Nokia’s implosion results in 10,000 layoffs. BlackBerry is also teetering; is RIM following suit? Path, a new social networking platform, gains traction –Facebook may have a problem. And is GigaOM up for sale?
Read on to see the stories making headline news on the tech scene this week!
Facebook, We Have a Problem
Facebook is the uncontested king of social, right? Well a slew of smaller social networks are now nibbling at its heels – and the one worrying Facebook execs the most is Path. Path is notable for being a mobile-first experience; it’s only available for smartphones.
As such, it strips away most of the options you have on browser-centric social networks like Facebook. The mobile platform offers only a few simple features for sharing, like: photos, check-ins with friends, what music you’re listening to, and short updates. Unlike Facebook and Twitter, your friends list on Path is limited to only 150 people and you get notifications each time one of your friends makes a Path update. If you pick your Path friends well, it makes for a very intimate experience of continuous sharing throughout the day.
Path is part of the new trend in smaller, closer social networks that I talked about last time I was on the show — like Pair, an app for couples. Path was founded by a former Facebooker. Now the word on the street is that Facebook is trying to create its own version of Path, however, rumor has it that it isn’t having much success. Could we see an acquisition in the near future? Anything is possible in Silicon Valley.
Trending on Twitter: Larry Ellison
Oracle CEO Larry Ellison is doing what even lottery winners can only dream about; he’s buying Hawaii’s 6th-largest island, Lanai.
Is GigaOM up For Sale?
Anyone who follows tech follows GigaOM – it’s a valuable tech newswire and research site. Rumors have surfaced that the company is on the sales block and that either Bloomberg or Dow Jones could buy it. If the site is in play, I personally think that it’s more well suited for Bloomberg, given their heavy focus on Silicon Valley – but perhaps it’s for that reason that it might make sense for Dow Jones to increase its positioning in this field.
How much could GigaOM sell for? It’s circulation is estimated at 4 million, so based on similar earlier acquisitions, it could go for as much as $40 million – although I think it would be less than that. In any event, it’s not bad for a company that was started in 2006 by just a single blogger: Om Malik.
Last week, Nokia announced that it’s firing 10,000 employees. The company is in a tailspin – it’s Microsoft phones aren’t selling well, and it’s continuing to lose marketshare in the US and internationally to the iPhone and Android. In fact, In the five years since Apple released its first iPhone, Nokia has lost a staggering 92% of its market value. Just last week, Moody’s downgraded the company’s unsecured debt to ‘junk’ status after the layoff news and company outlook were released.
Nokia’s failure affects Microsoft; its smartphone partnership is crucial to the blue giant’s success in mobile. That’s because Microsoft was banking on the partnership to break into the mobile market, now dominated by Google and Apple. The cell phone market has become a “platform” market. This means it’s based on operating systems built by third-party developers that run atop of smartphones. Platform markets tend to standardize around one or two winners. Unfortunately for both Nokia and Microsoft, the smartphone market is already standardizing around Apple’s iPhone and Google’s Android.
Microsoft is desperate to gain some marketshare in smartphones from Goole and Apple. But its one major global partner, Nokia, is now teetering; this puts Microsoft back at the drawing board. We could soon see moves by Microsoft to untie its phone brand from Nokia, seek new partnerships or go into the hardware business for itself – the way it just did with the Surface tablet announced this week, which will run Windows 8 (no specific release date yet).
RIM’s Falling Apart
The other mobile company headed for disaster is, of course, RIM. The company reported this week that it’s trying to cut $1 billion in operating expenses – and laying off workers as a result. RIM’s latest batch of smartphones, and its PlayBook tablet, have largely failed – and its customers and investors have been waiting far too long to see its next OS iteration, the BlackBerry 10 (BB10). In the last 12 months, the company’s stock has declined a staggering 60%.
RIM plans to release a new lineup of phones based on the BlackBerry 10 operating system this year, an attempt to regain market share from the Apple iPhone and Google’s Android. However, with all the bad news about RIM, it does still have its fans – mainly enterprise users, like IT departments and people who like chiclet keys. That might not sound like much, but I’m not entirely convinced that RIM is a goner. With a new OS and the right leadership, it could possibly stage a comeback –especially when BB10 comes out.