Long Live Microsoft, Farewell Yahoo, and Flat Is the New Up: A Panel of Predictions for 2009

11/12/08Follow @gthuang

Everyone loves a good prediction. Well, last night there were many of them. I attended the Washington Technology Industry Association’s “Predictions for 2009″ dinner event at the Westin Hotel in Seattle. Before I get to the panel discussion, just a couple of tidbits overheard around the room:

—Ben Elowitz, co-founder and CEO of Wetpaint, told me about “Superwoman Teriyaki.” This is a little restaurant in Seattle’s Pioneer Square (its real name is Asia Ginger Teriyaki) that is legendary among local entrepreneurs because of the woman behind the counter who takes orders, makes the food, delivers the food, manages the tables, and everything else—all at a blindingly fast pace. “CEOs want to hire her,” Elowitz said. Imagine her doing search engine optimization, he added.

—At dinner, I sat next to Big Fish Games founder and chairman Paul Thelen. (The fact that I was wearing a nametag from a PopCap Games event probably didn’t go over too well, but he humored me.) I asked for his thoughts on the casual games industry in 2009. He pointed out that some companies are cutting back because of the recession, but added, “We’re growing faster than ever.” The $83.3 million that Big Fish raised in September probably doesn’t hurt. Not too surprisingly, Thelen’s an avid gameplayer on his iPhone.

—Ken Myer, CEO of the WTIA (and an Xconomist), said he had a very successful trip to China last month, meeting with companies and potential partners together with a host of Seattle-area mobile tech companies. More on this soon.

Now for the main event. The “predictions” panelists were Mark Anderson, CEO of Strategic News Service; Ben Elowitz of Wetpaint; Matt McIlwain, managing director at Madrona Venture Group; and Kelly Smith, founding partner of Curious Office and founder of Pressplane. The panel was moderated by John Cook from TechFlash, who took audience questions via text messages on his iPhone. I’ll leave the more comprehensive roundup of the panel to John, and just give my top five take-aways here:

Microsoft is stronger than ever. Three of the four panelists listed the Redmond giant as the big company best positioned to thrive in the economic downturn. Why? “An ungodly amount of cash,” as Elowitz put it. Smith pointed out the wealth of opportunities Microsoft has because of the number of interesting companies that could be for sale on the cheap, such as Adobe. (McIlwain chose Amazon’s position instead, because it knows how to operate cost-effectively as the “Wal-Mart of online,” he said.)

Yahoo will be bought, though it probably shouldn’t be. But by whom? Anderson called the failed Microsoft acquisition “the dumbest deal that ever didn’t happen.” Smith and Elowitz thought it would be a good enough bargain for Steve Ballmer now. McIlwain said Disney would be “the most logical choice,” because it understands how to monetize content.

Flat is the new up. We’ve certainly heard this before, but the reality of the economy is that holding steady is about all you can ask for in 2009, whether it’s online advertising, VC investments, or startup revenues. Elowitz noted that Wetpaint hasn’t touched the $25 million it raised in May yet. McIlwain warned that we could be headed for a Depression if there are big tax increases, trade policy changes, and more national bailouts in the coming months.

The biggest issue in technology is far from unanimous. Anderson voted for broadband access and energy, while Elowitz cited the broader economic and financial climate, and McIlwain and Smith touted “education and talent” to foster innovation and the information economy.

The trends predicted for 2009 are not sexy. McIlwain joked that the biggest trend would be “tax shelters,” but then said it would be “helping extend what I have further.” Elowitz concurred, saying it would “not be a sexy year,” but rather would be all about focusing on return on investment. Smith cited cloud computing and virtualization as the tech trends to watch, while Anderson pointed to the confluence of biology, chips, and software. All in all, that sounds pretty conservative, gentlemen.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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  • http://www.washingtontechnology.org Lew McMurran

    Greg, thanks for the coverage. Hope you enjoyed the event.

    My prediction is that network marketing is the new real estate. Everyone is looking for some way to make extra money and obviously flipping houses is dead for the moment. Combine that with the maturation of network marketing businesses and the ability to make some decent money on just a few hours a week makes it very attractive.