Why does Google Want to Talk?

The interesting thing about googletalk (their new IM & Skype-like client) is that it's a window on their strategy. Yahoo and MSN blindly mimicked gmail's big storage and free access just to compete, but it wasn't clear why google sought to be in that business. It's probably profitable - with ads next to every email you read that are relevant to your emails. But it looks like the real reason was to create a user base for other kinds of applications. There has been a lot of speculation about Google creating something like a platform independent (browser based mostly) OS using the AJAX extensions. Their two strengths are searching/data distribution and now a user base - which can be used for peer to peer (email and IM are the most basic forms of peer to peer). So talk.google.com seems to be the first non-email use of that user base. Remember I was saying AOL ought to be in the telephone/VoIP business because they already have the directory of users from their IM business? This would seem to be Google's attempt at that angle. Certainly from Google's first client (beta they say, but I think maps is still technically beta) is pretty weak. It's very simple though. They seem to have decided that they would rather have utter simplicity over features. It worked for them before, but existing IM users have higher expectations. Also, IM in businesses is partly popular because it mostly isn't tracked or archived, unlike email. Google probably is tracking and storing IM, if not voice.

Housing Bubble: The Soft Landing Myth

Housing Bubbles have a soft landing. Prices just stablize or dip a little - no more than 20% - and everyone is happy. That's the myth and even the Wall Street Journal has bought into it to some degree in their recent article about housing prices stabilizing in Australia (where the bubble has been growing more dramatically than in the US).
There is truth there.
A housing bubble can stop expanding without a total collapse in prices. But there are at least two other kinds of bubble-popping: How long does it take to sell a house? How many houses are available for sale? If the average 2 bedroom home is selling for $500,000 at the peak and 1000 of them are selling in your city every 30 days, is that the same as 1 home selling for 500,000 every six months? That's what happened (with different numbers) in the early 90s in L.A. Speculators drop out of the market. People are afraid to buy a home when all the hype about astronomical appreciation isn't there anymore. They can't commit as much of their income to payments. Sellers still try (for two or three years) to get the peak prices. They can't afford to sell for less than their mortgage. It's a stalemate. And for people who thought they would flip their home for easy money and can't afford their zero principal ARM payments, it's not a good time. Of course, when those people go bust, there will be a bunch of nice, lower priced homes coming on the market that will ease the crunch. And that is the "soft" landing.

Tech Tags: economics housing bubble soft landing