Emergic: September 2, 2006 Archives

Saturday, September 2, 2006

Indian Industry Rising

India’s annual growth in manufacturing output, at 9 percent and accelerating, is close to catching growth in services, at 10 percent. Exports of manufactured goods to the United States are now rising faster in percentage terms than China’s, although from a much smaller base. More than two-thirds of foreign investment in the last year has gone into manufacturing in India, not services.
...
A prime reason India is now developing into the world’s next big industrial power is that a number of global manufacturers are already looking ahead to a serious demographic squeeze facing China. Because of China’s “one child” policy, family sizes have been shrinking there since the 1980’s, so fewer young people will be available soon for factory labor.

Emerging Markets | PermaLink | Comments (2)

I see India's infrastructure holding it back from becoming a manufacturing powerhouse. Interestingly, China has lately been very much encouraging a growth in its service sector as one way to reduce pollution.

www.chinalawblog.com

Posted by China Law Blog

check this related article by Malcolm Galdwell on demographic trends and their fallouts!
http://www.newyorker.com/fact/content/articles/060828fa_fact

Posted by Ajith Nair

YouTube Monetisation

The Economist writes:

Even as advertisers evaluate these new ideas, however, YouTube and the other video-sharing sites face other difficulties. For one thing, they are in a no-man's land of copyright law: they promise to pull pirated content from their sites when asked to do so, but it is only a matter of time before one of them is hit with a big lawsuit. Then there are the costs of running such a site—video requires a lot of bandwidth and storage. A rival estimates that YouTube is losing more than $500,000 a month.

Software | PermaLink | Comments (2)

I would quote my boss on new ideas - "these are highly overrated from a short term point of view... but really underrated when looked at from a longer term perspective".

Amazon accumulated above 3 Billion dollars loss before they made a measly yearly profit of 15 million USD a few years back. The whole thing looked like a goner to everyone. Right now their market cap is over 13 billion USD with a decent profit margin. source: http://finance.google.com/finance?q=amazon

Lets look at the figures quoted in the above article. 500K USD loss per month = 6 million USD per year. If they continue to make the same amount of losses, they would accumulate 30 million USD loss in 5 years (basic calculation, pardon me if I miss something big here, but this should be good enough to build a logic upon). Again, lets assume that YouTube guys can sustain this loss for a long period. What would the valuation of youtube be if they were to sell off after 5 years? I am sure they have a few more aces up their sleeves if they are not working on the build-to-selloff model.

YouTube could easily get multiples of accumulated losses in returns were they to sell. This obviously if they are not planning to do anything more (radical?) on YouTube.com

Posted by Vivek

Its really too early to make any sort of assesment on the business. Youtube is getting millions of visitors daily to their site who are creating content. They have almost zero promotion budgets - as its entirely viral. Remember - Google would have been a failed model if they didnt get "lucky" with Adsense and Adwords. These models only came out in 2004... thats many years after they launched. Clearly 2006 has been the year of Internet Videos/ Shorts... and its way to early for anyone to make a good assesment here (IMO). Who knows - with 4G around the corner... maybe Youtube will pull off a micropayment model for mobile video.. or something like that - and embedded ads within videos may raked in a large amounts of cash. Even a very low per-view fee will result in large amounts of $$ - as this model is wholly driven by the large volumes. Who knows - they could also merge with another site / service. Perhaps a buy out. (Google Video is their rival). Clearly something can happen... anything. They could also pack up and face what friendster did - if they dont watch out for alternate / models with new features... just look at myspace and bebo and cyworld ($300,000 per day in revenues in korea alone)... so if they watch their backs and are aware of competing models - and move quickly if they suspect a competitor ... then they could be the grand daddy of online community videos. (its also possible that they coud maybe merge with netflix - if and when netflix takes their model to video on demand - and once the bandwidth allows it to). So, what i am saying is - that its way too early to make any sort of prediction ... and i wouldnt dare make a solid one. :-)

Posted by Vishal Lamba

Google's IT Strategy

Information Week writes:

Google managers tend to be reticent on the subject of IT strategy, they're loath to talk about specific vendors or products, and they clam up when asked about their servers and data centers. But a day spent with some of the company's IT leaders reveals there's more to Google's IT operations than a search engine running on a massive server farm. Behind the seeming simplicity is a mash-up of internally developed software, made-to-order hardware, artificial intelligence, obsession with performance, and an unorthodox approach to people management.

There's a lesson in Google's IT philosophy for other companies: Shun the herding instinct that leads toward the same systems and software everyone else is using. There may well be competitive advantages in doing things your own way.

Enterprise Software | PermaLink | Comments (1)

Nice article. Every time I read about Google's server farm, I am really impressed.

Posted by Kyl