MetaRAM Busts RAMBUS Stranglehold?

Sand Hill Road envies RAMBUS. Oh, they don’t envy them their lawsuits, precarious business model or turbulent management structure. But they do envy them their ruthless monopoly of the high-speed DRAM market. RAMBUS successfully competed against the behemoths with a clever architectural enhancement, kept belief in their approach against huge odds, fought back as hard and dirty as the big boys and made licensing deals stick. They are survivors.

When RAMBUS went IPO back in 1997, I was completing work on the first preliminary patent application for InterProphet’s SiliconTCP technology, while William began his hunt for investment. RAMBUS’s IPO was on the minds of many VCs, but it wasn’t in a good way, surprisingly. RAMBUS’s 7 prior years had been fraught with changes in business model and personnel. Instead of setting up a fab, RAMBUS chose to license their technology. Finally, RAMBUS chose to make their stand on the basis of their patents. Don’t let me fool you — investors may crab about the need for “intellectual property protection” but when it comes to playing with the big boys, they believe about as much in IPR as the tooth fairy.

RAMBUS has been remarkably successful in defending and enhancing their patents (and yes, I know about their “steering committee” games — coming from the OS side I’ve seen Microsoft and others play the same games, even to the point of doing software patents on work pre-existing by decades). Essentially, they’ve played dirty like Intel, Hynix and all the other guys the VCs said you could never win against. But it has been a very long wild and crazy ride for the payoff — too much for the “10x in 3 years” crowd.

But despite all of RAMBUS’s remarkable turbulence, it has been amazingly successful. During one incredible record-setting day in 1998, I listened to a top-tier VC say that he’d never want a single share of RAMBUS’s stock no matter *how* much money they made. He just hated them. Another top-tier VC rambled on about how “you could make a lot of money with a RAMBUS business model, but they weren’t interested in that”. What they really hated is how there wasn’t a single massive success where they could bow and take their winnings (like VMWARE in 2006 for example, but they didn’t invest in that one either because it was run by a husband-wife team that believed open source was valuable — hmm, beginning to see a pattern). As Magdelena Yesil (at the time partner at USVP) liked to intone to me “Venture Capitalists are more capitalist than venture these days”. Chip risk wasn’t as exciting when you could respin any company as an Internet venture and go public with no revenue. And semiconductor companies *are* risky.

Semiconductor companies are also the historical lifeblood of Silicon Valley — hey, that’s why it’s called “Silicon Valley” and not “Internet Valley”! So now we come to MetaRAM, an attempt to steal RAMBUS’s monopoly on architecture. According to Ryan Block of Engadget “MetaRam uses a specialized “MetaSDRAM” chipset that effectively bonds and addresses four cheap 1Gb DRAM chips as one, tricking any machine’s memory controller into using it as a 4x capacity DIMM.”

Is the technology innovative? Not likely — it sounds like a combination cache and bank decoder, which is not innovative in the least. In fact, you need 4x the number of components on the DIMM, which means 4x the number of current spikes and decoupling capacitors, even if you put the chips together in the same package. Because you have a fifth chip, you complicate things even more. There is no way you can approach the triple-zero (volume, power, cost) sacred to chip designers with such a design, because one single high-speed high-capacity chip will eventually win out given the proliferation of small expensive gadgets demanding the lowest of volume and power. In a world of gadgets like IPODs, cellphones, laptops, PDAs and the like, cost is very important but *not* the most important quantity. So RAMBUS doesn’t have a lot to worry about here.

Hynix has been fighting a losing battle against RAMBUS ever since getting hit with a whopping $306M patent infringement judgment in 2006 (since reduced to $133M), and RAMBUS is still going for more. These are the same guys who pleaded guilty in 2005 to a DOJ memory price-fixing scheme from 1999-2002 and paid a $185M fine. There is no love lost in the memory biz.

So where does little MetaRAM come in. When technology fails, maybe a clever business model will do. MetaRAM’s big claim to fame is cost reduction — not for gadgets or laptops, but according to Fred Weber, CEO of MetaRAM, for “personal supercomputers” and “large databases”. And who is the big licensee for this so-called technology. Why, it’s Hynix of course, who announced they will make this lumbering memory module. They claim it will be lower power. I think I’d like an independent evaluation on this point, but it will probably be lower cost. Is it worth it? Given reliability considerations, that also remains to be seen. But the moral of this saga is simple — human memories are longer than memory architectures in this business, and the real puppet-master behind the throne (Kleiner-Perkins) is sure to walk away with the money. I wish I could say the same for the customers.

Fun Friday – Jim Gray Tribute Scheduled

Jim Gray was lost at sea a year ago, but he is not forgotten. His family has joined with UC Berkeley, the ACM and the IEEE Computer Society to hold a day of technical sessions in his memory on Saturday, May 31, 2008 in Zellerbach Hall at UC Berkeley.

Jim was a Turing emeritus and computer science legend. There will be speakers discussing his contributions to fault tolerance and database transaction processing from notable companies like IBM, Tandem and DEC, as well as his later interests at Microsoft Research in handling massive processing and storage for astronomical and high energy physics datasets. This promises to be a fitting farewell to a man of dedication and intellect.

SCO Gets Valentine, Lessig Campaigns for “Change”

Well, SCO got a big Valentine’s treat last week – a $100M potential investment by the very politically-connected Stephen Norris Capital Partners (an equity firm) and their “partners from the Middle East” to lift the firm out of the morass of Chapter 11 bankruptcy and into private hands. While Linux adherents are clearly annoyed with SCO’s escape from the bankruptcy abyss, the more interesting item to consider is how SNCP is going to get the kind of “bragging rights” IRR out of UNIX.

What if there was a strategic need for an OS that’s entirely licensed for military use? $100M would be a reasonable bet to get return on investment if 1) you had an “in” with the DOD and 2) they buy off that they need an OS qualified for strategic security reasons. I know some people might get hung up on the Middle East connection, but that would only be an issue if there was majority foreign ownership, and that can be easily handled via a domestic equity firm. Just food for thought.

Also, Larry Lessig of “creative commons” fame (whom I’ve interviewed as well as reviewed) has announced that he is considering a run for Tom Lanto’s seat against the very popular and (once again) politically-connected Jackie Speier. Larry’s concern is political corruption, and given the Zeitgeist it is a serious one, but not one that has arisen recently. Several years ago Larry and I chatted about the possibility (before YouTube, mind you) of using user-generated video to create a “truth squad” to monitor political campaigns for honesty. We both could see this coming, but I think it came into fruition with the “macaca” remark blurted out by George Allen (former Republican Senator for Virginia) during a campaign stop and captured on video for the world by the intrepid (and unflappable) S. R. Sidarth. I don’t vote in this district, but I must say that Larry would make this a very interesting race if he chooses to enter it. Time will tell.

What are they saying about you, girl?

Stanley Fish of the NYTimes today explored the “hate Hillary” movement, something that he said he was reluctant to do “because of a fear that it would advance the agenda that is its target”, in other words, embolden Hillary haters into sending him more trash email of the type where “the Swift Boat campaign against John Kerry was a model of objectivity” in comparison. He was not arguing with people who genuinely prefer other candidates on the issues. Instead he was examining those for whom “the level of personal vituperation unconnected to, and often unconcerned with, the facts” has become an all-consuming hatred that he felt was akin to that vehemence expressed by anti-Semites.

What I found interesting was a thoughtful comment from “J” (number 176):

Thank you for this piece. As a woman working an a male dominant field, I’d like to think I am equal to my fellow co-workers and am a welcomed member. But with the development of this campaign you can not imagine the vitriol I hear in my office. In my professional office I hear men talk about the size of her thighs, how grotesque they find her, stating that they would never “allow” their wives to wear pantsuits, that a woman will never make a good president and continually pick her apart physically. This is in loud voices as though I am expected to join in, not a private conversation by any means. It often makes me wonder what they think of me in this office and what would be the effects of my being promoted.

“J’s” note reminded me of something a very wise older male African-American executive once told me in assessing your standing and value to a company. He said that it was very important to listen to your co-workers when they talked about others without managers present. If it was disrespectful and unfair, than he said that’s exactly how they talk about you behind your back. If they spoke about others with respect and fairness, then that’s how you were spoken of.

So “J” is right in her concern about how she is perceived of and spoken of when she’s not around, because this vulgar conversation could indicate she’s not considered part of the team. If she were, then her co-workers would be much more aware of how a fellow member of the team feels about their vulgarity (and believe me, a lot of men loathe this kind of stuff too). Professional men and women are quite capable of self-control if they believe it is demanded by the team to get the job done.

Silicon Valley attracts the best and brightest in innovation of all religions, creeds and colors. The thing that unites us is our dedication to the creation of new technologies, products and businesses — workstations, operating systems, networking, enterprise software, and Internet. The key to success with such a diverse workforce is building the team to accomplish the mission. “Outing” members of the team imperils their ability to do the job and diverts resources when focus is needed to survive in a “world is flat” global economy.

So what would be the best advice for “J”? The direct way (and the best to clear the air and refocus the team) is to find the manager and point out that the team isn’t focused on building the product but instead involved in indulging individual whims. I wish I could say it will work — there are a lot of bad managers out there who don’t get held accountable when their teams fail to achieve — but sometimes sanity prevails.

But what if “J” fails to get satisfaction? In this case, she’d have to do what a lot of women are forced to do — try to find another job and pray she isn’t “too old” (for women I’m told it’s now 40, for men I’m told it’s 50, and yes it’s discriminatory but as an SV attorney said not so long ago “You can’t prove intent”). “J” can’t ignore that a lot of men (and women) agreed with Rush Limbaugh when he said nobody would want to watch a woman, no matter how smart or experienced or good at her job, grow old.

Would be safer for “J” to keep her mouth shut, hunker down and try to last a few years longer? Perhaps. In a recession, taking a risk like this, even if it’s right and good, may require “J” to pay too high a price. It isn’t fair, but what if nobody is either?

I can’t see a good answer here. Is there one?

VC Loses Weight, Music Loses a Legend

SV is buzzing about former Mobius VC Heidi Roizen’s new vanity music CD Skinny Songs. Since leaving the investment game, Heidi decided to dedicate herself to losing weight (don’t you wish you had the time and money to do that?), but was dissatisfied with her exercise music. So she turned “songwriter”, crafting lyrics like “For years we were together, every Saturday night,/we’d go out dancin’, you’d hold me in tight,/but you were unforgiving and you wouldn’t let me grow/Now I can’t put you on – but I can’t let you go” (Skinny Jeans) and “I use wills of steel, at every meal, to control my every bite/And with my xray vision I can see without a doubt/There’s a skinny girl inside me, I’ve just got to let her out” (The Incredible Shrinking Woman – isn’t that the name of an old scifi movie too?). She didn’t write the music, sing, play, or produce of course, since she doesn’t know how, but she does know how to fund a project…

Meanwhile, Dan Fogelberg, a true artist, died of cancer yesterday, and the world got a little bit dimmer somehow. Dan was one of my first strong musical influences along with Christopher Parkening (I learned to play guitar from Parkening’s classical guitar book and no, I don’t use a pick because classical guitarist use their fingers!). I played and sang Stars and Be on Your Way while other kids were listening to disco.

I haven’t played his songs in close to twenty years I’m ashamed to say. When I have time, I spend it on my own compositions (and yes, I write the music, lyrics and sing and play, but my husband does all the digital production, and no, it’s not a business, it’s just for fun). But even after all these years, I still remember them.

So I pulled out the guitar last evening. The fire was warm and so was the music. I sang Longer while my husband listened and my daughter drew. Our cat Tiger came over from where he was sleeping, jumped up next to me and leaned his head against the guitar body.

Longer than there’ve been fishes in the ocean
Higher than any bird ever flew
Longer than there’ve been stars up in the heavens
I’ve been in love with you

Stronger than any mountain cathedral
Truer than any tree ever grew
Deeper than any forest primeval
I am in love with you

I’ll bring fire in the winters
You’ll send showers in the springs
We’ll fly through the falls and summers
With love on our wings

Through the years as the fire starts to mellow
Burning lines in the book of our lives
Though the binding cracks and the pages start to yellow
I’ll be in love with you
I’ll be in love with you

Thank you Dan for your wonderful music. You inspired a young girl to pick up a pen and a guitar and sing for the pure joy of it. I know your heavenly debut will be wonderful. But we will miss you here.

Silicon Valley’s Middle Class Dilemma

Almost everyone I know likes to claim that they are “middle class”. Yes, I know I live in Los Gatos, a nice little town that in many ways resembles Santa Monica or La Jolla. We’ve got a great library, a Christmas parade (I once marched in it with my kids as “California pioneers”), a nice neat downtown, several great parks, and what is generally considered a very good school system (although my daughter decided to short-circuit a slow educational malaise for Ohlone College after 7th grade). Yet we’re all “middle class”. Not wealthy. If pressed, someone might say that local resident Steve Wozniak is probably wealthy, even though he eats at Bakers Square during pitches.

But wealthy? No, most everyone I know (even several VCs) don’t feel wealthy. Oh, they hope to be someday. But with $5,000/mo mortgages, insurance and taxes going into Silicon Valley tract houses that went for $30,000 new in 1967, they definitely feel middle class. And scared they’ll lose it all if something – anything – goes wrong.

The problem with definitions of “middle class” is that they don’t take into account debt load and age. Many people who appear affluent in expensive areas of the country have very high debt load, dominated by mortgages. The only reason they survive is that good old mortgage deduction on their taxes.

People buy houses based on their current income and debt (unless, of course, they fell into the subprime disaster – note that many people who qualified for better ended up with these mortgages because brokers made more off of them). What if they lose their job, or their medical insurance tops out and they have to go out-of-pocket on medical bills? In this case, the fixed asset value of their house doesn’t help much, unless they can unload it at a profit fast, because once the debt load rises or you can’t validate the old mortgage with a paystub, you can’t refi and pull money out of that asset. But you still have to pay mortgage, taxes, maintenance and all that stuff. And in costly areas like Silicon Valley, that adds up real fast.

And finally, if you’re over 40, there’s a good chance you’ll not get as good a job, pay-wise, than you had when you were younger. We see it all the time here in Silicon Valley. It has nothing to do with education – I see very educated people here past 40 saying they’re “retired” rather than admit they have no job prospects. It has nothing to do with connections or talent – many of these people have established track records of products and successes and everybody knows it. It has everything to do with age. Nobody wants an employee over 40 because 1) the medical costs go up – I paid $70/mo for a 20-something in my engineering group in one of my startups and he had a major car accident that cost Kaiser plenty, while several 40-something engineers had monthly medical costs 10-times that and never got sick – and 2) old guys and gals aren’t “cool”, and investors and the few old survivor executives only want to be surrounded by youth to feel young.

Maybe that’s where the real Silicon Valley “wealth gap” lies. The super-rich winners believe they are immortal and beautiful (even if they are old toads) because they are rich, and only wish to deal with others like them (the current minimum in venture circles these days is about $100M) and they use the young to flatter their egos and not necessarily to line their pockets. The people who made them their successes – the generation of hard-working scientists, engineers and businesspeople that created the wealth – are disposable because their very presence is a reminder that the “wealthy” got there because of them.

So what happens to the guy who made that open source project succeed, or that gal who got those semiconductor patents together? They’re “retired”. Put out to pasture. There are no second chances in Silicon Valley.

The only bright light in this little meditation is that we should be happy they still use “retired” in the conventional sense, and not the Blade Runner sense.

Cyberbullying on the Internet

The Lori Drew case has hit the media this week, and the reaction is fairly universal – how could a mother behave in such a shameless narcissistic evil manner to drive a young girl to suicide? The anonymous use of the Internet and MySpace to bully this child provides the techno-grist for over-the-top analysis by doyennes of housewife journalism like Judith Warner (admittedly, I do like her style) who draws rather shaky lines between this nasty criminal weirdo and “helicopter parents” who dote on their offspring. Unfortunately, this trivializes and distracts from the centerpiece of this drama. Powerful technology like the Internet can be used by amoral predators to hunt down victims as efficiently and rapidly as normal folks use it to hunt for the best HDTV bargain.

The “good old days” mantra (oh sure, bullying didn’t happen before the Internet? I’ve got a bridge to sell you too) that pops up during this public debate is relevant only in the sense that the way we interact in society is vastly changed and enhanced by technology. Social networks like MySpace and FaceBook and business networks like LinkedIn are poor substitutes for real friendship, collegiality and love. But what if you don’t have any real friendship, collegiality and love? For whatever reason one would prefer to choose (consumerism, individualism, globalism, …), these businesses would not exist and flourish economically if there weren’t so many isolated people out there looking for validation of self. While technology like the Internet facilitates new forms of social interaction, it is not the sole catalyst for such interaction. That responsibility lies within ourselves and the way we treat others in the real world.

The major lament about the Internet is that it has no “controls” to prevent criminal behavior. Consider that the Internet (Arpanet for those oldsters who remember) was designed at a time when networks were few and conduct was scrupulously monitored. In the 1970’s, I knew quite a few people who were very careful with their postings for fear of losing their prized university or corporate accounts. However, balancing this was the belief that academic freedom was equally important, and that disputed statements should be heard and debated – not suppressed – in other words “Cui peccare licet peccat minus” (Ovid).

But in the real world, we also view actions separately from words. When words are used to torment and destroy another person, it becomes a difficult matter of law. It forces us to look at our values and behavior. How many times have you, dear reader, met with a poison-pen email or posting notable only for its vacuous viciousness and then actually met the writer and found him or her indifferent or unaware of the venom dripping from the words? I actually have on occasion, and it is very disconcerting.

Anonymity on the Internet has always been a bit of a misnomer. The Internet provides for much better tracking and record-keeping than sending an old-fashioned letter and is far less regulated than phone conversations. Cookies and behavioral search give businesses like MySpace a “snapshot” on buying habits and trends worth billions of dollars. People who use these “free” services may believe they are “untraceable” but the entire focus of the business is one of tracing a caricature of the consumer. Identifying users in criminal or civil actions is simply incidental to their business, but as the RIAA actions demonstrate, the information is available.

DNA analysis has revolutionized identification of criminals, but that hasn’t stopped all crime. The same goes for Internet tracking. Technology changes, but the desire for justice is timeless.

Oh Microsoft, Google is Calling – They Want the OS Space

With the announcement of Android, the Google open source mobile platform, there has been breathless talk of Google taking out the “locked” cellphone market with a Linux OS version. But we all know there are many open source Linux OS mobile versions already out there, so grabbing one and putting some stuff into it isn’t really that hard. In fact, one wag I know had this little joke:

How many Google Ph.D’s does it take to create a mobile operating system? Answer – 1000. One to download the OS, and 999 to add “Copyright Google”.

Hmm, ever since the bright kids at Google were accused of appropriating code to build their social networking site Orkut (see Google Stole Code? Is Social Networking that Hard?), many techies have expressed a somewhat low opinion of Google’s technical expertise, especially when doing the actual work with all those incredible resources in people and money is probably a lot easier than “borrowing” somebody else’s “crufty” code and figuring it out. Sometimes, by the way, “crufty” means “I can’t figure out your code because I’m too stupid so I’m going to run it down”. I got that a lot with 386BSD. But given the incredible brainpower Google has gathered, I would think they could not only eventually figure it out, but maybe do a better job from the beginning…

So if Google is so full of smart people, why I am asked did they just take a Linux distro and hack it? Why didn’t they give us a “from the ground up” genius OS?

Google is full of smart people, and Linux (and BSD and Windows BTW) are not optimal OS’s for mobile computing and they know that. They also do have the resources to completely change the paradigm of open source and mobile computing but choose not to. That’s a fact.

But choosing a Linux distro and entering the mobile space is the perfect feint if a very large and very rich company has decided to take on Microsoft in the OS market, but is worried given their rival’s monopoly that they already would look like a loser if they competed directly. By cudgeling one of the Unix lookalikes and stuffing it into a small device, they can appear like they are a real contender in a big space and work their way into the heart of Microsoft’s defenses.

So it is a smart strategy. Too bad people only think tactically nowadays – they’re missing the real battle.

Fun Friday – Nobel Peace Prize for Gore Validates Global Climate Change Concerns

Well, the Nobel Peace Prize committee decided that global climate change is important enough to award the Nobel to Al Gore and the UN Intergovernmental Panel on Climate Change. Some are already protesting that concerns over rapid changes in the environment have nothing to do with peace, but it’s pretty hard to promote peace when people start warring over rapidly-dwindling resources as drought, flooding, and loss of habitat threaten their very existence.

Of course, there are many people still in denial that their lifestyle can and does impact the earth – we’re actually all in this together. There are also many political and commercial interests who fear that recognition of this problem worldwide will impact their private deals before they mine out the money, and like the tobacco companies of an earlier generation feel compelled to promote and package rhetorical nonsense to muddy the waters. There is no absolution in denial, but there is vindication in an international award.

Silicon Valley, the heart of technological innovation and a lot of “green” investment, has embraced the concept of global climate change and there is a great deal of investment in this area. This is a complex problem demanding real long-term commitment and funding, and since it took us a while to get to this point, it won’t turn around overnight. But we’re well-educated, innovative, and opportunistic, and there’s a lot of gold in new clean technologies, so expect the unexpected! Until we get there, I hope you enjoy this short video “tone poem” entitled Global Warming – A Threat to our Life. It reminds us there is still hope for our world. I think the Nobel committee would agree.

Guilty Pleasures and Guilty Publishers

OK, I admit it. The New York Times has gotten rid of their notorious “Times Select” racket, and I’ve been busily catching up on all the columns that didn’t make the grade (the moderator likes politics) on Behind the Times. And so I’ve been glancing through Dick Cavett’s blog, and found his difficulties at getting his best selling book shipped to eager bookstores very interesting. Apparently, he had to resort to threats of canceling the book tour that was generating tons of sales for the publisher unless they shipped books to Chicago!

The comments were also very interesting. Many authors wrote in with stories of how impossible it was to get the publisher to ship any books to any bookstores, but they lacked the star-power of a Cavett to get the ball rolling. Several cited disasters with liberal arts incompetents masquerading as businessmen and women mishandling their projects and yes, I’ve experienced this myself, particularly the idiot from Wiley who couldn’t keep straight the project, the book, the times scheduled to discuss matters, and the communications. While I could cope with basic incompetence (I work in Silicon Valley, after all), I had to threaten legal action when she decided unilaterally wreck the project when it was essentially completed by contacting one of my business associates (who ran a lovely datacenter and was going to buy lots and lots of books) that she didn’t want to do the project and he shouldn’t deal with me. She then went on to sign a nobody to try and rip off the same manuscript (I hadn’t given her the good stuff yet, so there wasn’t enough to rip-off, because I had been clued in by my agent to be careful after my prior editor was off’d), and it went on to be a complete failure. Suffice to say she didn’t last long, but I never did business with that publisher again.

But the primary reasons for this lack of execution are economic and global in nature. Yes, execution is CEO-speak for doing, or not doing, the job, and it’s the executives that are ultimately responsible. Cavett found it almost impossible to get his publishing execs on the ball for executing on his agreement, even though executives are supposed to be the ones who make sure things go — that was my job in the last four companies I co-founded. In fact, I remember when execution was always on the top-three lists for CEOs, but last time I saw John Doerr he apparently didn’t think it was that important anymore — hmm, do you start to see a pattern? Sometimes when people hear words like global, they feel they don’t have to do anything because the problem is too large. This may explain the complete disinterest Cavett experienced — they just don’t feel they have to deal with any problem because it’s too big.

So I guess we have to reduce the problem down to a level where they have to take responsibility. So I’ll take a shot at it (anyone is free to comment on a better approach). The reason publishers blow it has much to do with how they have adapted, or not adapted, to Internet publicity and distribution. Book cycles are much shorter than 20 years ago, and demands for books are likely to be stochastic (a foreign word to most liberal arts publishers, but very understandable to technologists). If a publishing house is still doing publishing “the old fashioned way” (e.g. sign an author, wait for a complete manuscript and then do editing, get in-house art to handle the cover, in-house marketing to do the blurbs and publicity, recon the entire work into their own proprietary system, re-edit, rewrite, and finally, after much discussion, order inventory for storage from a book binder), then they’re putting themselves at a great deal of risk because they can’t respond to fluctuating demand easily. And the author loses out because the progression from signing to book takes a great deal of time — perhaps missing a good window of opportunity to establish it before trends shifted. No wonder book publishers only want to sign “pet autobiographies” and “self-help memoirs”, and fixate on block-busters. Perhaps instead of checks, publishers should just buy everybody in the biz lottery tickets, so that maybe somebody will make it big.

Of course, there are ways to adapt to the ever-changing marketplace. One approach is to embrace the long-tail, and not run away from it, perhaps by using some of the technologies available such as “instant book publishing” and software license arrangements (see Fun Friday – College Textbook Sticker Shock). But this would demand a fundamental sea change in how publishers relate to their authors and their business — one that would require just-in-time inventory, Internet updates, Internet publicity (online video, for instance of authors chats), investment in new technologies like kiosks, and so on. Their revenues would be based on licenses to read, and not on tangible inventories, and their financials would look completely different. And that is the real bugbear in the bookselling business.

This will happen, whether publishers want to adapt or not. And the end result will be bankruptcies, mergers, failures, and ultimately a few successes. The real sufferers are the book-buying public who wants to see the long-tail of new book ideas and the authors, who just want to write and sell books to those who want to read them.