Industry

Loss Leaders

Office, Windows bring in the big bucks:

• MSN lost $97 million on $531 million in revenue
• The CE/Mobility Group, which includes Pocket PC and Microsoft cell phone software racked up $33 million in losses on sales of $17 million
• Profit margins for desktop versions of Windows came in shy of 86 percent

Microsoft 2003 1st Quarter Form 10-Q (Word document)

4:38:38 PM # Google It!
categories: Industry

Availability

I think people are starting to factor broadband availability into their decision to buy Internet access, so whether or not there's a broadband option available will make a difference in the sale. When choosing between dial-up providers, the local broadband provider will have an edge over the provider who can only provide dial access, whether that provider is national or not. However, I need more data to support this hypothesis.

A broadband provider thus needs a national dial presence, of some sort, to attract travelers, while a dial provider needs to have a contiguous broadband presence in order to retain customers as they upgrade from dial to broadband.

3:48:38 PM # Google It!
categories: Industry

Flypaper

E-mail, the Internet's killer application, and its necessary corollary, addresses, is one of the main ingredients of stickiness, loyalty to a particular provider. Yahoo Mail, HotMail, and .mac, among other services, overcome this by removing the binding of e-mail addresses to Internet access. But people are still attached to their e-mail addresses, and delay switching between access providers because of them. With more and more people considering various broadband solutions, the ability of your dial-up access provider to provide broadband access as well should increase the probability of your remaining with that access provider, much as non-portable telephone numbers did. It may also have a measurable impact on how one chooses an access provider. In other words, you'll choose the provider who can provide a full range of services.

What happens if you can't offer broadband and dial-up access in the same market?

12:53:43 PM # Google It!
categories: Industry

And That's a Wrap

SBC now offers bundles. As the press release, rewritten by Reuters, says

With the "SBC Connections" promotion, SBC said customers can save up to 35 percent off the regular price of buying the services individually. Packages including SBC Yahoo Internet access, Cingular wireless service and local and long-distance calling start at $85 a month.

This is a necessary move for SBC, and I'm glad they finally got around to it. Reuters notes that Verizon sold more than 250,000 Veriations packages in that program's first two months. The problem with both packages, from both the vendor and customer perspective, is that they are limited by the vendor's geographic zone of influence. Luckily, the competition has the same problem.

10:48:15 AM # Google It!
categories: Industry