Entrepreneur Watch

Yahoo to adopt AdSense?

The Wall Street Journal reports today that Yahoo may be on the verge of signing an ad deal with Google. There's a mention of it at ZDNet. That article apparently mentions that "this Yahoo-Google tie-up could create a real-time auction system that could allow Microsoft to connect." Not sure what "to connect" means, but I assume it means Microsoft could participate in the ad deal to ease anti-trust concerns.

The best comment on the deal comes from fr0thy2, who says of the connection aspect: "That'd be great. Especially if they keep changing the protocols further down the road so that MS machines don't work properly."

After all, since Microsoft is accusing Google of being the new, monopolistic Evil Empire, whom better to take lessons from than Microsoft?

I've said for years that it was dumb for Yahoo not to use AdSense, because AdSense works and Yahoo's ad system does not -- although they could fix that if they would just follow Google's lead and make sure the ads are RELEVANT with no flash or pop-ups. But Yahoo just can't resist giving into the demands of advertisers, even though it's painfully obvious that those demands simply don't work.

Here's another one. Yahoo is a portal. Google is a search engine. Yahoo should also drop its own search engine and use Google's again. Once Yahoo decided Google was a competitor, it dropped Google Search, the best general search engine on the market, in order to offer its own, inferior engine. That's a really smart way to serve your customers: Remove a product that works for an inferior one out of fear and spite.

The way for Jerry Yang to turn Yahoo around is to adopt the best-of-breed applications wherever possible and then to work on distinguishing the portal in other ways. That includes offering the best content it can find, rather than the stuff that content providers can be convinced to pay Yahoo for the privilege of posting on Yahoo.

A case in point. I write for an investment site called smallcapinvestor.com. Very early on, Google Finance started posting links to the articles we write, because they rose to the top. Yahoo did not, until smallcapinvestor worked out a deal to pay Yahoo to carry them. Very occasionally, my articles do not rise high enough for Google to capture it, and Google does not provide the link. But now everything we write appears on Yahoo Finance.

Yahoo needs to get it through their skulls that picking content based on financial deals instead of quality actually hurts the site, and its revenues, in the long run. Google is unbiased and tries for the best. And it has all but killed Yahoo because of it.

This is the internet. Get with the program, Yang.

Web 2.0 Expo: Words of hope from tim O'Reilly, Jesus, and me.

At Web 2.0 expo, Tim O’Reilly made the inspirational speech. He was preaching to the faithful, but it was good to hear some optimism about the future of technology, and not just in entrepreneurs’ ability to get rich.

Quite simply, We’re making a change in the world, he said. And it’s true.

He had some heady comparisons: Web 2.0 is not just about participation. We are building a platform to make people smarter, he asserts. It’s akin to literacy or the formation of cities --a huge change in the way the world works. And, he adds: We have a long way to go and a lot to discover.

For those who think his rhetoric is a bit strong, I would add a comparison I’ve made before: The ancient Great Library of Alexandria. More than a repository of knowledge, it was a place for the great thinkers of the age, about 300 BCE to the year zero, to come and study, experiment, write and change the world.

Just as the need for organizing all the world’s information provided the impetus for new inventions – including the process of alphabetizing scrolls, the invention of the dictionary, the bibliography and the Greek grammer, which became the basis for the later invention of the Latin Grammar – the Internet necessitated the invention of the Google search engine.

And we all became smarter. The Library of Alexandria was created by the Ptolemy clan. Ptolemy I was a general of Alexander the Great, who conquered Egypt and much of the rest of the civilized world and then died, leaving the spoils to his general to divide up. So great works were translated into Greek, the works of the great Greek writers and philosophers were collected, the Greek language spread throughout Europe and the Middle East, and the Hellenic Age began. Its influence is with us today. A translation of the Torah into Greek is even believed to be the document that Jesus used to spread his religion to a mostly Greek speaking world.

The Ptolemys, like Alexander, were idealists. The intent was to spread knowledge and Greek culture, and it worked. Parts of Alexandria were open to the public, making it the first public library, as well as the greatest library the world saw until the spread of the internet.

O’Reilly made an interesting comparison that points to the benefits of idealism. He compared Google to a large bank. Both are massive data centers. But only Google gives you services against the data, including the data collected about you. The bank mines our data in the back office but keeps it to itself. O’Reilly expresses the hope that Enterprise 2.0 will be about companies letting users into their back office and turning companies inside out. Give us the chance to learn from our data.

And here I hope his enthusiasm is more than just the optimism of the faithful. The alternative, he says is to lead us back to the concentration of power we saw in the Microsoft Age. There is still the danger that will happen.

And, just my opinion, if it does, it will not be Google that does it. As much as the Technorati sometimes complains about Google, the company seems to have its head in the right place. There is no evidence that it has yet abused any of its power or access to massive information. Google is all about sharing. As long as it maintains its ideals, we’re in pretty good shape.

Web 2.0 Expo: I hate bloggers

I'm an old press guy. I used to work at Business Week, Upside magazine, have written for Science magazine, Technology Review, a bunch of others. In general I hate bloggers.

I don't really hate them as a group. I hate the fact that blogging pays nothing to very little. There's no reason to rely on the mainstream press for first news any more, because billions of low-paid bloggers are reporting on everything, sometimes accurately. Publications are cutting back, laying off, cutting fees and going out of business. It's hard for an old hack like me to make a living.

But the most fascinating indication of the change in hierarchy is here at Web 2.0 Expo. The mainstream press used to get special treatment at conference. Free internet access in the press room, free lunches, preferred seating at keynotes, exclusive interviews with execs, invitations to the best parties.

Well. The bloggers now get all the perks of the mainstream press, plus. I seem to qualify as both, so i get my choice.

I'm hanging with the bloggers.

The press room has terrible wi-fi. Nobody can get any work done. We get the same box lunch as everyone else. Some of my old Business Week and other print press colleagues are sitting in the press room complaining or silently typing away.

Two doors down is the Blogtropolus room, hosted by a social media consultancy called TheConversationGroup and sponsored by a bunch of Web companies, and things there are hopping.

Lunch is served. Wi-fi is better, and password accessed. They have people giving free massages, a Wii bowling tournament going on, a video center filming conversations with bloggers, neat new products being shown off -- like a $350 pet robotic dinosaur with touch sensors so that it knows whether to snuggle up to you when you hold it or walk on the floor when you put it down.

There's buzz. People are talking, blogging, meeting, the room is alive.

The press room, alas, seems like a retirement home. Sedate. And much more sparsely populated.

So I'm hanging with the bloggers. Now if they would only pay us better...

UPDATE:

OK, now I'm really pissed off. They're bringing beer and food into the blogger's room. It's 3:30 pm.

Those poor suckers in the mainstream press. I'm gonna have a beer.

Web 2.0 expo: Oosah

I'm attending the Web 2.0 conference this week, spending a lot of time meeting with companies.

I've been sitting at home working on a book proposal and writing investment stories too long, and have a lot of catching up to do on Web 2.0 stuff. I've been stuck back in about Web 1.4.

So I've taken a different approach to meetings at this conference. I accepted meeting requests from all takers until I was too booked to take anymore. I just didn't know enough about the companies to pick and choose.

About two out of 10 meetings have been interesting. which is actually about the track record I get when i screen them first. Fortunately, that included the first meeting I took, with a brand new company called Oosah, founded early '07.

Oosah allows you to swap pretty much any kind of file from site to site, or into Oosah, creating mashups and sharing them with friends. Started by a brilliant Sergey Brin-like kid who doesn't want his overseas programmers to know how young he is, the distinguishing thing about Oosah is that you don't really download anything.

You can log in to several sites at once through the OOsah interface -- Flikr, YouTube, Picasa, Facebook -- and they all appear on your dashboard. Drag and drop items from one site to the other. If you're a PC user, it's like putting in shortcuts that link from one site to a file on another site.

But the content is never moved from one site to another. It's pulled up in real time from the site on which it resides. You can remotely manage the stuff through the Oosah interface -- make slide shows, galleries, whatever you want. All your stuff is in front of you at once. Share them publicly, privately or password protected.

It just came out of beta. Check it out at www.oosah.com.

How Rolla P. Huff destroyed Earthlink

Earthlink has been having trouble making money lately. It's abandoning municipal wi-fi efforts to focus on "more profitable" businesses.

Earthlink can't figure out how to run the businesses it has. After years of great DSL service from Covad, I decided to switch to earthlink for phone and DSL because it's cheaper. I was hoping this was still a decent entrepreneurial company, not a jaded loser like the monopolistic telcos.

I was wrong. My service has been spotty. A week ago, the phone line suddenly went screwy, full of static. The static comes and goes, and is so bad that I can rarely get a DSL signal through it.

I went to tech support, and they spent hours getting me to unplug and plug in lines, cycle the modem, etc. Finally they agreed to send out a technician. But I had to wait two days.

The technician checked all my interior phone lines and found no problems. He hooked up his equipment to the main phone box, and concluded that there was a bad signal in the local loop, which Earthlink leases from AT&T.

He told me he would put in a work order to AT&T to fix it, and said the telco contractually had 24 hours to fix it.

No such luck. The line is still bad. I called tech support again. the technician told me that the issue had never been "escalated" to AT&T. She read me the report. It said that tests found no stress on the interior lines, but did find a problem with the local loop. But, since he did manage to get a DSL signal momentarily on one line, he recommended also having my interior lines checked. Earthlink decided my interior lines were the problem.

I demanded to talk to a supervisor. The supervisor insisted that the technician decided not to escalate to AT&T, but said I should have my interior lines checked. I insisted he had said he would put in the order for AT&T. The supervisor said he would call the technician to see what the difference was. He hasn't been able to reach him for the last four days.

I was on the phone for two or three hours with the supervisor while he tried to reconfigure my system for a bridge connection. That worked for about half an hour, and now I can't get a signal again.

The supervisor had to get me to call a different technician to reconfigure my laptop, which runs Vista. I was on the phone for about two hours with that technician, but the Earthlink bridge could not recognize my earthlink password. He kept trying, changing the password, running off to talk to others. He wouldn't quit, despite zero progress. I finally hung up on him. I had wasted five hours.

Yesterday I got an automated call from Earthlink saying their records indicated my issue had been "resolved." If true, press one. If not, press 2. They connected me to another technician.

The technician said he had to transfer it to a supervisor and put me on hold. For one hour, I listened to a recording telling me that my call was very important to them, but all technicians were helping other customers. At the end of the hour, the recording said I had been waiting too long and they had to help other customers, but please call again. Then it hung up on me.

I'm so mad I can't see straight. I have to go back to AT&T for phone, which seems able to run a decent loop when it isn't for earthlink. And I'll go back to Covad.

Mr. Huff, if you want to know why Earthlink can't make money, talk to me.

UPDATE:

I submitted a complaint to the FCC, then called Earthlink tech support again. The automated service asked for my case number, which I entered, and was again told by the machine that records said the issue was resolved. I pressed 2 to get a technician, and the computer told me that it could not reach any at the moment.

Do you think they set up my case number to start ignoring me?

So I called the tech support line again and just waited for a technician without giving the case number. I got a technician, who insisted HIS records show that the case is still open.

Which should I believe, him or the computer? I'll go with the Borg. It knows.

He transferred me to a supervisor, who first said that the report from the technician who visited my home indicated a problem with internal lines, not the local loop. I made the supervisor read me the report, and sure enough, it said there was a problem with AT&T. The supervisor said she would call the technician.

She called back after an hour and said she could not reach the technician. She would send out a new technician, who would stay in contact with the central borg while checking, so there would be no question of what the problem was.

The technician is supposed to be here on Thursday.

In the meantime, I'm using a wi-fi signal from a neighbor to get online. It works sometimes.

Microsoft/Yahoo = AOL/Time Warner

Is Microsoft's bid for Yahoo a surprise? No. Any idiot could have seen this one coming 11 months ago.

Will the deal be consummated? Probably, but nobody knows for sure.

Will Microsoft/Yahoo be a better competitor against Google? No. It would only benefit Google.

Let me tell you a story. I bought a new laptop in December. I didn't want to upgrade to Vista, but there was not one single laptop on the market that came with XP.

Microsoft Office would have cost me more than the laptop itself, so I'm trying desperately not to buy it. That is very hard.

Microsoft Write is incompatible with Microsoft Word. I tried sending an article I wrote in MS Write to an editor at one of the publications I work for. He couldn't open it. So I copied the article into a Google Doc and invited him to share it. He managed to export it as a Word document.

What does it say about Microsoft that, in this day of mass communications and online collaboration, I have to go through Google to translate a document from one Microsoft product to another? Microsoft is still stuck in the 1990s.

Microsoft is used to telling its customers what to do, and punishing them if they don't play along. The only reason I can possibly conceive of for the Write/Word incompatibility is that Microsoft has designed Write to be purposely flawed in order to force me to upgrade. It's punishing me for trying to use Write.

That's old school thinking. In a world of complicated technology, every company should be doing everything it can to make things easier for customers. There is a near infinite universe of fascinating programs on the internet, and a walled garden is simply going to be broken down by the sheer force of the new world outside that wall.

Yahoo doesn't really get it, either. It does everything it can to keep you inside the Yahoo garden, and desperately throws annoying ads at you in the hope that you'll click on one, ignoring the fact that it decreases the quality of the experience for its users.

Combine those two companies, and you have a disaster.

Google isn't perfect, either. It has not made Google Docs compatible enough. When I export as Word, for example, it comes out with manual line breaks rather than as paragraph returns, so does not recognize individual paragraphs. I have to do a search and replace to get the paragraph returns.

Google should have had this fixed by now. If the company can figure out how to make every application it has compatible with everything from Yahoo and Microsoft , it will become the de facto stadard, the universal translator that gives us compatibility where it is woefully lacking.

This is Google's opportunity to really take over.

Unfortunately, there's a decent chance that will also destroy Google. But by then, there will another competitor to come along and take the reins.

TechCrunch Resolutions: Apple, Google, Microsoft, Yahoo

Don't you just hate New Year's resolutions? I mean, who ever keeps them anyway? I made one that I've already broken, but I promise to try again next week. My other resolution is to blog more. I know I don't blog enough to get any real traffic. Hit me if I don't keep this one, OK?

The folks over at TechCrunch were kind enough to offer resolutions for some of our favorite companies. I thought that was amusingly generous of them. The mostly boil down to one thing: Open up dammit. I found some of them interesting and some amusing. So I thought I'd offer my comments about their offered resolutions. All's fair in love and blogging and self-indulgent self-publishing.

Apple: Open up more.

I think Michael Arrington wasn't born yet when Steve Jobs returned to Apple, so I'll add a little ancient history perspective.

Jobs wasn't really planning on staying at Apple long after his return, which was orchestrated by getting rid of then-CEO Gil Amelio and then taking over as "interim CEO, or "iCEO." Jobs, I'm convinced, was plannning on short-term moves to return the company to profitability, become a hero, then take off for Hollywood with Pixar and let the company founder after he left. But he surprised himself, and was more successful than even he expected, reviving the company with iMacs. So he decided to stay and make Apple a Hollywoodish consumer products company.

Now, Jobs is brilliant. He designs outrageously great products, as he is fond of humbly pointing out, and is the greatest marketing genius since P.T. Barnum. But he's a control freak.

Apple's market share has soared, from about 4% of the PC business (as I recall) when Jobs returned, to about 7% now. The company's stock price has skyrocketed.

Big deal. One of the things he did for short-term gains that really hurt Apple's long-term success was to kill the Mac clone business that Amelio had started to implement. Apple would be much bigger, wealthier and more successful if there were Mac clones -- if Jobs were to really open up. I said this in my Upside column at the time it all happened, but now no one will know if I was correct.

Look, people hate Microsoft's operating system. People are uninstalling Vista. If Apple simply licensed its OS to cloners, it could have destroyed Windows XP and Vista would have been stillborn. Jobs argued at the time that profits would have declined because it would make less money off each clone license than off each Mac it sold.

But that assumes the market didn't expand. I would bet that Apple clones would have at least half the PC market by now, there would be many more applications for Apple's OS, and Apple would be selling at least as many self-made Macs as it is today.

I think it's cowardice not to. Jobs is conceding that his own elegant hardware designs could not compete with Mac clones. Nonsense. People who want cheap comptuers would buy Mac clones instead of Windows PCs, and those wanting a truly elegant, integrated device would pay extra for the real thing, although Apple PCs would have to sell at a lower price than they do today.

But with a mix of hardware sales and software licenses, Apple would be more profitable today. Microsoft has 78% gross profit margins and 27% net margins. Apple has 35% gross margins and 15% net margins. Apple's market cap is $158 billion. Microsoft's is $322 billion. Software is simply more profitable than hardware.

Jobs blew it. Open up, guy. Apple is the only closed hardware system on the market. There's a good reason people abandoned the model. 7% market share? Sheesh.

Facebook: Let people take their data from Facbook and use it in other apps and sites.

Also correct. Come on guys, closed systems are a thing of the past and anti-Web culture. If Facebook doesn't do this, others will, and will take its business away. Yahoo has already proved that the walled garden approach does not work.

Google: Go beyond PageRank.

Sorry, TC. Just because you don't know what Google is doing beyond PageRank doesn't mean nothing is being done. Google is way ahead of you on this. The company just chooses not to tell you what algorithms it's using these days. Secretive company, remember?

Amazon: Open up Kindle and let others make the hardware.

No brainer. See Apple comments above. And Amazon hardware isn't even elegant. I don't know if Bezos is smart enough to take the advice, but I think he is.

Microsoft: Get serious about Webtop apps.

Well, the company is trying. But it's hard for a company with a huge, profitable legacy business to change, and Microsoft is probably the best in the world at adapting. To Google, the internet is the primary platform, the PC an adjunct. In Microsoft's view, it's the other way around. The company has to try to distinguish its strategy some way, and hoping its desktop leverage will still help. It won't, but it will take Microsoft a while to find out. Then it will change.

Yahoo: Use the traffic and stop trying to keep everyone inside the walled garden.

Right on, but it won't happen. Yahoo still thinks it can be a content company and monetize it by sending people to that content. Wrong. No single publisher can offer all the best content. People want to get the best. And Yahoo hasn't learned that content is a notoriously unprofitable business unless you have monopoly status. But content monopolies are being destroyed by the internet, and the only successful ad strategy is to sell ads around content that you don't own.

To that I'll add that Yahoo still refuses to admit that only relevant ads make big profits online. But then, most online publications refuse to admit it as well. Too much junk, too many irrelevant pop-ups. Yahoo still gives preference to the highest ad bidders, even though nobody clicks on them. Read my clicks: It doesn't work!

eBay: Sell Skype.

It will. This year.

Thanks to TC for making promises for others. Think I can try that on my relatives?

Google, the industry catalyst

I was at the Google Media Holiday Party tonight, an annual bash the company gives to show the press that the folks there aren't as hostile to our profession as it seems.

I still think that Google is one of the most misunderstood companies out there. Being contrarians, nobody in the press likes to write yet another positive article about the company that's become a behemoth, an advertising monopoly, the primary invader of everyone's privacy, the abuser of copyrights, the scattershot company that goes so far afield of its core business it wants to build a ladder to the moon and take on the cell phone industry. Google bashing articles are in. So the company throws a party.

Sergey and Larry were absent this year, but senior folks such as Eric Schmidt, Marissa Meyer (who seems to be in charge of everything that falls into the category of "search" and must have no social life,) economist Hal Varian, open source maven Chris DiBona, Google.org director Dr. Larry Brilliant (isn't that a great name?) and others that I didn't get a chance to talk to were there.

I joined a small group talking with Eric Schmidt about things like Android, Google's attempt to open up the cellular industry. He wasn't saying much, of course. So I asked him if Google wanted to become a communications company, given Android, rumors of a Google-branded cell phone and its decision to bid on the 700 MhHz wireless spectrum.

Eric's non-answer was to say, "We already are a communications company." It's true. Google already has its own private internet, and allows Google users to speed up their internet transmissions by tapping into it.

So look at the potential. A cell phone, a piece of the wireless spectrum, its own huge network of fiber and server farms, and you have a telecommunications company.

Since Google is bidding on the wireless spectrum it is strictly forbidden by the FCC from talking about what it wants to do with it. So Schmidt had to dodge direct questions.

But I've been thinking about the idea of Google as a catalyst for industries lately. Why does Google get into so many strange businesses? I think the answer is simple. Others aren't doing it, at least not properly. Somebody has to.

Google hates monopolies (except online advertising monopolies.) Monopolists charge too much and stifle innovation. The internet presents so many ways of breaking monopolies and lowering prices, but governments are pretty good at listening to monopoly lobbyists. So Google tries to act as a catalyst for breaking monopolies and unleashing the potential of the internet.

Of course, when the internet is unleashed, Google benefits. There's no other company with such a 1:1 relationship between the number of people online and its own revenues. Just get people there and Google will make money from them, with one ad or another. As DiBona said in a Guardian interview, "as the internet gets bigger, so goes Google."

I asked Schmidt if Google was just trying to be a catalyst to steer industries in the right direction. Schmidt just schmiled.

Everywhere there's an old monopoly failing to take advantage of the internet to increase services and cut costs, there's an opportunity. The cellular industry has been a closed, monopolistic system, locking people into two year contracts just in order to upgrade their hand set. It keeps prices high and service quality low.

So Google comes along and creates an open handset that allows apps developers to innovate, and is unlocked so it can run on any cell network. The cellular carriers will resist, but just suppose the Google phone starts catching on.  Google has a phone into which it can  shove its apps without having to deal directly with the cellular carriers.

If the Google phone itself doesn't become a big hit, it just might start breaking apart the closed industry. Other carriers start accepting unlocked phones, stop subsidizing the price of hand sets with higher access fees, and people start getting a choice of which carrier to use. It gets easier to use the cell phone to go online, and cheaper to boot. The Google phone fades away, but Google still wins.

Google bids on the spectrum and changes the rules: Its cell network will take any phone that manufacturers want to put on it, and Google subsidizes the whole system with advertising (which is Google's real business.)

Or the other telcos realize they have to drop their prices and find a new business model in order to compete with Google, making it easier and cheaper to use cell phones as portable online devices. Google's cell business doesn't take off, but it still wins. And it sells its spectrum to someone else.

How about municipal wi-fi? One muni wi-fi consultant, Craig Settles at Successful.com, told me recently that he thought Google was just dabbling in muni wi-fi, but would neither put up nor shut up. Google offered to install and run a free wi-fi system San Francisco, but it never came to be.

But suddenly muni wi-fi systems started springing up across the country.

Settles thinks Google actually did a lot of harm by getting municipalities to think that they should all get it for free, but I don't know. It at least got them to thinking about how to offer the service.

So Google doesn't become a wi-fi supplier. It was a catalyst, and the more free or low-cost wi-fi we have across the country, the more people get online. Google comes out ahead.

Why does Google do apps and email? It does have advertising on email, but apps are a tougher cookie when it comes to mixing advertising in the batter. Well, first of all, Google wants to kill off Microsoft -- again, a monopolistic company that charges too much, in Google's opinion.

If I outfit my new laptop (which I was forced to accept loaded with Vista) with all the usual Microsoft apps, the software will cost more than the hardware. Does that make sense?

So Google starts offering free apps online. Would Microsoft have ever started moving in that direction without Google as the catalyst? Duh. So suppose Microsoft ends up winning the online apps war after all. The software is now cheaper, and runs online rather than in the home machine. Without an operating system monopoly that all apps must conform to, there's more competition in applications. More people go online and spend time there. Google wins.

Look at Dibona's group. Among other things, he runs the summer of code event, bringing together students and mentors to work on open source projects. But it's really about getting people to use Google APIs to create apps for Google software platforms. Google socks it to Microsoft and boosts its own platforms. And the idea of opening up online platforms to outside apps developers catches on. Look at Facebook.

How about alternative energy? That one's really far afield. Dr. Brilliant told me it's good for business because Google wants to lower energy cost and consumption. So it pays solar thermal energy companies to set up systems for Google, and puts money into the industry through Google.org.

This doesn't really benefit Google's business (hence the .org involvement,) but its something Larry (Page, not Brilliant) wants to see more of. A pet project. With funding and purchases, Page hopes to give an extra boost to the alternative energy business.

Over and over again, these peripheral businesses show their benefit not by being direct moneymakers for Google, but by busting monopolies and getting more people online (or serving other pet projects from executives.)

Who says Google's scattershot strategy is dumb? It doesn't have to take over these industries, it just has to make the investments to move existing, old-fashioned corporations in a direction that will benefit Google.

Who better to do it? As Dr. Brilliant told me this evening when talking about investing in alternative energy, "We've got the money."

CNN coverage of Google vs. the iPhone

Blogs can influence the mainstream press.

CNN London saw my blog about the Google phone and set up an interview with me to discuss it.

You can see the video on CNN International here.

It's currently listed as the Video of the Week in the right hand column. The title is "Google takes on the iPhone."

Google's Android phone: Less than met the ear

Google made its anticipated announcement about a new Open System phone. People listened. What they heard was less than what they heard last week. The stock seems to be sliding a little in after-hours trading -- although not by much.

I had thought it would decline further. This was only an announcement of a new operating system for cell phones, not the unveiling of some fancy new gizmo like the iPhone. Handset makers include HTC, Samsung and Motorola.

But it's easier to get the handset makers on board -- they can cut costs with an Open and probably free OS -- than it is to get the mobile carriers to buy into this. As the Wall Street Journal predicted, Deutshe Telelkom's T-Mobile is a partner in Open Systems crime. So are Sprint Nextel and NTT DoCoMo.

Sprint and T-Mobile are desperate for something to distinguish themselves, and a wealth of new applications may help. Japanese carriers like NTT are more open to Open.

Absent are AT&T and Verizon, the biggest U.S. carriers. The Wall Street Journal brings up the legitimate issue of concern over rogue applications that may be security risks and steal info from us.  "Those issues partly explain why large U.S. operators like AT&T and Verizon ... have yet to sign on to Google's initiative."

Sure. I'll accept that. But I'll bet iPhones to land line handsets that the bigger reason is that they don't want to give up the ability to overcharge us for features.

Still, this will be a start -- in the second half of next year -- to wresting some control from the carriers. It will not only allow third party apps, it will operate on more than one carrier's cell network. That's got to put pressure on the Old Age carriers.

And perhaps when the handset makers reveal their phones there will be some nice surprises. We don't know yet if Google will release APIs for apps makers before the phones are released.

Also, analyst Jeff Van Rhee at Craig-Hallum, who follows Nuance Communications (maker of the Dragon voice recognition system) recently told me that there have been strong rumors that a Google-backed phone will include Nuance's software.

That could make QWERTY keyboards on phones obsolete. Just speak your email message or web search. That's a good app and one that Steve Jobs mysteriously passed on with the iPhone.

Now let's see if Google can pull it off. For everyone's sake, and the sake of real competition, I hope so.