chief Procurement Officer
A quick read as we head to Lenovo in Beijing (and for those I’ve taken there in the past). China watchers may also be interested in the interview with the CEO of controversial Chinese carmaker, Chery.

IS Dept. Wins TWiN Award
The IS Dept picked up honors for instructional innovation at this week’s Teaching with New Media (TWiN) awards at BC. Also honored, the Professors Olivieri for work on nursing video podcasts, and IS Professors Kane and Fichman for pioneering work with wikis. Special thanks to those who nominated me, as well. I also picked up a TWiN for the second year in a row. The plaque will grace my new digs overlooking the quad. The IS Department (and my personal office) moves to Fulton 460 this summer.