Can’t say I’m surprised by the news that Starbucks is closing 600 stores nationwide. First of all, they were over expanding to the point of cannibalizing other stores, but were OK with it as long as consumers were still drinking Starbucks coffee.

In college, we spent a lot of time reading case studies about Starbucks. They were sort of the ideal company; great growth strategy (we thought), unbelievable brand strength and even admired for being a good employer. Starbucks apparently over-estimated their domestic growth capabilities, and it wound up biting them. We don’t know a lot about the closings yet, but we do know that most of the 600 stores were opened since the beginning of fiscal year 2006. To me, this suggests poor location decisions. Whether opening in new, unproven communities or blanketing existing locations, these stores did not have the customer base to support them and even dragged down other successful locations. The tanking economy doesn’t help either.

Unfortunately, the real loser in all of this is the 12,000 or so employees that will soon be jobless. Starbucks does hope to relocate many of these employees to continuing locations. Lets hope they do!

Overall, I think Starbucks will rebound from their recent struggles. Their ‘return to their roots‘ strategy will pay off in the long run as Starbucks redeems itself as the world’s best coffee experience. I also like their new WiFi agreement with AT&T, as well as the Starbucks iTunes music store. Their brand is strong enough to carry them, and new innovations such as iPhone ordering is just awesome.

I took some time off from writing, and don’t really have a good explanation as to why. Wasn’t quite feeling it, I guess. But I’m back now, and have a very interesting topic for today.

I came across a web clip in my GMail this afternoon that the world is on pace to reach capacity on the internet by 2010. For those not well versed in math, that is just over a year and a half away! I imagine for a lot of people, this doesn’t make a lot of sense. The internet is so large and expansive, and you are free to add pictures and video and create sites as you please, so how could we reach the edge?

The problem isn’t in the internet itself, rather, its the infrastructures set up by communications companies that are reaching a breaking point. The article is based on a speech from AT&T VP of Legislative Affairs Jim Cicconi at an eForum on Web 2.0 from England . Here are some of the highlights:

“The surge in online content is at the center of the most dramatic changes affecting the Internet today,” he said. “In three years’ time, 20 typical households will generate more traffic than the entire Internet today.”

…said that at least $55 billion worth of investment was needed in new infrastructure in the next three years in the U.S. alone, with the figure rising to $130 billion to improve the network worldwide. “We are going to be butting up against the physical capacity of the Internet by 2010,”

“Eight hours of video is loaded onto YouTube every minute. Everything will become HD very soon, and HD is 7 to 10 times more bandwidth-hungry than typical video today. Video will be 80 percent of all traffic by 2010, up from 30 percent today,”

For me, the most interesting detail from the article is the prediction that 80% of online content will be video by 2010. While the current trends certaintly support this, I think that figure might be a little steep. I feel the technology and capabilities will be there, even if the infrastructure can’t support it. I think we’ll see most online advertisements in video by then, and even more sports, news and entertainment via video.

Hopefully we can build up the infrastructure by then so we can have a wide-open internet for years to come!