Photo: kaibara87 via Flickr
It’s been a crazy week in tech news.First Google announced a $12.5 billion bid for Motorola, which (almost) nobody saw coming.
Then HP killed the TouchPad after seven weeks, shut down its Palm hardware line completely, and announced it might be getting out of the PC business altogether.
As another tech reporter remarked to me last night, it’s the only week in his career where TWICE he’s seen news headlines that made him blink and re-read them to make sure he wasn’t hallucinating.
This probably isn’t the end of the crazy news. There are several reasons why not:
First, money is cheap right now — big companies sitting on hoards of cash aren’t getting any return on it, and smaller companies with decent credit ratings will never find it cheaper to borrow money for expansions or acquisitions.
Second, smartphones are a once-in-a-generation opportunity. It’s the most competitive, fastest growing, and fast-changing tech market seen since the Internet went mainstream in the 1990s. There’s going to be a shakeout — it started yesterday with HP and WebOS — but the winners have the chance to achieve dominance for decades (think Microsoft and Intel with PCs).
Third, the broader economy looks to be heading back into a second downturn. That creates uncertainty — will the IPO window close? Will it still be easy to raise big VC rounds? — and gives companies good reason to shore up their core businesses and discard ailing ones before the bad times kick in.
With all that in mind, here are 10 tech news headlines that sound completely crazy now, but just might happen in the next few months.
Why it's crazy: The mobile phone market already has more platforms than it can support, and phones aren't nearly as good as tablets for consuming electronic books or movies.
Why it might happen: Amazon's hardware group, Lab126, has been on a hiring spree lately, and a lot of the jobs -- antenna designer, battery designer, program managers with 'experience in cell phones' -- look like the kind of people Amazon would want on board to design a phone. Jeff Bezos seems very interested in mobile phones. The company is working on an NFC payment system, which could let users buy real-world products from their phone -- like Google is doing with Wallet, only with the added advantage that Amazon already has millions of credit card numbers from loyal users.
Plus, as MG Siegler pointed out earlier, former Palm CEO and WebOS guru Jon Rubinstein sits on Amazon's board.
Why it's crazy: Hardware has much lower margins than software, it's outside Microsoft's area of expertise, and it would alienate every other PC maker out there. Plus, Steve Ballmer hates the hardware business.
Why it might happen: Microsoft already recognised that it couldn't compete in smartphones without a deep relationship with a hardware partner, and paid Nokia at least $2 billion up front to take that role. But tablets are WAY more important to Microsoft than smartphones -- every iPad sale is one less Windows computer purchased -- and Microsoft has said that its tablet and smartphone ecosystems will eventually converge.
Here, Microsoft could enter some sort of joint venture with HP -- and maybe another party like Intel? -- to share a piece of its newly independent PC business, or might simply strike the same kind of deep partnership it has with Nokia.
Why it's crazy: Buying a hardware company like Motorola is enough of a stretch for a company that's always focused on free Web services and selling ads. Buying a wireless carrier would take Google even farther from its core business. Plus, regulators would never approve it.
Why it might happen: Google has been interested in the wireless space for years -- remember when it bid on wireless spectrum? -- and owning a carrier would give the new Android-Motorola phones a dedicated channel. Plus, Larry Page likes to think big. And Google doesn't have anything close to monopoly power in the mobile phone space, so regulators might have no choice but to let it go through.
Why it's crazy: Apple does not do big acquisitions, and regulators would never approve of the only tablet maker controlling the primary supplier of designs for the chips that go into tablets and smartphones.
Why it might happen: Apple would not only sew up the tablet market, it would also make life a lot harder for Google-Motorola and every other smartphone maker, all of whom would be paying Apple royalties. Apple has already threatened to dump Intel from the next generation of Macs, and may have secretly made the decision to do so already. Plus, Apple is a hardware company, so owning the company that knows how to design low-power silicon cores that will be used in the next 20 years of computing devices is a great long-term move.
Not to mention Apple has more than $70 billion in cash and marketable securities. ARM's market cap is less than $11 billion -- easily affordable.
Why it's crazy. This isn't supposed to happen until 2012. Facebook has plenty of cash and is thriving as a private company. Plus, it hasn't really figured out how to monetise its more than 700 million users, which means that the books might not look as good as they would a year from now.
Why it might happen. Facebook is playing in the big leagues, taking on companies like Google and Apple which are 10 times its size and have massive amounts of cash and cash flows. Facebook can't possibly build its own phone, for instance, without more staff, money, and some key acquisitions.
Why it's crazy. Larry Page doesn't seem to be a huge fan of Google's enterprise business -- he didn't make it one of Google's seven core businesses, and didn't name it as a priority on his last earnings call. Google's enterprise business still has sales of less than $1 billion a year -- after almost six years.
Why it might happen. Google has been known to engage in strategic misdirection before -- it certainly surprised people with the Motorola deal. Google execs keep showing up on the boards of cloud computing companies -- Chrome leader Sundar Pichai joined Jive Software's board earlier this year, and Google Enterprise leader Dave Girouard just joined the board of cloud-based business intelligence startup GoodData.
Why it's crazy. Somebody (probably the bankers shopping Hulu around) has leaked a bunch of names as potential Hulu acquirers -- Google, Microsoft, Yahoo, even Apple. Amazon has never come up.
Why it might happen. This actually isn't that crazy at all. Amazon is widely expected to launch a tablet focused on video next year. Just yesterday, the company announced that it has more than 100,000 movies and TV shows for rent via Amazon Video. Buying Hulu would give Amazon some great exclusive TV show content -- and lock competitors like Apple and Google out. Plus, while Amazon isn't as rich as the other rumoured buyers, it does have more than $6 billion in cash lying around.
Why it's crazy. The last thing Yahoo needs to add to its troubles is a company whose core subscription business is dying and whose display and ad business are underperforming.
Why it might happen. Buying AOL would make Yahoo the undisputed leader in display advertising -- AOL is not only the number-five U.S. site, but it also owns the number-four ad network (after Google and Yahoo), according to ComScore. Yahoo blamed a weak ad sales force for its last poor earnings showing, so having AOL's CEO, Tim Armstrong, who formerly ran ad sales at Google, could help. And AOL has never been cheaper -- its market cap now is about $1.3 billion. That's cheaper than Hulu.
Why it's crazy. The project kicked off less than a year ago, and Google is still working out the kinks -- just a couple weeks ago, one of the cars crashed. Plus, Larry Page recently said that the company was devoting a very small amount of its time to experimental projects like this.
Why it might happen. Sergey Brin is the other cofounder of Google, but has been almost completely silent since Page reclaimed the CEO role earlier this year. Apparently Brin heads-down on a set of secret projects called 'Google X.' Plus, that self-driving car crash was apparently caused by human error anyway.
Why it's crazy. Apple without Jobs is simply unthinkable.
Why it might happen. The man is very sick. Some members of Apple's board have reportedly been looking for replacements. (Although Jobs says that story is nonsense.) The publisher just moved the publishing date of Walter Isaacson's official Jobs biography up from March 2012 to November of this year -- maybe they know something the rest of us don't.