Posts Tagged ‘Skype’

The TPS Report hits the road

May 1, 2013
Conférence supply chain

Random Supply Chain Conference. Conférence supply chain (Photo credit: Pierre Metivier)

 

Well, I wouldn’t say we ‘hit the road’ exactly…unless by hitting the road, you mean that we pressed the little green button on Skype.

 

Anyway, friend of the blog, Dustin Mattison made a mistake invited me to discuss how prediction markets could be used in the supply chain, commodity modeling, and solving problems through data analysis among other topics.

 

Did I have anything intelligent to say? You’ll just have to click over to the Future of Supply Chains Blog to find out.

 

 

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Technological competition at its finest – the world of online travel search

June 2, 2011

I can feel your eyes tiring through the computer screen. Online travel? Why do I care? And why should I spend five minutes reading your blog post? I’ll take those one at a time…you care because technology is moving in this area and Google is involved. You should read this, because the opportunity cost is minimal – i.e. you’d otherwise have to go back to something boring, like doing your job.

Many of us have had at least some experience purchasing flights from an online agency or even a standard brick and mortar travel agency. They can process your order, book your flights, and most importantly, take your money. Travel agencies are set up to do those things, but that technology and process is not necessarily the same as finding the flights in the first place.  It is fairly natural, then, that companies that specialize in finding the right flights at the right prices would be better placed to develop better search technology than what the travel agencies could do. Or maybe I’m only writing that because it has already happened, and it always seems so much easier to predict the past.

Enter Google, and friend of the blog, Larry Page (ok, more of an admiree than a friend). Google, owner of a $169 billion market cap, needed to burn some extra cash, and carefully considered its next target. Actually, it was probably more like “ok, we’re the kings of general search, but if people want to buy plane tickets, they don’t come to us – that means that some other search firm is actually making money, and it’s not us. What should we do about it?”

I’m sure they at least considered the idea of building their own travel search engine, but remembered all the learning that allowed them to reach the top, and decided to take the lazy way out – they bought ITA. I mean, what’s $700 million among friends? We at TPS report love the humility implicit in this, because instead of building it from scratch, they can take the best of their know-how and combine it with ITA’s well-established product (they already serve Orbitz, Hotwire, and Kayak).

However, Everbread might have something to say about all this before we just hand Google the Dukedom of Travel Search. The young upstarts at Everbread have developed what they believe is a superior product, and they aren’t scared of Google.

While the other search firms use boosted carrier logic in their algorithms, Everbread’s claims to achieve NP-complete searches. What is NP complete? In non-mathematical terms, it means that every possible solution to a problem is evaluated, ensuring that the optimum result is obtained. Plus, they’ve got a bit of star power on their board with the risk-taking former Skype CEO, Michael Jackson.

Flight from Bristol, UK to San Francisco, California on July 17? The number of viable options are exponentially greater than your typical search on Orbitz would reveal. When performed on carrier boosted logic, the big airlines that pay search firms just so happen to appear, while smaller/cheaper airlines do not. NP-complete searches in this case would take days or even weeks to compute for the standard search firms. There is just too many possibilities and not enough computing power – until recently.

The consumer? Well, we just don’t know any better. Plus, who wants to go through the hassle of searching every tiny airline for an extra 40 bucks (in the rare case that we happen to stumble on the right combination)? However, the Department of Justice is investigating the boosted carrier logic used by some of the search firms to determine whether this constitutes anti-competitive behavior. So stay tuned to the TPS report for further developments.

The good news in all of this: as search technology improves, barriers to entry fall…and the big winner is…us.

You mean there isn't just some dude in the back room calling all the airlines?! *Note - meta search means a search that combines and presents the outputs of multiple search engines.

Microsoft buys Skype

May 10, 2011

Anupreeta Das and Nick Wingfield of the Wall Street Journal are reporting that Microsoft has purchased Skype for $8.5 billion. Read the article here if you have a WSJ subscription.

My first reaction is that it is another example that calls to mind Alan Greenspan’s famous “irrational exuberance” quote, since Microsoft is paying $8.5 billion for a company that lost $7 million last year. However, that reaction should be taken with a huge grain of salt, since it is just a gut reaction based on a recent reading of the news.

No doubt Steve Ballmer wants to put his stamp on Microsoft, and Skype boss Tony Bates will have made a name for himself as well. Whether it is good for Microsoft shareholders or is another sign of valuations running out of control, time will tell. My gut says it is the latter, as something better, newer, and cooler will come along before Skype manages a profit. However, if the Microsoft Skype division successfully fends off the natural drift toward bureaucracy, it could be the Skype division that finds that new thing. One thing is for certain, and that is that capital to invest won’t be an issue. Whether that spurs or hinders innovation is certainly up for debate.


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