Investing Liberty Investor Alert Observation & Opinion


  • Economy & Politics
  • Investing
  • Personal Finance
  • Related Posts

    Homebuilder Confidence Misses For 4th Month In A Row
    Stocks Move Higher On Encouraging Profit Reports
    Here’s How Box Can Still Go Public In The Midst Of The Brutal Tech Selloff
    Stocks That Go Up Can Keep Going Up
    Nestle Reports Slow First Quarter
    China Gold Demand ‘On The Rise’
    Don’t Just Sit On Your Investments, Do Something
    Should Google Know Your Deepest Darkest Secrets?
    How Companies Are Using Wearables In The Workplace
    Is This Tiny Gadget The Future Of Smoking?
    Commodity-Backed Currencies? China Buys Huge Copper Mine; Russia Onshores Largest Gold Miner
    BofAML Warns VIX Complacency Suggest Stocks Fall Further
    Futures Tread Water As Geopolitical Fears Added To Momentum Collapse Concerns
    “Shadows Of March 2000″ – Goldman On The Great Momo Crash Of 2014
    Weekly Sentiment Report: Horrific? Hardly!

    Getting The Masses Online: Mark Zuckerberg’s Quaint Plan

    Apparently, the millenial generation’s wunderkind has come up with a brilliant new idea: Wire the world.

    Unfortunately, this is a well-trod road already.

    Google’s (GOOG) dirigible-based Project Loon is already in beta testing.

    And stretching back 15 years or more, there have been plans and goals to get the world wired.

    But before I get to the history, let’s have a look at the brave new idea proposed by Zuckerberg (founder of Facebook (FB)) and company.

    The facts:

    • The Internet is currently used by about 2.7 billion people.
    • That rate is growing at about 9 percent a year.
    • There are about 7 billion people on Earth.
    • Internet access is expensive (relatively speaking).
    • Internet access requires infrastructure that many parts of the world can’t afford.

    The Big Idea

    Zuckerberg (Facebook) has become the spokesperson for a group that includes Samsung, Nokia (NOK), Qualcomm (QCOM) and that is launching a concerted effort to get the other 5 billion or so people online.

    Last Wednesday, he launched the idea in an exclusive interview on CNN. And it’s now rippling around the world — except where they don’t have connectivity.

    Of course, the reason so many big tech companies are after these 5 billion is to share the modern world of connectivity with the tech-underprivileged. Can you imagine the joy when they can share the news of a rogue tiger among villages, the status updates of where someone found a patch of yucca roots or a traffic update on Waze from Ketapang, Borneo? Or how happy folks will be to be able to watch CNN in a home in Dori, Burkina Faso? Actually, making people happy is not the reason they want to do this, no matter what they say. It’s like my old economics professor said, “No war was ever fought for moral principles; they’re all about economics.”

    Well, the corollary here is no group of big tech companies is getting together to link in 5 billion people without there being something to add to the bottom line.

    From the list of participants, you can tell that the goal is to put a smart cellphone in everyone’s hand in coming years.

    While this sounds revolutionary, it’s really a warmed-over quixotic concept that started many years ago with One Laptop Per Child. The goal is to get computers into the hands of children to help them learn.

    It was the brainchild of an MIT professor who rounded up friends and colleagues to build the coolest state-of-the-art PC they could for less than $100. They took into account the lack of service infrastructure and built an internal network so that if you couldn’t access the Web, you could collaborate with other kids and people around town.

    You can make music with the built-in synthesizer, make films with the camera, etc. It’s also packed in a sturdy case and is easy to see in bright sunlight.

    Then OLPC launched Microsoft (MSFT), and Hewlett-Packard (HPQ) also jumped in the game. The thought of accessing 5 billion new customers was too tempting to pass up.

    The problem was (and is), how do you market to people who aren’t plugged in?

    OLPC, a nonprofit, was making headway when the big boys came to play. OLPC would be working with a school district in Brazil and Hewlett-Packard would roll in and muscle them out, having a bit more pull with the higher ups.

    Needless to say, OLPC had a rough go of it for a while — until the big boys realized that selling to the unplugged 5 billion was much harder than they expected and that local governments don’t like rich, powerful Westerners rolling in and “helping.” Many were colonies of Western powers not too long ago and aren’t particularly receptive to our help.

    The sub-$100 laptop for the developing world was finally left to nongovernmental organizations like OLPC. And, by the way, it’s still plugging away with programs from Charlotte, N.C., to Afghanistan to Ramallah.

    I saw one of the first presentations about the machines and was so engaged by the concept that I bought the first-model OLPC just to see how it all got put together. It was and is an incredible little machine.

    But I digress.

    Nice Idea, Hard Reality

    The point is there’s nothing new to Zuckergerg’s great announcement. A few years ago, Nokia chose to bypass the smartphone market and concentrate on getting phones into everyone’s hands. It has been tapping into the emerging markets for years now. You can see how well it has done for their stock that they missed out on the smartphone bandwagon.

    While the group’s motives are noble and their theories correct, this is a lot bigger than they think. The unconnected folks aren’t the first 2 billion gadget grabbers.

    They’re offline for more than economic reasons. And reaching them is going to be very difficult.

    I remember on a trip to Ecuador workers were laying cable just 5 or 10 miles out of town to the underserved environs. When they punched out for the day, they would leave the giant rolls of copper cable at the worksite for the next day’s run.

    The problem was that at night, the offline folks would steal the cable, melt it down and sell it back to the cable makers. It took years and millions of dollars more to get a small patch of the country wired.

    Mobile tech has changed some of that, but there are more unexpected hurdles to come. The question is whether this group has the stomach and resources to truly make a go of tilting at this windmill.

    — GS Early

    Discuss this Story:

    Comment Policy: We encourage open discussion. Comments including racist statements, profanity, name calling or spam will be removed at our discretion. We use filters for spam protection. If your comment does not appear it is likely because it violates the policy.

    Beta Earthquake
    Gold Jumps To 3-Week Highs, EUR Fades As Tensions Rise In Ukraine
    CME Sued For Giving “High-Frequency Traders Peek At Market” Since 2007
    HFT Purge Begins: SEC Prepares To “Remove” Some High Frequency Trading Firms
    GE Capital Seen Ripe For More Slimming After Credit Card IPO
    Ukraine Tensions Land Fresh Blow On Struggling Stocks
    China Targets Trust Firms In Shadow-bank Crackdown
    Citigroup Cuts 200 To 300 Jobs
    Stocks Face Earnings Blues After Tech Slide
    Europe’s Top Banks Cut 80,000 More Staff In Post-Crisis Overhaul
    Check Out Who’s Investing In Bitcoin Now
    There Is No Biotech Bubble; Here’s The Real Story
    Why You Need To Read Michael Lewis’ New Exposé
    Social Media IPOs 2014: Watch For These Companies To Hit The Market
    As Promised, JPMorgan Delivered An Ugly Set Of Trading Results
    The Hedge Fund That Thinks It Can Succeed Where A Criminal Investigation Stalled
    Blythe Masters Under Investigation By Federal Prosecutors
    Carl Icahn Warns: “Easy To Fake Earnings” Thanks To Fed; “Major Correction Coming”
    The HFT Blowback Continues: Fidelity Creates New Trading Venue
    China’s Demand For Gold Has Trapped The West’s Central Banks
    For The First Time Since QE, BTFD Fails For The S&P
    SEC Eyes Test That May Lead To Shift Away From ‘Dark Pools’
    World Equities Hit Two-week Low As Tech Stocks Retreat
    Safety Advocates Alarmed By Fatal Accidents In Recalled GM Cars
    Federal Prosecutors In Manhattan Probe JPMorgan’s Masters
    Watchdog FINRA Probes Banks’ Bond Transactions: WSJ
    U.S. Judge Accepts SAC Guilty Plea, Approves $1.2 Billion Deal
    Google To Sell Glass To Public Next Week
    Investor Group Offers To Buy Mt. Gox For One Bitcoin
    Why The Bitcoin Price Is Falling Today
    Read more from Investing...

    Liberty Investor Digest

    Get today's most important
    financial headlines all in
    one place by email!



    Sign Up For Liberty Investor Digest™!

    Get Liberty Investor Digest FREE By Email!

    Input your name and email address in the fields below and get today's most important financial headlines sent straight to you inbox!

    Privacy PolicyYou can opt-out at any time. We protect your information like a mother hen. We will not sell or rent your email address to anyone for any reason.