Daily Archives: August 29, 2006

Google’s Schmidt Elected to Apple’s Board; What Now?

Apple Computer announced today that Google CEO Eric Schmidt has been elected to its board of directors.

Niall Kennedy cites some pre-existing coziness and board-level interconnections between Google and Apple, while Om Malik says today’s announcement portends hard times for Microsoft and all other comers in digital media.

I figured Microsoft and its Zune were in for a dauntingly uphill fight against Apple’s iPod and iTunes even without having to contend with the additional resistance that Google might bring to proceedings. As the MSN/Windows Live debacle demonstrates, Microsoft is not nearly as close to the web-connected consumer as it presumes to be, nor as close to that market as many observers believe it to be.

Increasingly, I see Microsoft as more of a threat to incumbents in SME business markets — beware security, business intelligence, database, and asset management vendors — than in consumer-oriented services. Microsoft has gotten things right, for the most part, with the Xbox, but not so much with its online offerings.

What’s interesting about today’s announcement of Schmidt’s ascension to the Apple board of directors is the relief into which it throws Google’s decisions earlier this month, as announced at the annual National Association of Recording Merchandisers (NARM) conference, to refrain from entering the online music marketplace. It all makes sense now, doesn’t it?

So, now that the deal has been signed in boardroom blood, so to speak, what sorts of quid pro quos will Apple and Google exchange with one another?

Viisage and Indentix Merger Complete; Resulting Company Moves to NYSE

Viisage Technology, Inc. and Identix Incorporated, both of which had been listed on NASDAQ, have completed their merger.

The resulting company, L-1 Identity Solutions, will begin trading on the New York Stock Exchange (NYSE) tomorrow, when the company’s chairman, president, and CEO Robert V. LaPenta will ring the exchange’s opening bell to commemorate his new corporate entity’s public-market debut.

I’ve written about Viisage and L-1 before. The more I look at this company, the more I believe it will succeed at selling a broad range of biometric-security solutions — comprising authentication systems based on fingerprint, facial-image and iris-pattern recognition — to government agencies and large private organizations inside Fortress America and beyond.

Just look at the board of directors, composed as it is of a veritable who’s who of Beltway insiders. But if you try visiting the newly merged company’s website, you’ll be confronted with a login screen. I don’t know about you, but I don’t have a login name or password.

Perhaps LaPenta and company are taking security a bit too far. At least they didn’t subject me to a video-camera-delivered retinal scan.

Analyst Predicts Hard Times for InfoSpace

InfoSpace is in serious trouble, according to an WR Hambrecht & Co. analyst quoted in a story published online today by the Associated Press.

The company, which has carved out a niche for itself as a content aggregator and search provider for wireless operators and their subscribers, will be under increasing pressure as content providers, such as Walt Disney Co. and Time Warner Inc., seek direct relationships with wireless operators; and as search giants, such as Google and Yahoo, increasingly move into InfoSpace’s territory.

At least, that’s what Denise Garcia, the WR Hambrecht & Co. analyst, suggests.

Actually, her argument seems reasonable and sound, and all indications point to the end of what has been an up-and-down roller-coaster ride for InfoSpace. It managed to squeeze out an existence from dealing with wireless operators, and for that it should be commended, but the golden age of the content intermediary (or middleman) would seem to be coming to an end. There’s too many of them, particularly now that the major content providers are insisting on their own direct relationships with the mobile service providers. 

So, what will happen to the company? Writes Garcia:

We do believe InfoSpace makes an attractive acquisition target for a mobile content aggregator seeking to expand its mobile content library or media company wanting to expand its content delivery platform

But Garcia says the company is overvalued by the public market at the moment, and that its price must fall before it can become sufficiently attractive to a buyer. That, too, sounds like a reasonable assessment.