Eric Bingham

Microsoft #1 For Web Traffic

Nancy is correct and it's even worse. MSFT gets count for user "reach" that is generated via communications between your browser and its servers. There is no monetization (or even user knowledge) of this "traffic". But MSFT gets credit for this and other captive traffic which unlike the conscious visits to YHOO or GOOG, has little real value.

How Google Slips To $100 a Share - And Stays There

What's lost on most analysts is that the vast majority of MSN's user base is generated via MSFT's control of the OS and the ability to make it the default setting on their OEM versions of Internet Explorer. Luckily for MSFT many people have no idea how to change their home page.

Contrast that with GOOG (and YHOO) whose users made conscious decisions to use their services. Who do you think has the more enduring relationship with their users? Whose services were chosen on their merits not because their users were captive?

Anyone who forecasts MSFT overtaking either GOOG or YHOO needs to start by addressing this issue. Just like Zune and its other offerings in competitive (non OS) environments, MSFT has shown clay feet.

GOOG and YHOO have to continue to earn it everyday, but they've shown the ability to compete and this race is theirs to lose, not MSFT's to win.

DVDExpress' Biz Model Threatens Netflix

The key to the success experienced by NFLX has been ease of use. Not having to get to a physical location to return a dvd is huge. BBI's success has been due to its ubiquitous distribution network -- their stores are easily accessible to a very large % of the US population. And both these models allow for a huge selection of titles. So even though there's probably a 80/20 rule in place (or even 90/10) in terms of a few titles generating most of the rentals, the margins on these titles is much lower than library titles.

So while on a pure economic basis the arguement for this business model can be made, I see it in fact having the weakness of the BBI model without the strength of either NFLX or BBI's models. Rather than a virtual or physical retailer -- this is a semi-physical one which will not offer consumers anything other than an attractive pricing model which can be easily addressed by BBI and NFLX given their leverage with Hollywood.