broadstuff

Its interesting....no sooner has Facebook had its valuation ratcheted up to 3 orders of magnitude x revenues, owing to its (putative) ability to target users based on their data better than ever before, but a whole slew of news comes out inferring that users - as we predicted they would in 2006 - are not playing ball.

Yes, the naughty customer is avoiding all that delightful Adstuff. Among their unsporting behaviours are:

- Cutting off tracking cookies fairly frequently
- Using Ad blocking software
- Protesting to their platforms - AOL is allowing users to opt out of deep tracking
- In fact, even Facebook has allowed users to log some of the "news" as spam

Now, a coalition has got together to force Ad players of the nosy kind to adopt a code of conduct for Privacy, as the idea is that people will be able to sign up for do-not-track lists, which will help shield their Web surfing habits from the prying eyes of marketbots.

Now, not all think this is wonderful. Mashable for eg says:

But it’s as if no one thought about the feasibility of enforcing restrictions on advertising companies, or how, for instance, you’d initiate an agreement to share demographic information with a user downloading an advertising supported podcast. In a world where these privacy advocates have their way, am I going to be inundated with privacy policy pop-ups every time I navigate to a new domain?

It’s simply not feasible for something like this to be executed, and even if it were, would we want the government in charge of enforcing compliance?

Of course, the Ad industry is trying very hard to get inside this tent - as the New York Times notes:

There is a silver lining for marketers, however: the AOL site will try to persuade people that they should choose to share some personal data in order to get pitches for products they might like. Most Web sites, including AOL, already collect data about users to send them specific ads — but AOL is choosing to become more open about the practice and will run advertisements about it in coming months.

This is not exactly supporting privacy though, its more testing the water to see what level of exposure customers will accept. Remains to be seen if customers will accept this - as Donna Bogatin says;

While many assert the online advertising goal is to “find tracking that consumers will accept,” Web marketers must come to terms with the reality that many, many consumers will accept NO tracking.

Funnily enough, Steve Rubel (an Edelman PR person and blogger!) summarises our view best:

Right now, the marketers can really dabble a lot and perhaps even blur the line with what's ethical. I am not saying they are nor am I condoning it. However, since this level of behavioral targeting is relatively new, the unwritten ethics rules - in theory - could be bent since a lot of consumers aren't paying a lot of attention - yet. Plus, of course, they benefit from more relevant ads.

That's all about to change. It's clear the FTC is concerned about user privacy. That's why they're hosting hearings next week.

Regardless of where the Feds decide to weigh in, the noise around mining behavioral data and patterns and the potential privacy implications is only going to get louder in the coming months. All of this is going to make consumers even more aware of just how much is being tracked. Some will begin to ask serious questions. It will be particularly interesting to see how Gen Yers react since at times they seem to not care much about their privacy. Other times, they do.

All of this will spur lots of debate in the coming months and will impact the so-called social graph and other innovations in Web 2.0. Get yer popcorn. It's going to be fun to watch.

I think that solving this will be the "killer app" for customer empowerment plays such as the VRM stuff being worked on by Doc Searls and Co.

Google has finally dropped the other shoe and released details of its long heralded Open Social network platform. Marc Andreesson (who Mosaic'd the AOL Closed Gardens last time round) sums it up pretty well:

This is the exact same concept as the Facebook platform, with two huge differences:

With the Facebook platform, only Facebook itself can be a "container" -- "apps" can only run within Facebook itself. In contrast, with Open Social, any social network can be an Open Social container and allow Open Social apps to run within it.

With the Facebook platform, app developers build to Facebook-proprietary languages and APIs such as FBML (Facebook Markup Language) and FQL (Facebook Query Language) -- those languages and APIs don't work anywhere other than Facebook -- and then the apps can only run within Facebook. In contrast, with Open Social, app developers can build to standard HTML and Javascript, and their apps can then run in any Open Social container.

Though Ning is not fully open either, of course, but maybe this move will change it - after all, in Web 1.0 eventually everyone got the message that users wanted open platforms and for people to compete on services - this is tacit admission that SocNets are part of the platform.

The Google platform is not in itself truly open of course - its more a Microsoft "de facto" standard play than an open standard play, as Dave Winer notes (Why is it that Dave is usually the tech A lister who has the bottle to call these things?) but I live in hope that, as in Web 1.0 when Sun, MSFT etc got off their high horses to make the Web interwork, all these players will collaborate)

Not entirely great news for Facebook - as we have noted many times before, historically SocNets have a life of about 18 months before the Shiny New One appears and all the Cool School flock off to it.

Well, here it is, or the next iteration anyway....wonder what Facebook's current valuation of $15bn will be in 6 months time - will they be the Pointcast of Web 2.0?

I don't think it will be that bad....the analogy with AOL et al in the mid 90's on seems closer to me, but if you look at our piece on Facebook valuation, the assumptions you need to make for it to "grow into" a $15bn valuation have just got harder to believe.

(Update...just got worse for Facebook...MySpace and Bebo are weighing in on the Google Platform (see Grauniad here. Open annd Big means one can be politically correct (Open Systems) and make money too - Bright New Shiny Thing, here we all come....).

As Umair Haque notes, the level of reasoned discourse on Facebook has pretty much gone out the window recently.

Facebook - a $100 billion company ? Plentyoffish - a $1 billion company?

Did a haze of vapor cocaine descend on the Valley this morning? The value of Facebook just went up by...uhhh...an order of magnitude*...in two days? Are you kidding?

Look: let's all please take a deep breath.

Let's realize that gigantic valuations are not the same thing as real, durable, value creation.

In fact, the more we drink the kool-aid, the more we're actively helping the people who are only in it for a quick buck.

I think that we should all try being just a wee bit more critical of the businesses we're looking at and talking about. This means you, journalists, ReadWriteWeb, VentureBeat, and of course, the relentlessly breathless TechCrunch (ex Erick Schonfeld, who is still writing like a champ).

(Some wags are already renaming TechCrunch as FaceCrunch I note....and even Valleywag is not its usual admirable caustic self)

After reading all the hullabaloo in the last few days what I don't "get" is what is driving the mass drinking of the snake oil (sorry, kool aid) around FaceAds. After all, the concept of Ads + Cookies + (vaguely true) user input demographic data has been around quite a while, as has MySpace, so this isn't exactly new new stuff, and nor is it surefire to succeed. But that seems to be have been buried in the rush to praise....

Patrick's First law states that the most likely explanation is the most cynical, so one assumes the blogulation is to get the traffic (as is this post of course ) but the Facehype is getting so extreme that I think Umair may be right, and a cloud of something has descended on the Valley. Maybe the air in bubbles is mildly hallucinogenic

Or perhaps there is a Tipping Point when the wisdom of crowds turns into the madness of crowds?

Or maybe they're all hoping that Facebook will remember and distribute a few stock options as shill for some of the swill being written

Shurely Not !!!

Still, Google has now announced it has a new toy too, so I guess they'll all rush off in that direction now for a bit and give poor Facebook's PR team a breather.....

* Broadstuff Note - thats on top of the existing 100 x revenue valuation....must be an IPO in the offing then

We had noticed the rise in spam comments on our blog, even with Captcha's on, and wondered about what made people waste the time to go through this just to spam us - after all we are not exactly A List.

Now we know....according to the BBC the horny hands of toil doing this work are...well, horny:

Spammers have created a Windows game which shows a woman in a state of undress when people correctly type in text shown in an accompanying image.

The scrambled text images come from sites which use them to stop computers automatically signing up for accounts that can be put to illegal use.

By getting people to type in the text the spammers can take over the accounts and use them to send junk mail.

So now we know......

Yes, its seems vinyl records are coming back in fashion again - time to dust off the Rega Planar: and defur the stylus....

"For many of us, and certainly for many of our artists, the vinyl is the true version of the release," said Matador's Patrick Amory. "The size and presence of the artwork, the division into sides, the better sound quality, above all the involvement and work the listener has to put in, all make it the format of choice for people who really care about music."

Because these music fans also listen using portable players and computers, Matador and other labels include coupons in record packaging that can be used to download MP3 versions of the songs. Amory called the coupon program "hugely popular."

Portability is no longer any reason to stick with CDs, and neither is audio quality. Although vinyl purists are ripe for parody, they're right about one thing: Records can sound better than CDs.

Essentially CD's are being disintermediated by MP3 files on the move and the greater artistic beauty of vinyl at home...though those of us who were around the first time may recall that its not only Rice Krispies that snap, crackle and pop.

And finally my kids will stop pointing at the turntable and vinyl and going "how quaint"....its now another cool thing (well, OK, the one thing) the Old Boy knows more about

...a long time parting?

As the old song noted, they go away. In London a few months ago Facebook was the Thing du Jour - or more accurately maybe du Monde, as all those groups that were set up so enthusiastically seem to have slowly declined in traffic, the amount of poking recedes, and the number of people who have "discovered" Facebook and gush to me about it dries up.

And then set this against the inexorable reported rise in Facebook traffic and valuation ($15bn and counting), and supposedly the increasing number of page hits per person, up from a fairly SocNet average c 600 pm in March to c 1,000 pm (reportedy) now.

So, whats going on? Possibilities are:

(i) I am out of the social loop - a virtual Johnny No Mates - very possible, though the Twitter, email and blog exchange traffic grows and grows. Its also notable that emails to Facebook friends take longer to get replies now than before.

(ii) People are still logging in frequently, just not communicating as much - maybe they are using all the exciting new tools to just peep at each other.

(iii) Actually, there never were many other people on Facebook, its just the staff peeping at you - as Valleywag notes, its a perk of the job:

What happens when you put twentysomethings in charge of a company with vast amounts of private information? Sheer madcap chaos, of course. Not to mention abuses of power. And that's what seems to be happening at Facebook. Valleywag kept hearing reports that Facebook employees had violated their users' privacy in a number of ways. The claimed abuses varied: Looking at restricted profiles to check out dates. Seeing which profiles a user had viewed. And, in one case, allegedly logging onto a user's account, changing her profile picture to a graphic image, and sending faked messages. Oh, and don't dare ask a Facebooker about any claims of misbehavior -- they'll report you to customer service for "harassment."

Or - shock horror - are we just seeing a replay of Second Life Syndrome, where in Autumn the PR juices rise strongly, hype springs anew from their (black clad) bosoms but it eventually becomes clear that the number of "users" is a very different number compared to those who actually use the system often.

Is Facebook the new "coffee table thing" for the NextGen - you have to have it on display, its a chip in the Game of Life, but you never actually read it?

I suspect its probably true of all SocNets - initially a high amount of activity to set it up, find all your friends, play with all the features - then activity for most people tails off as (i) the rest of your life's spinning plates need holding up and (ii) (dare we say this after a $15bn valuation) the new new shiny thing comes along to take your breath away.....

3 UK launched the first Skypephone today.....is this a good idea for 3, and what does it mean for the industry overall?

For 3 its...."interesting". Blognation opines that :

There are some unsolved questions; there is an inevitable tension created by having two communication systems sitting side by side on the same device, with revenue from each of them going to different parties. Every time I use Skype on my phone, I am depriving Three of revenue from chargeable minutes. This will be exacerbated when SkypeOut is available - it is in direct competition with Three

This also pokes Blyk in the business model, as who wants Ads on a phone if you can call for near gratis without them?

As pointed out in the publicity statement, its pretty low cost - in the UK, the handset will be £49.99 to buy on a PAYG tariff or free on a contract for a minimum of £12 / month including 100 minutes and texts, up to c £27 for 1100 minutes (which at that price is near as damnit free anyway, so 3 UK may as well give 'em Skype to boot and get the buzz).

The real winner here initially is Skype, who get the mobile extension to their service they have always needed, and probably a better way of monetising than off all us cheapskate PC users who don't pay a bean for Skype transport. Whether they stay winners when no-one uses Skype In/Out 'cos they all have Skypemobiles is another matter.

The guys left with the bigger problem however are the other mobile operators, as it seems pretty clear that highly priced roaming is not going to be an option much longer, and in that sense its a Trojan Horse for the industry as a whole.

O2 especially is in an "interesting" position, as on the 9th it will start to sell the iPhone, which as a 'web device par excellence should easily run Skype - ne c'est pas?

Whether its a cash cow for 3 or Skype is another matter, but it certainly is disruptive. And if you are 3 or Skype you have far less to lose from disruption then the Big 4 - but then you have less to start with, so will it be a race to the bottom of the pockets?.

Interesting times.....

(Disclosure - was invited to launch today, couldn't make it)

Read/Write Web has covered off quite a lot of the early ground here on Vendor Relationship Management or VRM (it intersects a lot with the older C2B models by the way). I quite liked this piece:

The irresistible force is personalization. This is the key to productivity. Personalization technology cuts through the clutter and saves time. The firm that delivers personalized content sits at the top of the attention economy food chain; all other content is “drive-by commodity”. Personalization leads to relevancy in advertising; and loyal customers.

The immovable force is privacy. You cannot do personalization effectively without knowing an awful lot of information about an enormous number of people. The privacy backlash is building. Today it is only techies who are aware of the issue and where it is headed, but when mainstream users get spooked by a few more high profile cases, we will see consumer backlash and then, with politicians on the bandwagon, more regulation.

We have been banging on about this (privacy) for some time, however (based on quite a lot of client work over the last two years) the VRM bit is non-trivial. Aggregating demand of many disparate people with different agendas is hard, never mind all the issue that instantly pop up around suspicions of just why a service would want to anonymise/aggregate its users (we have had "aids money laundering", "fraud abetting" etc etc thrown at us more than once).

Doc Searls has been putting some thoughts together on what a VRM service can look like, abetted by a number of people on the discussion list (we are on it, natch), but this article is a reasonable intro to the Story So Far.

The obvious area of work is how to integrate it with emerging Enterprise 2.0 thinking (and systems) - in Olde Times, car manufacturers for example handed customers a lot of personalisation options so the cars could be built to spec - but of course it relies on modular car design and aggregating a large volume of orders to achive any scale economy benefits.

Clearly, anyone who became a trusted C2B aggregator (which is in all likelihood what initial VRM implementations will be as well, I think anarchic/dispersed systems will be far harder to run with) would wield enormous influence over many current value chains. Its interesting to think about whether they will be generic ("BuySpace") or sector specific ("MySports"). In Web 1.0 the thinking was that this area would by and large be handled by Exchanges (remember VerticalNet anyone), but there was very little thought given on how to utilise social networks (though there was a lot of thought given to using behavioural data mining, which may turn out to be much the same thing).

One wonders also where the first players will come from - startups, eBay offshoots, Comparison sites or potentially existing Social Nets

So, Hulu has launched amidst much hullabaloo, and has gained a bit of a halo - I quite liked Kara Swisher's take as she is less prone to Geek-gasms than many:

There are, of course, a lot of open questions, such as how costly all these media rights are and how to make advertising pay for them. And it is not clear consumers are willing to embrace yet another destination site.

But Hulu’s willingness to send its content far and wide from the get-go, with very little friction and using easy tools to do so, is perhaps the most compelling aspect of its debut.

Finally, someone in Hollywood has realized that ubiquitous distribution, which is being driven by consumers’ desire to move their media anywhere they want, whenever they want, is the future.

The willingness to embrace the new business models and make the service easy to use are key. Some see it as a YouTube riposte, we think the Web TV plays that rely on the same content as Hulu (like Joost) are actually under more threat as Hulu is not really a UGC play,which YouTube will surely evolve to once the major players really sort out the takedown process (and if you can get good quality TV on hulu, why faff around with YouTube).

From The Register:

The International Monetary Fund (IMF) has this month brought out its World Economic Outlook for 2007, and the various heavyweights of financial news have all had their bash at reporting on it. Normally, no vulture would stir on his/her perch over this type of thing - unless, perhaps, Paris Hilton had been implicated in some kind of major economic upthrust - but in this case, the economists make some rather startling pronouncements about technology.

In essence, according to the IMF, technological innovation is what causes economic inequality among the human race. Yes, you read that right: technology - and not just the machinery, but people with tech skills - are to blame for the fact that some people are dirt poor and others disgustingly rich.

"Technological progress alone explains almost all of the increase in inequality from the early 1980s," according (pdf - page 2) to the IMF

You Wot?

As the Register notes, most of the mainstream financial press have chosen to ignore this dazzling suggestion from the "world globalisation bureau" that globalisation - and inflicting (subsidised) rich financial markets on uncompetitive poor countries - is great and if something has gone wrong it must be someone else's fault.

That this hypothesis is provably untrue is not the issue, its that an organisation with this amount of power is so blatantly pushing its own agenda by seeking to cast aspersions elsewhere is what is so worrying.

So whats going on? Maybe its this - sadly, some do not feel the IMF is exactly in a good position to define financial strategy anymore - from Wikipedia:

While it was created to help stabilize the global economy, since 1980 critics claim over 100 countries (or reputedly most of the Fund's membership) have experienced a banking collapse that they claim have reduced GDP by four percent or more, far more than at any time in Post-Depression history. The considerable delay in the IMF's response to any crisis, and the fact that it tends to only respond to rather than prevent them, has led many economists to argue for reform. In 2006, an IMF reform agenda called the Medium Term Strategy was widely endorsed by the institution's member countries.

If this is the medium term strategy output.....

We are in a changing world, behavioural economics has shown that much of the NeoClassical economics the IMF lives is less relevant today (even the Random Walk isn't in many markets) , and new comms technology is driving a lot of this change now - in fact if ever there was a force for equalisation it's the open internet.

The IMF is a structure from a bygone era and needs to adapt, rather than try to play King Canute.