2009 Predictions: Intro

It’s been a long-standing rule here at TNL.net to make pre­dic­tions about the upcom­ing year. For many rea­sons, unfor­tu­nately, this didn’t hap­pen in 2008, ruin­ing an oth­er­wise per­fect decade-long streak of mak­ing such pre­dic­tions. To be per­fectly hon­est, last year was a bit of a down year in terms of pro­duc­tion of con­tent here on TNL.net as events beyond the blog required my attention.

So the first pre­dic­tion I will make is a purely per­sonal one and more of a promise than a pre­dic­tion: 2009 will be a year when more new post­ings will emerge from TNL.net.

Macro-economics

I do not share the opti­mism of many other peo­ple in the tech­nol­ogy field when it comes to macro-economic fac­tors and their impact on the tech­nol­ogy field. My view is that the first half of 2009 will be much worse than the last half of 2008 and that the sec­ond half of the year will, at best, look like the first half of last year.

I sus­pect that the finan­cial pic­ture will get more con­strained over the next fiew months as banks start feel­ing the impact of a consumer-led credit card cri­sis as indi­vid­u­als try to save their houses by max­ing out the credit card instead and even­tu­ally reach the end of the credit limit, unable to repay.

In the broader econ­omy, the cur­rent credit crunch will con­tinue to have an impact on all indus­try and I sus­pect this will lead to large com­pa­nies first encour­ag­ing vol­un­tary lay­offs, fol­lowed by fur­ther job cuts. This will trans­late into a larger impact on the retail sec­tor, which is still larger than it ought to be under the cur­rent con­di­tion. Expect more con­sol­i­da­tion in retail, with some large play­ers clos­ing shop altogether.

Start-ups

I don’t think it’s very hard to pre­dict a wave of start-up fail­ures this year. How­ever, this will not be any­where near as bad as it was dur­ing the first dot­com bub­ble because the cur­rent crash is not see­ing inflated VC invest­ments as its core. The level of invest­ments in web 2.0 com­pa­nies never reached the excesses we saw dur­ing web 1.0 so I sus­pect that many start-ups will float away with more of a wim­per than a bang.

Estab­lished Web Players

Some of the more estab­lished web 1.0 com­pa­nies will have a rough year.

I would not be sur­prised to see Yahoo no longer run­ning as an inde­pen­dent firm by year end. My sus­pi­cion is that it will either be com­bined with AOL as part of a com­plex trans­ac­tion that will spin AOL out of Time-Warner and com­bine with Yahoo (a com­bi­na­tion that I sus­pect will leave all involved hope­ful for the best at the start of the trans­ac­tion and dis­en­chanted with the result by year end) or, should the stock price drop lower, I would not be overly sur­prised if Rupert Mur­doch were to swoop in and pick it up to com­bine Yahoo with other News Corp. Inter­ac­tive prop­er­ties (includ­ing MySpace).

eBay is another com­pany that will have a rough year in 2009. Much atten­tion will be paid to it as Meg Whit­man, the company’s for­mer CEO makes a guber­na­to­r­ial bid in Cal­i­for­nia and many will point to her lead­er­ship there as either an exam­ple of suc­cess or fail­ure, depend­ing on which side of the polit­i­cal spec­trum they stand on. Mean­while, eBay’s auc­tion busi­ness will con­tinue to crater and more of its rev­enue will come from its Pay­Pal and Skype subsidiaries.

Ama­zon will sur­vive the retail down­turn and may actu­ally emerge as a win­ner in the cat­e­gory. As more retail con­sol­i­dates, Amazon’s rich data-mining abil­i­ties are mak­ing it the Wal-Mart of the online world and I expect it to see growth in the retail space as smaller play­ers fall off by the way­side. Fur­ther­more, its diver­si­fi­ca­tion, with the com­pany also offer­ing some of its infra­struc­ture via web ser­vices for a low fee will pay off as more star­tups will move their oper­a­tions to the Ama­zon cloud as part of some cost sav­ings efforts.

Mean­while, Microsoft will con­tinue to sput­ter along in the online space, pos­si­bly pick­ing up the search busi­ness from Yahoo but ulti­mately end­ing the year with­out any sig­nif­i­cant gains in the online space. Hope­fully, by then they will have released Win­dows 7, which may undo some of the rep­u­ta­tional dam­age the com­pany suf­fered after the release of Win­dows Vista.

In the next entry, we’ll look at the media space and how those macro-economic changes will have an impact on that.