GreenwashIT
Sorting truly sustainable tech and business from greenwash
Friday 8 February 2008, 11:32 AM
How to make power-walking even sillier
ZDNet.co.uk’s Dialogue Box has a regular feature called Axis of Awesome – where tech is rated on axis of useful to useless and cool to uncool. A definite contender for the useful but not cool segment has to be a knee-brace like device from US and Canadian scientists.
Outlined in the journal Science (and reported on the BBC), the adapted brace can generate “more than 1000 times more energy” than existing technology such as a kinetic watch. Apparently, the "Biomechanical Energy Harvester" may provide a green way to power the portable devices of the future, claims Science.
You can find the full article here: Device Gives New Meaning to "Power Walking"
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Friday 8 February 2008, 10:01 AM
Ballmer will let Yahoo brand live
Just as city types are nervous that the US and UK will “talk themselves into recession” - surely there’s also a danger of the tech industry talking Yahoo into acquiescing to Microsoft’s bear hug takeover bid? Well Redmond is obviously not going to complain if that happens and Steve Ballmer has already started openly discussing what will happen to the Yahoo brand. The good news, sort of, for Yahoo is that Ballmer would let the company keeps its name for a while at least, according to an interview the chief exec did with Business Week .
Thursday 7 February 2008, 3:36 PM
Undersea cables extremely vulnerable say analysts
The cutting, and power failure, of four or more undersea cables has had some conspiracy theorists shouting terrorist but this is the first comment I have seen from an analyst house suggesting that foul play is possible.
Matt Walker from Ovum doesn't appear to be claiming that the recent spate of cable problems were deliberate acts of sabotage - but he does point out that it would be all too easy to do:
Undersea cable networks are an underappreciated but essential part of modern life. They now carry well over 95% of the world's international telecommunications traffic. As trade rises as a share of global GDP - it's now over 30% - reliable connectivity becomes a key ingredient to growth. Some drivers of economic growth - outsourcing, offshoring - would be nearly impossible without it. As such, the undersea cable networks that support this connectivity are clearly vital to global commerce. (See "Undersea ON market upswing brings greater connectivity, competition," November 2007.)
Cable security
At the same time, cables are nearly impossible to secure. Cable landing stations are often located in remote areas and usually staffed with a handful of technical employees, not teams of armed guards. Moreover, a typical transpacific system stretches around 20,000km. Even if the private cable owners increase security for the "dry plant" segment of such networks, securing the wet plant is problematic. Cable owners work hard to minimize accidental damage, making cable routes available to those that need to know, such as fishermen, navies, and research vessels. Cable routes also deliberately avoid, as possible, such hazards as earthquake-prone zones and rocky seabed. However, there is an unspoken assumption that the networks are safe from deliberate human sabotage. The recent spate of cable failures in a politically volatile region has called this assumption into question.
Data from the field
In deep waters, cable cuts are rare. According to one paper presented at last year's SubOptic conference in Baltimore, Maryland, rates of cable fault in water over 1km deep are less than 0.1 faults per year, per 1,000km of installed cable. This implies around 50 deepwater repairs per year, globally. At depths of less than 1km, failure rates hovered between 1-2 per 1,000km in the 1990s, but have been steadily declining. According to a SubOptic 2004 paper, the rate in 2003 was 0.2 fault per 1,000km. This same paper estimated that 60% of all cable cuts occur in waters less than 100 meters deep. Of all cable faults, roughly three-fourths are due to "external aggression," the bulk of which is accidental human activity, namely, fishing, anchors, and dredging; a small portion of the 75% is natural, e.g., from earth movement and chafe, sometimes caused by earthquakes. Equipment failures and unknown - some portion of which could be theft or attempted theft/sabotage - account for the remainder. In deep water, natural causes and/or cable equipment failure dominate; human causes are rare. Hence, when cables fail in deep water, usually a natural and detectable event is the cause, as with the late 2006 earthquake near Taiwan, the last quake to cause multiple simultaneous outages. An earthquake, albeit small (magnitude 4.8) was reported February 2 in the Persian Gulf and could have affected cables there.
Conspiracy?
So what does all this say about the multiple events since January 23? Of the four reported and confirmed failures, two are on cables in the Mediterranean, two in the Persian Gulf; at least one of these may be a power failure, not a cable cut, and hence the landing station is the likely culprit. (Note: As this report was being finalized, a report of a fifth event in a different segment of an already-affected cable in the area was reported but could not be confirmed.) The Persian Gulf is shallow but the Mediterranean reaches depths of several kilometers not too far from the coast. Without knowing the exact depth of the Mediterranean outages, accidental damage from fishing/anchors/dredging is certainly possible there, and highly likely in the shallow Gulf. Four breaks in two separate locations in a single week are rare but hardly impossible, or proof of a conspiracy.
To paraphrase Henry Kissinger, though, even the paranoid have enemies; there may indeed be something sinister lurking. Even if all the outages occurred in shallow water, that doesn't prove that accidental damage from, e.g., a fishing trawler, was the cause, but merely suggests it was physically possible. Intentional sabotage is, after all, probably more feasibly done in shallow waters than deep, and cable security in shallow waters is only modestly more practical. Clearly, undersea cables are a ripe target for those with an interest in wreaking havoc on international communications, whatever their motivation. Another consideration is that undersea cables have been used for submarine/surface surveillance purposes as far back as World War II, with the cooperation of private industry.
Implications
In my view, the most likely outcome of this is that a credible explanation for the coincidence will be presented soon, and a few weeks from now, all will be forgotten. However, this should remind the market of the increased importance of reliability in the world's undersea cable networks.
It is not enough to have multiple independent operators of ring- or mesh-based networks, with built-in restoration capabilities, optical equipment and power redundancy, multiple redundant links between cable stations and city gateways, etc. Physical security from deliberate human attack or sabotage must also be considered. If ports, railways, gas pipelines, and other types of networks are being secured against possible sabotage, we must similarly increase the security of undersea optical highways. Guaranteeing reliability is impossible, but an improvement on the current hands-off approach is long overdue. The economic cost of losing, or even just slowing down, international communications is extremely high. This risk has to be factored into the calculations behind the investment level and design of undersea optical networks.
Friday 1 February 2008, 2:07 PM
Analysts expect Yahoo to accept Microsoft's offer
The conference call with Microsoft on its plans to acquire Yahoo is winding up and although though we are only hearing from the Microsoft camp at the moment - the impression we are getting from analysts is that Yahoo would be foolish indeed to turn down this
offer.
"Yahoo! lost 30 percent of its share price over the past year," said analyst John Collins of Freeform Dynamics. "But that is all short term stuff, aginst the backdrop of the world market."
Microsoft knows that Yahoo is definitely on the back foot - and its board and shareholders will probably capitulate – the real question is not if Microsoft will seize its prize but what will do with it when it does?
While it is not spelling out how it will integrate Yahoo with its own web operation, Microsoft claims it will make the $44.6bn (£22.4bn) it has bid for the internet portal back in the next couple of years!
"This deal will break even or better in the second financial year," said Microsoft CFO Chris Liddell.
Friday 1 February 2008, 12:29 PM
Steve Ballmer's love letter to Yahoo
Friday is meant to be a day of long lunches and rubbing of chins as we plot and plan the week ahead. This rarely happens and Friday usually ends up unreasonable busy. Today is no exception with Microsoft renewing its overtures to the Yahoo board – and this time it feels like they might well be successful.
There is a conference call with Microsoft at 1.30 pm GMT – so we should have some more concrete information to bring you then. In the meantime we are chasing the great and the good for some insight and perspective on this deal and what it means not only for competition with Google but what it could mean to Yahoo’s UK employees already facing potential job cuts.
For now – here’s Steve Ballmer’s letter to the Yahoo board in full – released today:
Board of Directors
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: Roy Bostock, Chairman
Attention: Jerry Yang, Chief Executive Officer
Dear Members of the Board:
I am writing on behalf of the Board of Directors of Microsoft to make a proposal for a business combination of Microsoft and Yahoo!. Under our proposal, Microsoft would acquire all of the outstanding shares of Yahoo! common stock for per share consideration of $31 based on Microsoft’s closing share price on January 31, 2008, payable in the form of $31 in cash or 0.9509 of a share of Microsoft common stock. Microsoft would provide each Yahoo! shareholder with the ability to choose whether to receive the consideration in cash or Microsoft common stock, subject to pro-ration so that in the aggregate one-half of the Yahoo! common shares will be exchanged for shares of Microsoft common stock and one-half of the Yahoo! common shares will be converted into the right to receive cash. Our proposal is not subject to any financing condition.
Our proposal represents a 62% premium above the closing price of Yahoo! common stock of $19.18 on January 31, 2008. The implied premium for the operating assets of the company clearly is considerably greater when adjusted for the minority, non-controlled assets and cash. By whatever financial measure you use - EBITDA, free cash flow, operating cash flow, net income, or analyst target prices - this proposal represents a compelling value realization event for your shareholders.
We believe that Microsoft common stock represents a very attractive investment opportunity for Yahoo!’s shareholders. Microsoft has generated revenue growth of 15%, earnings growth of 26%, and a return on equity of 35% on average for the last three years. Microsoft’s share price has generated shareholder returns of 8% during the last one year period and 28% during the last three year period, significantly outperforming the S&P 500. It is our view that Microsoft has significant potential upside given the continued solid growth in our core businesses, the recent launch of Windows Vista, and other strategic initiatives.
Microsoft’s consistent belief has been that the combination of Microsoft and Yahoo! clearly represents the best way to deliver maximum value to our respective shareholders, as well as create a more efficient and competitive company that would provide greater value and service to our customers. In late 2006 and early 2007, we jointly explored a broad range of ways in which our two companies might work together. These discussions were based on a vision that the online businesses of Microsoft and Yahoo! should be aligned in some way to create a more effective competitor in the online marketplace. We discussed a number of alternatives ranging from commercial partnerships to a merger proposal, which you rejected. While a commercial partnership may have made sense at one time, Microsoft believes that the only alternative now is the combination of Microsoft and Yahoo! that we are proposing.
In February 2007, I received a letter from your Chairman indicating the view of the Yahoo! Board that “now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction.” According to that letter, the principal reason for this view was the Yahoo! Board’s confidence in the “potential upside” if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment. A year has gone by, and the competitive situation has not improved.
While online advertising growth continues, there are significant benefits of scale in advertising platform economics, in capital costs for search index build-out, and in research and development, making this a time of industry consolidation and convergence. Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition. Together, Microsoft and Yahoo! can offer a credible alternative for consumers, advertisers, and publishers. Synergies of this combination fall into four areas:
Scale economics: This combination enables synergies related to scale economics of the advertising platform where today there is only one competitor at scale. This includes synergies across both search and non-search related advertising that will strengthen the value proposition to both advertisers and publishers. Additionally, the combination allows us to consolidate capital spending.
Expanded R&D capacity: The combined talent of our engineering resources can be focused on R&D priorities such as a single search index and single advertising platform. Together we can unleash new levels of innovation, delivering enhanced user experiences, breakthroughs in search, and new advertising platform capabilities. Many of these breakthroughs are a function of an engineering scale that today neither of our companies has on its own.
Operational efficiencies: Eliminating redundant infrastructure and duplicative operating costs will improve the financial performance of the combined entity.
Emerging user experiences: Our combined ability to focus engineering resources that drive innovation in emerging scenarios such as video, mobile services, online commerce, social media, and social platforms is greatly enhanced.
We would value the opportunity to further discuss with you how to optimize the integration of our respective businesses to create a leading global technology company with exceptional display and search advertising capabilities. You should also be aware that we intend to offer significant retention packages to your engineers, key leaders and employees across all disciplines.
We have dedicated considerable time and resources to an analysis of a potential transaction and are confident that the combination will receive all necessary regulatory approvals. We look forward to discussing this with you, and both our internal legal team and outside counsel are available to meet with your counsel at their earliest convenience.
Our proposal is subject to the negotiation of a definitive merger agreement and our having the opportunity to conduct certain limited and confirmatory due diligence. In addition, because a portion of the aggregate merger consideration would consist of Microsoft common stock, we would provide Yahoo! the opportunity to conduct appropriate limited due diligence with respect to Microsoft. We are prepared to deliver a draft merger agreement to you and begin discussions immediately.
In light of the significance of this proposal to your shareholders and ours, as well as the potential for selective disclosures, our intention is to publicly release the text of this letter tomorrow morning.
Due to the importance of these discussions and the value represented by our proposal, we expect the Yahoo! Board to engage in a full review of our proposal. My leadership team and I would be happy to make ourselves available to meet with you and your Board at your earliest convenience. Depending on the nature of your response, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.
We believe this proposal represents a unique opportunity to create significant value for Yahoo!’s shareholders and employees, and the combined company will be better positioned to provide an enhanced value proposition to users and advertisers. We hope that you and your Board share our enthusiasm, and we look forward to a prompt and favorable reply.
Sincerely yours,
/s/ Steven A. Ballmer
Steven A. Ballmer
Chief Executive Officer
Microsoft Corporation
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