Thursday, April 29, 2010

Strange bedfellows?

Yesterday was a really interesting M&A day. Palm's acquisition by HP and Siri's acquisition by Apple seem to redraw battle lines across many historic boundaries.

Siri is a mobile application that's pursuing a lead generation, transaction oriented, business model. The application uses natural language, speech or written, to refer you to places, things or actions. Rather than being a search engine that refers you to information, it's more of an action engine, that short-cuts search. Combined with it's acquisition of Quattro Wireless, it seems as if Apple is girding for a fundamental change in which we interact with phones and search. Rather than going from web page to web page, an application to application metaphor is building. It is really similar to our relation with Facebook, where Facebook Connect, and its native applications keep someone engaged for extended periods, within a common framework. If search is invoked, it's within an application and, due to the deep vertical nature of the apps, offers incredibly relevant results. Better than GOOG can naturally aspire to.

This application to application metaphor is also easily translated to the mainstream computing market with tablets, or netbooks, being a natural bridge between the two. I have been using Siri for the past few months, and though impressed with the promise, must opine that today the results are just barely competitive with a host of similar applications, such as Tellmewhere, Searchit, and AroundMe. Don't be surprised if one of these are next in line to be acquired too.

I don't think this change replaces traditional search, but if adopted, will clearly cap the time spent searching via a traditional search engine. Combining Quattro and Siri has great potential to move advertising dollars away from search results and into applications. Now, if Apple can only figure out, or have the desire to open this up to more platforms, perhaps, they can be the MSFT of this decade. Or, paying homage to Dave Winer, perhaps they should just publish an open API and let anyone use it on any platform.

Palm's acquisition is noteworthy, not for the innovation, or leadership that's being shown, but for how far the industry is moving away from Microsoft. I simply can't imagine, 5 years ago, any PC maker building, or buying any operating system, other than Windows. Heck, even selling a dated version of the OS was enough to get you into scolding water. But now, HP is boldly saying (it takes revenues of $120B to be bold) they plan on using the soon to be acquired WebOS as a foundation for a series of computing devices that will take it beyond phones.

I am not sure that we really need yet another OS, but if HP can follow up it's tag line of "Let's do amazing', it may be worth playing with a few of those devices. On the other hand, till writing this post, I must confess that, for the past 15 years, I never would have associated 'let's do amazing' with HP.

Finally, speaking about Amazing from an unexpected source (besides the 'Amazin' Mets winning 9 straight), grab a look at this MSFT link to their work on Natal (courtesy of my buddy Zak). If they can really commercialize this, Redmond will again assume a lead part of the conversation.

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