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Five Things Weekend Edition: Rolodex, Windows' Disadvantage, GM = Great Misery, Footnotes, Yahoo?


What you need to know (and what it means).


1. Ain't that a Rolodex?

Friendster has made waves in the web geek space by their good-cop/bad-cop comments concerning a new patent about to be issued by the US Patent and Trademark Office. As a startup, Friendster was encouraged by its investors to file a gaggle of patents. The USPTO notified the company that they are about to issue a patent covering "a method and apparatus for calculating, displaying and acting upon relationships in a social network." This could have several unexpected implications:

  • The Emily Gilmores of the world, with their encyclopedic knowledge of who fits where inside their social world (DAR members high, diner owners low) may need to pay a royalty fee every time they say something snooty like, "Well, his family didn't come over until the 1850s!"
  • Those who vainly Google themselves to see who their friends are will need to exercise more restraint. Same goes for women who Google their dates to see what they might be getting into.
  • And no word so far from the people at Rolodex, who are celebrating the 56th year of their formerly indispensable office product. Perhaps Friendster will make their devoted customers de-alphabetize their cards to make it less easy to take advantage of the social network represented on those little slotted cards. Oh, the horror!

2. Windows genuine disadvantage

It's hard to overstate the reverberations in geek land from Microsoft's (MSFT) decision to shove the Windows Genuine Advantage spyware down their update pipeline. In case you've been living under a rock for a month, WGA is ostensibly a form of copy protection for Windows that chokes a machine if the serial number of the Windows software doesn't come back as legit. While that sounds benign, it wasn't seen that way by the geek nation.

  • Microsoft used the cover of a "critical security update" to send this piece of essentially marketing software down the pipe. What's worse, according to geekdom, is that it chokes the ability of the OS to obtain other updates unless your copy of Windows passes muster. That sounds reasonable, until you realize "passing muster" is often as reliable as… well, Windows' own ability to be secure.
  • Geeks especially hate how WGA phones home at regular intervals, passing along personal information. If there is something a geek hates more than a program doing something they don't know about, I don't know what it is.
  • This has created a stampede away from the Windows Update program, a keystone for IT administrators. Shavlik Technologies has been an early winner, though they've chosen to give away their product for small network users for free.
  • Expect McAfee (MFE), Symantec (SYMC), and especially Check Point Software (CHKP) to have substitute offerings out as fast as they can.

3. GM stands for "Great Misery" for bears...

Once upon a time, the entire fate of the financial system apparently rested on a Detroit-based company's future. If General Motors' (GM) bonds go to junk, the tale went, the entire system will unravel. These bears not only shorted GM to 3-4x what one might see for a company of its type and size, they shorted the 'bejeebers' out of the overall market. Suffice it to say, that didn't work so well.

  • Even if the bears had the steelies to hold a DJIA short through the recent highs, they're only up about 1% (150 points) since GM went junk on May 1.
  • GM traded at $29.74 the day they went to junk. Yesterday's close was $32.11, up 8%. Sure, GM dropped hard into the end of 2005, but since the turn of the year the stock is up 70%.
  • Oh, but those short shares were just to offset the convertible debt they owned, right? That debt, according to the Wall Street Journal article today, is up only about 14% this year.
  • Shorts have been covering since the bottom, but only about 25% of the total short interest has been covered. 60 percentage-point gain from 25 percentage points of short covering? For a group that often boasts of being contrarians, that's certainly a crowded bear den.

Don't take this the wrong way. I think GM is in bigger trouble than even most bears believe. It's just worth looking backwards every once in a while, especially to what was the "sky is falling" message du jour.

4. Seven straight plus a footnote?

Floyd Landis got the bad news earlier this week that a test showed he had higher than normal proportions of testosterone in his blood. His win of the Tour de France last week made it eight wins in a row by an American. Now Floyd has to hope a second sample test doesn't show the same thing.

  • Anyone want to take odds that the second sample will be untestable or inconclusive? After years-old samples from Lance Armstrong made their way out of UCI's hands to vendetta-driven French newspaper Le Monde, forgive me if I'm skeptical of the neutrality of the process. Editors at Le Monde always hated Lance, but were incensed when he chastised them publicly from atop the podium after win #7.
  • The test result doesn't make a lot of sense. Testosterone has limited short-term effects on highly-trained professional athletes and has to be used over a period of weeks to do a professional athlete any good. Floyd's prior tests from earlier in the Tour were negative.
  • Regardless of the outcome, Floyd will always have this hanging around his neck. That's a shame for a guy who rode an incredibly gutsy last two stages on a hip so badly damaged it will be replaced in the off season.

5. Yoohoo? Anyone home?

Yahoo! (YHOO) pulled off a major update of their message board system recently. The early opinions have not been good by users. While the search routines are considerably improved, the lack of message numbers, no ignore feature, and a change to thread-based (instead of chronological) format has large numbers of users seeking their posting fixes elsewhere.

  • According to, posting on the 120 stock message boards it tracks was running between 10,000-12,000 posts per day in early April when Yahoo! debuted the new format as an optional beta-test offering.
  • On July 14, the new format went live and the old format was gone. Again according to BusyAnt, posts were running about 9000 per day just prior to the change. As of yesterday, the posts are running about 3000-3500 per day – a four-fold drop from before the new format was introduced.
  • By 7/20, Yahoo! already made a change to allow at least some form of chronological view in response to huge volumes of complaints. They initially called the change "temporary," but made it permanent by 7/24.
  • People who kept track of posts they wanted to save by message number are especially frustrated. If they bookmarked them, they're OK (so far, anyway). If they used some other method (Excel file, for example) they are out of luck because the numbers don't translate.

No positions in stocks mentioned.

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