Tuesday, December 20, 2005



2006 Predictions


The new year is less than two weeks away. Here are some predictions:

Search

Google will lose market share to almost everyone but mainly A9.com, Alexa, Ask, Clusty, MSN and Yahoo. I would say that by the end of '06, Google's market share of pure search (done through Google.com) will be down at least 4%.

In terms of stocks, I think Yahoo or Amazon are likely to outperform Google by a wide margin.

Google's stock price will be below its 2005 peak.

Alexa will change (almost completely) the dynamics of search.

www.clusty.com or Vivisimo (the parent company) will be bought. Likely contenders: A9, Yahoo or MSN. Even Ask could by this clustering company.

Yahoo of Google will add wiki like note taking feature to their email service.

Google will launch (first half) calendering functions to Gmail.

MSN Live won't live up to expectations but MSN will gain 2% point market share in search.

Currently, www.A9.com is ranked around 1,300 by www.alexa.com in terms of site ranking and www.clusty.com is around 4.000. a9.com could easily in be in the top 100 by the end of the year and clusty in the top 1,000. (Updated December 31 at 11.40 pm)




Technology

Novell could start gaining some traction in sales of Linux as well as stock price; is likely to outperform Red Hat.

Sun Microsystems is likely to do well – in terms of stabilizing Unix sales, increasing storage sales and sales of Niagara.

FireFox market share gain will stabilize around 15-18% globally from around 10% in December 05.

Windows Vista will be the biggest disaster in Microsoft's OS history. The operating system is too taxing on the hardware and hence machines bundled with Vista will be as expensive, if not more, than Mac X. My guess is that PC prices could be at least $100 more because of more memory and processing requirements.

Apple's Mac X will continue gaining market share and could easily top 5% of global shipment – partly because the machines will be very competitively priced compared with HP and Dell.

Linux will gain market share as well, this time at the expense of Vista. The price difference between a Vista PC and a PC installed with Linux will be at least $200. So, on desktops, the gains will come from more low end sales.

HP will increase its share of PCs.

Acer will continue marching into Europe, Asia and even the U.S. at the expense of Dell.

Lenovo should do slightly better than the industry.

Dell would do slightly worse than the industry.

PS3 will be a major hit.

Nintendo Revolution will be the dark horse -- if not No. 1, it will be the No. 2 selling console by the end of next year.

Microsoft will be dealing with four major flops: Vista, Live, XBox and Office 12.

Misc


GM is likely to get closer to bankruptcy.

Hyundai and Toyota will continue to be the most exciting car companies.

Ford may announce some senior level management change – they will continue to flounder in the U.S. and Europe.


Finance and Economics

After nearly an 18-month lull, I'll finally have some more ADR recommendations on www.adrinvestor.com

Returns on S&P – between 2% and 8%.

Emerging markets will outperform the U.S. and Europe.

Microsoft's stock will again underperform the index; Dell also.

Japan will outperform the U.S. – returning close to 20% returns

Chinese stocks will do very well

Sun Microsoft's stocks is likely cross $8

Emerging Market bonds five year streak should come to an end and will do poorly


Publishing


Blogs will continue to gain popularity. Technorati, which currently searches 23 million blogs will have more than 35 million.

Blogs will start consolidating i.e. there will be blogs that will have mass following.

Newspapers will continue to lose circulation; they will focus more on their Website to prevent readers switching to blogs – they will succeed in terms of higher Web viewer ship but fail in generating revenues.

At least three major newspapers will report substantial (5% of more) decline in circulation.

Because of its conservative leaning, Detroit News will see gains in circulation -- despite the strong unionized workforce, Michigan almost went Republican in the 2004 election.

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