Yesterday I saw the unveiling of the Zune HD on a few different sites, and I have to admit I was impressed.  Following the disaster that was the original Zune, Microsoft seems to have finally hired some people for the Zune design team that were born after 1970.  The original Zune, of which I know of absolutely not one person who owned one, was suppose to be the first real competitor to the ipod.  It was designed by MS and was backed by lots and lots of money, which we have learned means nothing when you are trying to get at the younger generation.  At the end of the day, the Zune was a failure and another notch under Apple’s rivalry belt.

Now MS is going after the ipod touch market with the Zune HD.  While I haven’t played with it yet, from the videos I’ve seen and the comments I’ve read, it looks like they got it right this time.  It’s touch screen like the iphone/touch with an accelerometer which work swiftly, the UI looks great, it’s quick and moves smoothly.  The screen resolution is good, and it has an output for 720p plus and HD radio receiver. Personally, I always thought that the sound quality on the Zune was better than the ipods, so hopefully that still holds true.  So while the hardware seems ready to compete, the one unknown is the service.

What made the iphone/itouch so successful wasn’t so much the hardware (which is amazing), but itunes and the app store.  I have been using my itouch as my gaming console over the last few months and have barely touched my xbox 360.  The app store has been a revolution in the way users purchase games and will likely change the face of the video game industry.  If MS wants to compete they have to get this perfect at launch.  The biggest advantage MS has is that they have the Xbox 360 and Xbox Live. They can utilize that infrustructure to allow online gaming through the Zune, or downloading of content which can be played in either system.  They also have a great library of original IP such as Halo, Gears of War, the Rare collection of games and many others.  Imagine playing your friends online through the Zune while they are playing on the Xbox Live.  While it won’t be possible with the higher-end games, it will be with Xbox Live Arcade games and the social games like 1 vs 100.  However, in order for MS to get this right they have to do the opposite of everything RIM has done with their app store.  They need to make it functional, and put no minimum or maximum value to the cost of games.  They have to allow less oversight (which will never happen with MS), and they MUST not use the point system for purchasing apps.  It’s bad enough with the Xbox Live, but if you will start using the point system for the Zune you will lose the majority of the public.

I have high hopes for the Zune HD.  There is no reason it shouldn’t be able to compete with the itouch and make it a much more competitive fight than the Zune had with the ipod.  With the infrustructure of Xbox Live, the MS game library, and UI which I saw, MS finally can make a serious dent in the MP3 player market. 

Twitter is everywhere.  EVERYWHERE.  It seems like every celebrity and wanna-be celebrity has a twitter account.  They honestly believe that people want to hear what they are doing, what’s on their mind and where they are.  And while the popularity is huge, and there is no denying the impact, even if short term, Twitter has had on society, the question remains; what’s the value of twitter?

I’ve heard some increadible numbers.  Hundreds of million.  Billions.  Tens of billions.  Numbers that seem to have no relevence any more.  Ever since the bailouts, billions of dollars seem common place.  The government is printing trillions, and giving away billions left and right, so Twitter must be worth at least a billion, right?  Well, no.  I don’t see how it could be worth nearly the same as some of the largest, most well established companies in the world.  Companies which have been around for decades, have proven revneue and have stood the test of time.

The fact that Twitter generates no revenue is it’s biggest ace.  Without revenue, numbers can be thrown around and dreams can be sold.  But that’s the catch.  As long as they generate no revenue they can value it whatever they wish, however, the moment they start generating revenue the value of Twitter will plunge from a billion dollars to maybe ten million (which is still a great value for such a website).  

If I’m Jack, Evan of any of the other prinipals involved I sell now before I try to prove to anyone what the actual value is.  They are sitting on hype, massive hype, and that alone should allow them to sell it for 20 times it’s actual worth. Then again, the same can be said about nearly all web start ups.  Sooner or later people will realize that the value being paid just doesn’t make sense.  To value Facebook, My Space, Skype, YouTube and many other web 2.0 which were valued or sold for over a billion dollars is incredible.  Ask Google how much net revenue YouTube generates, or Ebay about Skype.  The math doesn’t make sense and never will.

And yes, I understand that as a serial startuper (not a word, right?) it doesn’t benefit me to say so, but it’s the truth. The days of over paying for startups will soon end, so if you have the opportunity, take the cash and walk away.