broadstuff

Hugh MacLeod writes a very interesting post today on two topics, firstly on the nature of search, and especially its relationship to Social Networks, and secondly on the nature of Microsoft's acquisition path.

In essence Hugh's argument is that, when it come to searching for, say, a restaurant in another town, then instead of Google one can use one's own social network/s. Hugh's is huge, which he admits, and then thinks about how less well endowed people may use such a tool:

So I'm thinking about how Facebook and/or its competition could help fill the gap.

If if they can, even partially, then Google should be concerned... because at the end of the day, all search begins and ends with people, not algorithms.

Now as I understand it, this is part of the concept behind Mahalo, which is sort of a Search + Yahoo Answer hybrid. However, to make it work they have had to limit the answers to the common stuff in the "Hit Head", so can't really deal with Long Tail stuff.

One of the comments on Hugh's post makes another related point, ie that Social Nets may be OK for "Social" stuff like restaurants, but how about answering a question about something like the effects of low Reynolds numbers (the description of the type of flow due to the viscosity of a fluid) .

Hit Mahalo with "Low Reynolds Number" and you get:

We haven't written a result page for "low reynolds number" yet. Why?
Notify me when Mahalo creates a result page for "low reynolds number"

..and it defaults to Google. As an experiment I have mailed the same on Facebook and Twitter too - lets see what happens .

But I think Hugh is right re Search not ending at pure Algorithms. Clearly a deeper understanding of context is the next stage, and clearly one's social network has a deeper understanding of context - but it probably has to be much vaster than "your" social network to have a fraction of the reach of a Google (as Hugh notes). There are New Search approaches that try and create context (eg by results other people have valued on the same search topic etc). We believe that another approach is to add your context voluntarily before the search, this is in essence what we built for the BBC Innovations lab project to monitor Zeitgeist.

To enable this within a SocNet you would need to enable a search capability, allow user-set context to occur (or be deduced) then record and cross reference the searches, results and actions. Very do-able, though non trivial.

On the topic of Hugh's title, Microsoft Should buy Facebook, the issues are:

(i) the price - an order of magnitude higher than News International paid for MySpace
(ii) the amortisation period - how many years will Facebook be going for before the newer brighter Next SocNet comes along.

It would be an interesting business case to build, the "what you have to believe" would probably make even a Mobile 3G pundit blush .

In fact, the build case would probably be very attractive....if one could build the Next Facebook and integrate it in the browser, now that would create serious value.

Now could Microsoft do that?

Broadstuff as it is started up in August 2006, and posting started in earnest in Sept 2006.

Its been an interesting learning curve, we've learned a lot. Here are some highlights:

- Blogging can be fun, but you have to make sure you (i) keep the addiction under control and (ii) make sure what you are doing is fun and not a chore. A balance....

- Finding a "voice" is....interesting - and an evolutionary process?

- We haven't got a clue about how Technorati, Google Blogs, Alexa et al get their results - of course we know the theory of what they are doing, but what is actually going on is anyone's guess.

- Its allowed us to meet (online and face to face) a whole raft of interesting new people, and interact with loads of new ideas.

- We've been invited to events and been alerted of interesting stuff we otherwise would not have.

- We have people who read us and like what we say (and tell us when they don't)!!!! Thank you all, it is great to be a part of the Conversation

- People have read what we said and even asked us to do work for them !!

- we have a drive by Karma Kritik Klub who don't like us at all when we say things against the sacred cows of the day (especially Twitternuts) - its astounding to watch the -ve karma ratchet up in minutes sometimes. To y'all - a sacred cowpat on the head

From a business justification point of view, its been the best bit of Marketing / PR we have undertaken in the last year, and the most fun to boot.

Going forward - the "voice" continues to evolve, we just let it take us where it will.

Following on from yesterday's post on Advertisng Game Theory is this timely reminder of the level of certainty of what we are dealing with when it comes to Online Ads right now.

Greg Sterling's Screenwerk notes that 2 respected research companies, e-Marketing and Veronis Suhler, have somewhat divergent views:

e-Marketer's 2011 forecast shows the US Online Ad market is $ 7.8bn

Veronis Suhler's Stevenson's is $19.2 bn

A mere 2.5 x difference.......but the key question is:

There are similarly divergent numbers for mobile advertising, which in a way is more understandable given how new and generally speculative the medium is at this point. But how can the VSS and eMarketer forecasts be so far apart? Are the assumptions wrong? Are the underlying data incomplete? Is the methodology flawed?

We do this sort of work ourselves all the time, and the answer is not so much error as choice of assumptions. The most likely thing is that they have most probably made different interpretations and assumptions on (typically similar) existing underlying data sets, and maybe used different methodologies to drive the rates of change over the 5 years.

For example, what method would you use to define rate of growth of online Ads as going forward? You could use historical data of similar industry growths in the past. you could map Ad revenue to something like the online Attention forecasts and proxy that, you can try a Delphi technique and sample a lot of experts in the area. You can build simulation models, nice simple system dynamics ones or huge event based ones. You can do all the above - and guess what - they wont match - probably will miss each other by a mile.

You can even get numbers wrong!

To be fair, in this case they start off with different positions in 2006 - $2.1bn vs $6.1 bn - so growth rates assumed are not too dissimilar anyway - the issue is why the discrepancy in what is being counted as US online adspend?

The only thing you can say for certain is, to quote one of my Uni lecturers, "all forecasts are wrong, and the further out it goes, the wronger it gets". Or in other words:

- Firstly, that forecasting is an inexact science, especially about teh future - and especially in emerging industries. Small shifts in assumptions and methodologies can drive huge shifts over 5 year projections.

- Secondly, that there is truth in what Ronald Coase noted, ie : "If you torture the data long enough, it will confess" (to say what you wanted it to say)

So what do you do?

On ething is to map your past forecasts to actual to see how good your approach is - Veronis claims they are no more than +/- 2% over the last 9 years. (I'd like to see how that is calculated, if that is forecast v actual on a 5 year future number it is....um..well why waste time writing research reports, there is a stock market waiting.)

The real error is to think there is "one number" for a new industry like this 5 years in the future. Too much can change.

Our usual approach is to use an estimate plus upside and downside scenarios, with "what you have to believe" pointers for both - the idea being that as data comes in you can see which scenario's "beliefs" are most true and can start to track that trend.

Easy way out mayhap, but we think that as the "what you have to believe" approach starts with the concept of a range of error, so it at least starts with the correct frame of mind.

This post is an expansion of a comment I posted on Nic Brisbourne's blog,

Here is the conundrum - many (most) web 2.0 businesses have a nearly totally Ad-supported business model, but users continue to find ways to avoid Ads.

And if we won't watch the ads, advertisers won't pay up, and we won't get those delightful services

Ignoring the rights and wrongs of it all, it is fairly easy to model this as a Prisoners dilemma game.

Advertiser can either go for:

- Immoderate usage - punt as many obtrusive ads as they can, payoff is this maximises revenue, but also pisses off user
- Moderate ad usage, reduces revenue but attracts user (or at least does not turn them off)

User can either:

- turn off ads, maximising pleasure but driving Advertiser to wall
- watch all ads, thus minimising pleasure but ensuring that advertisers continue to fund services.

A moment's examination will make you realise this game has two different optimal positions for Advertisers, depending on whether the Advertiser expects very few transactions or very many.

Taking the many transactions first - if the user comes back again and again, then the incentive for the Advertiser to not piss off the user is higher, because the user's lifecycle benefit is higher than the Ad benefit from any one hit. In this case, the Advertiser is best motivated to moderate the use of Ads.

If there are very few transactions - the user visits that site once or a few times only - then the Advertiser's optimal strategy is to pump as many ads as they can at the user, as this will be the higher lifecycle benefit.

The user is happy to deal with sites with moderate Ad usage, but after a few experiences of the Immoderate users, the User adopts Ad blocking software, and from then on no Ads are seen

This then sets up a classic tragedy of the commons effect - the impact of the immoderate Advertisers makes all users adopt Ad-blocking, thus killing the game for all the moderate Advertisers too.

So, by default the game reverts to the "Block Ads" quadrant after a few cycles, to the detriment of all.

Well, not quite - it would seem that we are very capable of discriminating - for example, nearly everyone has popup blocking software, but few people bother with display ad blocking or classifieds blocking.

So the empirical message for the Advertiser is this - be moderate, and you will get users colluding with your advertising - be Immoderate, and you will not. Find the Advertising "Laffer Curve" by staying on the good side of it.

The issue moderate Advertising sites face ongoing is how to stop Immoderate ones from chasing away users as soon as a new consensus re-emerges, because the temptation to cheat in a commons environment is always too strong

It is in practice probably impossible to punish the Immoderate advertisers, and probably impossible to use Coasian approaches and pay them to be moderate.

The longer game is that Moderate Advertisers must find a way of signalling to users that they are moderate, and that the user can therefore collude in switching off the Ad blockers safely, for mutual long term benefit.

One can imagine voluntary codes of conduct, kitemarks for moderate users, educating brands not to advertise on Immoderate sites etc.

But given the tragedy of these commons, I suspect that the endgame will be some form of direct transfer of benefit to the user to switch Ad blocking off - in other words the Ad Blocker will negotiate with the Advertiser to get a benefit - for example, an Immoderate site may find that it gets hit with a "pay per click" cost every time it serves up a popup onto a page.

Clearly the more attractive the content, the less the Advertiser will pay to the user...but the probable outcome for "me too" sites is that they will have to pay over the odds for user attention in some way or another.

The 'Web is a point to point medium, not a broadcast medium and at some point the value of each link will be traded.

Prediction is risky, especially about the future. However, the "death of" genre is always popular, clearly the benefit of great headlines today outweighs the potential egg on face later. Anyone remember Francis Fukuyama predicting the death of history, for example, just before it became clear that a new world structure was emerging (China, Islam etc) ?

Mark Cuban has now weighed in with his view that the Internet is dead...and boring at the same time:

On past evidence however, his timing may be as unfortunate as Mr Fukuyama's. Look at this curve

(courtesy Ray Kurzweil)

Push this to 2007 and you are probably on the flat end of an S curve just before the next one takes off.....

Actually, the headline is far more dramatic than the post - what he really said was:

The days of the Internet creating explosively exciting ideas are dead. They are dead until bandwidth throughput to the home reaches far higher numbers than the vast majority of broadband users get today.

Few people's actual throughput to their homes have increased more than 5mbs in the past 5 years, and few people's throughput (if you dint understand the difference between throughput and the marketed downstream speeds your read from your ISP, you should) to their homes will increase more than 10mbs in the next 5 years. That's not enough to define a platform that allows really smart people to come up with groundbreaking ideas.

In fact, if you index the expected growth in bandwidth consumption by applications that are heavy LAST MILE bandwidth users (as opposed to the Internet backbone where there is plenty of bandwidth but consumers cant get to it) vs the actual increase in LAST MILE bandwidth available to the home, our net effective throughput to the home could decline over the next few years. The Internet is like a highway. There is plenty of room for everyone to go as fast as the throughput will let you go, that is until the traffic forces everyone to slow down.

For some reason a lot of people don't understand that concept.

So, let me repeat, The days of the Internet creating explosively exciting ideas are dead for the foreseeable future..

This to me describes the feeling of being on the top of an old S curve quite well.

So here is an alternative hypothesis - the 'Net is sitting at the point in the S curve in its current (broadband) cycle where closed ISP's like AOL (read closed SocNets like Facebook) et al replaced the Bulletin Boards (Blogs), just before Mosaic emerged.

So...its 1995, AOL (Facebook) Rules, the Chatterati are blithering on about a whole lot of stuff that was derivative, and about to be made fairly irrelevant - CD ROMs, Apple Online Shops etc etc.

The Internet, as it was, was getting dead boring.

But, if you had been trying to read the tealeaves at the time, you would have been watching the altnet, what people were doing with open comms techniques like FTP, the interesting work on network linkages that Tim Berners Lee had started...

A day after a teenager cracks the Apple iPhone lock, more cracking fun...

First......it is already possible to block YouTube Ads - Tubestop. Chris Finke (inventor) notes:

TubeStop is an extension for Mozilla-based Web browsers that disables the autoplay on YouTube videos. This means that you can open multiple YouTube videos in tabs in the background without them all starting to play at once. TubeStop also disables the autoplay on YouTube videos embedded on non-YouTube.com sites (MySpace, for example).

Second....an Australian schoolboy took 30 minutes to crack the new national $84m anti-porn system:

His technique ensures the software's toolbar icon is not deleted, leaving parents under the impression the filter is still working.

He also noted......

"They could get a much better filter for a few million dollars made here rather than paying overseas companies for an ineffective one."

When will they learn......

* Craic - the Irish word for fun / party / etc - pronounced like "crack" funnily enough.

..its in the McKinsey Quarterly so it must have

Re Wikis and blogs:

- Executives looking to get the greatest possible value from corporate blogs and wikis can learn from the experiences of online video-sharing sites, which are growing fast—largely because of the contributions of a small percentage of their members.

- Corporate managers must learn how to identify and nurture their core contributors to generate enthusiasm for and interest in wikis and other collective-intelligence systems that rely on contributions from users.

- As these systems begin to take off, managers can give them further momentum by providing tools that make it easy for users to contribute and share. A quality-management scheme can make such efforts more sustainable by helping to ensure that the content is worthwhile.

What is most interesting is this allows some idea of timing from how long it takes something to get from "early adoption" to "mainstream" status (or at least to the point the big consultancies will run with it) - all aboard the Cluetrain (Pub. 1999), as it were. (Though to be fair the technology for running a Cluetrain set only really hit scale in 2003/4)

I guess the most interesting thing is that most of the McK reader base will probably genuinely not know about this stuff. So:

Good news - this serves as "ratification" for the work that small specialist outfits (like us) have been doing for years already.

Bad News - do we have to use language like that......its enough to destroy any enthusiasm for, and interest in, wikis etc

Also, some notes - these systems are not really "top down" tools, they are more democratic - which always sits somewhat uncomfortably in hierarchical structures and more so if they are seen as part of the command and control structure. Also, the surefire way to destroy any in-company attempt to make this work is to dress it up in turgid management New-Speak. Furthermore, old style "quality management systems" to help ensure the content is "worthwhile" are the antithesis of what these systems are about and how they work - it needs to evolve from the users, by the users, for the users - top down enforcement will lead to it being discredited fairly fast. (The article mentions use of Open Source style QM, which is good for homogenous efforts as everyone understands the ambience, but rating/recommendation can be more applicable for more heterogenous networks.)

...according to the Economist, quoting the new Ofcom report (this long weekend's scheduled reading):

- 67% of kids between 12 and 15 use the 'net, 41% between 8 and 11
- There is a move from video games to social networking software
- 7% of 10 year olds use Webcams, 15% of 13-15 year olds

And there is lots more.

So, I have kids in those age ranges, and here is my take after 3 or so years observation:

Caveat Investor!

If you had taken the picture last summer holiday, you would have said YouTube is the best thing since sliced bread, World of Warccarft was The Game and Bebo was the hot SocNet, that videogames were on decline and that WebCams were in bigtime.

Take the snapshot this summer and WoW is out, YouTube is out, IM is back in, and playing over WiFi on Nintendo DS is The Cool Thing. And Watching good old Mainstream TV plus going to Movies is up as well.

Oh...and bicycles have been rediscovered.

From the, like, Hey thats cool Dept.

A teenager in New Jersey has broken the lock that ties Apple's iPhone to AT&T's wireless network, freeing the most hyped cell phone ever for use on the networks of other carriers, including overseas ones.

The New Jersey teen collaborated online with four other people to develop the unlocking process.

George Hotz, 17, confirmed Friday that he had unlocked an iPhone and was using it on T-Mobile's network, the only major U.S. carrier apart from San Antonio-based AT&T that is compatible with the iPhone's cellular technology.

While the possibility of switching from AT&T to T-Mobile may not be a major development for U.S. consumers, it opens up the iPhone for use on the networks of overseas carriers.

And here I am in the UK with a SimCard in my hand

Respect!

He worked with 4 other people, 2 in Russia. The shape of things to come......

Read all about how to do it here.

From the "You Can't be Serious" Dept:

A Web site owner has blocked Firefox users from accessing his site in protest of a popular browser extension that blocks text and display ads.
Firefox users who go to http://jacklewis.net/weblog/ are redirected to Why Firefox is Blocked, which says the Adblock Plus extension undercuts Web sites dependant on advertising revenue.

"Accessing the content while blocking the ads therefore would be no less than stealing," wrote Danny Carlton, a Web site designer and author, who runs both sites. JackLewis.net is his personal blog site. "Millions of hard working people are being robbed of their time and effort by this type of software," he added in a posting on the Why Firefox is Blocked Web site.

(seen on InfoWorld)

Errrm...I'm a Firefox user...guess what I do when I reach a site that won't let me in...thats right, I immediately switch over to IE and try again.

Not.

The creator of Adblock Plus, Wladimir Palant, wrote earlier this year that the popularity of the tool can be attributed to poor Web site design, which has overwhelmed users with too many ads.

"Why does everybody who puts up a site on the Internet assume that making users watch as many ads as possible is the best business strategy?" Palant wrote. "It isn't Mozilla who is pushing Adblock Plus into mainstream -- you [Web-site operators] are.

Guys...read this and try again.