my digital nationalism

looking for Indonesia's significance on the web

Archive for the ‘internet’ Category

Why hasn’t Google+ crossed the chasm?

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After reading this excellent post on Mashable about Google+, I found myself wondering, why hasn’t google+ reached facebook level membership?

At the moment G+ has 170 million members, which is a huge number of users and remarkable achievement in its first year, but still that number is less than the number of users facebook grew in the last year, which is from 700 million to 900 million this year.

I attempted to create this simple graphic illustrating the situation:

This graphic captures the situation with google+, that while it is still very popular with a huge user base, but it appears that its appeal is still limited to a very select audience, mainly tech/social media enthusiasts. Facebook, on the other hand, has definitely crossed into mainstream the market, even into our daily lives and culture.

How can we explain this? Why is Facebook so successful, while g+, bearing the google name and unlimited resources, has not yet crossed the chasm?

EDIT:

I have to be honest, when writing this blog post I had not visited google+ in a while. This is what I realized. The mainstream kinda sucks, in terms of the quality of content. Just like how Reddit’s frontpage is so mainstreamified that in order to get to a quality post you have to sift through  a mountain pointless memes, I have just realized that my facebook stream is full of updates of people I know but to be honest not very interesting. My google+ stream, in contrast, is full interesting content, it could be because the people I follow, but it is also because there is a general air of intellectuality in google+ that is lost on facebook, well, lost or never did exist in the first place.

So maybe for google+, it’s best that they stay where they are.

What do you think? If you beg to differ, please feel free to comment.

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Written by randomwalls

June 28, 2012 at 9:26 am

Building Something

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So I mentioned in my post before that I have been picking up coding. I am taking an online course on MIT OpenCourseWare, I am learning the basics of Python from learnpythonthehardway.org, which is an excellent way to get acquainted with the basics of coding, and also reading the book Think Python, which is also an excellent book to learn the foundations of programming.

On the side I am also learning HTML at w3schools.com. An from this I decided to start my own website, which I am proud to show here, www.gumoh.net.

I know its not much at the moment, but I am proud to say that I worked on this site on my own, with some assistance in purchasing the domain and setting up the host server. The coding is all done in HTML edited with notepad ++, and my FTP client to upload files to server is WinSCP.

Also, the site is mobile responsive meaning that if you view it using your laptop it will show 3 columns, but if you resize your window, or, you are viewing on your iphone or android phone browser the layout will resize to single column, like this:

I thought this was pretty cool and I was surprised how simple this was to implement. I may not understand the underlying coding involved to make this thing happen yet, but that is something I intend to learn over time. The framework I used to make this responsive site is GetSkeleton.

I am reminded of something I read on the learnpythonthehardway.org, it’s that learning to code is like learning a musical instrument. Before you write music you have to learn the chords, before you understand the chords you have learn the scales, before you learn the scales you have to learn how to move your fingers. And that is the stage that I am at, I am learning to move my fingers on the instrument an getting a feel of what I can do with this.

On a closing note, It’s a really exciting feeling working on something and seeing it come to life, and I am getting as excited about learning to code as I was about learning to play guitar almost 20 years ago when I was a teenager.

Hopefully I will learn something useful that I can use to build something that I can call my own.

Written by randomwalls

June 6, 2012 at 3:48 pm

The 3 Tech Giants: Income Statements Compared

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You can tell a lot about a company by looking at its financials.

The purpose of this post is to look at income statements of Apple, Google, and Facebook. And we try to point out any interesting similarities or differences between these companies, based on the numbers. Of course these 3 companies work in different industries and the numbers are not comparable to each other, but what I’m trying to do here is to get some feel of what the margins and cost structure of these giants are.

(Apple and Google income statements are taken from the latest 10-k filing, and Facebook’s income statement is taken from their from S-1, with some formatting done by myself for comparison purposes.)

So here they are,

What can we learn from this?

1) Net Sales/Revenues, Apple currently makes way more money (net sales/revenues) than google and Facebook combined. With the popularity of its products it’s no wonder Apple is the most valuable tech company in the world. It’s net income (profits), though the lowest of the 3 in terms of percentage of revenues (24%), are the biggest in terms of real dollars, 25.9 billion dollars, almost 3 times as much as google’s profits and 25 times Facebook profits. Please note that the profits in terms of percentages of revenues between the companies are not far off with apple, google, and Facebook at 24%, 26%, and 27%

2) Gross Margins, In terms of gross margin however, Facebook is leading the pack with a 77% gross margin, while google is second at 65% and Apple at 40%. This is because the difference in industries, Facebook and Google are internet companies whose costs of revenue are mainly salaries, revenue share to publishers, and data center costs. It’s online presence allows it to deliver its services at a relatively cheap price and it shows in the gross margins. Apple, on the other hand, is a brick and mortar manufacturing and retail company. They have raw material costs, production and distribution costs, including the costs to staff, stock, and maintain the apple stores they have all over the world.

3) What about Research and Development? No surprise that Google leads the pack with an R&D budget of $5.1 billion dollars (14% of revenue). Apple on the other hand only allocates 2% of its total revenue (2.4 billion dollars) to R&D. Facebook allocates 388 million dollars to R&D, around 10% of its total revenue. Please note that even though Apple only contributes 2% of its sales, that amount is more than enough for apple to keep generating new products. I wonder what would happen if Apple allocated more than that to R&D, what kind of new products would we see in the future?

4) Selling, general and Administrative and Total Operating Expense, Apple’s selling, general and administrative (SGA) costs total 7% of total revenue (7.59 billion dollars), while and google and Facebook’s SGA costs are a higher percentage of revenue (21% and 20%) but lower in terms of dollar values (7.8 billion dollars and 707 million dollars). Whats amazing to me is that in terms of Total Operating Expense, Apple is the most efficient of three with a total operating expense of 9% of revenues (10 billion dollars), which is even lower than google’s total operating expense of 12.9 billion dollars, around 34% of google’s total revenues. Facebook’s total operating expense is 1 billion dollars, 30% of total revenues. This demonstrates that Apple is an incredibly efficient company, and no wonder its profits are so high. These high profits are also due to the fact that they can get away with selling items at ridiculously high prices.

So there we have it, the income statements of the 3 tech giants today compared side by side. What do you think, any ideas or comments?

Written by randomwalls

April 25, 2012 at 11:22 pm

Creating and monetizing

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Instagram was recently bought by facebook for 1 billion dollars in cash and stock. For a company thats been around for only 3 years with no revenue, that is crazy.

What can we learn from this?

Instagram is an outlier.

Creating a product and hoping for it to get bought at an absurd value is not a business plan. It almost never happens.

Creating a product that solves a specific problem and brings value to users, that always has to be the key.

In this industry the focus should be your customers, your users. Know your market and what problems they are facing. Create products that address these problems.

Only if you manage to create something that attracts million of users can you think of monetizing. If by then you haven’t figured out how yet, don’t worry, this is a good problem to have.

What you don’t want to is to ruin the user experience for the sake of monetizing and ruining your product in the process. If this is the case, you have lost the battle even before it has begun.

If your product is great somebody will eventually pay for it. It might be from the millions of users you have, or in other forms, like a 1 billion dollar payout from a huge company. Who knows right?

Written by randomwalls

April 20, 2012 at 9:05 pm

45 million users

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There are 45 million registered facebook users in Indonesia.

What does this even mean?

I guess you can use this figure to demonstrate that Indonesian youth are tech savvy, connected, and sophisticated.

I dont know what the precise number is but the 45 million figure must be close to the internet penetration number in Indonesia.

Meaning almost every Indonesian that uses the internet has a facebook account.

What I’d like to see are metrics showing how the internet has improved the quality of life in Indonesia.

After all thats what the internet should be, right? A tool to improve life.

Such metrics, for example, would be number of wikipedia articles created and viewed in bahasa. The number of online businesses created and transactions done. How much easier it is to find things and connect with people and create new value.

I wonder of there are such metrics and if there even is a way to measure such things.

Saying Indonesia has the most facebook users is nice, but so what?

It still means we are just users.

Written by randomwalls

April 4, 2012 at 11:46 am

The case for (and against) ad funded downloads

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Ad funded downloads is the holy grail of digital music. Well, not really, iTunes is the holy grail of digital music, and Apple is making tons of cash off of it.

Ad funded downloads is the idea that people can download music for free and artists still get paid. How do the artists still get paid? Because brands and businesses will want to pay to put advertising on the download pages, and that payment will become revenue for the artist.

Simple enough. An artist puts up their music to download for free. Millions of people will download the music. Brands will pay for these millions of impressions, which becomes revenue for the artist.

People want music. Artist want money. Brands want people to sell their stuff to.

In theory this looks like a no-brainer.

But this is why I think it won’t work.

It’s like having a band play a show for free, people won’t have to buy tickets for the show. The only catch is, there will be brands there, that could manifest in the form of: the stage will be full of advertisements, or you would have to like a brand on Facebook or tweet something for the brand to watch the show, or you would have an ad running in the backdrop of the band, whatever.

The key is you would have to suffer intrusion from a brand. I can’t imagine that would be an enjoyable show. Also it would be hard to find a decent band willing to compromise their artistic integrity in exchange for cash. Or maybe I think too highly of artists.

At its current form, people have a choice of:

  • buying music they like from the available outlets in whatever form they want, for digital they can go to itunes or amazon or google music or whatever.
  • or if they know how to do it just go to thepiratebay and torrent it for free, no hassle

So there are these 2 extremes. Pay or pirate. Ad funded downloads would appear to appeal to the middle ground, people who dont have money to pay, but don’t want to (or don’t know how to) pirate.

I wonder how big this middle ground is, is it even worth the effort.

The only way I could see this working is if the brand experience is non-intrusive, meaning, the most you could do is sell impressions. Requiring users to click, like, tweet would be a hassle. Just have the brand banner above the link, or you could go the way of filesharing sites where the download link takes 60 seconds to load and in that time display some banner ads. That maybe could work.

Let’s just imagine what it would need to make an ad-funded download site work:

  • The site would require a vast sales and marketing department to get brands and businesses on board. They would need an A&R department to get artists on board.
  • They would need to be able to match brands to bands so the impressions would hit the brands targeted demographic (not that hard actually).
  • The downloads would have to massive enough in order to cover the costs of such an operation while being able to pay the bands a fair share, at least what the current market price is which is $1 per song. Any revenue offer to bands lower than that would be a hard sell to artists.

You could argue that this way we could still monetize traffic that otherwise would be lost by pirating, which justifies paying artists lower than the market price of $1 per download. How low could we go?

Let’s say we are starting an ad funded downloads website. The operating costs are $10,000 a month (to maintain sales and A&R teams as well as servers and bandwidth and maintenance and whatever). We are selling the impressions to brands at $10 CPM which is roughly what the current market rate is. Let’s say from all the music we have on the site we have managed to generate 10 million downloads. 10 million downloads at $10 CPM equals 10,000,000*(10/1000) = $100,000 revenue from brands. Now we take out the operating costs of $10,000 because bills have to be paid right? leaving about $90,000 to share to the artists. At $90,000 that means that we are valuing each download $0.009 cents, less than a penny. Good luck selling that to artists.

Based on this model, if we tweak the numbers, there could be a way we could tweak the CPM cost and artist revenue share so the numbers would be more fair for all parties, but in order for it to work the CPM would have to be an absurd number. The CPM would have to be $1000 for us to be able to pay artist $1 per download which is an impossible sell to brands.

So ad funded downloads to me is something that seems like a great idea, but when put in practice it seems like its impossible to make it work. Or am I taking the wrong approach on this?

I guess I ‘ll just think about it some more.

Written by randomwalls

March 30, 2012 at 8:40 am

Product Idea: Custom Retail Search Engine

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Following up from my last post I’ve been thinking about how to solve the problem in Indonesia of not being able to get quality information on products using search engines fast enough. In order to solve this I’ve tried creating a targeted search engine.

Using google custom search I’ve created a custom search engine targeted at local Indonesian retailers. The idea here is to find what you are looking for fast. So for instance, instead of googling for “beli blackberry gemini” and having to sift through irrelevant search results to get to the retail site, I bypass this process completely by specifically targeting the search to known local retail sites. So I can get to sites that I know are reliable and get information of what I am looking for quick and easy.

So here it goes.

Clicking on the image above will send you to the custom search engine page. I’m sorry I had to go this way, I just couldn’t figure out how to elegantly show the custom search bar on my blog post. Maybe someone out there can help me with this. I guess I’ll google around some more and if I find a solution I’ll go back and fix this.

Here are screenshots for the different search results using the same terms. The search term we use here is “hp nokia”

These are the results from normal google:

 

And these are the search results from my google custom search engine:

 

The results from my targeted search engine are much more focused, showing links directly to retail sites blibli.com, berniaga.com, tokobagus.com, and glodokshop.com. The results from normal google showed links to nokia indonesia’s website, a nokia phone price directory, and a blog post about nokia. If I was looking to purchase something I’d have to go deeper to find the links to the major retail sites.

So there we have it. What do you think?

 

P.S.: Credit to Netty Gritty for the google custom search image I used above. Here is the original post where it came from.

Written by randomwalls

March 28, 2012 at 5:10 am