Ross Mayfield, CEO of SocialText: "DRM will become a mainstream issue." Chances: 65%. DRM, or digital rights management, is on its way to becoming a significant barrier to widespread consumer adoption of downloaded music and video. Mainstream consumers are willing in principle to put up with minor inconveniences so that major labels can prevent copyright piracy, but the inconveniences are getting more troublesome. Sony ( SNE) weathered a brand-damaging scandal when the DRM software on its CDs exposed computers to viruses and prompted a major recall. Consumers have balked at DRM-ware from Amazon.com ( AMZN) and TiVo ( TIVO) that automatically deletes programs from users' hardware. The DRM debate may go mainstream in 2007 as Microsoft's Vista operating software becomes more common. Microsoft's approach to DRM has been the most comprehensive and considered to date, but if bugs appear in Vista tied to DRM code, the consumer backlash could begin.
Mark Anderson, editor of stock newsletter Strategic News Service: "The year of the Flash Wars." Chances: 60%. Anderson starts off by noting that there are 17 new chip fabrication plants beginning production this year, and most of them are planning to churn out flash memory chips, used in everything from memory cards to iPod Nanos. "This means flash memory prices take a dive, flash-based computers take hold, and everything that can use memory will, and more of it," Anderson writes. "This alone will help to fuel a new explosion in consumer electronics, just when some thought it was taking a pause, with the result of pulling up sales for other chip and component makers, etc." My handicapping of Anderson's prediction is a little low because of the inherently unpredictable nature of chip supply and demand. But if true, his could be one of the most far-reaching predictions in terms of impact.
Rob Enderle, analyst, Enderle Group: "Virtual worlds become real." Chances: 10%. Virtual worlds such as Second Life are to 2006 what podcasting was to 2005: a technology receiving undue press coverage as the next big thing, prompting many to check it out only to find it's not for them. Second Life is very real to a small group of people; the rest of us will find that the old-fashioned world remains much more interesting. Most of the activities on Second Life center around vices: sex, gambling, corporate branding. Someday, somebody will create a more compelling virtual world that resembles the "metaverse" that Neal Stephenson described in Snow Crash. But it's not going to happen in 2007.
Wired News Staff: "Google stock hits $1,000 per share." Chances: 1%. The good folks at Wired News (another ex-employer) get major points for boldness, but let's look at what this prediction means: Google closed 2006 at $460.48, so a run to $1,000 requires a 117% jump. It took three months for Google to double to $200 from $100, and another year for it to double again to $400. In the 13 months since then, Google has moved pretty much sideways. That flagging pace reflects economies of scale, which say another doubling in the next 12 months is very unlikely. The market values Google at $140 billion. To get to $1,000, investors will have to pour in another $165 billion -- not exactly spare change. That would give the stock a 2007 price-to-earnings ratio of 73, which is high -- even for Google. If video ads start to gain traction in 2007, Google could again blow away everyone's expectations, easily topping the $600 price targets set by many analysts. The $1,000 mark could be reached in time, but not in 12 months. Of course, it could happen overnight through a reverse stock split, but that would be even more surprising.