RIP 2008

I think it's fair to say that few of us will mourn the passing of 2008, at least from the standpoint of the financial meltdown, on-going business uncertainty, mass layoffs, plunging stock prices and pretty much any other money metric you care to come up with.

Still, life is about more than that. We had a wonderful trip to Africa, added another dog into the mix and generally got on with life, liberty and the pursuit of happiness. (Where have I heard that line before?)

As the dust settles, and thanks to some heroic efforts that only finally got a result at 1:30 am last night, looks like we made our number for the year, plus a bit for good measure. In this sort of economy, and given all the challenges associated with building any sort of high-tech business regardless of where and when, that's a quite remarkable result and testament to the calibre of the entire team we've assembled. Of course, no one knows what 2009 will bring but it's fair to say that we have set the seal on a very strong 2008 and can feel proud of what's been accomplished.

It's with hope, therefore, that we all look forward to 2009. Across the board, it's a year of "new"s: new presidency in the USA, new ways for the world economy to benefit from all the various injections of capital and lowering of energy and raw material costs, new means through which we can all do better, and be better.

Can't ask for more than that opportunity really, so happy new year, thanks for reading and here's to 2009!

Merry Christmas

Eric Gill, 1882-1940

"Peace to men of goodwill" is I believe the more precise translation, rather than the traditional "Goodwill to all men", and much more logical. Therefore, let's go with that!

Merry Christmas and a Happy New Year!

Fraudster Fleeces Fry's

Fry's electronics store is something of a Silicon Valley legend. Founded in 1985 in Sunnyvale, the store started out as a geek's gathering spot; the sort of place where you could buy everything from obscure components to complete computers. From those early origins, the company has grown to where they now have 34 stores nationwide and turn over north of $2 billion per annum.

(Just as an aside, any of you visiting in this area who is interested in technology then do yourselves a favour and make a pilgrimage to one of the multiple Fry's locations. Each store has some sort of theme and the one in Palo Alto is fun as it's the Wild West. However, this is not the Fry's of old. Much more space is now dedicated to everything from fridges to folders, cameras to chocolate, and that close knit "geeks only" feel has gone. Nevertheless, it continues to attract the Valley's brightest and best who can be found wandering the electronics and components aisles still. It's also remained true, therefore, that the best way to learn anything in Fry's about what they have in stock and how it works is to ask one of the customers, their sales people being, err, "variable" in their knowledge, shall we say.)

Meanwhile, back at the ranch, all was not well: there was a traitor in their midst. A company VP, earning a salary reported to be $225k per annum, (which is more than I get paid in case you were wondering if I was one of those fat-cat CEOs the media bang on about) had more expensive tastes than this could reasonably cover. Therefore, he decided to make a little extra on the side, to the quite staggering tune of $65 million ...

By setting things up so that there were no other sales staff between him and his suppliers, it's alleged, he was able to offer them more attractive pricing and terms in exchange for a "marketing" fee that was supposed to offer them preferential treatment for things like advertising, shelf positioning etc. Those fees were channeled through a shell company the defendant owned, and in just a few short years got built up into quite a nice little nest egg for him to cash out on ... except it didn't.

Believe it or not, in parallel he managed to rack up debts in Las Vegas to the tune of $162 million. Yup, close to $100m underwater. To the Vegas mob. In three years.

Unsurprisingly, the Judge, upon letting Siddiqui out on bail, banned the defendant from travelling to Las Vegas. But he needn't have bothered. Doubtless Las Vegas will be paying a visit to Siddiqui instead .... and most likely by one of their employees whose middle name is "the".

What is it about Christmas and fraud??

What's An Eyeball Worth?

Interesting Business Week article on the social news site Digg. Digg is basically a news aggregater, relying on Internet users to vote for stories they like that then find their way onto the Digg site; the more votes - or "Diggs" - the higher the story ranks, and hence the closer to the top of the site it's displayed. So far, so what? Does this have any real-world enterprise value? Let's see.

Digg gets something like 1.5 million hits per month. Let's be generous and call it 20 million hits per year. Business Week reports that their revenues are likely to be around $8m for 2008 ($6.4m for 1-3Q, and assuming some fall-off from their on-going ramp thanks to the general recession.) Therefore, Digg has found a way to monetise each hit to the tune of roughly 40 cents. Not too bad, you might think, considering that they don't have to actually, you know, produce any content themselves? Not so, according to the article, that says this year they lost $4m in generating that $6.4m, or roughly speaking Digg has an expense rate of $14m to $15m per annum. On Digg's site, there are around 80 people shown as being "on the team" so that level of expense does indeed seem about right. Yeah, yeah, I have the same question: just what an earth are they all doing every day?? But let's just share the cool-aid and pretend that this level of expense is justified... somehow. What, then, does the future hold?

So here we have the classic Web 2.0 dilemma: this all looks good when both web traffic and advertising dollars are growing every month and when valuations are built around an assumption of being bought by Google, Yahoo!, Microsoft, Time Warner, Fox or someone else flush with cash and hot for web hits. Hang in there long enough, generate enough hits and voila - everyone gets to call in rich. Alas, those times are now as much history as is the Battle of Waterloo, but without the happy ending (well, for the British at least).

Last year, Digg reportedly went out with a heady $300m valuation and tried to sell themselves. They failed. Last year Digg did less than $5m in revenue and lost close to $3m in getting there. "Growth at any cost" would therefore seem to have been the prevailing mantra. Hmm, wonder how that chant's sounding right around now?

A 60x multiple is a bit cheeky in any climate; just now it's downright laughable, which might explain why Business Week reports that an additional financing round closed in September was done at a valuation of $167m, still a sum driven 100% by the prize of a rich exit through acquisition being within reach.

To be break even at a $14m expense run-rate would require Digg to attract 35 million hits per year. That's hard to see anytime soon, and by "soon" I mean ever. There's a limit to how social the world is willing to be in getting news items, even of the "ecstasy was for my dog your Honour" kind, and Digg is far from being the only game in town. Yes, they now have cash in the bank and hence time to figure all this out, but what we don't yet know is just how long-term many of these social-based businesses actually are; the available runway may be shorter than any of us know. Let's face it, there's nothing business critical here. If Digg went away tomorrow then another version of the same thing would take over, people would switch and the world will keep on turning.

I have no idea how this particular story will play out nor do I have any particular axe to grind against Digg, but it has been fascinating to see under the covers of the financial blanket that being private usually throws over the operation of a company such as this, and Digg's was just the one Business Week got to see under. Having now had a peek underneath, though, it just helps you understand that there isn't anything especially magic about these business models, other than how on earth they keep attracting the kinds of insane valuations that they apparently do. (Makes you wonder - if they went out now, what do you think that valuation would be? Bet the answer would be a lot less than $167m)

Despite the public warnings from Sequoia of "RIP The Good Times", the "land grab" mentality of Silicon Valley still appears to be alive and well. However, as the old time prospectors will tell you, there's a big difference between staking your claim and actually panning enough gold from that land to keep you supplied with whisky & beans, let alone striking it rich ....

Still Doing It Wrong

A few more vehicular examples of how not to do things ... and thanks again to Jalopnik.

Classic.

Jobs-Worth?

A lot of column inches have been dedicated this week to analysing the announcement by Apple that this will be their last year giving the keynote at MacWorld. Furthermore, and despite its valedictory status, Steve Jobs won't be up there on stage delivering it ....

It's not hard to see the logic of the first point. Ever since the Internet put up its first corporate web-site, trade shows were well on their way to being a doomed species. Give it five years plus a nasty dose of recession and these high-tech bashes will be largely extinct. Apple doesn't need MacWorld anything like it did ten years ago now that they have their own retail outlets, their own highly-hyped press conferences and so much free media-buzz that it would drown out a city-sized swarm of bees.

It's therefore the second decision that's causing all the discussion: is this the beginning of the end for Jobs as the Big Cheese of Apple? Indeed, has his leadership role already slid into titular territory? Is he now too sick to do it? (Talk keeps going back to his dice with cancer, complete with obligatory mention of how gaunt he's been looking lately.) Apple says not, but it's clear that the change-over is no longer a matter of "if", but purely "when".

Silicon Valley has its own aristocracy within which Jobs has been ennobled to the highest possible level. But this begs the question, "what's that worth?" to Apple's stock price. Om Malik just posted an interesting assessment of how strong this "SJ premium" is when viewing Apple's current stock price, and the summary makes for interesting reading.

Today, Apple's market cap stands at around $80 billion. Using industry benchmarks to calculate the effective break-up value of the constituent parts of Apple's business, Jeff Segal, from the NY Times arrives at a total of approximately $60 billion from the Mac line, iTunes, gadget sales and all the rest. He therefore says that the Jobs premium is $20 billion, or roughly 25% of current enterprise value, which is really rather quite a lot when all is said and done.

Of course, this all assumes the market is a logical and methodological beast, something it proves not to be the case each and every day it lives, and hence no one really knows how wild the swings will be on the days following the switch to "After Jobs" for the Apple calendar. Regardless, it's interesting still to see the maths and ponder on what happens when he does inevitably step down. Ultimately, I suspect much will depend on the circumstances. An orderly transition to a board role will, if handled well, minimise the problem; a more sudden and more emphatic disengagement and just a 25% drop will be looking like a bargain.

Either way, the change will happen, so I actually hope for everyone's sake that this does indeed signal the beginning of the formal handover process. After all, with the stock price as beaten down as it is, when better to get this done?

Shocking

Believe it or not, the picture here was part of a series from Austria, produced in the 1930s, warning of the dangers of electrocution. Not sure that this is immediately obvious from the drawing, nor indeed that the risk of getting zapped from a dodgy lamp via a cow is actually that high, though I can accept that in pre-WWII Austria this might have had a slightly higher chance of occurring than would be the case today. (It did though seem to require an odd coincidence of events to occur, from said faulty lamp going live, through to the cow having it's tail wrapped round the lamp casing and requiring a bare-footed milking maid to boot, err, or rather not be booted.)

Cautious lot those Austrians, as the other one shown above indicates. Is no one safe, not even a bloke with two bedside lamps and a grasping fixation??

(Thanks to Bre Pettis for making these available via Flickr here.)

Daylight Robbery

In the Valley we are used to large sums of money being made and lost seemingly overnight, so it takes quite a lot to make us sit up and take notice. However, when one bloke manages to burn through $50 billion, even we have to pay attention and doff our caps.

You really have to be pretty impressed with what Madoff (pronounced "made off", as in "made off with a huge wad of other people's money") accomplished. I mean, do you know how hard he, personally, had to work to dump that much? To put this in context, at the end of 2007, the Bill and Melinda Gates Foundation had investments worth around $38 billion. In order to house the necessary staff to handle things like investment management and funds disbursement, these guys are building a downtown Seattle campus on 12 acre lot. Big. Scale. Stuff.

Contrast this with Madoff. Seems this scam operation was run out of one floor of Madoff's New York office building, underneath the two floors dedicated to his other business of market trading. The same article goes on to say that the auditor who had been signing off the accounts is already under investigation. This highly complex task was, it seems, entrusted to an operation comprising one partner, who is in his seventies and living in Florida, and who employs one accountant and a secretary. That's it. Please contrast this with the audit we are currently doing at my company, a Silicon Valley start-up, where we've had a team of 4 variously on site for weeks at a time for a business that's almost 4 orders of magnitude smaller.

While public companies have to live under the broad and heavy yoke of Sarbanes Oxley, the fact that a $50 billion hedge fund can get away instead with using the sort of operation that would struggle to handle the accounts of your local sweet shop, it is clear that something is fundamentally broken at the base of the regulatory framework.

This jerk gets $50 billion free-and-clear to play with while real companies, producing real products (albeit largely crappy ones) like GM and Chrysler, can't even get a civil word, let alone a hand-out, from the very legislators that allowed this whole situation to fester for years unchecked? Fire the bloody lot of them, country-wide, and start again. And by "them" I mean Congress.

Madoff is a complete and utter scam artist, running an obviously illegal pyramid scheme. Congress is a collection of weak and venal politicians who can see no further than their next boondoggle, narrow self-interest,special interest payoff or electoral contest. Against them, it's hard not to prefer Madoff, minor failings like iceberg-scale embezzlement aside.

Picture Competition

So just what is going on in this picture, and why should anyone care?

Answer in a couple of days.

Abandonment

Just a plug for a fascinating site: Artificial Owl. It's a pictorial record of abandoned man-made items or locations, anything from aeroplanes to atolls.

There's a great selection of aircraft pictures, including the one above which just begs the question of how on earth things ended up this way? Either it was a very unfortunate (or highly skilled) landing, or just an amazing construction project by someone with a bizarre sense of humor.

Definitely worth going through the Chernobyl images showing the abandoned town of Prypiat, stuck, unfortunately for it and it's residents, on the doorstep of the reactor site, and deserted now for 22 years.

Where To Live In Silicon Valley?

People moving into Silicon Valley are faced with a tricky initial choice: where-o-where should we hang our hats?

In common with any large conurbation, there are a myriad array of discrete towns or communities to choose from, and, matching this, an equally large set of criteria to be applied if you are having to decide where to live. Are the schools more important than, say, the anticipated commute? Is access to a park a key requirement? Are there three Starbuck's within spitting distance? (Actually, the last one barely warrants even a passing thought since that rule would easily be met even if you were moving to the wilds of Alaska.)

The San Jose Mercury News today offered another way of looking at this: how many poor people do you want to encounter, on average, when strolling over for your daily caffeine fix? In the print edition, the Mercury News looks at poverty levels around the Valley using data that was derived from the 05-07 U.S. census.

In the South Bay, the only area mapped in this way, San Jose comes in at last place with 10.2% of the population below the poverty level. At the other end of the scale, Los Altos tops out with a quite remarkable 2.1%. (And that's remarkable because I have no idea where in Los Altos that 2.1% are living, given the prevailing property prices, even in today's market. Must be in the garden sheds of the large and plush grounds surrounding the mansions in the hills.)

Starting from Palo Alto in the north and going down to Gilroy in the south, three cities in Santa Clara County show up as having less than 5% of the population below the poverty line: Los Altos, Los Gatos and Saratoga. On the other side of the ledger, three cities are at 9% or higher: Gilroy, Santa Clara and San Jose.

Does any of this really say much about the quality of daily life for residents in these cities? Not to me, but in all fairness we are hardly the standard issue nuclear family & so may not be the best of judges. Personally, I either like to live a long way from anyone - pretty much as we do now - or in the middle of a city larger than any of those listed above; San Francisco, for example, would fit the bill quite nicely. And as they say in real estate, the three most important factors to assess with any property purchase are location, location and location. After all, the wrong sort of neighbours in Los Altos can likely be just as annoying as those you might find in San Jose; they might just drive a nicer car, is all.

Busy Week

Not sure how much posting will get done this week as Silicon Valley heads into the final stretch before the Christmas break. We still have a lot of business to close, and less & less time now in which to do it.

Therefore, "here's a test card and some music" as they used to say on the BBC when there was no programming on (remember those days?) in order to keep you occupied in the meantime.

OK, then ... pelicans flying over some flamingos, all delivered in absolute silence. Happy now?

Deliverance Cottage

This cabin is in some woods close to our house. Story goes that some bloke bought the parcel of land promising to build him & his missus a cabin getaway. However, once he proudly showed her the early results of his handiwork she threw a bit of a wobbly, quite understandably vowing never to go near the place.

I'll have to go back and capture it on a nice misty morning and maybe try one or two other things because the above doesn't do the whole spookiness/rustic hovel thing proper justice. (And only using a Canon point-and-shoot, just before sunset and in a densely wooded area didn't help much either.)

Handy, though, to have an additional bolt hole in these challenging times, even allowing for the fact that there's no vehiclular access, just an old logging path. It's also worth bearing in mind that the water supply seems to be drawn from a spring that only runs towards the end of the winter and any electricity you may feel in need of is via a very old and now rusted portable generator. Oh, and he never quite got round to putting any windows in, either.

Cue the banjos ....

You're Doing It Wrong

Do yourself a favour and look at the rest of this gallery. I find it very cheering to see just how badly others manage to screw up!

Thank you, Jalopnik, I needed a good laugh in these most trying of times.

Bank Of The Mafia

According to the BBC, luckless business owners in Italy are having to seek alternate sources of funding in order to keep going in these credit-constrained days. In short, when Banko di Highstreet fails you, turn instead to the Banko di Cosa Nostra.

In the radio version of the story, the reporter cited the case of a business owner who went to his local bank to request a loan of 50,000 Euros in order to continue to operate. The bank told him it would take 5 to 6 months to gain approval, terms that if he could accept would of course mean that he would not need a loan in the first place. Instead, he went to the Mafia. Next day, someone showed up with 50,000 Euros in a black plastic bin liner, and he signed up for a very reasonable 4.5% interest rate.

Now you know what's coming next, right? This is all fine so long as you make the payments and hence keep those large, young men, in their nice suits and flash cars, all smiley and happy. Alas, he could not perform, repeatedly borrowing more and more to try and stay afloat until he had outgoings of 160,000 Euros per month just servicing the debts.

Unfortunately, the BBC didn't close this story out by saying what happened next but you can bet whatever it is you value highly that he didn't just declare bankruptcy and walk away into the Italian sunset. Indeed, I doubt he's walking anywhere at all, any time soon....

Right now banks might be a royal pain in the rear end, but at least it's not a terminal condition.

Valley Hillbillies

Thanks muchly to Jalopnik for this one but, as you can see, this part of California 'aint all Lambos and multi-million McMansions. However, seems on Black Friday even the coast-dwelling proletariat feels the need to go East and buy a bright, shiny new bauble to decorate their nests with. But how to transport it back home on Highway 17 afterwards? Hmm, tricky. Well, how about we just stick it on the back seat and rely on a single bungy cord to stop it either a) flying forwards and hitting us on the back of the head, or b) flying out the back to be smacked-into by whatever happens to be behind us at the time? Hell, yeah!

Just to be clear, Highway 17 is one of the worst roads in the Bay Rea, if not the entire state. It's windy, hilly, prone to very bad weather and almost always traffic clogged, being the main route between the coast and Silicon Valley. During the morning and evening commutes, it's not uncommon to come around a corner to find the two lanes of traffic at a dead stop, thereby generating a rash of rear-end accidents on an all-too-predictable schedule. It only takes one truck lumbering up the 5 mile-long hill towards the Summit to turn a two lane road into a one laner, with the added fun of people stuck behind said mobile-chicane trying kamikaze lane-changing maneuvers in order to try and overtake. "But what makes you such an expert?" you may ask. Simple. I drive it everyday.

From Bad To Worse

Not Many Customers This Month Then, George?

Fresh from the rumour mill, it seems that one Silicon Valley equipment manufacturer is predicting sales in one division will come in at 25% of what was originally predicted. Yes, you read that right, a 75% miss. Another rumour is that a major semiconductor manufacturer came within $20m of running out of cash, and that's in a business doing close to $5 billion world-wide on an annual basis. Meanwhile, companies across the globe are making cuts in both production capacity (semiconductors to name but one) and ongoing operating expenses as the calender 4Q plays out. (Oh, and as the big three U.S. auto makers head to Washington again to try for bailout round 2, GM is spreading the love to their dealer networks by allegedly refusing to make incentive payment unless they take more inventory ... which they can't anyway sell but it makes GM look, well, slightly less worse I suppose.)

In short, the January reporting season is going to be extremely ugly as retail companies give-up and fold now the Christmas bubble has popped, and industrial companies report the quarter in which they felt the worst impacts of the worldwide slowdown. And it is worth noting here that Wall Street today is only operating on the basis of reports reflecting the early signs of slowdown, the full economic impacts of which have yet to be fully felt.

2009 could yet be a record-breaking year, but not the good kind ....

Happy Thanksgiving!

Art Prize

This of course begs the question, "if this is the prize, how do I enter the competition?"

Sort of an odd motif for one of the world's premier modern art competitions don't you think? Not complaining, mind.

Stealth Layoffs at Google?

According to Web Guild, and others, Google too has been making layoffs, but just not telling anyone.

Web Guild claims that Google has 50% more headcount than is being reported as such, with an additional 10,000 workers lumped into the "temporary" category and comprising staff that get moved around from job-to-job in order to pass muster with US employment law. Advantages to Google of taking this approach abound including that categorising people this way makes them cheaper to keep (no benefits, being not the least of them) and total actual headcount is now much easier to hide from the prying eyes of Wall Street analysts.

The first article also claims that Google has in fact already made some layoffs, primarily in the ranks of recruiters where, if this story is accurate, 500 heads have been lopped off. I can't even begin to think about what sort of a company needed 500 recruiters, but I suppose the answer is "a big one" and "a hungry one", albeit one whose appetite seems to have faded. If the other stories are true then another 500 will bite the dust sometime this week, and presumably they will be something other than recruiters ....

I don't have any insider information on whether or not this premise holds water so I guess we'll have to wait and see how things pan out, but whatever the facts of the case it's clear that on-line advertising is at best slowing down, and more likely actually contracting in real terms. It's going to be a long, hard winter in Google-land if so.

Porsche 911 Battery

At Least I Only Need The Battery To Start Mine ...

I got to spend most of the weekend wondering why one of our cars wouldn't start. Decided on Friday morning to take the Porsche to work. Jumped in, turned the key and was greeted by a very lethargic looking set of dashboard lights. Hmm, definitely not a good sign. Either my eyesight was fading rapidly or the battery was flat. Fortunately, it turned out to be the latter so tried to start the car and, apart from a succession of clicks from the starter relay, got nowhere fast. Gave up, changed cars and left.

I tried charging the battery overnight but that didn't help. Bummer, so now it's either a completely dead battery or something else has gone like the starter motor that's now shorting all the juice as soon as the key is turned. I have a battery booster so once that was charged then I added that to the arsenal to be deployed and ... nothing. Voltage gauge on the dashboard barely crept to 10 volts even before turning the key. Definitely not good news. Can the battery really be so bad as all that? Given that it's now 8 years old and at least once in its life got completely discharged when I left the key in the ignition for a few days then it felt worth changing it out on-spec to see if that was indeed the culprit.

Given the state of both the world's and my economy, buying one form Porsche wasn't a viable option! I hate to think what they would charge; in fact, I hated it so much I didn't even bother looking. I poked instead at some Porsche forums, most notably Rennlist, and got pointed to Autozone for a replacement, grand cost of $90 for the 48 DL, plus $12 refunded when you take the old one in. (Note: make sure it has the vent pipe included. It should be in an envelope stuck to the battery. You will need this bit of rubber to finish things up properly.)

Switching it was easy, if you happen to have a 13mm socket for the battery clamp and a 10 mm socket for the battery terminals themselves that is, and thankfully I did because that thought didn't cross my mind until after I got back from the parts store of course. Although the replacement unit is a bit smaller than the original (model year 2001, 996 coupe version at least) Porsche kindly has provided several holes for the single clamp fitting so low-and-behold the new one does indeed fit snugly into the retaining tray. (One other hint, remember to go and search out the radio code in advance, OK?? Removing the battery will kill power to it and the radio take this as a sign someone is trying to kidnap it. As a result it goes into a very deep sulk, mollified only by you feeding it the requisite 4 numbers provided in the original handbook documentation.)

Anyway, nailed it all back together, turned the key and voila - it started first time. Job done. Amazing that a battery can die quite that comprehensively overnight, but apparently it can. So there.

Serendipity

A great new service has been announced jointly between Life magazine and Google: the Life image archives are now on-line.

In the Google image tab you just enter the search item you are interested in followed by "source:Life" into the usual address box and voila, matching images from over a century of Life's peerless collection. Fascinating stuff, and covered extremely well here.

As is often the way with the Internet, you never quite know what you might get back. I wanted to see if they had any interesting shots of Brighton's piers, so I tried "Pier". Turns out that there was a 50s actress named Pier Angeli who, based on the photos that showed up, liked standing in things and looking very happy. The exact description was:

Pier Angeli
Actress Pier Angeli, 22, clad in strapless chiffon party dress, exhulting in a downpour of rain as she stands knee-deep in a woodland pond.

Location: CA, US
Date taken: June 09, 1954
Photographer: Allan Grant

You just don't see words like "exhulting" used any more, especially when, surely, they meant to write "exulting"? (Pier's filmography here for those interested. Only one I recognise is Battle Of The Bulge, a war she has most demonstrably won on more than one front.)

Sunset On The Financial Community

Literally, and in San Francisco anyway. Of course, what I really should have taken a picture of was the sun setting on a GM vehicle, but I didn't and so this is as topical as it gets.

Zeppelins Over San Francisco

No, that's not the name of a new Hollywood blockbuster, though I'd be happy to sell it to them if they so desire, but rather it's descriptive of what we saw on Saturday in the city.

We had a great weekend in San Francisco. courtesy of some friends with a downtown apartment and spare tickets to the opera. Bliss. To top it all, the weather was glorious, company sublime and the view ... well it's not often you see an airship gliding past downtown skyscrapers now is it?

The dirigible shown here was flying courtesy of a new operation based at Moffett airfield, Airship Ventures. An hour flying time costs around $495 per person, and on days like that then the views must have been nothing short of spectacular. It was unseasonably warm this last weekend with the weather being driven by an off-shore flow of warm air coming straight from the central valley. The main benefit of this pattern, at least as far as San Francisco is concerned, is that it pushes the fog bank far out to sea, resulting in crystal-clear air.

When it's snowing in the Midwest but 78 degrees & sunny in the Bay Area, it really does remind you why you pay the premium required to live here!

Tesla Has It's Own Begging Bowl

Tesla is hitting up the Feds for bailout money too. Yeah, they claim it's to build new models and that tapping the Department of Energy isn't the same as milking money from the Treasury, but quite frankly that's all BS.

A) they lost bucket-loads of money on the Roadster, a model line you can be sure will never show a profit;

B) the plan to build a mid-size saloon, from scratch, for less than half the price of the Roadster, especially when combined with the pretence that Tesla will somehow defeat the combined forces of BMW, Lexus and others, is absolutely ludicrous;

C) the management has been an unmitigated disaster, lurching from one set of hands on the tiller to the next, with Musk now stepping back in to make it his personal plaything, something that's been cited before as a major reason for Teslas series of problems.

Just goes to show that Silicon Valley can still learn a thing or two from the good old boys in Corporate America. Tesla Hearts GM.

GM Adopts Nigerian Business Practices

A friend of mine forwarded to me a personalised e-mail he received from GM. Seems they are sending begging letters to their current customers pleading for access to cash that, truly-promise and hope to die, they really, really will pay back as soon as they sell off a couple of things and the world is all made better again. Promise.

"Dear XXXXX,

You made the right choice when you put your confidence in General Motors, and we appreciate your past support. I want to assure you that we are making our best vehicles ever, and we have exciting plans for the future. But we need your help now. Simply put, we need you to join us to let Congress know that a bridge loan to help U.S. automakers also helps strengthen the U.S. economy and preserve millions of American jobs.

Despite what you may be hearing, we are not asking Congress for a bailout but rather a loan that will be repaid.

The U.S. economy is at a crossroads due to the worldwide credit crisis, and all Americans are feeling the effects of the worst economic downturn in 75 years. Despite our successful efforts to restructure, reduce costs and enhance liquidity, U.S. auto sales rely on access to credit, which is all but frozen through traditional channels.

The consequences of the domestic auto industry collapsing would far exceed the $25 billion loan needed to bridge the current crisis. According to a recent study by the Center for Automotive Research:
• One in 10 American jobs depends on U.S. automakers
• Nearly 3 million jobs are at immediate risk• U.S. personal income could be reduced by $150 billion
• The tax revenue lost over 3 years would be more than $156 billion

Discussions are now underway in Washington, D.C., concerning loans to support U.S. carmakers. I am asking for your support in this vital effort by contacting your state representatives.

Please take a few minutes to go to http://email.generalmotors.bfi0.com/W0RH007CBE8BF8FD9D7FC290A65960, where we have made it easy for you to contact your U.S. senators and representatives. Just click on the "I'm a Concerned American" link under the "Mobilize Now" section, and enter your name and ZIP code to send a personalized e-mail stating your support for the U.S. automotive industry.

Let me assure you that General Motors has made dramatic improvements over the last 10 years. In fact, we are leading the industry with award-winning vehicles like the Chevrolet Malibu, Cadillac CTS, Buick Enclave, Pontiac G8, GMC Acadia, Chevy Tahoe Hybrid, Saturn AURA and more. We offer 18 models with an EPA estimated 30 MPG highway or better — more than Toyota or Honda. GM has 6 hybrids in market and 3 more by mid-2009. GM has closed the quality gap with the imports, and today we are putting our best quality vehicles on the road.

Please share this information with friends and family using the link on the site.

Thank you for helping keep our economy viable."

Love the last line. You just couldn't make this stuff up. (Oh and in case you were wondering, the Centre For Automotive Research cited above is indeed funded by the car companies and the unions. Probably about the only thing they can agree on is that the best propaganda is always disguised as an independent research report.)

Frankly, I wouldn't give GM a brass farthing without first seeing them go into Chapter 11. They were losing money 12 months ago before things turned south, and now it's bleeding away so fast that they are all but dead by year-end. Even as the economy does recover, there's no way GM will have done what they need to do to get costs under control without Chapter 11 protection, a fact even Congress must see.

GM is on a death march, and giving them a drink of water now won't change anything except that they will be able to shuffle forward a few more yards before dying further down the road.

The Other Shoe

So the inevitable happened: Yang "stepped down" as CEO at Yahoo. With the share price now trading at barely one-third of the cash offer made by Microsoft back in February, even the Yahoo board finally sat up and took notice. Jerry will stay in the big chair until a replacement is found when he will return to being Chief Yahoo, a no-line-management role that allows him to sit in a corner and think about stuff.

Now the fun bit starts, namely speculation about who they will sucker attract to Yahoo to take over. Obviously, all those internal to the company who could have stepped up a few months ago have already bailed so they'll have to go outside, doubtless amidst cries of "fresh blood" and "new ideas". (Yes, exactly the same logic they used to explain bringing Semel on board from Hollywood, a step you can argue led them down this treacherous path in the first place.)

Any chance the previous discussions with Microsoft, Google and AOL will re-surface? Doubt it, especially with all the market turmoil still raging at its peak. No one knows for sure what the on-line advertising spend will look like going into '09 (though it's already becoming clear that old media spending on ad placement is dropping through the floor), so therefore it's much better just to sit on the sidelines and see what happens next. After all, it's hard to see Yahoo getting more expensive any time soon!

Still seems weird, though, to see once high-flying Internet companies go from kings to clowns in such a short space of time. Back in the day (damn it, I hate Sarah Palin and her horrible folksy phrases) major companies grew large and then stayed there, continuing to dominate their spaces until either the government took them apart or they were overwhelmed by the next market or technology shift. Of course, the same basic process plays out today in the Valley but now it's on timescales that are barely credible: companies stumble and fall in a matter of weeks or months instead of the decades it used to take.

This is one hell of a "take no prisoners" kind of place.

Firing Employees - Literally

Breaking news here in Silicon Valley is that a worker, laid off from a small, fabless semiconductor firm earlier in the week, just went back and shot to death three co-workers.

We saw this happen earlier this century when the last bubble burst, and I'm very sorry to hear that we are headed into such ugly territory once again. Condolences to the families of the victims who died from a such a brutal, cowardly and utterly uneccesary act.

Laying-off employees is never easy, regardless of whether it's one, a hundred or over a thousand. Having now to think about as well which ones are likely to go postal on you certainly doesn't make things any easier on either side of the divide.

With all this in mind, Jonathan Schwartz at Sun might want to go and buy a bullet-proof vest right around now ... they just announced up to 6,000 additional jobs will be cut.

I'm not especially picking on Sun - I'll leave that to others better equipped than I - because as we've seen there are firings happening all around us. However, they do earn the tag of being serial offenders in this particular area. How the mighty can fall in but a few short years.

It's all scary stuff out there, even before fretting about lunatics with handguns stalking the office parks of Silicon Valley.

NASA's Top 50

Air & Space magazine has a "top 50" slideshow of the best images from NASA's archives. Above is just one example of what's a great collection of images from manned and unmanned flights, as well as other historical moments of note. Well worth a look.

In Silicon Valley we of course have our own NASA facility, the AMES research laboratory, along with the famed balloon shed on Moffett field that local conservationsists are currently trying to preserve. Oh, and of course that's all helped by being right next door to Google who, in exchange for landing and parking rights, allow NASA to play with their company planes, build new buildings and generally make nice with their scholarly neighbours in exchange for limited access to all those web-vertising dollars.

Seems fair.

RED Alert

Some background here: Jim Jannard is the CEO of RED Digital Camera. He made his fortune by founding Oakley, the sunglasses-and-similar company. Jim's also into photography, so he founded another company, RED Digital Camera. According to Wikipedia, Jim likes to take pictures of his company-sponsored race cars, his dogs and his company jets. In short, our sort of bloke.

Anyway, we discussed here a while back how RED was threatening to shake up the industry with its emphasis on merging still and motion capture through the introduction of a new digital convergence device, the DSMC Scarlet & Epic camera systems. Jim's a bullish, "we will win this war" sort of chap, and it's easy to be seduced by what he says on the topic. However, I also mentioned that the big boys weren't standing still, and so was gratified to note that not long after both Canon and Nikon introduced new members of their own DSLR family that also now featured the ability to take HD video sequences.

Today, Jim revealed his counter attack. And it's no mere "sniping from behind a wall" sort of thing but rather a full-out, blitzkrieg-style frontal assault. Good stuff! Having fought his way into the professional video market, he's now heading out beyond those borders to conquer new territories.

You can look at the specifications and decide for yourself the pure technical merits at the sensor level, and there's plenty to look at! The FF35 looks very interesting, especially with 16 bit capture and a very decent resolution of 24 Mpix. Being RED, the other specification to look at though is the frame rate: from 1 to 30 fps .... which is very impressive indeed. Just imagine how fast that thing - somewhere in the lower-middle range of what's been announced - is pumping data when running at the full frame rate? Actually, you don't need to imagine, it's 1.44 Gbytes per second. Serious stuff.

However, there's another aspect to what's being announced here, and that's the complete modularisation of the camera's main components. The sensor block is of course separate from the lens but unlike a DSLR, RED's use of electronics instead of a mechanical shutter, combined with the lack of moving mirror mechanisms etc., makes this now a much more attractive proposition, more like the digital back approach applied by the likes of Hassleblad, Phase One and others.

Downsides? Price of course. The new Canon 5D Mk II is around $3,000 for a full-frame sensor, 6fps frame rates for still use and a very decent HD video capability thrown in. The FF35 RED sensor "brain" is listed at $12,000 alone, before you add the viewfinder, battery packs, control grip and the rest. And whilst we are looking for problems, I have no idea as to what the metering is like, how the autofocus operates or indeed any other the other aspects of the photgraphic capture process we take for taken for granted in current generation pro/am DSLRs. After all, even 24 Mpixels at 30 fps is pretty useless if what you are shooting remains out of focus 90% of the time. In the video world, all of this is more manageable than is often the case in the stills market, but again perhaps that's just old-world thinking. We will see when all this starts to roll-out in mid- to late-2009 and the classic camera users begin to get their hands on one.

Modularisation always comes at a price, regardless of who is producing it, and in many markets it's a price consumers are unwilling to pay. I think it's definitely the right way to go at the high-end, especially for this class of device that has to cover still and motion capture, but don't expect this particular innovation to work its way down the food chain very far. Built-in obsolescence is alive and well in the halls of Sony, Nikon and Canon, and that's where what most of us will continue to get our equipment fixes from.

More Bad News

Late today, Intel announced it was likely to come up short this quarter. By "short", they meant about $1bn. Instead of doing around $10.5bn this Q, Intel is now forecasting more like $9bn. Whilst this is still a tidy sum, it's clearly a long way off where they started out believing the Q would take them.

Why such a big change relatively late in the quarter (bearing in mind Christmas is but a few short weeks away)? The blame is being laid on manufacturers for reducing inventories and cutting future orders. This is of course a by product of the obvious signs of weak consumer spending across-the-board. In short, every element of the supply chain is bracing itself in the expectation of weak holiday sales.

Now, how much of this is driven by a true and very negative picture of the spending patterns leading up to the holidays is debatable; just as likely, companies are doing two specific things designed to protect themselves regardless of how this all plays out.

Firstly, they are of course playing safe. Better to have too few products available on the shelves, with any shortfall helping keep prices up, than to have stock left sitting on shelves that they will have to discount deeply when January rolls around

Secondly, they are ratcheting down their corporate numbers across the board, both on the spending side as well as the income side. Cutting expenses faster than any actual revenue falls means that as things do start to improve there is a real accelerating effect as to how fast those increasing sales numbers flow through as profits to the bottom line. Wall Street has already baked a lot of bad news into the stock market so there's little point in being seen as a shining star today. Much better to keep that light safe in order to glow more brightly in the future when valuations can reflect it.

There is good news in all of this though for innovators in Silicon Valley. As we saw in 2000/2001, when sales are ramping quickly, no one pays much attention to trying to be more efficient or cutting costs. Consequently, if you are selling a process improvement/more efficient kind of value proposition, it's likely easier to garner mind-share now than it was, say, six months ago.

"It's an ill wind ..." and all that.

Here We Go Again

Having managed to get a few days at home, it's now time to leave again. This time around it's just a relatively short hop to Texas, returning Wednesday.

With all that's happening in the economy, we've decided to do about the only thing that makes sense at this stage: go on the offensive and see what we can make of this quarter. We have stuff in the pipeline to close, so we need to close it. Anyway, that's partly the reason for the up-tick in travel, that and getting some other things underway for 2009.

The next couple of months will tell the whole of Silicon Valley a lot about what the future may bring, big company or small. For those with real businesses selling actual products to Fortune 500 customers, we need to pay close attention to what the customer is telling us about their plans and priorities going forwards. For Web 2.0 plays that rely on somehow monetizing advertising dollars, that writing is already on the wall and it's far from eloquent or upbeat. Fortunately, we are in the former category rather than the latter so we have the luxury of a little time in order to see how things play out.

If some extended time on aeroplanes is what it takes, so be it. I just wish they'd find a way to stop them from being large, cylindrical disease vectors into which you get packed sardine-tight just in order to ensure the maximum exposure to everything from a light cold to leprosy.

"Catch a flight and catch the flu", would be a more accurate slogan than any the airlines currently run. And I can vouch for that one being solid, 24-carat-true.

Yup, Feel Just Like That

Apologies for not posting here for a few days but a couple of things got in the way this week.

Firstly, travelling. I was in Europe Sunday through Thursday and moving around somewhat between the UK and Switzerland. The prices hotels are charging now for Internet access have become way too extreme for all but critical connect times. Instead, I use the T-mobile overseas access (as offered by the likes of BT) which is more pay-as-you-go, but nevertheless incentivizes one to only connect briefly to deal with e-mail.

Secondly, I felt like the bloke above for most of it. I started to feel lousy Sunday night and steadily got worse until I had a fever, headache, sort throat and all those lovely symptoms of having caught something nasty. Travelling is little fun at the best of time but when you are ill, even with no more than a touch of flu, it's ten-times worse. And trust me, the sight seen looking in the mirror Wednesday morning was not pretty.

Happy to now be home (at least until Monday when I fly to Texas) and happy to be feeling a little bit better.

Some weeks, whatever it is I'm being paid doesn't seem anything like enough to offset the misery of flu in a foreign land.

Bacon Special

Two kinds of Bacon for me on Monday morning in London: the crispy kind, followed by the painterly kind. Unsurprisingly, the first sat much easier on the stomach than the second.

There's a major exhibition of Bacon's work currently running at the Tate Britain. Not sure why the powers-that-be chose there vs. the Tate Modern, but the contrast between Turner the artist, Bacon, and Turner the prize, with all three being available aunder the same roof, certainly throws up some interesting, not to say disturbing, contrasts.

Since both the Turner Prize 2008 and Francis Bacon exhibits are running in parallel, you can get an interesting dish at the ticket counter: Bacon and Turner special, priced at just 15 quid.

First then, Francis Bacon. The exhibition coves a broad sweep of Bacon's work, starting in the 1940s and closing with canvasses produced right up to his death in 1991. I won't here try and add to the glowing reviews this exhibition has garnered (here's a prime example) but I will echo all that they have said: this is a visceral experience that presents an artist - perhaps one of the last - whose art has a real, enduring impact on the viewer. Bacon's tortured, screaming figures deliver such a unified vision of bleakness and isolation that you are snapped to attention, as much by a defence mechanism against their grim depiction of mortality as by anything especially aesthetic in his works. Open, fanged jaws -- a symbol he used frequently to show primal emotions - are as powerful in his human pictures as they are in his animal works. But for me the images with the most impact are those of Pope Innocent X, a subject Bacon returned to many times, shown seated on his throne but caged within a delineated cubic space (as per the example posted above). In one depiction, vertical shutters of dark grey further bind him and his head from the mouth upwards bleeds into the back ground darkness as might "a sunset" to quote the artist. This is a "must see" exhibition and well worth making time to see a very comprehensive collection of some of Bacon's finest work.

On then to the Turner Prize exhibit. Oh ... dear. For me, the only reason to see the Turner Prize exhibits is to be annoyed, perplexed or dumbfounded by it all. Emmin's bed, Hirst's cow - they all have been there, forcing their way into the modern art world and launching big $ careers, so you have a certain level of expectation going into this thing that you'll see boundaries being pushed once again. Well, forget it. All safe-and-sound this year. Some architectural installations that look like something you'd find in a DIY store showing how to use perspex and stainless steel hand rails; a minor installation comprising a couple of check-out tills and associated ephemera; two audio-visual presentations that were utterly unmemorable, and you've about done it all. Conclusions? Retro AV is in - the Tate had several 16 mm film projectors showing stuff for these pieces, but Lord alone knows where people are getting the equipment from to shoot and show this stuff - and trying to shock is out. Dull, dull, dull, dull, dull,

Brit art has become bland art. Wait another year and we'll see what comes up next, but meanwhile go and see Bacon for what a true master can produce over a lifetime of delivering and refining an artistic vision.

He Did It! Cue "We Are The Champions"

At the last corner on the final lap of the ultimate 2008 F1 Grand Prix season, Lewis Hamilton gained back the one place he needed in order to clinch the world driver's championship. Just as he lost by one point last year, so he duly won the most coveted prize in motor racing by one point also in this.

After a somewhat dodgy start, things were going swimmingly well, with Hamilton in a solid 4th place and holding station, right up until the last 6 laps that is, when it rained again....

Five of the front runners pitted to switch to wet tyres with Hamilton joining in. However, one car - Glock's - stayed out on dry rubber meaning Lewis was now running 5th. Two laps before the end, Kubica, a back marker at that stage but on a charge (for some reason), pushed past Vettel and was sitting right behind Hamilton. Lewis sensibly let him past but in the process slipped wide and Vettel pounced. Hamilton was now 6th and was about to repeat the misery of losing it all in the final race once again. The whole UK held its breath, but by now it was clear he wasn't going to be able to get Vettel back before the end of the race. Unbelievable. After 17.98 races, Hamilton was going to lose again by reason of total race victories in the year; the points tally with Massa, now taking a comfortable win up ahead, was even.

We Brits are good at defeat. We far prefer winning, of course, but given our relative size and importance on the world stage these days, coming second is still quite respectable (See what I mean? If proof were ever needed....) But just then, with the pack comprising places 4 through 6 approaching the final straight, a glimmer of hope. Glock, who had stayed on dry-weather tyres as everyone switched to wets, had finally reached the limits of what he could achieve and had slowed dramatically as he lost more and more grip in the increasing rain. While Massa was crossing the finish line to take first place, and Ferrari were wildly celebrating his winning the world driver's title to boot, he was actually in the process of losing it.

Hamilton passed Glock and crossed the line to finish 5th, just enough to clinch the crown in only his second year as a Formula 1 driver.

An unbelievable and fairy tale ending to an unbelievable and ... well you get the picture. This has been the most exciting season I can remember for many a long year and for once, just once, we can celebrate a new world championship at the end of it all.

I'm off to the pub ... so good job I'm on a layover in London before heading to Geneva! That beer is about to taste pretty damn good. Congratulations to Ron Dennis and all the team at McLaren. Despite everything, you did it.

Time For Sun-set?

Sun Microsystems just announced a loss of almost $1.7 billion, news that took another 13% off their battered stock price, already down over 70% this year before now falling further. Even with something north of $3 billion in the bank, the meltdown on Wall Street may well have hammered the last nail into the coffin they've been building themselves year-in, year-out for the past two decades.

The company has tried pretty much everything it can think of: going into software, sticking it all in open source, switching to non-proprietary hardware, buying a tape back-up company (yup, they did that), burning sheep entrails, etc. Nothing has systematically halted the slide from Sun's heyday when they were out there decimating DEC's business, ultimately leading to the death of the the entire company. But now it's their turn. Apart from some cosmetic re-branding - going to the JAVA ticker symbol was supposed to fool who exactly? - nothing is stopping this particular high-tech Titanic from sailing full-tilt into their own, home-hewn iceberg.

What would I do differently? No idea, but at least it would be different. You can't help feeling that Scott McNealy's hand is still on the tiller and really nothing has changed since he handed the captaincy over to the one that FSJ (aka Dan Lyons) dubbed "My Little Pony". And when I say nothing has changed, that seems to include the way Sun executives get compensated even while the company sinks lower and lower.

Think Wall Street has been greedy of late? Try hazarding a guess at what Jonathan Schwartz got paid in FY 2008 for delivering such impressive negative shareholder value. Eleven ... million ... dollars, and no that's not all stock based either. Nice.

World Ending - Just Deserts At Google

Phott by Everett Bogue, via NY Mag

Ah yes, early signs that the on-going meltdown of capitalism is impacting even Google, or at least the lavish perks Googlers have come to take for granted. The notice, as reproduced below -and thanks to Silicon Alley Insider for this one - was sent round the New York offices of Google. (Please do though take a look at the linked article to see the inaugural menu so you can get a taste of what, err, you won't be tasting.)


Hi Everyone,
Changes have been made recently to programs throughout our company to ensure cost effectiveness and consistency across offices. In New York City, our food service team has closely examined cafe usage, food consumption and labor costs to find areas where efficiency can be improved without compromising food quality and nutrition. We would like to announce the following NYC-specific changes to the food service program:

* Meals: The below hours were determined to be the most cost effective to serve meals based on traffic flow to cafes.

* Breakfast will be served from 8:30-9:30am (formerly 8:00-9:30am) and the menu will be simplified.

* Lunch will be served from 11:30am-2:00pm (formerly 11:30-2:30pm).

* Dinner will be served from 6:30-8:00pm (formerly 6:00-8:00pm). Please note that dinner is provided for those working late in the office and is not intended to be taken home.



* Microkitchens: Those of you who have been around for a while know that the microkitchens started for a variety of good reasons, including a genuine desire to make it easy for folks to grab some food while working long and/or odd hours. While we are staying true to that original purpose, we are also looking for ways to be smarter, more cost-efficient, and more earth-friendly in the usage and product offerings of our microkitchens.

* There will be changes to the selection of snacks in the microkitchens. We will be sending a survey to Googlers in NYC soon asking for them to vote on their favorite snacks.

* Socials and Guest Policy

* Afternoon tea on Tuesdays will be suspended. Similar to Mountain View, there may be occasional surprise "snack attacks" in the future.

* On those occasions when a senior executive would like to speak at TGIAF, temps, contractors, vendors and guests will be restricted from attending, for confidentiality reasons.

* To maintain consistency with other Google offices, we are going to adopt the guest policy announced in MV last month. Please see below for more detail about this policy.

We look forward to continuing to provide Googlers with a great meal experience every day. Questions, comments or concerns can be sent to [REDACTED]@google.com.
Thank you,

Shocking. Next they will ban pyjamas in the workplace and actually make people work on real stuff that matters. Fancy that. And for those of you who can spell schadenfreude without first looking it up, bets on when we'll see the first round of Google lay-offs? April '09 gets my vote.

HHNF #2

Pithy, and to the point.

Hell Hath No Fury ...

... etc.

On The Plus Side

Layoffs are starting to bite here in Silicon Valley. Any young company that relies on click-throughs, eyeballs, web-traffic or advertising spend in order to have a business model is about to have a tough few quarters. For example, following their doom-and-gloom presentation, Sequoia's portfolio companies are cutting back on average by 30%. However, they are not the only ones. Some 50,000 tech job cuts have been announced spanning everything from semiconductors to PCs, cell phones to cars.

This is nothing new to California's high-tech businesses. In its short history Silicon Valley has already lived through several cycles of up-and-down, with the more recent-prior in 2001 being, of course, the worst by far.

At this point we don't yet know how wide or how deep this new rift in the high-tech landscape will become. Yes, it's going to hurt; yes, we'll get through it and something else will propel the next run-up. It may be green-tech, bio-tech, web-tech, nano-tech or something-else-tech, but somehow we'll figure something out. "Hope springs eternal" as they say, and nowhere quicker or more vigorously than in Silicon Valley.

Meanwhile, Starbuck's will get clogged with unemployed geeks renting wi-fi by nursing a small coffee for 5 hours, property prices will fall further as people migrate away from the area, and the incessant calls from stock brokers touting for business will become even more strident.

However, experience tells us that on the plus side at least the commute will get easier....

Made It Back

Racing Aston Martin, 007

Back from Europe, at least for a few days, but leaving again next Saturday to head to Switzerland.

Meanwhile, here's a car picture to keep you going until I can sort out what timezone this is. Going to China, getting home but then turning right around and heading to Europe for few days is a painful way to do it, but circumstances dictate that that's just the way it had to be.

Hopefully, the travel gods will get me into Heathrow in time next Sunday to watch the final F1 GP in Brazil where Lewis Hamilton again has a seven point lead going into the closing race. Thanks to what we saw last year (he lost the title by one point after a poor start and mechanical problems) it's goign to be a nail-biting experience.

Alas, before that there's a board meeting to get through, along with all the usual end-of-year planning and other tasks to get completed between now and Friday.

Much less fun in prospect, therefore, than watching cars going round a racing circuit.

Yea, Now We're Winning ... Kind Of

Over breakfast, I found myself reading an article in the european edition of the Financial Times discussing the impact of the precipitious fall in world oil prices.

Now that the price of a barrel of oil has fallen by 50% from its peak, bringing it down to around $70 to $75, the writer was noting that this is likely to have a positive impact on the west but a much more significant and negative effect in the east.

It seems that the national budgets in Iran and Venezuela, for example, only balance when oil trades at $95 per barrel or above; that figure is $70 for Russia, making them about break even today but clearly much worse off than before Wall Street withered. (This is of course a game the US doesn't even get close to playing, thanks mostly to dwindling oil output and a budget deficit that beggars belief.)

Add to the above an analysis by Deutsche Bank that says the marginal production cost for crude is between $65 and $80 a barrel - by implication also therefore the trading range that things should settle into over the long term - and it's hard to see how even with OPEC trying to trim output and push prices back up again that we will see much in the way of upwards pricing pressure.

Ultimately, it was economics that brought the collapse of the Soviet Union, not some inate demand from the proletariat for the wholesale adoption of democracy. Over the past years, Iran's burgeoning balance sheet has unnaturally emboldened the state in both its rhetoric and the surpression of internal anti-government dissidents. Being flush with cash makes it much easier to covertly fund terrorist activities elsewhere and also creates a thick insulating blanket against the negative effects of any sanctions applied by the western powers. Take away that comforter and it makes you wonder if falling oil prices may ultimately do more to bring stability to the middle east than the reverse trend ever could, especially as meddlesome forces get increasingly distracted by niggling domestic issues like, shall we say, trying to stay in power?

Oh, and the dollar is finally worth something again. Funny old world, innit?

Night Races

Racing Into The Night, ALMS 2008, Laguna Seca

I've raced in the dry and I've raced in the wet; I've driven in sprint races and endurance races; I've raced in the US and the UK. But, I cannot claim to have ever had the chance to race in the dark. I've read a lot of accounts of what it's like at Le Mans proper, especially in the old days of turbo charged long tail Porsches doing over 200 mph down the Mulsanne straight in the pitch dark, and quite frankly it sounded terrifying, an impression not changed by noting that the drivers often felt exactly the same way. Definitely a case of taking the brave pills and refusing to listen to the nagging voice in your head that says there's no way you can get round the next corner flat in fourth,despite the fact that you've already done so many times in the past.

Don't know if I will ever have enough time and/or money to race again, but even if I do then I think I'll stick to the daylight hours and leave this challenge to the pros.

What the 360 Means in Xbox 360

Porsche 911 GT3 Having a Bad Day, Laguna Seca, 2008

"Degrees of rotation" would be the answer, at least in this case. This GT3 nerfed the car in front between turns two and three, somewhere close to the back of the pack. Lots of tyre smoke (blue stuff front left) and bits of bodywork was the result, along with the exit of this competitor from the race. If only it had been hit by a car sponsored by Nintendo then the world would have been in perfect harmony, but alas not!