Featured Image

Why Whatsapp was a good deal for facebook

For the past week, everyone has been going crazy over the big news – Facebook bought Whatsapp for 19 Billion Dollars. It’s not really 19b (as I’ll explain in a bit), but still this goes down as the biggest tech startup acquisition in history. The discussion revolved around how ridiculously big the price tag was, but I believe that misses the point. Facebook are in trouble, and they are acting in self defense. They have a strategy, and executing that strategy is mission critical, regardless of the price. The internet is filled with articles that explained why Google overpaid for youtube (1.6b), Facebook overpaid for Instagram (1b) and on and on. These companies make huge bets. Some pay off, some fail. But not making those bets is how a company reaches irrelevance (Yahoo, Microsoft)

So – why is this a good deal?

Facebook don’t have a mobile platform, so they are forced to come in the back door

Facebook are transitioning themselves nicely towards the mobile world. They have the fastest growing advertiser platform for mobile. More than half their revenues come from mobile. But they are forced to use mobile platforms owned by Google and Apple. That means that they don’t control the experience, and that they are constantly threatened by these two companies, that can effectively shut facebook out. The more services facebook controls on mobile, the more protected they are. Again, they took a lesson from Google, which did an amazing job taking over iOS by building great apps for google services, even if it’s not on their own platform. By controlling a core mobile functionality such as messaging and phone calls (rumored to come to whatsapp very soon), they protect themselves from being shut out of the mobile game simply for not having their own OS.

Facebook is playing Whack-A-Mole

shutterstock_150460016

Whatsapp is very popular here in Israel. Everyone I know uses it religiously. Facebook messenger didn’t catch on as the go-to synchronous communication app between friends (essentially where chatting and media sharing takes place between friends and groups). It’s hard for people to trust the facebook brand with things other than its core offering (the original social network). This is why facebook mail failed. This is why Facebook’s snapchat clone failed. This is why facebook messenger is not dominating.

Facebook is playing a strategy of allowing startups that threaten its core offering to rise, only to buy the successful ones. Facebook realizes they won’t be able to build the next big thing, but they can definitely buy it. Facebook doesn’t see itself as a social network, but as a social conglomerate. They want to own the big brands in the space of social interaction and media delivery, and keep them far from the facebook branding.

Although they won’t be able to monetize on these brands properly (when they bought instagram, the company had zero revenues), they will generate value and prevent their current business from falling apart. They’ll “figure out” the revenues later on. This is very similar to Google’s strategy (youtube, waze).

The main problem is that this strategy is not sustainable. Facebook don’t have unlimited cash. They just spent all of their profits in 2012 & 2013 for whatsapp, and this is just on the cash part of the deal ($4b). They also diluted their shareholders by almost 10%. That may be ok if it’s a one time thing. But if successful competitors keep coming, they won’t be able to continue this strategy

Facebook are buying growth and a new business model

The Facebook brand is declining. It’s a lost battle for facebook, as they reach market saturation in developed countries. As a public company, they find it utterly impossible to build the next growth engine in-house, so they are forced to buy it.

Whatsapp are supposed to launch voice calls soon. Facebook wants to be the global telecommunications company, turning the phone carriers into dumb pipes. That’s massive business

In deals so big, traditional accounting doesn’t work.

$19,000,000 is a lot of money. However, only 4b of that is in cash. 12b is in facebook stock (which has since risen, so that number is actually higher), and 3b is in stock options for whatsapp employees (for employee retention)
But that’s just part of the story. When evaluating companies that reach this kind of scale, looking at how much revenue whatsapp is making is almost irrelevant. Why?
A) Facebook aren’t buying whatsapp for the revenues, current or future. They are doing it because they have to. Therefore the price is a question of supply and demand. There is only 1 whatsapp, and quite a few companies that are willing to buy it (google was rumored to pay the same amount). So the only thing that matters to evaluate the deal is: “How much do I need to bid in order to make sure it doesn’t fall in the hands of Google, like Waze did”.

B) It’s mostly non-cash, therefore doesn’t harm the business in the short term. Shareholders get diluted, but if this deal transforms facebook and propels it to where it wants to be, they’ll be happy to have paid. If not, they are screwed either way.

Good move facebook. Now the question (and topic for next post) – where the hell is Apple??

So long 2013, here’s some of the best you had to offer

Haven’t written here for a while. I’ve been hard at work on Slotagram (will write more on that soon).

But end of any year provides an invaluable excuse to write a (yet another) worthless “best of 2013″ post:

TV:

houseOfCards21House of Cards: One of the finest moments for the small screen. Netflix delivered a knockout this year. Kevin Spacey is as good as the highest expectations (and they ran high). The cast was great, so was the screenplay. Can’t wait for the second season to start.

 

 

Breaking-Bad-Movie-Wallpaper-BackgroundBreaking Bad: Breaking Bad came to an end after 5 (and a half) seasons. It was talked about in every possible place, so not much to add. I will just say that if you didn’t see it, you’re missing out. It slowly evolved from yet another TV show into a pivotal show for television. It took the anti-hero theme to another level, and came to a very graceful end (a fate not many good TV shows manage to reach)

 

Notable mentions: Witness (HBO documentry), Borgen

 

Music:

downloadPearl Jam – Lightning Bolt – There’s usually something stale about bands that are together for too long. Musical production tends to go mainstream, making the band a mashup of their original style and more contemporary music. Just look at U2, Red Hot Chili Peppers, Rolling Stones and more for examples. Pearl Jam seem to fight the trend. Their voice sounds so refreshing in the torrent of (usually crappy) progressive rock. Their new album is a real joy.

 

 

Notable mention: David Bowie – The Next Day 

 

Film: I haven’t been watching too many films lately, so I’ll just point out my favorite for the year:

betlehem_poster_finalBethlehem – an amazing Israeli film which depicts the relationship between an Israeli intelligence officer and his Palestinian informant – a teenager. It’s a dark and touching film which captures the essence of the Israeli Palestinian conflict, without pointing fingers or assigning blame (which is usually the essence of Israeli Palestinian relationship)

 

 

 

 

 

Notable mention: Gravity – The acting is mediocre, and the screenplay simply sucks. But it’s a visual miracle, and actually seems to give the feeling of zero-gravity.

Games:

Asphalt_8_imageAsphalt 8 - The king of mobile racing games. Adrenaline packed and fun.

 

 

 

Website:

72415v4-max-250x250Quora – The Q&A site has been a favorite of mine for for a few years now, but it seems it made a real jump in 2013, and is now mainstream (for better or worse). Calling it a Q&A site is really understating it. It’s a great knowledge sharing site where some of the smartest people in the world share their insights about almost anything

 

 

 

Happy new year!!

Featured Image

Microsoft is buying Nokia – 10 years ago this would have been important news

Microsoft is buying Nokia for 7.2 billion USD. The US based Microsoft, once the leader of all connected and non-connected devices which didn’t adapt to the smartphone revolution is buying the Finland based Nokia, once the leader of mobile devices which did not adapt to the smartphone revolution.

Nokia could have been Apple, a company manufacturing devices holding their own operating systems for a high end experience. Microsoft could have had google’s position, an operating system OEM provider for other device manufacturers, with a mass market appeal due to a high range of devices sold.

They both failed miserably. Nokia failed to turn its symbian operating system into a platform that developers want to develop for. Microsoft were stuck in their old business model and did not see how fast open source became a real threat on the consumer level (which is surprising given the detrimental effect it has on their Enterprise business) and how appealing open source is to developers and carriers. Without developers and good apps, no operating system can ever succeed.

Microsoft and Nokia are like two blind people helping each other cross the street. They both don’t get what consumers in 2013 want. Microsoft is stuck in a classic innovator’s dilemma. Do you invest in technologies that disrupt your current revenue stream? Can Microsoft consider open sourcing windows in order to give it a chance against Android? Not a fucking chance. Will any device manufacturer give windows a chance when they know they will help Nokia in the process? Not a chance in hell. Will developers invest in a closed platform which doesn’t have any users? Developing for two operating systems is hard enough.

Why did Microsoft spend 7.2 Billion then? Because they don’t have a choice. They can’t give up on mobile. It’s the future. So even if their attempts are bound to fail (and they have had enough failures in the past few years), they have to keep throwing their money until they succeed. Nokia is actually a good buy in that sense, probably better than Blackberry (another company which is looking to sell before nothing is left). But it doesn’t change the basic fact – the mobile market has taken shape, and a mediocre operating system with no apps isn’t gonna change that.

Sorry Microsoft. This decade just ain’t for you.

Featured Image

Jeff Bezos, Amazon and the craziest news story of the week

Jeff Bezos is one of the most interesting figures in tech today. He is the man behind the largest e-commerce company in the world (by miles). Amazon is a very successful company, and one of the weirdest ones. Amazon has always built itself to make very little profits from their huge turnover. In Q2 2013 they posted a loss. Imagine that – one of the biggest, most well known companies in tech, which has been around for many years is losing money! And yet the sentiment around amazon is super positive. They are worth 1.5 times what facebook is worth (and that’s after an amazing quarter for facebook).

It’s all because of Bezos. Everyone knows he is playing the long game, but no one knows what that game exactly is. It bares resemblance to Google, which is also investing in tons of stuff for the future, and it seems only the top execs know the full extent of the plans. The rest of the world simply knows these guys are very, very smart. Under Bezos, Amazon has diversified itself from the traditional e-commerce to selling infrastructure, e-books, tablets, grocery shipments and more. And while everyone from ebay, google, Etsy and others have been trying to eat his lunch, he’s focused on protecting Amazon by maintaining low margins that don’t allow anyone else to penetrate the market.

And now he’s buying the Washington Post, an aging newspaper in the shittiest business there is. Print advertising is dying and seeing the internet eat away at every single revenue source they had (advertising, subscriptions, classifieds), but the smartest guy on the block just bought one of the largest (and most expensive) newspapers. Huh?

There are a ton of theories as to why he would do this (some good reads here, here and here). He’s doing it personally (not through Amazon). That might lend a hand to the theory claiming he is doing it for the influence or the challenge (similar to billionaires buying sports teams – another shitty business). Others claim he’s buying it as a jumping board into politics. Or maybe, just maybe, he thinks he can turn the business around by finally transitioning it to online focus (much like the New York Times or The Atlantic). Some are more cynical and think he’s doing it to have some leverage over politicians who might (rightfully) view Amazon as a monopoly and try to curb it.

One this is for sure – The guy is as secretive about his plans as he is smart. Whatever his motives are, they are bigger than most theories. Bezos is here to stay, on Amazon and outside of it.

If you have 17 minutes, see this talk he gave at TED in 2003 (after the .com bubble burst). He makes an analogy between the internet after the bubble burst and the electric industry in its early days. 10 years later, you can appreciate how forward looking the guy is.

Featured Image

My thoughts on iOS 7 – Beauty is skin deep, where is the substance?

So I’m officially a digital dick. After watching Apple’s CEO unveil the new operating system for the iPhone, I ran and downloaded the beta version (which is open only to Apple developers for now). Apple have dubbed it the “the biggest change to iOS since the iPhone.”, so expectations are running high, especially seeing how they are perceived as being left behind the stellar growth and progress of Google’s Android.

And I’m sorry Apple. You’re very pretty, but I don’t think this is gonna last much longer. I’m looking for something with more depth.

Apple’s iOS 7 is beautiful. They’re getting a lot of shit for how their icons look, but I think that you can’t ignore the fact that they made a huge leap in terms of design. They dumped the skeumorphic design (designing everything to resemble real world elements, such as the light effects on the icons) for a flat design, which feels more modern and up to date with the trends. They redid all their stock apps (the preinstalled apple apps for mail, sms, calendar etc). They fixed a lot of UX (user experience) problems that have ridden the iPhone since its launch (for example – turning bluetooth on/off was a long task, now done with two gestures).

But they haven’t changed anything. It’s the same OS, same functionality, dressed better. The problem with iOS isn’t the design (although it needed a change). The problem is the core of apple’s product strategy, which is to control everything and treat users as if we should be thankful for everything apple is doing. When the iPhone was originally launched, Apple were educating the public as to how mobile should act. 6 years later, we know. We don’t need Apple to control the experience in order to “save our tortured souls” from horrible mobile OS’s. We need to be able to go to the next phase. I want to be able to define a home screen that has context, not just my most used apps. I want to be able to use 3rd party apps as my default apps (no redesign is going to save apple’s mail app against gmail or mailbox, and Safari is never gonna be my go-to-browser, not when chrome is on the market, and don’t get me started on maps).

Apple are trying to feed a growing kid with breast milk (sorry for the analogy, it’s the best I can do with the hours of sleep my 1 year old boy provides). Users are getting smarter and want more choices. It has improved iOS by using the same trick box that worked so well on iOS 1. If Apple want to fight Android, it needs to rethink the product, not the design.

I’m inching closer and closer to Android, and I’m sure I’m not the first one. If this is the best apple can do for the “the biggest change to iOS since the iPhone.”, they’re in for stormy times.

A few more taking points from the keynote:

- They improved iCloud, Apple’s take on personal cloud services. It’s a step in the right direction but still far behind Google, dropbox, or any of the other cross-platform cloud services.

- Live streaming of the keynote was available only for mac and iOS users. Yeah. If you’re an Android or PC user fuck off. I think that’s a condescending move. It almost looks as if Apple wants only their clapping masses to see the new OS, so they don’t have to face any criticism.

- Apple’s vision is smaller than Google’s vision. Google kept talking about changing the world, rethinking technology, etc. Apple were mostly showing off new interfaces and talking about how they reduced the clutter. After watching Larry Page’s keynote I felt inspired. After watching Tim Cook’s I went to download a beta version of an operating system so I can have early access to some cool features.

- Redesigning the apple stock apps (mail, sms, browser) does nothing for me. Having felt neglected by Apple for a long time, I have moved over to 3rd party apps. And I don’t plan on even giving the new apple apps a try. So 50% of this update has nothing to do with me, and with many of the more tech savvy iPhone users

- Tumblr can be a funny platform

Featured Image

2013 is the new 1984 (big brother is googling you)

The world is shocked. It turns out the American government (through the NSA) has access to data from google, facebook, apple and most of the tech giants. That means that your emails, search history, or whatever it is you do on facebook is pretty much open to the US government. The full extent of the government reach is not completely known, but if I had to guess, I’d say it’s as comprehensive as possible.

And a shitstorm has erupted. The privacy debate was always focused on personal and commercial aspects, never about how easy it may be for governments to abuse their powers over the companies that hold the data. These companies were quick to deny that they supplied any “backdoors” to the NSA, which doesn’t deny that the NSA had access, only that they didn’t grant them that access (more on that later).

And I have to ask – why is everyone surprised?? We all willingly give trust in these companies and use their services for everything we do on the web. They in turn save every scrap of data with the hopes of monetizing on it. When we use Google, Gmail, facebook, our iPhone or any other online service we leave a trail. That’s how it’s supposed to be. That trail resides in a database that is either accessible through direct access (“backdoors”) or through hacking. If a government (US or Israeli) managed to hack the Iranian nuclear reactor, how surprising is it they managed to get access to servers that reside on their own soil, from companies that make money inside that country?

We’ve all given up privacy the day we attached our name to an email, opened a facebook account or logged into the internet for the first time. It was a matter of time before governments got their hands on this data. Us law abiding citizens in democratic countries are probably safe for now. But that may change very fast.

Or in other words, we’re fucked. Luckily, we’ve been that way for a long time, so there’s nothing we can do about it…

On a side note – the fact that these companies are denying providing the NSA with a backdoor is more troubling than anything. It means their servers are prone to hacking. Meaning that the US government might be just one of many. But don’t worry, nothing to see here.

Featured Image

Google’s vision is freaking amazing and freakingly scary (thoughts from Larry Page’s keynote speach)

I watched the Google I/O (developer conference) keynote speech last week on live streaming (yes, I know how nerdy that sounds). It ended in a 12 minute keynote by Larry Page, who presented the vision for google. I really recommend anyone who’s interested in technology to listen to it. It is not a choreographed “Steve Jobsy” keynote, but rather an unorchestrated, compelling vision, which in my opinion eclipses any vision laid out by a CEO that I have seen. He was speaking from his gut. It was honest, megalomanic and humble all at once. It was compelling enough to get me thinking about google and the role it plays in our lives (both in 1st and 3rd world countries), and its future influence on where the world is going.

Google was built on successfully monetizing search advertising, but seemed to invest its hard earned cash on everything else. It was built by engineers, who love computers and science, and believe that good engineering can solve any problem. They built gmail when Microsoft and AOL ruled the web based email world. They started maps when mapquest was all the rage. They bought Android when Nokia, Blackberry and Microsoft ruled the mobile world. They kickstarted Chrome when Internet Explorer was the golden standard. They are bulding computer operating systems (chrome OS), self driving cars, futuristic hardware, online payments, a social network and the list goes on and on and on.

They have been criticized for it over and over again, especially in contrast with the laser focus of rivals Apple (most famously by Steve Jobs himself). Apple have prided themselves on shipping pixel perfect customer experiences and products (and not a second before perfection), while google seemed to ship half assed products, and then constantly work to improve them until they were ready for mass consumption (Android, Chromebooks, Google Drive) or given the axe (iGoogle, Google Reader).

And you might say that now is the time they can sit back and laugh at the critics. Page hints to the fact that they never had a big strategy behind everything. They probably didn’t know how important location will be to the world when the mobile revolution arrives, but they hedged their bets and were able to have the best mapping service when that happened. They probably didn’t realize that the age of the social internet will come, but they were smart enough to buy Youtube before it happened and have one of the most coveted social spaces (one that will last long after facebook – if you ask me). They have placed their chips all over the table, and it’s all coming together now. Google’s fragmented services are starting to appear as a suite, as if everything was thought out back in 1998, when they started Google.

And it’s scary. Never in history has one business entity have such global reach and strength, in any industry. For almost every company in the world there are competitors that can fill the void. Even monopolies usually rule because of regulation. Not with google. They are so good at everything and so far ahead of the competition, that their grip on the web will only strengthen. Think about it: The world can do without iPhones, Amazon, or any other single company (maybe aside from Microsoft’s windows). But google is currently irreplaceable. They power too many services for too much of the world.

What happens when Larry Page and Sergei Brin decide to retire is another question. Google currently operates like a private company, and they call all the shots. Once they are gone, god knows what will happen. This kind of power should be left only for nerdy geniuses. Giving it to corporate thugs is scary. Very scary.

I’ll finish with a quote from the keynote (full transcript).

And despite the faster change we have in the industry, we’re still moving slow relative to the opportunities that we have. And some of that, I think, has to do with the negativity. You know, every story I read about Google, it’s kind of us versus some other company, or some stupid thing. And I just don’t find that very interesting. We should be building great things that don’t exist. Right? Being negative is not how we make progress. And most important things are not zero sum. There’s a lot of opportunity out there. And we can use technology to make really new and really important things to make people’s lives better.
I think back to a very long time ago. All of humanity was basically farming or hunting all the time. And if you lived at that time, you probably hoped that you could feed your family. And unfortunately that’s still true for a lot of people in the world. But certainly for us, we don’t worry about that. And the reason for that is technology. We’ve improved how we grow food and so on, and the technology has allowed people to focus on other things if they choose. By the way, I think being a farmer is great if that’s what you want to do. But it’s not great if that’s what you have to do. And that’s what technology lets us do, is free up ourselves to do more different things.
And I’m sure that people in the future will think we’re just as crazy as we think everyone in the past was in having to do things like farming or hunting all the time. So to give an example of this, Sergei and I talk about cars. He’s working on automated cars now. And imagine how self-driving cars will change our lives, and the landscape. More green space, fewer parking lots, greater mobility, fewer accidents, more freedom, fewer hours wasted behind the wheel of a car.

 

Featured Image

The internet is polarizing politics (and the world is full of idiots)

Obama’s success in the US to rally the masses through facebook became an inspiration to a generation of younger politicians who understood that facebook/twitter is a way to bypass the mainstream media (and their biased agenda) and reach voters directly. The outcome of the Israeli election showed me once again that social media in politics is not a trend, it’s a reality that will probably continue to change politics all over the world.

One thing though – people don’t want to listen to anyone saying anything they don’t like – and they now have that choice!!

See – in the old ages of printed media and televised news, the media channels had to go mainstream in order to get as many viewers/readers (thus increasing their value to advertisers). This created the trend of “soft-journalism” that plagues our world till today, turning so-called journalists into puppets of their shareholders. People were served a mass-consumer product which accepted a wider set of views, so that the news could pander to more people. More people equals more ads. Therefore – the masses were exposed to a low level of journalism, but at least one which was diversified in its view.

Now people have choices. They can read bloggers they like. They can follow any politician they want. They can unfollow pesky people who annoy them with views other than their own. That fragments the public space. People are increasingly living in “intellectual islands” where everyone thinks the same.

And this gets exposed by the “discussion” on the walls of public figures on the internet. When people actually leave their “intellectual islands” they are so hell bent on anyone who doesn’t agree with them they rant (and usually look like idiots). This isn’t limited to one side of the discussion. I know many smart people who might be eloquent and are able to write a status without any spelling mistakes, but are as obtuse to other opinions as any other talkbacker on a news site.

 

How facebook makes the Israeli elections slightly more bearable (just slightly)

Elections in Israel are just 5 days away. The political system in Israel is as fucked up as any political system can be. Nothing special – lobby groups take over the primaries, causing our politicians to become weak puppets . it’s usually a time where the average citizen tries not to puke while he votes for shitty politicians which did nothing for the general public in their last term. The main stream media plays the game and tries to inject interest in a non-interesting election, which brings no change and only more of the same (and in our case – a horrible prime minister).

But I detect a slight change, which actually has a huge impact on democracy (and I have to assume this happens around the world). Politicians can now bypass the main stream media and connect directly to their voters. Voters get to choose who they want to listen to. Newspapers & TV seem less relevant than ever in shaping public opinion. The public gets educated outside of what the media feeds, and actually start to understand what they need to know about their fucked up government and parliament.

This has the potential to change everything. If parties can elect their politicians through the crowd, rather than through the corrupting force of primary elections, the lists will improve in quality. And if politicians can contact their voters without any proxy, voters will be able to choose parties by themselves, without the “thought police” that is the main stream media.

It will be interesting to see the election results. The polls show no major change, but polling is very inaccurate (they call landlines which very few young people still have), and yet on facebook it seems like the power is changing. Not towards right or left but towards younger candidates that did not grow out of the corrupt political establishment but through a growing engaged user base on facebook.

This is the most optimistic you will ever hear me about Israeli politics. I guess that on Wednesday morning I’ll go back to bitching and moaning about our prime minister and the public that wishes to see him continue taking our country down the drain.

Featured Image

Tech predictions for 2013 (or – how I got it all wrong)

It’s time to get it all wrong – here are my predictions for 2013 for the major tech companies:

Apple

Apple had a turbulent 2012. They launched a new iPhone, iPad and iPad mini, but none of them were game-changing devices and there’s a general feeling that the magic is slowly fading, as Android tablets and phones seem to be on the rise. The maps debacle didn’t help the general perception that Tim Cook is not as product oriented as Steve Jobs was, something that will hurt such a product centric company. I think that perception is wrong and is driven by the idolizing of Jobs. Remember – he had his share of flops (Ping, MobileMe to name a few).

I think 2013 is going to be continue the turbulence in Apple’s core business, but a launch of new business that can take the company forward. Improvements to current products are incremental and not revolutionary and are likely to stay that way. Android makers will get more and more attention, as Android matures while iOS moves slowly. The tablet market is opening up and iPad is not the “only tablet out there”. The Kindle has its place in the low-end of the spectrum, and the Nexus devices, as well as Samsung’s tablets are going to eat away at the market share.

I am however very bullish on Apple. Their opportunity lies in two avenues:

New consumer tech products – be it watches, TV’s or any other product they decide to bring into their eco-system, I’m sure they are gonna make it great. And seeing how Apple is having a hard time growing their current revenue streams, they will have to start a new one in 2013

Further monitization of iPhone/iPad users – Apple has a unique opportunity to drive mobile payments at scale (Apple are the only company capable of changing consumer behavior). They will try to move more towards the enterprise and the iTunes store is constantly improving.

Google

Google had a good 2012. They saw Android devices gain popularity (especially the Samsung Galaxy S3). They also made headway in the tablet market. And they created some great iOS apps, which gave them a stronghold in enemy territory and will help them drive revenues through the Apple eco-system. They gave Apple a nice middle finger with google maps, and they are even seeing better adoption of G+ (especially for photographers).

They will probably launch the first commerical google glasses in 2013, and they will do it the google way  (launching a half assed product, and constantly improving it until it is actually ready for mass-consumption). Google glasses is a game changing technology (as is self driving cars) and can transform Google massively. Android will continue continued rise in phones and tablets. Google will also launch the first google branded Motorola phones, and they will be great.

On the negative side:

The first cracks in the Android eco-system will show as Samsung and HTC will get pissed off at the Motorola phone and start building their own private version of Android (a la Amazon Kindle). But since they are so committed to Android, there’s a limit to how big a fight they want to pick with Google.

Google’s cash cow is declining, and will continue to do so. As the world continues to shift pageviews (and searches) to mobile, Google’s ARPU (average revenue per user) will decline, since the CTR (click through rates – the % of clicks on advertisements) are lower on mobile. Google needs better monitization of other products/services, and this will take time.

Facebook

Facebook are going to stagnate heavily in 2013. The company is doing everything in their power to monetize but in that road they are killing the user experience and alienating the masses. I’m hearing more and more users get tired from facebook (me included) and moving into the hands of mobile first social networks, in my case mostly Instagram and Whatsapp (yeah, it’s a social network and a damn fine one). Instagram is owned by facebook but monetizing on it is going to be hard. Very hard. And any move towards revenue streams will annoy users, who have a lot of options (and apparently not that much loyalty).

Facebook are going to see mobile advertising grow, but usage patterns shrink. They are not innovating and are focusing on revenue streams (fair enough) and bullshit. 2012 has passed and all facebook did this year had to do with decreasing the user experience.