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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

November 11, 2008 at 8:05 PM

Tech outlook for 2009: “Flat is the new up,” GOOG to $250, Yahoo to Disney

The perfect metaphor, heading to the WTIA’s annual technology forecast dinner tonight at the Seattle Westin: The upward escalator was broken.

Panelists generally said they’re expecting conditions to get worse before they improve, but they still see opportunities amid the economic wreckage. They also expect Microsoft and to fare especially well during the downturn.

The panelists included Friday Harbor tech pundit and consultant Mark Anderson, Wetpaint Chief Executive Ben Elowitz, Madrona Venture Group Managing Director Matt McIlwain and Curious Office founder Kelly Smith. John Cook moderated.

Elowitz may have given the night’s best line: “I like to say flat is the new up.”

Other predictions and observations:

Who should President-elect Barack Obama choose for the country’s chief technology officer?

Anderson said the question should be “who will he, not who should he.”

Elowitz: “I threw my name in the hat and so far I haven’t heard back yet.” He said the economy is a greater concern, so he’d like Warren Buffett “even if it’s the wrong office for the right man.”

McIlwain: Wouldn’t be surprised if it’s someone who is a current or former Microsoft executive. Or “John Stanton — he isn’t doing anything right now so he might be an interesting guy.”

Smith: “I really think Bill Gates would be a great CTO for a couple of reasons … he is a technical guy — more technical than Steve Ballmer. I think what he’s doing with the Bill and Melinda Gates Foudnation gives him a point of view that suggests he understands the larger implications of some of these types of decisions.”

He also thinks Sun’s Jonathan Schwartz would be interesting.

McIlwain: “Schwartz would be an inspired choice because Sun might be one of the next ones asking for a government bailout.”

What’s the biggest technology challenge in 2009?

Anderson: Broadband. There’s “no leadership I can see whatsoever.” Also energy, ending “Middle East dependence.”

Elowitz: The No. 1 one thing on the agenda of every single tech company is the economy.

McIlwain: Education. “If we can’t both educate people in our country to have absolutely the best opportunities to be innovators, contributors to the innovation economy, it’s going to be very hard for us to be the market leader.”

Smith: Education, and “the tax climate needs to be incredibly favorable for innovators in our market.”

Where will Google’s stock be at the end of 2009? (Last year’s predictions for Google at the end of 2008 ranged from McIlwain’s $725 guess to Smith’s $901.)

McIlwain: $450.

Smith: $400.

Elowitz: $500.

Anderson: It will fall to the $250 or $200 range, then come back up into the $275 range by the end of the year.

What’s going to happen to Web 2.0 and ad-supported companies?

Elowitz: So many businesses using targeted online ads it “creates an automatic insulation layer.”

McIlwain: Bullish on “arms dealers for ad networks” working on technology to figure out which ad goes to which viewer at which point in time.

Smith: What we’re facing now is just sort of more fundamentally severe than what we went through in 2000-2002.

Who will buy Yahoo?

McIlwain: “Nobody probably should. I actually think the most logical buyer is Disney … Fundamentally at its core Yahoo is a content company. There;s no better company in the world at monetizing content [than Disney].”

Smith: Viacom is interesting, CBS is interesting.

Which of big tech companies are best positioned to thrive in the economic crisis and why?

Anderson: Microsoft. They’ve got plumbing in every single place and lots of plans to extend that.

Elowitz: Microsoft.

McIlwain: Microsoft and Amazon.

Smith: Microsoft.

Where will Microsoft stock be at the end of 2009?

Anderson: $25, after dipping as low as $15.

Elowitz: $28

McIlwain: $25.

Smith: $25.01

What surprising acquisitions might happen in 2009?

Anderson: Nortel will be gone.

Elowitz: Yahoo can’t remain an independent company.

McIlwain: I think the more interesting development is the number of small cap companies that get acquired by big cap companies.

What will kill the iPhone, and what’s the biggest mistake Apple can make?

Anderson: Lying about Steve Jobs’ health.

McIlwain: Favors the BlackBerry and its stronger distribution channel and enterprise presence.

Elowitz: Impressed by Google’s Android application store, but Apple “has a chance to be the new Nokia in terms of market share on consumer handsets.”

Will Sprint remain a standalone company?

Elowitz: No

McIlwain: “You’ve seen the ads [with Chief Executive Dan Hesse] … That probably says there’s a big self confidence issue there. So I would guess they remain independent even though they shouldn’t.”

Will Steve Ballmer be Microsoft’s chief executive at the end of 2009? All said yes.

What’s going to be the next big thing?

Anderson: Software and hardware integration with biology “wetware” – adding computer technology to animals at first and then human beings.

Smith: Cloud computing and virtualization, maybe electronic medical records.

McIlwain: Tax shelters. Also businesses that help “extend what I’ve got further,” to extract more value from companies’ existing investments in hardware and software.

Elowitz: Cloud computing; in the media/Web 2.0 world, companies using measurement to drive returns on investment.

Is a real depression coming — a meltdown led by the collapse of consumer spending?

Anderson: I don’t think so. I believe that the international banking authorities have put the right tools into place quickly.

McIlwain: If you start to see excessive tax increases, tariff increases or more national bailouts for other industries beyond banking, “we could be headed for a depression. Let’s hope it doesn’t happen.”



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