The 3 Biggest Surprises in Tech This Week

Say what you want about the tech sector, but it's never boring. Any given week will keep tech investors flooded with product announcements, earnings surprises, and crazy strategy shifts that absolutely nobody saw coming.

These are three of the most shocking pieces of tech news this week.

International intrigue
We know that Google (NASDAQ: GOOGL  ) isn't shy about international politics. The company has stood up to the Chinese government in a big way. The same year, Google Maps drew fire for controversial border drawings in Southeast Asia between Cambodia and Thailand, as well as in Latin America between Costa Rica and Nicaragua.

This week's Google involvement in political disputes is a doozy. On Wednesday, Google renamed its Google.ps service from "Palestinian Territories" to "Palestine." That's tantamount to recognizing Palestine as a sovereign state -- an idea that doesn't sit well with Israel but was praised by Palestinian thinkers as "a step in the right direction."

Source: screenshot of google.ps, English version.

Big G's official stance isn't that the company is taking a political position, but that it's following advice from "a number of sources and authorities." The UN upgraded Palestine from an "entity" to a "state" last year, and Guatemala recognized it as a state only last month. But President Obama's latest policy statement on Palestine was that the U.S. would veto any UN Security Council bid for full Palestinian statehood, and the U.S voted against the "entity" upgrade.

Whichever side of this decades-old conflict (some would say millennia) Google might land on, the company would inevitably catch flak from the opposing side. But if Google wants to do business in the Middle East, it has to pick a name and a side here. Even backing out entirely would be seen as choosing the anti-Palestine, pro-Israel side. So some assets will always be controversial.

For what it's worth, Bing.ps is an empty domain and Yahoo! (NASDAQ: YHOO  ) sidestepped the issue by redirecting Yahoo.ps to its Arabic subsidiary, Maktoob (meaning "destiny" or "written" in Arabic). All three services have Israeli sites up and running.

Being Swedish, I try not to take sides in international disputes. Even so, I expect the comments box below to fill up with heated arguments and maybe some personal attacks just for covering this story. I sure don't envy Google for the political heat it just invited onto itself.

Let's not go there
In happier and far less controversial news, IBM (NYSE: IBM  ) backed down from the worst idea Big Blue ever had.

IBM's attempt to sell its server operations to Chinese systems builder Lenovo has been called off. The companies couldn't agree on a price, according to Bloomberg's sources. Lenovo wanted to pay as little as $2.5 billion for the server division, but IBM's estimate of the segment's value may have been almost twice as high.

All's well that ends well. Big Blue gets to keep its unique and powerful top-to-bottom IT portfolio intact, and I hope management doesn't go looking for alternative buyers. Synergies between IBM's many moving parts are the secret recipe to the company's success, and other tech giants are trying (but mostly failing) to copy IBM's strategy.

Why change a winning team?

The Apple lottery
When my son pushed the family iPad into my face and started asking about this $10,000 gift-card lottery, I thought he had stumbled on a major scam. Apple (NASDAQ: AAPL  ) is not in the business of running lotteries, after all, and anything that sounds too good to be true generally turns out to be empty fluff.

But Apple really is running a gift-card lottery to commemorate the upcoming milestone of 50 billion app store downloads. App grabber number 50 billion will get a $10,000 App Store gift card, and the next 50 downloaders receive a less generous but still significant $500 card. It's real, it's totally backed by Apple, and I'm still shaking my head.

Apple is the master of public relations and has built a unique brand around exclusivity and quality. Buying Apple gear is a lifestyle choice, not a bang-for-your-buck decision. You buy Cupertino's stuff because it makes you feel better.

Or at least that's the way it used to be. This attention-grabbing milestone marker didn't need a tacky lottery drawing. It smacks of desperation. And if you win, what would you do with $10,000 in App Store dollars? It's not like you can use Apple cash to grab a nice dinner or a used car. Ten thousand dollars is a nice, big, look-at-me-now number, but the winner will probably never use up the entire thing.

As one of the most dominant Internet companies ever, Google has made a habit of driving strong returns for its shareholders. However, like many other Web companies, it's also struggling to adapt to an increasingly mobile world. Despite gaining an enviable lead with its Android operating system, the market isn't sold. That's why it's more important than ever to understand each piece of Google's sprawling empire. In The Motley Fool's new premium research report on Google, we break down the risks and potential rewards for Google investors. Simply click here now to unlock your copy of this invaluable resource.


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  • Report this Comment On May 04, 2013, at 12:12 PM, carla01j wrote:

    I guess you missed the report on a comprehensive test of laptop computers that showed the most stable laptop for running Wndows was a Mac!

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