The moment came when Apple surpassed Microsoft in Market Cap [*].

A few numbers:

Market Cap: Microsoft at $219 billion – Apple at $222 billion (yesterday)
Revenue: Microsoft at $58.4 billion – Apple at $42.9 billion
Net income: Microsoft at $14.6 billion – Apple at $5.7 billion
Cash: Microsoft at $39.7 billion – Apple at $23.1 billion

Microsoft is still has bigger earnings, but Apple has the momentum. Apple still sells computers, but twice as much revenue is coming from hand-held devices and music. And smartphone sales are growing faster than PCs.

Worse for Microsoft, analyst perceived that “The battle has shifted from Microsoft against Apple to Apple against Google,” as said Tim Bajarin, a technology analyst following Apple.

Google has a market cap of $151 billion.

Read original NYT Article: Apple Passes Microsoft as No. 1 in Tech

Google TV, as described by Google is about:

• Less time Finding More time Watching
• Control and Personalize what you Watch
• Make your TV content more Interesting
• More than just TV

Google TV is built on Android 2.1 and Google Chrome and Flash 10.1.

It runs all Android Apps that do nto require a phone hardware. A Google TV SDK will be available to apps developers, including tools for an IP remote control.

A version of YouTube adapted for Google TV: YouTube Leanback

Partners:

• Sony will launch Connected TV sets  and Blue-ray players integrating Google TV
• Logitech will build a Google TV Set-top-box (companion box)
• Intel Atom chips will power the devices with hi-performance video handling
• BestBuy will distribute those products
• Dish Network will have an advanced integration  with Google TV

All coming this fall in 2010. TV meets Web. Web meets TV.

Watch the Google TV keynote on YouTube.

From TechCrunch: Google TV Unveiled. It’s All About The Ad Reach

Google makes $18 a year for each unique visitor. Facebook makes roughly $3.

Three observations from the chart:

1)  Google is far ahead of the others in monetizing their visitors. A sign that search advertising is much better paid than display. Facebook will need to invent something to market their ads more valuable.

2) Recently a tier-1 telco CEO demanded that Google should pay telcos  for the business they do on their networks. The yearly revenues per broadband subscriber for a telco can reach $240-$400. What Google or Facebook gets from a single user is peanuts compared with what the telco gets. What portion of Google’s revenue they want to get?

3) By chance the revenue per user for Internet giants look in the same range as what a traditional  ad-funded broadcast TV channel makes per average viewer in a year.

It would be interesting to see how Hulu would do on this chart. According to Bloomberg, the Simpsons on Hulu command a $60 CPM, while on prime-time TV the same ad would cost $20-$40 per thousand viewers. If Bloomberg is right, considering that Hulu aggregates much more content than a single broadcast TV channel, with a higher CPM, we should see Hulu go off the chart!  Assuming it could reach $100-$200 revenue per user per year, that starts to look something on which the telcos might want to ask for a share…

The future of Adobe Flash is in the hands of Google.

Apple’s reluctance to support Flash on the iPhone and the iPad is putting tremendous pressure on the future of Adobe’s ubiquitous platform, present in 98% of browsers worldwide.

The Adobe Flash Player  is the engine behind 99% of  Video in the web. Adobe Flash Player 10.1, soon to be released, was supposed to take Flash Player dominance together with online video to mobile handsets. But Google and Apple insistence in an Open Web with HTML5 native video (among other capabilities) that make Flash irrelevant can ruin Adobe’s plans. Apple bet of non supporting Flash even on the iPad shows they are pretty determined to kill Flash.

Abobe is going from being the ‘good guy’ that enabled video on the Web, to the ‘bad guy’ that imposes proprietary technology and that crashes browsers too often. Is Flash doomed to die then? It is up to Google.

Apple and Google close romance is turning to an end as both turn to competitors rather than friends in smartphones, office applications, browsers, OS, and soon in tablets and ebooks.

With Chrome OS now targeting the trendy tablet feast too, the support of Flash Player on Chrome OS and Android can give an edge over Apple’s rivals.  Having all video on the web on Google powered smarphones and tablets, that would be a huge advantage to Google.

But Google could also well decide to stick to its principles and go full speed on the HTML5 open web vision, shared with Apple. If Google moves all YouTube content to HTML5, who on Earth is not going to install an HTML5 browser? Even the stubborn IE6 laggards would finally wake up and change. How long would it take for other web video properties to move to HTML5 and drop Flash?

Update: Good ZDNet post on the HTML vs. Flash war.

Update 2: Good explanation on Gizmodo about HTML5 and Flash

Update 3: Great post on TechCrunch on the Future of Web Content

Google has announced the acquisition of On2, the company that owns some of the video compression codecs widely used in online video, but that were recently losing ground in favor of h.264.

Why is Google spending $106 million in purchasing the owner of  decaying codecs?

1) Google has high hopes for HTML5, a standard set to handle video natively (i.e. there will a a <video> tag, as there is a <img> tag for pictures now, and no plugin will be required for the browser to play a video, unlike the plugins required now for flash, Windows Media or Real Audio). If Google open-sources the coming VP8 codec from On2, and forces it into  HTML5,  it would seriously hit Adobe Flash and Microsoft Silverlight proprietary strategies in favor of an open HTML5. Google can put a lot of pressure by incorporating VP8 into Chrome and migrating YouTube to support it.

2) Owning a video codec technology, as online video becomes King in the Web. Although h.264 is an open standard licensed by MPEGLA, Microsoft owns their own propriety Windows Media codecs. Imaging Windows introducing ad insertion, or search within videos, or interactive video objects within the video coding technology ahead of others. What would be the effect to Google’s search and advertising “bread and butter” in a video-centric Web? Can you imagine Google paying licenses to archrival Microsoft?

3) Is $106m too much? Google might be making the simple maths? What would be the impact on their market cap, if Microsoft releases a video codec with ad/search features? What would be the impact on Microsoft stock if Google is able to master the video codec technology and do that first? Note that just the announcement of this acquisition make Adobe shares drop 3.5%!!

It is not the saving in licenses or bandwith what drives this acquisition. This is about strategy, defending from Microsoft, and taking control of its own future. Google will not make direct revenue from this $106m acquisition, but if it succeeds in getting VP8 widely adopted into HTML5, they are going to be better positioned that anyone to defend their Advertising and Search business in video too.

Online 3D video, interactive objects within video, search within video contents. All that will come and Google wants to be the one to bring it and not depend on standard bodies, or worse,  its major competitor.

Coverage of this news by other blogs:

TechCrunch, Google Acquires Video Compression Technology Company On2 For $106 Million

GigaOM, Google: You Buy Some, You Sell Some

NewTeevee, Watch Out, Flash; Google Buys On2

StreamingMedia.com, Google’s Acquisition Of On2 Not A Big Deal, Here’s Why

As the graph via TechCrunch perfectly illustrates, WolframAlpha has not revolutionized Search… at all. It is a very nice concept, but far from delivering any real everyday value other than being somewhat useful to find numeric facts.

By comparison Bing has resulted in a good surprise to put pressure on Google monopoly in Search. No Search Revolution, but at least some good competition. That is excellent news for all of us.

An today’s news of Bing Travel launch look very promising.

NYT, GigaOm, and others attribute to the 20th anniversary of Tiananmen the fact that Twitter, Blogsplot, YouTube and many other sites are not accessible from China these days.

Even the brand new Microsoft search engine Bing is now blocked!!

I wonder if the cause of Bing blockage will not have anything to do with the fancy feature of Bing playing video thumbnails as you move the cursor over them. Taking into account that porn is censored in China and that YouTube videos were perfectly watched from Bing (and YouTube is blocked in China since March), there might be an additional reason for Microsoft’s search engine black-out. See the picture above via TechCrunch and put yourself in the shoes of a chinese censor. Wouldn’t you block it too?

China is a country where the collective good is well above individual rights. Chinese perfectly accept to have only one child by law. And Chinese do not mind censorship as long as the system allows the economy and standards of living to keep growing  as they have during the past years. 

Any Chinese who is really interested in bypassing censorship can easily do it with plenty of VPN services available in Internet, like FreeGate. In reality, very few of them care.

I am sure you have already heard about Wolfram Alpha, the new search engine that will shake the thrones of  Google and Wikipedia as kings of Internet knowledge. 

Soon to be launched, Wolfram Alpha defines itselft as a Computational Knowledge Engine, aiming at providing factual answers, more than a set of links to search results. See it in action in the clip above. 

The man behind is Stephen Wolfram, a Brittish professor who, in the early 90s, created Mathematica, a software tool for maths computation well known among engineering and science college students.

Boxee is getting so successful that many of its users are seriously considering to stop their Pay-TV subscriptions.

Boxee is a cool open source software for Media Centers based on Mac or Ubuntu. This software transforms a Mac Mini, Apple TV or any Linux small-form PC into a social network  set-top-box. With a great user interface, Boxee enables you to enjoy on your TV not only your media library but also online video such as YouTube and Hulu, as you interact with your buddies.

Hulu -the joint venture of NBC Universal and News Corp- offers a sensational online catalog of  TV shows from their parent companies and others, that has made their user growth in 2008 stunning.

Such is the success of the Boxee-Hulu combination that Hulu’s content providers have requested Hulu to be removed from Boxee,  in an attempt to stop cannibalizing their traditional revenues from TV ads and Cable networks.

Again the traditional Innovator’s dilemma in front of a disruptive threat. Innovate first and cannibalize yourself? or wait and risk to be eaten by others with less to lose?

NBC and News Corp might worry about Online TV in the short-term, but in the long-run it will ony bring good news:

• CPM of Online TV should be higher than traditional TV. As marketers say, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”. Online TV ads can be targeted to specific viewers.  Interactive responses can be measured. That should  reduce wasted ads, and therefore advertisers will be ready to pay more for an Online TV Ad.
• Online TV might display less ads per show than traditional TV, but ads are at least seen.  A way to avoid all the wasted ads wiped out by DVRs and Tivos.
• Online TV can enable Content Providers to sell subscriptions for premium content and VoD directly to the user without any Cable intermediary.

If Hulu is able to build a stronghold in online TV, they will capture all the benefits of a richer online TV in the long-run.

The ones to worry about Boxee are the Cable and IPTV operators that will need to ad significant value to avoid being by-passed by over-the-top solutions such as Boxee, and dumped by their customers. There is time. Boxee is great, but still for Mac or Linux geeks, a minority.

“The question is not whether Telcos want to be a dumb or a smart pipe. They are already a dumb pipe. The question is do they want to be something else on top?”

Max Foresite – Telecom, Internet & Media Analyst

According to comScore and echoed by The Economist, China is the country with most Internet users in the World, accounting for 179.7 million users out of one billion worldwide. The United States of America, until recently the leader, has 163 million users. With a far lower Internet penetration in China than the roughly 50% in the US, we will only see China widening its lead in this chart. Clearly a market not to be neglected.

A good way to enter the year of the Ox that just began.

Happy Chinese New Year! Gong Xi Fa Cai!

Picture from The Economist daily charts.