PROFIT IN THE EYES OF AN ENTREPRENEUR:What news attracted my attention last month? Selection & commentary by Jana Budikova
Will Twitter Survive the Change of Company Culture?
In November, Twitter went IPO,
following the strategy of Facebook. Valuation of Twitter at 22times multiple of
its sales, even though the Company still founds itself in a loss, shows, that
investors appreciate, rather than its historical P&L performance, the high
number of its users reaching 200 million worldwide. Investors recognize
increasing trend in the Twitter’s user’s base, mainly in the mobile space. Even
though founders celebrate, that they have become rich over night, they may not
be fully aware of the pressure they will face from now on - the pressure from
investors to deliver results every quarter. Investors expect break-through
innovations, continuous growth of turnover and shift from a loss into a profit
gain, all of that preferably in very short time. Twitter will have to change its
way of Company management. Reporting to shareholders on a three month basis in
fact means replacement of truly entrepreneurial, opportunistic leadership
approach by traditional management of a company listed on the stock exchange,
where the leaders do not have so much freedom to make decision and everything
is more focused on processes and short-time horizon. I doubt this is a piece of
cake for Jack Dorsey and his soul mates.
American support of Bitcoin
The American Senate gave a
green light to the development of a virtual currency. They admitted that
eventually Bitcoin (BTC) may become an alternative official payment method,
which has its advantages in the digital space. However, such virtual currencies
must be first regulated and their security and stability must be solved. It
must be clearly stated what role and relationship they have towards other
currencies. Legal rules have to come in
force, to protect the currency from money laundry misusing. Before this
happens, I would not recommend Bitcoin (BTC) as a payment instrument, but I am
positive about its future usage in the digital world. At the beginning, Credit
cards and PayPal were also a subject to criminal causes, and today we all use
them regularly. So why be afraid of an innovation?
IBM in a cloud crisis
Although the IBM strategic
priority is to offer cloud computing services, its leaders struggle to realize
this intent. IBM focuses itself over proportionally on the big customers; they
lack flexibility towards the market shifts and towards the action of arising
competition, like Dropbox and Netflix. IBM managers publicly question Amazon
for its low safety level, instead of using the media space for promoting the
benefits of its own cloud computing services. No wonder that in the third
quarter, IBM recorded the downfall of turnover and profit, despite its
acquisition of SoftLayer , the cloud specialist. I believe that to recover the sales
of the group, it is important to change the business model, to better define
the target group as well as to improve quality and availability of IBM
services.
IBM will not be able to
reverse the negative trend, unless it will put focus on the small and middle
sized companies, who represent the future revenue stream. And trust in the cloud computing expert will
remain the key aspect for choice of a provider. How long can IBM attack the
credibility of Amazon when it was IBM who lost the pitch to the American CIA?
The CIA has already given the preference in cloud computing to Amazon for the second
time.
Microsoft attacks Google
For those of you who want to
be officially “anti-google” and do not agree with the fact that Google collects
personal data about its users and processes them to change the search order
based on paying customers, Microsoft created official web pages, as well as an internet shop Scroogled store. You can express your opinion towards Google´s
actions publicly – you can buy there T-shirts, caps, or an-eight-dollar cup,
that suggests you to “keep calm, while Google is stealing your data”. Microsoft
builds this way on its campaign “Don´t get scroogled”. It softly points out
towards the Bing search engine, which is supposed to be more objective. I
cannot judge, but after the recent NSA spying affair in the digital world, I
may stay with - still Czech owned- Seznam.
This article (in the Czech language) was published in "Profit" magazine by Mlada fronta on Dec. 9th, 2013 You can download it here: Profit in the Eyes of an Entrepreneur
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