Tuesday, July 25, 2006

This, that and the other

Humble apologies for the thin posting lately. It's Q2 reporting season, and I have to shadow a lot of results as well as write things for clients, so as one of my old Memphis friends used to say, "I'm busier than a one-legged man in an ass-kicking contest." Colorful, eh?

Just a few points of interest and observation:

Om seems to be on to something with the Skype founders' side project story. I'm 99.9% sure I know the punchline, but let's wait for his undoubtedly interesting followup later this week.

Six months ago, in the run-up to Vonage's IPO, I expressed a gut feeling that we were looking at a $1bn valuation when all was said and done. Not having paid any attention to the company for the past couple of weeks, I now see that, in fact, this is exactly where the stock price seems to be getting some support over the past 10 sessions or so after a 59% slide since trading started.

In a separate development, Jamie Serino, Vonage's director of corporate communications, has left the company (no doubt with a head full of grey hair) for what sounds like an interesting new opportunity elsewhere. I wish him success.

Speaking of people on the move, my friend and co-opetitor Rod Hall from DRKW has left the firm. Given that Rod went through the pain of getting official approval for his blog and trying to integrate blogging more closely with the research/sales function, rather than going the purely personal route, I'm curious to see what he does next.

The agony and ecstasy of free broadband in the UK continues. My colleague, whose woes I described here, managed to work out his problem through trial and error. It seems to have involved some authentication error, but his description is somewhat vague. In any event, he has not had a response to his personal email to Charles Dunstone. Meanwhile, his wife has demanded a credit on her Carphone Warehouse mobile account due to all the time spent on the premium rate TalkTalk technical support desk. She was advised on the customer service line to go to her nearest Carphone Warehouse shop, where employees can use a dedicated direct line to contact TalkTalk technical support. Meanwhile, Disruptive Dean suggests that Carphone Warehouse has redeployed some of its mobile call center employees to TalkTalk - the phrase "fighting a war on two fronts" comes to mind.

Yesterday's Vodafone Q1 KPI release and conference call brought another epiphany in my mental musings on why broker research is likely to be toast in the long run. Management were pretty forthright in saying that a lot of the metrics traditionally used to assess company performance have become less relevant in saturated markets with multiple SIM ownership (Italy they cited as an example of a market with an average SIM per customer of 1.3), and I would have to agree. Yet there we were, 50 or so sell-side analysts who cover the company, God knows how many on the buy-side, individual investors, media, bloggers, etc., all spending a good few hours poring over these same statistics which contain a lot of distortions, in search of some magical message - namely what is the true underlying trend in usage per real person? The rather staid note I wrote for clients politely expressed frustration at the exercise (what exactly do you do with a near-15% inactivity level in the UK?), but the likes of Keith and Dean can be more direct and immediate. Like I said quite some time ago, I feel confident that the bloggers' mindshare will expand to the detriment of brokers' research.

Check out the Vodafone AGM webcast at 11:00 AM UK time (12:00 PM CET) - it's better than reality TV. Will they or won't they, does he or doesn't he? Ultimately, it doesn't matter. This company faces big challenges no matter who is in charge.

Now back to the trenches...

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