Monday, January 24, 2011

China, Where Foreign-Owned Companies Go to Die

Excellent read: China, Where Foreign-Owned Companies Go to Die, China is all about Shanzai, aka imitation with minor improvements.

This is not new, Japan did the same thing in the 1950's-1970's.

Wednesday, January 19, 2011

Groupon: Should have sold to Google?

Groupon's business model seems unsustainable.

A participant has to provide a greater than 50% discount followed by splitting half the coupon revenue with Groupon, leaving them with a lousy 25%.

Furthermore, they have little to no economic moat for protecting their currently enormous margins. Living Social and others are starting to eat away at their business.

I bet in 2-3 years they will be valued less than the $6B offered by Google. Classic example of founders overvaluing their creation, similar to Jerry Yang with Yahoo (though at least he had some semblance of a reason in the undervaluation of Yahoo's Japan and Alibaba holdings).

Saturday, January 15, 2011

NY Times Article: Wi-Pay? Won’t You Be My Wireless Neighbor?

Won't You Be My Wireless Neighbor?

I hope Helen Rubenstein realizes she admitted to committing multiple felonies. Maybe she can claim it was a work of fiction?

Wednesday, January 5, 2011

Leviathan field off Israeli and Lebanese Coast

The Levant basin is estimated by the USGS to contain over 122 TCF nat gas, 2B bbl oil technically recoverable reserves, and the Leviathan field with 16 TCF off the coast of Israel and Lebanon is a game changer.

Israel and Lebanon have a total population of 7 MM and 4 MM, the USGS survey translates into ~ $800 B worth of reserves, or $60k worth of natural gas @ $5/mcf and $20k @ $100/bbl per citizen (assuming equal reserve split between Israel and Lebanon). By comparison, the USA, which has 300 MM citizens or 30x as many citizens, has technically recoverable reserves of 900 TCF of natural gas and 134 B bbl.

The fields that have been initially mapped and tested so far (Leviathan, Dalit, etc..) add up to approximately 20 TCF.

For Israel the finds mean energy security. Currently Israel is highly dependent on hostile Arab neighbors for energy.

The joke used to be that it took Moses 40 years to bring the Jews from Egypt to Canaan. Why? It took him 40 years to find the only place in the Middle East without oil.

It also means that Israel will likely become a hotbed for natural gas generation builds, but also for natural gas fired vehicles. Much of Israel is currently dependent on public transportation.