Annual predictions of the year to come
- Chang So
- Brian Fitzgerald
- George Sollman
- Dan Hankins
- Dave Lundell
- Derrill Stepp
* Yahoo has since
split. Opened on 5/25/04 at $30.50 ($61)
On 7/1/04 opened at $36.00; $72 pre-split.
Microsoft will become even more unstoppable. Lawsuits
behind them, they are entering the enterprise software
space which represents huge revenue opportunity. Plus
if they make these products as easy to use as the rest
of their Office products, adoption/penetration will be
huge. And the software is simply getting better --
they are doing a much better job with, among other
things, integrating the web with their standard office
products. For instance, if you want to find a calendar
or expense report template, you simply search the web
from either Excel or Word and you can find hundreds of
templates on microsoft’s site. Very impressive.
Further, they are building in xml support to all of
their document types so it should be feasible/easy to
eventually migrate all of these apps to the web or
some other content publishing system. In the next year
or so, it will be very easy to drag and drop forms or
page elements to create polls, charts, easier to use
address books integrated with label printing, etc. Any
regular person will be able to do seriously cool stuff
with their regular office apps. And by the way,
Windows XP is rock solid, boots quickly, and is very
easy to use.
The thing I resent but also admire is that With
Microsoft’s recent announcement that they won’t
continue to support Windows 98 and prior releases,
there will be a flood of users who will now upgrade
their PCs and move to Windows XP. This means $ to
Microsoft and Intel and a nice blip for Dell and HP.
Because of this, I just threw down for a new desktop
Adobe is also going to be HUGE this year, because of
Windows XP. Adobe makes products for image
manipulation and organizing, and because Windows XP is
optimized for photo sharing they should will also have
a decent uptick in sales as powerful software is
easier than ever to use. Futher, Adobe’s Acrobat
software, which allows users to create documents in MS
Word or any other app, and then save it so it can’t be
over written, is finally easy enough to use and folks
are finding value in it for writing white papers and
resumes. The web is evolving from publishing freely on
web sites to publishing securely via some kind of
Digital Rights Management. So DRM will finally matter
this year. The time wasted on DRM for launching ebooks
will be recouped on downloadable music and protecting
documents with Acrobat.
Speaking of Downloadable Music. Cool. It’s legal now.
Apple will have the largest share of market. Napster
will become an also-ran. (remember, these are only
The stock market will continue to favor market
leaders. There is no trust in anything but the market
leader, and absolutely no interest in anything beyond
second or third place. That’s why stocks like YHOO and
INTC keep moving up so much.
Sun Microsystems will try to reinvent itself but fail.
They are the next SGI.
Gateway Computers will be bought by a Korean company.
Desktop PCs are incredibly boring looking. Only Apple
creates a cool looking desktop. There is a market
opportunity for cool looking desktop computers with
built in speakers and networking. No one but Apple is
doing anything about this. Dell doesn’t have to
(because people buy on their reputation alone), but
Gateway or Sony should.
We will become a truly world-wide economy. There will
be growth in communication technologies to reduce
time/distance barriers. Work will start on development
of faster, supersonic planes that are available to the
masses. This has to happen.
India. There will be more overt backlash against
outsourcing to India. But Indian culture will somehow
make an impact on mainstream American music. Sitars
are going to be huge!
In China, Sina.com will become as powerful as one of
the major TV networks in the United States.
Cell phone handsets have better functionality than
home cordless phones; they offer easier ways to redial
who just called you. This functionality will finally
be populated back to home phones.
Sony is a mess and is flirting with the enemy; they
are joint venturing with Korea’s Samsung for the
development of flat screen tv’s. Sony claims this will
be the last year they’ll make traditional tube tv’s.
Samsung is going to out-sony Sony.
There are only 3 internet companies worth working for:
google, amazon, yahoo. They are all becoming
decreasingly “fun” and increasingly grown up.
Start ups will come back but only as technologies
which will be bought by bigger fish. IPOs are going to
be dead for the next year at least. This isn't bad for
VC, but the next big thing is a while away in my
Revolutionary ideas are those that make day to day
life better. That’s why Microsoft XP, the Handspring
Treo, digital cameras, and flat screen tv’s are so
great. The hottest product right now is the Handspring
Treo 600. It will remain so for the next 9 months.
Toyota or GM needs to build a hybrid power SUV.
Everyone will buy it. The difference is Toyota will
actually do it while GM will get stuck lobbying
special interest groups.
And, finally, Stock Picks for 2004. I'll be tracking
this portfolio for the year, starting today on 1/5/04.
Unfortunately, today is nearly a two-year high for
Toyota (TM)-auto company that is doing it right
Samsung (SSNGY.PK)-Korean giant
Wipro (WIT) – largest Indian tech firm
Sina.com (SINA)-Chinese web portal
added on 6/23
UPDATE: 1/7/04-First Prognostication to materialize
January 7, 2004
Toyota Motor Corp.'s Lexus brand introduced the world's first hybrid
luxury sport-utility vehicle Tuesday at the North American International Auto
Show in Detroit.
The RX 400h hybrid will be powered by a new version of Hybrid Synergy
Drive, which combines a 3.3-liter V6 with an electric motor to improve
performance and fuel efficiency.
The RX will reach 270 horsepower and delivers fuel economy of more than
27.6 miles to the gallon. Some published reports say the vehicle could get
40 miles per gallon.
UPDATE: 1/14/04-good news for Sina.com
Yahoo and Sina sign China Net deal
Sina (SINA: news, chart, profile) was the leading dollar volume stock on the Archipelago ECN in the pre-open, rising 12 percent to $48.20 with 324,264 shares traded for a volume of over $15 million as of 8:15 a.m.
Yahoo and Sina late Tuesday said the auctions-based e-commerce service will be geared towards small- and medium-sized businesses and buyers and sellers in the mainland.
Terms of the deal were not disclosed.
The service will provide both a fixed-price and bid-price model for the sale of consumer goods and offer a range of services.
It will be co-branded and is expected to start by the middle of the year.
"From a very high level one can conclude that China is a big enough country to support multiple auction services," said Schwab SoundView Capital Markets analyst Jordan Rohan.
How are we doing?
Salesforce.com IPO happened on 6/23. Opened at 15 and closed at 17+. Now settled at $16. I don't expect this sucker to do much more. Ironically, Oracle will try to buy them in the next year.
For no scientific reason, predict that Shopping.com will have a big IPO and raise 30% by Christmas season. They have excellent technology, a good url, but low mindshare. It will be acquired by Microsoft to replace their portal shopping experience or Google in January of 2005.
Google IPO...expect at least 30% jump on
day 1. Within a month, price will be up 50% and then will taper off as investors
make sure to include it in their portfolios. Daily fluctuations will mirror
Yahoo but will be exaggerated by 10%. Google reality will probably meet the
hype; they are a cash printing machine similar to Ebay. Yahoo and Google will
spend too much time/resources fighting over the Overture patent (owned by Yahoo)
for bidded ad placement; Yahoo will become preoccupied and fancy themselves as
being the next IBM (notorious for suing companies for patent
infringement)--hopefully Yahoo doesn't get too greedy or take their eye of the
ball. Somehow Google will find a way to pay off Yahoo with a one time lump sum.
However, adoption of GMAIL will be lower than expected as search-based interface will be found unintuitive for mainstream users. Google will release a new version of Froogle that features attribute-based search results by October of 2004. Crazy prediction #1: Microsoft will try to buy Google; the transaction will mirror Oracle and PeopleSoft. Crazy prediction #2: Amazon and Google deepen their partnership, potentially Google buys Amazon.
Walmart. Walmart is the sleeping giant of Internet E-commerce. They've been working closely with UCCNET, the organization responsible for UPCs (barcodes-unique global product identification). Together they will establish new standards of information exchange. Walmart.com will create a new ecommerce consulting business where they run shopping web sites for other companies; walmart will purchase, warehouse, and fullfill orders using their existing infrastructure for companies like Circuit City and JC Penney. This will be their fastest growing, lowest cost division. They will battle it out with Amazon and eventually win. Expect them to diversify in to other financial instruments such as car loans, home loans, and will even enter the Costco space for car buying. Like GE, they will leverage their capital to start guaranteeing bonds and begin to make massive incremental money. In 10 years, they will have a larger market cap than GE (Walmart is at 225 billion, GE is at 328 billion) .
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