Perspectives

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Groupon has been Chicago’s most successful startup story in the last year. Especially for those of us who live here, it is nearly impossible to attend anything technology related without having the company come up in conversation – that’s a good thing. Chicago needs Groupon, as we stressed at midVenturesLAUNCH (Brad Keywell’s talk here; “Not being Silicon Valley” panel here).

Every city (especially a place like Chicago which is entering the larger world’s tech scene day by day) needs a hero. Still, one has to wonder: How much does Groupon spend per day on advertising? And what does that do to their margins?

We have all heard that Groupon is the fastest growing company ever – at least they say so – and their explosion to the top truly is a story for the ages. However, it is curious to note what percentage of their customers comes via aggresive use of Google advertisements. Go surf around for a few minutes and count the number of Groupon ads that you see. Impressive, right?

This could mean one of several things:

1) Groupon has grown through advertising like mad. OR

2) The company is aggressively reinvesting profits and investment dollars back into ads because those same ads have proven to be revenue-positive.

The answer to that question would be a serious revelation to the bottom line queries that we all have about Groupon. A half an hour in their financial books would make even the most seasoned investor or entrepreneur excited.

If nothing else, Groupon is growing using financial muscle. Groupon can do that so long as investors like Digital Sky Technologies continue to inject cash into the company by the hundreds of millions or so long as Groupon turns daily profits. Are those profits sustainable? And if they are, for how long will those advertisements play strongly before some form of market saturation occurs?

The problem with a company like Groupon is that, like any innovator, looking into their future is nearly impossible. For now, we’ll keep talking about the firm while peering over wine glasses with our wine-colored spectacles. The truth is that a better look would be well worth the savings.

Do you Groupon?

A funny thing happened on the road to a fully digital world: Print didn’t die. To the contrary it seems that some publications are finding new life, even in the shadow of the ever-faster world of internet writing.

Let’s take one important case: BusinessWeek. We have all read BusinessWeek off and on for years, but it never really took ahold of us like we had perhaps had expected it to. Why? It never felt like it had enough of what we didn’t read online to make it worth the cost.

Comic Strip by Wiley Miller

And so the magazine drifted out of our reading realm. Sure, we would pick up the occasional article online when it came to our attention, but the print magazine itself dropped fully from our radar. Fast forward to their acquisition by Bloomberg and their subsequent rebranding as “Bloomberg BusinessWeek,” and the company was giving away a few issues in subscription form to anyone who came along.

Being the free-minded people that we are, we signed up – after all, why the hell not? To our surprise, and we must admit vague consternation, the first issue that was delivered was actually an engaging and elucidating read. Many topics that we had only ‘grazed’ online from the previous days were present, but in slightly more condensed forms. And, since linking inside an article is not possible in print, the stories tended to be slightly more inclusive than the usual online fare.

Now the question is merely one of value: should we sign on to the print edition, grab the magazine on our iPads, or does it justify the cost at all? So, ultimately, we end up with the same equation and questions that print has always had – value for money; a much more promising prospect than “the death of print.”

Finally, we hear that publishers are starting to get their act together for the iPad, working with Apple to create subscriptions for traditional magazines and newspapers translated over to digital delivery, consumption and billing.

It’s about time.

This, however, is old news. Digital subscriptions on the Kindle have been successful for some time, unbeknownst to many people.  While Kindle gets press largely for its massive selling of eBooks, what most non-Kindle owners don’t know is that users of the gadgets have picked up a mountain of newspaper subscriptions.

The New York Times, which costs a steep $19.99 a month on the Kindle, is the 30^th most popular piece of digital content for sale in the Kindle store. It’s been in the top 100 for 899 days. The Wall Street Journal is the 78^th most popular digital item, and it has enjoyed 835 days in the top 100.

People are more than willing to pay recurring rates for good content delivered in a convenient fashion. That is a shockingly unsurprising statement.

In short, yes, the iPad is going to help stabilize media companies and protect venerable brands, but in terms of clearing the path for print subscriptions to take off online, you have to give Kindle the plaudits. It could be that the Kindle ends up saving print media from dying the death predicted by so many as the ‘print’ turns digital. At a minimum, Kindle is re-kindling (bad pun intended) book and newspaper publishers’ lives and saving them from the sharp fall of extinction.

What will Kindle do next?

All eyes were recently on Apple as they unleashed Lion (the next generation of Mac OS X), FaceTime for Mac, new iLife software and a Mac App Store all in a single event. But all the launches were merely a warm-up for the ‘one more thing’ – two amazing new MacBook Airs that melted the entire world of computing in an instant.

Well, that was the way it felt at least.

Apple, as a company, is an amazing sales organ. When they turn on the pitch, it works freakishly well. The new MacBook Airs are the ‘future’ of laptops according to Steve Jobs.

What did he mean by that?

Yes, the new MacBook Airs are smaller, lighter, faster and better – the normal progression of laptops. But Apple baked something special into this release: flash memory and instant-on. In a burst of brilliant innovation, Apple ditched SSDs and HDDs and adopted Flash memory as the next mass market storage solution for computing. The fact that flash memory has taken over portable media storage is an old tale, but two years ago no one would have expected Apple to port over their Flash knowledge to a full size laptop.

‘Instant-on’ means no more booting time. You press the power button on your computer and it bursts alive. Voila. Instantly.  If you are a Windows user that sounds nearly impossible. That frustrating lag starts our days. Now with the new MacBook Air.

Apple killed off the floppy drive. It is doing the same with modern optical media drives, and it is now relentlessly trying to oust slow boots and change storage.

That is why the new MacBook Air matters.

Sure, the MacBook Air is a great addition to the Mac lineup, but the real future is inside it – the little chips that are going to fundamentally change the way computers work. That is, of course, if Steve Jobs gets his way.

Windows Phone 7 has launched around the world with a bang (including at midVenturesLAUNCH), but all eyes are on the United States where the phone is lying in wait for its early November release. In terms of unit sales, the U.S. market is a make or break location for the nascent line of phones.

Microsoft is putting their money where their hope is and dropping hundreds of millions of dollars into an advertising blitz for the phones. That will surely help, but what matters the most is the phones themselves. Strong advertising can help a good phone sell better, but no ad dollars can save a bad phone from a short trip to the bottom of the heap. With that in mind, what are people saying about the new Microsoft phones?

The answer can be divided into two parts.

The first part: Windows Phone 7 is a refreshing take on mobile phones that has a real shot in the marketplace.

The second: Windows Phone 7 has potential but needs polishing before it is a real competitor.

The fact that Windows Phone 7 reviewers are torn between those two takes speaks volumes. The phone line definitely has a chance. At least for now, no serious technologist is writing the phone off and everyone is curious about their future.

Windows Phone 7 has a tough market to match with iOS and Android both being wonderful platforms. To start life with such competition is difficult, but Microsoft seems to know the game well enough to compete straight from the gate.

Walt Mossberg had this to say about Windows Phone 7:

“Overall, I can’t recommend Windows Phone 7 as being on a par with iPhone or Android—at least not yet. Unless you’re an Xbox Live user, or rely on Microsoft’s SharePoint corporate Web-based document system, it isn’t as good or as versatile as its rivals.”

Bad-boy gadget blog Gizmodo had this take:

“Let’s just get it out of the way: Windows Phone 7 is the most exciting thing to happen to phones in a long time.”

On the one hand, to beat Android and iOS from day one when these competitors have had years to grow and mature is a tall task, but as Gizmodo points out, Windows Phone 7 is giving them a real challenge by being very different. Microsoft is committed to returning to status as a player in the mobile market. The first generation of Windows Phone 7 is putting its stake on a slice of market share for the future. This first generation of phones will sell.  The next generation? They will sell even better.

Go get ‘em, Microsoft.