Tag Archives: amazon

👋👋Whats next for messaging as another stalwart departs.

This week we say goodbye to a messenger app that dominated North America and look at a new battle for messenger supremacy.

Its finally gone.

AOL Instant Messenger is shutting down in December. For most of you this will be a “so what” moment but it will be on almost all tech news sites as it was by far the biggest instant messaging service in North America. Here in the UK, MSN messenger was king for many years but that shut down in 2014.

Of course today it is all about WhatsApp, Facebook Messenger and Snapchat. Originally, these companies did little to differentiate from old messengers other than being a better experience on the mobile. That it seems was enough.

Today though, the capabilities of these apps are increasing. Filters, augmented reality, chatbot and of course more artificial intelligence.

But language continuously evolves around us and as technology opens new ways to communicate, so does the way we communicate. Today the world is emoji crazy. Tomorrow though smart assistants, augmented/virtual reality and holograms are all going to have a large impact on how we communicate.

Facebook announced Spaces last year, their vision of social networking in the future which I suspect will be looked back upon much the same way as we now look back on Microsoft Bob, Microsoft’s attempt to transform the computer interface. We still don’t have mainstream 3D computer interfaces but they are coming and with it will come the ability to communicate within these digital realms.

Microsoft Bob

Interoperability is not important.

Meanwhile, Amazon has brought its Alexa calling capabilities to the UK. It will allow you to communicate with other Alexa users (and hopefully call US phone numbers as well).

Now there are a lot of Alexa users out there but it is still only a tiny minority of my friends. It isn’t like there is anything compelling for me to use it.

Amazon is a late entrant to the messaging space though early within the smart assistant space. Still, this is not an open and new market and with heavy competition from Google and Apple it is going to be an uphill battle to make Alexa calling a real success.

Now if it allowed me to call other platforms, message WhatsApp, Snap or Facebook Messenger – that would be useful.

There are of course benefits strategically to Amazon building an Alexa-only calling capability – it serves to lock people into the platform and reduce churn. That only happens though with major adoption, which of course they don’t have.

Back in the 2005, Google launched Google Talk its first of many unsuccessful forays into messaging. Very quickly though they made it possible to chat to Yahoo, AIM and MSN contacts and the big players worked together to create a way for them to interconnect. It never really worked though and its struggles do not bode well for Amazon. This was not due to the open nature of the platform but rather a poor user experience and completely missed the mobile opportunity.

Unfortunately that industry-wide effort to create interoperability was abandoned and we are left with messenger silos again today. If I only use Snap and you want to message me you either have to download Snap or fallback on SMS.

History seems to suggest that this interoperability will only happen when a market becomes mature and stable. Perhaps the instant messaging market had matured enough for that to start happening only for mobile to disrupt it.

Perhaps though we could agree on some basic standards which all platforms can build to and allow for basic messaging between platforms.

Without this, unfortunately we are not likely to see any interoperability between devices for a long time without external intervention – that intervention in turn would slow down innovation so I guess we are destined to continue in the same vein for now.

Perhaps we will see WhatsApp and Facebook Messenger release “apps” (aka skills) into the Alexa and Google Home ecosystems and make the whole Alexa calling thing disappear.

💰The big five report. Amazon in depth. The differing paths to success.

The big four (Facebook, Google, Amazon and Apple) as the media refer to them, or big five as Microsoft should really be included have all released their numbers in the last week or so bar Apple, who release this week.

I spoke briefly on the BBC (video below) on the Amazon results but with so much happening at Amazon I’ve expanded on it further.
No one expected the disappointment in the results (which showed Amazon beat revenues but miss earnings).

In the lead up to Amazon’s results, the analysts were super positive. But like Google, Amazon has never really respected the stock market’s quarterly results cycle and this quarter’s results was a reminder of this. The investment over the quarter meant that earnings were 0.40c per share, instead of an average $1.41 per share. They didn’t just miss expectations, they completely ignored them. Why were we surprised?

The money is being invested predominantly in three major areas – expansion into Asia, delivery and their video service in advance of the key Christmas period. This was Amazon for the most part making a bet on their next quarter’s numbers and beyond.

Warp speed

In the US, maintaining Amazon Prime membership is now a critical way of shutting out the competition. More than 50% of US households are a member and Amazon’s competitors do not have their heads in the sand and are trying to compete.. slowly. Amazon though is not stopping at next day or even some same day delivery. It is pushing for broader and faster capabilities.

In the same way as Google changed the game with Gmail’s vast amount of storage, Amazon has done the same with Prime. Even more impressively they have done so for a fee. Amazon clearly believes that delivery speed will continue to be a key differentiator. Their recent Prime Day sale, exclusive to members was their biggest to date.

Behind the scenes
The margins at Amazon are thin but when you look underneath the covers, Amazon Web Services, their cloud server platform used by companies globally to host apps, websites etc. are performing extremely well and are increasingly profitable. It is a $10bn business and grew a healthy 42%. They completely disrupted the provision of servers to businesses and are continuing to lead the market. Microsoft’s presence here is starting to be felt now – they previously grew over 50% and whilst they are still far and away the leader, Microsoft has the arsenal to go toe to toe with Amazon.

Calling Alexa

The most exciting opportunity amongst Amazon’s portfolio is the Alexa ecosystem. This is not an area that Amazon has typically succeeded in. Their previous foray into hardware was their Fire phone which flopped. Alexa though is the clear leader in the smart virtual assistant space right now.

This gives it a unique opportunity to change the way we interact with technology in a similar way to how Microsoft did the same with the launch of Windows 3 and the adoption of the mouse. Back then, Microsoft used the success of Windows to build multi-billion dollar businesses in office and server software. Alexa could allow Amazon to do the same.

Amazon is placing communication as its bet on the key feature alongside the assistant itself. It launched the Echo Show in the US recently which disrupts the videophone.

The rumour is they are also going to launch a messaging platform to compete with Facebook and WhatsApp. This will work on the desktop and phone but if it isn’t tied directly into Alexa it will be a missed opportunity in my view. Even then, I am not convinced we need yet another messaging platform. Google has tried to compete in this space for years with little success. Whilst Excel truly transformed the way you used a spreadsheet vs Lotus 1-2-3, I am not seeing anything different about Amazon’s messenger vs Facebook’s.

Maybe Facebook will misstep when they monetise their messaging platform later this year. I wouldn’t bet on it.

The righteous path

What interests me the most is how, despite the very differing cores of each company, we are seeing the big five attack the same opportunity from their home turf.

In the short term, the bet is on smart virtual assistants. All of the five except Facebook has one.

Amazon being the most open (and Microsoft-like in strategy) by opening up the platform and building strong partnerships to extend the ecosystem. Their approach tightly integrates with its ecommerce engine of course. As previously mentioned, social is the piece it also wants to own itself.

Apple is focusing on music, which given the strength of iTunes should be of no surprise, though I suspect it will overhaul Siri every year until it is a really strong competitor again albeit within its closed Apple ecosystem. One for the fanboys 😉

Google is focused on its assistant being the best at providing information, building on its historic search capabilities. This should mean that it has the most helpful assistant over time but can it provide the breadth of services that the others are building?

Finally there is Microsoft, which under Nadella has the clearest vision it has had for a long time. They are focused on productivity. This potentially makes it a strong player in the business space but the consumer space is where the growth is today. Can it succeed here? I’m sure it will find a dozen or so hardware partners and flood the market but it needs to deliver on partnerships like Amazon has done to succeed. It could equally succeed as a business though without the hardware piece and just deliver its productivity capabilities through the other platforms.

What about Facebook? Well I am sure there will be addons across all the platforms for Facebook and WhatsApp. That is one reason I don’t believe Amazon’s messaging platform can succeed without more significant capabilities.

The smart assistant devices are also just a version one technology. They’ll integrate into everything and be everywhere. In your car, phone, TV and laptop. Probably even your fridge. To truly work though, they need to not just wait for our question but need to understand what is happening around us. The research Facebook is doing into augmented and virtual reality will deliver the next leap in smart assistant technology. The market may have passed Facebook by then though.

(This post originally featured in the Connected Paths newsletter, which you can sign up for here.)

amazon redesign – where’d the books go?

Amazon have redesigned their website.. My first impressions have to be “Where’d the books go?”. I still really only shop at Amazon for books but the only things I see is their credit card, cameras and gardening (?!). After that, I noticed Amazon search. They have given it much more priority overall in the site, and are definitely looking to have people navigate around using the search functionality. I like it, it seems to work and is quick. Thinking about it, I used to click the area and search before anyhow. Now I can just search.

Overall it does feel weird but I think given a bit of time I’ll like the new layout. It has emphasised Amazon’s shift to things other than books, which had been obvious by the number of tabs that kept having to be added in the old website. What I would really like is a customizable front page that lets me see the type of items I buy at Amazon now (yes I mean books. 🙂 )