Experts See $100 a Barrel Oil

I am not an alarmist, but this whole energy thing is really getting a little scary. How far do oil prices have to rise before market forces drive the development and profitable implementation of new technology? I have a hunch this will be the issue in the next election cycle. The war is old news. Energy costs affect everyone.

McCain is right:

U.S. Senator John McCain, an Arizona Republican, said the United States needs to develop alternate energy suppliers to avoid being held hostage by "Iranian mullahs" and "wackos in Venezuela." McCain said on Fox News that the U.S. must "get on a track to energy independence from foreign oil," including reliance on nuclear power.

Why Big Retailers are Shuttering Stores

CNNMoney.com has an article today about the trend among major retailers to close stores and scale back store openings this year. Although short on hard data, the implication that online sales are starting to impact store operating decisions is not surprising. Even if online sales are only in the single digits as a percentage of overall retail sales, the rapid upward trend is bound to have an impact on strategic planning. Stores cost a fortune to open, and with utility and labor costs going up, the Internet and direct marketing efforts in general are bound to draw some attention away from the traditional strategies.

"There's nineteen-and-a-half square foot of retail space for every shopper in this country. That's a lot," Davidowitz said. "Is it natural for companies to keep expanding when the market is already overcrowded with stores, especially when there are numerous projections calling for a slowdown in consumer spending?"

He also blamed online retail sales, which he said are growing about 20 percent a year. "That's a huge increase," said Davidowitz. "Don't you think it's going to eventually have some negative impact on traditional retailing?"

Market research firm ComScore Networks estimates that total online sales, including travel, reached $143.2 billion in 2005, up 22 percent over the previous year.

Jay McIntosh, director of retail and consumer products with Ernst & Young, agreed with Davidowitz.

"Is online retailing stealing market share away from brick-and-mortar stores? Absolutely," said McIntosh. He added, "Online retailing as a group is the second largest retailer after Wal-Mart in terms of annual sales."

To compete, especially on costs, some retailers will need to become leaner, said McIntosh.

Why no Redirect Command in Windows?

David Pogue points out something interesting. Why in the world would Microsoft not include the redirect command in the Windows version of Outlook? This is a great feature and would save considerable errors when replying to forwarded emails. This happens to me all the time when customer service forwards something to me.

And, yes, David, we have to cut and paste the original sender's email address in the "To" space. It's a real drag.

Pandora is Amazing

Pandora is a free online radio service that allows you to build stations that match your tastes with remarkable accuracy. It's just amazing. There was a lengthy interview with the company founder on episode 6 of Inside the Net

I've built three stations so far, all based on entirely different genres. In about six hours of listening over two days, I am hearing all kinds of music that I've never heard before -- and it's all stuff that I like.

So much for free. Pandora is going to cost me a fortune!

Let a Thousand Reactors Bloom

Wired ran this story about a year-and-a-half ago, but I never blogged about it. As oil is pressing the $70 mark again, I am thinking more and more about how we get out of this mess.

Ultimately, nuclear power has to play a major role in reducing the dependency on the volatile and unreliable oil industry. People have to get past the Chernobyl and Three Mile Island issues and start realizing that nuclear power is an area where we can put our technology skills to good work. The Chinese are doing it. So should we.

What's an energy-starved autocracy to do?

Go nuclear.

While the West frets about how to keep its sushi cool, hot tubs warm, and Hummers humming without poisoning the planet, the cold-eyed bureaucrats running the People's Republic of China have launched a nuclear binge right out of That '70s Show. Late last year, China announced plans to build 30 new reactors - enough to generate twice the capacity of the gargantuan Three Gorges Dam - by 2020. And even that won't be enough. The Future of Nuclear Power, a 2003 study by a blue-ribbon commission headed by former CIA director John Deutch, concludes that by 2050 the PRC could require the equivalent of 200 full-scale nuke plants. A team of Chinese scientists advising the Beijing leadership puts the figure even higher: 300 gigawatts of nuclear output, not much less than the 350 gigawatts produced worldwide today.

To meet that growing demand, China's leaders are pursuing two strategies. They're turning to established nuke plant makers like AECL, Framatome, Mitsubishi, and Westinghouse, which supplied key technology for China's nine existing atomic power facilities. But they're also pursuing a second, more audacious course. Physicists and engineers at Beijing's Tsinghua University have made the first great leap forward in a quarter century, building a new nuclear power facility that promises to be a better way to harness the atom: a pebble-bed reactor. A reactor small enough to be assembled from mass-produced parts and cheap enough for customers without billion-dollar bank accounts. A reactor whose safety is a matter of physics, not operator skill or reinforced concrete. And, for a bona fide fairy-tale ending, the pot of gold at the end of the rainbow is labeled hydrogen.

Instant First Impressions

I lost track of how I found this article a few days ago. The gist is that people form first impressions of a web site within a fraction of a second. In some ways, this is last year's news. Malcolm Gladwell's book, Blink, was right up this alley.

This passage in the article, specifically related to web site design, is particularly interesting: 

The lasting effect of first impressions is known to psychologists as the 'halo effect': if you can snare people with an attractive design, they are more likely to overlook other minor faults with the site, and may rate its actual content (such as this article, for example) more favourably.

This is because of 'cognitive bias', Lindgaard explains. People enjoy being right, so continuing to use a website that gave a good first impression helps to 'prove' to themselves that they made a good initial decision. The phenomenon pervades our society; even doctors have been shown to follow their initial hunches, Lindgaard says, relying heavily on a patient's most immediately obvious symptom when making a diagnosis. "It's awfully scary stuff, but the tendency to jump to conclusions is far more widespread than we realize," she says.

Advertising on Google Maps

Google continues to amaze me with their rapid fire implementation of new (and free) web services. Just when I start to believe they're going the Yahoo route with a new product that cannot readily generate advertising revenue as it's sole source of income, Google shows another innovation in advertising.

This time it's advertising on Google Maps (via Digg). Having store names visible on the buildings in Google Maps is remarkable because of the addition of satellite photos to Google Maps and the widespread interest in Google Earth.

The do-it-yourself approach is cute too. I've seen this around airports before, but this Google product makes makes this much more interesting.

Every time this kind of news comes out, it seems clear that Google has really not strayed from their core business -- advertising.

Newspapers Don't Get it

My dad and I were recently discussing the problems that newspapers are facing. He believes that the decline of newspapers is related to an intellectual decline of the potential readers. As someone who has quite possibly never read a blog or used digital media as a primary source for news, it is easy to see how he would reach this conclusion. There also may be some truth to the fact that people have become accustomed to getting their news in sound bites and are less likely to read an in-depth news story or listen to a lengthy report.

Regardless, I think the major problem facing newspapers is really an issue of the market. Newspapers simply do not usually offer something that you cannot get anywhere else. The product is no longer unique. For decades much of the content in newspapers has been nothing more than regurgitation of wire reports. With online media and round-the-clock cable news, we all get these stories on an hourly basis. Reprinting an AP story a day or two later in the paper doesn't give me much reason to subscribe. Except for local news, advertisements and the occasional original piece, they are really just a "me-too" product.

Mark Cuban has a great post about this on his blog today. I think he offers a credible opinion on this issue.

The More You Sell, The Less You Make

I've been reading the usual end-of-the-year retrospections on some of my favorite blogs. I found a great post on Brand Autopsy that I missed last February.

According to a recent BusinessWeek article, only 9 of the 38 companies generating 10% or more of their total sales volume at Wal*Mart are recording above-average profitability and shareholder returns. 

How Not to Run an In-Store Pickup Program

Kevin Brancato wrote a great post about his bad experience with Borders' in-store pickup program.

Last night I searched online and found that the Borders store nearest to my workplace carried in stock a Thomas the Tank Engine book I wanted for my son. Then I saw this: [reserve for in-store pickup button].

In theory, Borders will find the book to verify that it is still in stock, reserve it for you, and email you back within 2 business hours. Sounds like a time-saver, so I did it.

And an hour after opening, the store indeed sent an email with this disappointing message:

Thank you for your online reservation request. We're sorry to say that the remaining stock of the item you requested has been purchased since our last online availability update. You may want to check online to see if there are other items that will meet your needs. Your local store will also be happy to special order the item, if you wish.

Blah, blah, blah... To make a long story short, I checked online again, and the book was still in stock. So I went to the store, and within 30 seconds I found the book I had reserved, exactly where it should be in the Children's book section. Surprise, surprise.

Did Borders employees even bother to check the shelves?

If you can't do it right, don't do it. The whole system has to work, or these are the kinds of things that will happen. Then people will talk about them. And then your company ends up looking far less competent than it probably is. In other words, an attempt to offer better service and added value results in consumer doubt that erodes confidence and trust. And trust trumps everything else in the world of e-commerce.