Netscape founder Marc Andreessen/Charlie Rose: Should newspapers should go out of print? / Kindle / online banking
Bill Densmore
Should newspapers go out of print? That's what Marc Andreessen, the father of
the Web browser, tells Charlie Rose on Feb. 19, 2009:
[Watch full episode]
http://www.charlierose.com/view/interview/10093
A conversation with Marc Andreessen, co-founder and chairman of Ning and an
investor in several startups including Digg, Plazes, and Twitter. Best known as
co-author of Mosaic, and founder of Netscape. He is on the Board of Directors
of Facebook and eBay.
Highlights:
Facebook has 175 million users, think they can go for 500 million. They
could sell a billion dollars worth of advertising now but choose not to.
Longer term vision.
There are 20 million users on Andreesen's Ning service.
Linked In has 20 million resumes on it (I think he said that).
"If you can get 50 or 100 million people to do something, over time you
can get everybody to do it."
Regarding sales of videos or music driven by YouTube videos:
"These are the distribution vehicles of all time. It's like Mastercard for
music . . . there should be a buy button."
Q: Rose asks: "Who owns the user profile?"
A: Andreesen comments briefly on Facebook hassles last week. No news in
what he said.
Q: What is the hottest idea? What's the next big idea?
A: "The hottest idea is that innovation is alive and well . . . what I am
seeing is an endless stream of new ideas." He talks about Amazon's cloud
service. Startups are just uploading code to the Amazon cloud so they have
no infrastructure cost.
A discussion about mobile.
A: "The big thing is mobile has arrived ... 3g networks, sophisticated
handsets, application developers ... the iPhone is a template that every
other technology vendor is going to copy." It is the first fully
functional computer. It allows distribution of applications across the
network, a diversity of applications. "It's a full general purpose
computer . . . it's the first real operating system ... that really makes
a lot of applications possible . . . it's actually Unix, the same
operating system that runs banks and airlines . . . . " And also bundles a
way to distribute applications. He says the iPhone success paves the way
for another set of companies to create new devices.
"The iPhone when it landed was like beamed in from five years in the
future."
Q: What is idea for Quik?
A: "Any cellphone with a camera can be a source of live video streaming
right onto the Internet . . . three billion sources of live streaming
video wordwide." In a couple of years cell phones will have high-def
camcorders.
He talks about how he and Ben Horowitz (an early Netscape collaborator)
are going to raise money for a venture capital fund of their own to invest
$200,000 to up to $1 million in very early stage startups.
He is an angel investor in Twitter. He calls it "a new kind messaging
system, a combination of SMS and a little like blogging." He says it has
zero revenue. Growing like wildfire. In the last 2-3 months has really
taken off. It can be used for news. You can search on it. He calls it "a
real-time short-messaging system for the planet." He likes Evan Williams
because he created Blogger and then Odeo. He gave the Odeo money back
because it didn't work. He raised a couple of million in the first round.
Q: When did you start to think of the notion of "viral".
A: With the emergence of PayPal.
Q: Newspapers. What is it between you and the NYTimes?
A: "You want to know what really pushed me over the edge? Judy Miller . .
. I would normally cut somebody some slack for that but then the people
at Knight Ridder actually got it right . . . . "
Q: So you created a think called NYTimes Deathwatch?
EXCERPTS OF HIS RESPONSE:
A: He says it was a blog post that he took down. He says it's no longer
fair. Talks about strutural change in the business. "The typical newspaper
response is we've just got to figure out a way to gut through it . . .
their revenue today is still 90% print, 10% offline." They spend 90% of
their time in print, very little time playing offense and their Internet
divisions off to the site. "You gotta kill the print edition . . . you've
got to kill it . . . the stocks would go up . . . the investors are
through this transition . . . the investors have completley written off
these print editions . . . how many years of chronic pain do you want to
take in order to avoid the acute pain? . .. if you are the guy delivering
ice to peoples ice boxes at a certain point you gotta get into selling
refrigerators . . . everything about the online experience is better."
Regarding the future of the Internet ... the more people put things on it,
the more valuable it gets and the more people gravitate to it. "Every day
it is better and better and better . .. . every day as a consequence it
eats different industries . . . . financial services . . . photography .
.. . observationally people love it . . . every kid today lives on the
Internet."
He talks about growing up in rural Wisconsin, where there was no
connection to the outside world except what was in the library. Giving
those rural kids access to the information world -- they will be so much
better educated, he says. "I'm here today because your producer emailed
me."
Discussion turns to Intel and the process of technical innovation. He
talks about Google adapting Overture's ideas about linking advertising to
search and calls that, and Amazon, "magic businesses."
"When you have a magic business you go for size, and you go for scale."
Kindle, he says, "is gigantic ... it's representative of the future of
publishing." New Kindle2 holds 1,500 books. "The Kindle is a new form
factor . . . there's going to be a whole market for these pads, which will
be 7-inch screens." There are a bunch on the market, he says, but the
Kindle has taken off. The batter lasts for two weeks. "There will be a
whole generation of these sort of pads." He thinks they might eventually
scale up the iPhone so it has a 7-inch screen. "I will be the first person
to buy one."
Discussion about games. "My X-Box and I have a really close relationship .
.. . it's just tremendously stimulating ... it is essentially Dopamine ...
it's like playing sports but its for everybody . .. it's competitive, it
get's your adrenalin up, it's a lot fun." He talks about how neat the
Nintendo "We" is and how Nintendo is outselling Sony and Microsoft because
of it.
On the economy -- He says the Valley hasn't been so affected because the
valley runs on equity, not credit. But he thinks now sales are going to
fall and there will be layoffs, but because of sales declines, not the
lack of credit. He says the innovation will continue and when the economy
recovers there will be a ton of bottled up innovation unleashed. "Google
developed through the bust. Facebook developed through the bust."
"We will be a tragic beneficiary of the disrpution having in the other
sectors . . . media companies . . . financial services . . . real estate .
. .. we will tend to benefit because we will be playing offense instead of
defense . . . it is a tragic kind of opportunity . . . (but) there are new
companies springing up."
ABOUT BANKING CHANGE -- at about 48 minutes into the interview
"I think is what should happen in banking. I think there shoudl be a new
wave of infnaicla institutions that shoudl be created from scrdatch today
and they should play the role .... let's have them all be new, and online
. . . purely virtual, much lower cost structure."
Q: You're saying the government should help create them?
A: Convoluted answer but basically says yes. "You can create a bank with
software ... it's not that hard." Billulator provisions credit on the fly,
checking your credit score for each transaction. "The need to repair a
bank that has this outmoded credit-card structure . ... it's not clear to
me" why society should do that.
Chris O'Brien
Marc is brilliant when it comes to technology, but not so hot when it
comes to business. I believe his three companies (netscape, opsware,
ning) have never turned an annual profit with the exception of
Netscape for one year (1996). And of course, that was when you had to
pay $29.95 to download the Netscape browser. Once Microsoft killed
that business, Netscape had no other ideas.
Ning is huge, and I love it, but far, far from turning a profit.
Digg lost $4 million on $5 million in revenue last year, according to
businessweek.
Twitter is famously revenue free.
Facebook's financial status is less clear. They may at best be a break
even proposition. All that growth is requiring massive infrastructure
investments to sustain a business that has a very weak advertising
system (click rate is abysmally low).
YouTube=Giant Money Pit.
But it's typical Silicon Valley mythology. We'll build something cool,
get tons of users, and them revenue will take car of itself later.
Google pulled it off, but few others have.
Chris O'Brien