broadstuff

There are a number of interesting articles on the RSS reader, thought I'd do a "microblog" commentary on each.

WSJ - Bill Gates calling for a kinder, gentler capitalism, ie taking account of what economists politely call "externalities" (ie costs can stick on you without me paying for it, like pollution etc). Yes, thats right - that Bill Gates. I suspect all those eager wannabe-capitalists who have not yet made their pile are going to immediately sit up and take notice - not

Read/Write Web - the "work from home" generation. Maps very well to our experience. The economics show that it will increase. Big changes in comms drive big changes in socio-economic structures.

TechCrunch - Federated Media's John Battelle refuses $100m price - this is the same guy who wrote yesterday about Google's stock decline from $750 to c $550, and who, in the dotcom crunch, rued the day that his then boss refused a decent offer before the crash. Its Santayana time again - in Techcrunch words:

Now that Battelle is the controlling shareholder, you’d think he would be careful not to repeat that mistake again. He must be pretty confident that he can get more than $100 million for FM.

Techdirt - linking to PC Magazine saying that "the ongoing demise of DRM is actually bad for the music industry -- and even claiming that it goes against basic economic principles". He needs to listen to Bill's talk about a kinder, gentler capitalism clearly Techdirt skewers him so no point me doing it, question is why did he write it - its so clearly wrong, and a small amount of research would have told him that, so whats the hidden motive?

So, we were all chatting tonight about the Future of Online Music, in the wake (literally) of Pandora closing its UK feeds and Last.fm doing its thing, and we were discussing which approach was better - social scrobbling or musical metadata mining.

Anyway, that sort of divided out evenly, but what became clear is we all cleaved to favoured types of music, and the sort of people who like that music are the ones we trust that bit more. Sort of a sonic social network.

Thus, we start to peer-form Aural Sects with each other....

Just read John Battelle's Searchblog (it was on Techmeme) re Google stock drop, and the Dire Warnings Thus Forecast. Eh? Has he clocked that all stocks are tumbling globally? Did he bother to map Google against the NASDAQ? Or against Microsoft? For your edification, I have - see below. Guess what - Google's boat has risen and fallen with the tide - in fact it's gone a bit higher, so is doing better, and this is what stock markets do, after all.....



What gives here? There are 2 possible explanations, (i) The writer is posting on something he has little or no competence in (unlikely - its not hard to mark to market, after all), or (ii) that this is a deliberate attempt to spin and stretch facts to get a big traffic story onto Techmeme, and damn the accuracy. Thing is, even if it is the latter, I am left with the strong impression of the former.

What also bothers me is the "metastory" here - the increasing amounts of non-story stories that are hitting the Techmemes, Diggs etc now. Is winning the race for traffic only made possible by spinning ever more wildly, by becoming tabloid virtual media....I suppose, looking at the mainstream media that the answer is yes - sober reporting, the checking of facts etc is typically a minority reporting game.

(For the record, I'm no Google fanboi and avoid 'em wherever possible, but I am a fan of good reporting! )

Article on GigaOm today arguing that Yahoo can extricate itself from the brown stuff (Peanut Butter) and transform itself into a Web 3.0 (whatever that is) darling. Sez GigaOm:

The reason I believe that Yahoo can become the jewel of Web 3.0 is that it already has strong or interesting positions in multiple verticals, among them news, sports, finance, jobs and photo sharing. My entire Web 3.0 thesis is based on the web becoming verticalized, and therefore, to do justice to its potential, Yahoo needs to win in the verticals, and monetize them.

Let’s take the example of the online jobs vertical. The market has continued to grow rapidly; online recruitment advertising ($5.9 billion) surpassed newspaper job ads ($5.4 billion) in 2006, according to media research firm Borrell Associates. Newspapers are losing vertical classifieds to online, and Yahoo should be one of the most prominent beneficiaries of this movement.

But it isn’t, at least not yet. Why not?

Why not indeed - take any useful Noo Meedja vertical, and Yahoo has built / bought / bundled its way into it. It has some great assets, but seems unable to drive any synergies out of them. Why?

Now, Umair Haque reckons it all in the DNA, and thus they are doomed already - Kismet quick!

Is he right, or can they mount a transformation - a soup to peanuts re-engineering of the business, to maximise their assets, as GigaOm suggests?

History teaches that companies can and do come back from the brown stuff - in fact there is a strong element of cyclicality in many companies and industries. However, the "coming back from the brink" usually requires some fairly major housekeeping - some throwing out of baggage, bathwater and a few babies as well.

But it is a sad fact that the people who get companies into these states of affairs are too often the ones with the reins in hand when it comes to sorting it out, and if there is one lesson to take about companies in trouble its that senior management will fire legions of innocents before the market finally fires them in turn.

So, instead of laying off 1,400 people at $70k a year, how about cutting to the chase and laying off c 70 people at $1.4m a year first (OK, the number reversal is for effect, but you get my drift) - since there is so little synergy, shoot all those who were supposed to enable it first.

Then make a benefit out of a necessity and let the people in the bowels actually running all those small sub-businesses go and chase their own markets - be their own startups again. Let them decide where collaboration works and where it doesn't, and let the market fire them if they fail.

That said, it is a truism that any company that has only known growth can probably fire about 10% of the staff and performance will improve hugely - just make sure its the drongos that go, not those competent ones who have upset the internal power cabals (Yes Veronica, thats what too often happens).

The other thing is hard headed product rationalisation - 20% of the product range usually loses 80% of the money. These are often ones with political "protection", ie are untouchable (otherwise they would have been killed long ago). Another reason to shoot the top cadre.

In technology at times like this, the other thing is to drive new revenue streams - take more options on a few promising looking new programs as well as driving out / closing down losers.

Is it worth breaking up Yahoo into various smaller units to increase flexibility? It's certainly big enoigh to be Alfred Sloaned - and its not as if there are any great economies of scale in being conglomerated at the moment, apparently. (We are told that Yahoo's back-end infrastructure is all over the place, so clearly its not really a competitive benefit). In fact its probably another thing to go and fix - or forget - Google and Amazon are both trying to build huge, modular grids. If Yahoo is not going down that path (or even if its is) it should get hence with some alacrity.

The benefit of such a root and branch is that all les autres are trundling down the same eventual path o destruction - Google allegedly only makes money from a small number of its products - in fact the history of most sectors is just a continual cycle as each company has a near death experience, a painful catharsis, and regeneration, just in time to emerge as the next one stumbles.

Two interesting posts on how the media is shifting:

(i) Globalisation - report from Comscore showing that UK media (Print and TV) is going global in its digital form. The tables are very interesting



In summary:

The Daily Mail had the highest proportion of international visitors, with 69 percent of its 7.6 million visitors originating from outside the U.K. The BBC attracted 59 percent of its audience internationally, while the Telegraph (57 percent) and the Guardian Media Group (56 percent) also drew more than half their respective audiences from outside the U.K. Only two of the ten sites studied, British Sky Broadcasting (BSkyB) and ITV Sites, had less than a quarter of their traffic originate internationally.

And teh guardian is doing video and audio, the BBC has acres of screenprint - in 5 years will there really be such a thing as National Print or TV or Radio Media anymore?

(ii) Multi-mediating - great post here from James Cherkoff the many modes of TV today (tip of hat to Monkchips). Quoth I:

Let's look at a few scenarios to see how 'TV' is shifting:

In my home we have a Freeview box with a 160GB hardrive, a small DVD library and a subscription to ilovefilm. So almost all my viewing is time-shifted.

On the way to Thinkbox meeting I saw three twenty-something lads on a train watching football on a PSP. So their viewing was location-shifted.

I have a friend who has no TV but buys a lot of DVDs and watches them on his laptop. So his viewing is device-shifted.

Another buddy has BitTorrent continually 'dripping' into the servers that sit in his flat which are then saved as a 'best of' library on Mac Minis which he loans out to friends. Which is law-shifting.

A relative of mine has a 7ft Hi-Def plasma screen in a dedicated room where the only viewing is film and football. Which is wallet-shifting.

When it comes to live programming like football, the pub is often the venue for my circle. Call it venue-shifting.

Plenty of people are choosing to take their TV in sociable snack-size packages such as Room Mates on MySpace TV and Kate Modern on Bebo. A sort of format-shifting.

Others have forsaken TV and replaced it with submersive gaming such as World of Warcraft or consoles. Which is reality-shifting.

Then there are consoles which increasingly are equipped to handle films and programming or which have in fact just morphed into TV-like screens. So, the software is shifting.

And then there's Slingbox which allows those on the road to call up content from the hardrive in their home and watch it on a laptop. Which can be time-zone shifting.

And then 4oD, the million strong BBCi Player and ITV.com - all possibly due to be wrapped up into the new Kangaroo platform. Channel-shifting?

As he says...which of these is TV, and which is not?

So Scott Karp has blogged about using Twitter again. This tallies with what I have seen since December, a huge uplift in Twitter usage (we're also culprits, but that's 'cos we were thrown off Facebook, and Twitter is "the other place" where all the geeks who won't use email hang out

This is in counterpoint to the other trend we've noticed, viz early adopters saying they are unadopting / cutting down on / taking a sabbatical from Facebook. Added to this is Facebook's increasing habit of booting off nom de plumes - many of whom are bloggers, and they (we) do talk about it.

As these things are (anti)viral, it will take time for Facebook to reap the whirlwind it is still busy sowing, but I thought we may as well get our Requiem in early - prediction is that by summer this year, the A-list will all be busily blogging away on the New New Thing, and Facebook will be in the "MySpace" box - there, largely uncool and ignored, and full of a large number of Ghost Town accounts. Big difference is MySpace was cheap to buy and has a huge resource base behind it....

Unless....they become cool again, but we think they've jumped that shark - it's hard to see what can bring it back. Mobile Phone deals etc are not exactly cutting edge stuff, and I can'te see them easing off on all teh things that people hate about them - that $15bn valuation keeps their noses firmly clamped to that grindstone - the most likely way out there is a new CEO and then a Solemn Admission of "changing market conditions" requiring a re-evaluation of core values.....

Wouldn't be surprised to see that by end of summer either....

Another interesting post tonight on the RSS reader - Scott Karp talking about prevention of "gaming" social media by PR flacks etc. Discussion was kicked off by Mother Jones News, noting the start of the games played (here giving the example of a Wal Mart shill posing as a concerned resident blogger and others):

As newspapers' circulation numbers and ad revenues free-fall, their executives have decided that publications must go "hyper-local" and online, and they've enlisted the help of amateurs such as Getz to do it. But as her Wal-Mart plug shows, the newspaper industry's embrace of "citizen journalism" has a downside. Reader-submitted content rarely gets vetted by editors. In the same month as Getz's Wal-Mart post, the Democrat published a story by a retirement home's development director about the complex's great new golf course—without disclosing her job—and a woman wrote an article about a boy who'd organized a cancer charity event without noting that she's his mom.

Scott does a good analysis of what is going on in the mediaspace in his article, the area I want to comment on is the area of the gaming the algorithms in these systems. He notes that there are usually patterns observable:

The basic principle that sites like Google and Digg apply to combat gaming is that there are identifiable strategies for manipulating the system, and if you can identify markers of those strategies, then you can design “algorithms” to detect and block manipulative behavior. These algorithms do not always eliminate gaming, but they can reduce it.

Question is, how do you build algorithms that catch first order unknowns such as the undisclosed special interests? Says Karp:

What every newsroom or journalist practicing networked journalism should do is develop a list of all known instances of gaming, and also come up with other possible risks — then they need to develop algorithms to try to protect against these.

So what about the likelihood that some of these algorithms will fail as part of the learning process? The advantage that news organizations have over systems like Google and Digg is that they can actually disclose their algorithms, which Google and Digg can’t do because it would actually give gamers a roadmap.

Poses two interesting questions...firstly, is it really possible to build algorithms that can catch all these tricks, and secondly - and maybe more worryingly - is it worth it?

Thinking about whether it is possible - I can see how it is possible to write algorithms that can trawl data that is electronically available, but it assumes a level of naivete by the perpetrator that is unlikely from any "pro" (who will surely obfuscate themselves). I suspect, like any other form of anti-gaming system, there has to be a considerable amount of (expensive) human intervention - for the medium term, anyway.

Which brings us to the next question - what exactly is the values of all this?

By "value" that doesn't mean "is it a good idea" - that quality and integrity is important to people is clear, look at the BBC's reputation globally - but it is not run as a commercial business. "Value" means who will pay for this benefit, and how much?. The majority of the grockles out there don't seem to give a toss about accuracy, lack of bias, rapacious privacy erosion etc etc in "citizen media" (or in a lot of journalism for that matter), so - on empirical evidence anyway - there probably won't be a huge appetite for large spending on such algorithms in the short term by the production services.

I suspect that its the demand side - i.e. us - who will be asked to pay for it if we want it, just as today we buy quality dailies, subscribe to The Economist etc...so the challenge therefore is, how do you build an easily usable webservice that users can apply to filter/screen "bad" citizen journalism - at a price that is accessible to the majority of people?

One obvious way is limiting recommendations to trusted "friends of friends" networks, but Facebook Beacon gives an instant view of how this will be abused in future.

So, its going to be non-trivial to build this, but the prize could be huge, in that - globally - why would one bother to go anywhere except this sort of service if you were the sort of perspn looking for trusted media?

Sort of like why would you go anywhere except the BBC if you could get it - oh, wait....with the Internet you can, anywhere.....

However, there still seems to be a huge market for complete hoopla - as PT Barnum once allegedly said, nobody ever went broke underestimating the intelligence of the American people ...

Good article on GigaOm on the History of Online Social nets over the last 20 years or so (sad in a way though, I've been there for nearly all of them), and the future - for those interested in Ancient Net History it covers FidoNet, Bulletin Boards, the alt.net, the OSP's (AOL, Prodigy etc), the ListServers and Groups of Web 1.0 (many of which are still going strong) as well as the early Web 2.0 Social Nets.

Hands up who recalls when Archie and Veronica were not 2 comic book characters? Mind you, who recalls when they were

Anyway, the conclusion is I think obvious to anyone who has lived through the whole thing so far, i.e they all have their place in the sun*, but there is genuinely nothing really new under it - I totally agree with this take:

Commercial social networks today are a lot like online services in the mid-90s — they’re popular because they make something easier to do (maintain a social graph, keep track of friends, search for new people). It was not that long ago when getting online was difficult for novice users. Large businesses (EarthLink, Netcom, AOL) were built around making the Internet easy to use. They became superfluous as broadband became standard and devices with built-in Net access were shipped.

And they were all walled gardens, making it as hard as possible for anyone to get out of them - like today's crop of broadband based SocNets. But, as GigaOm notes, the components of these things are hardly rocket science, and can be reproduced in open systems. They note 3 main components of a SocNet:

Profiles

Social networks make it easy for people to create profiles using standard templates. This makes sense, but this is really no different than a web page. I like what Chris Messina and co. are doing with their distributed social networking project, which uses blogs as a basic building block, and microformats to embed metadata in pages. Separating profiles from other functions, like search and discovery, makes a lot of sense because then you can have one page or site that is visible via many different search tools.

Search (and the Social Graph)

The social graph is a function that can easily be added to search engines. Once web sites, blogs, etc. are tagged to indicate that they are profiles, search engines can crawl them to pick up metadata, links to friends, etc. Search engines are already good at indexing the web, so adding a vertical search for people and social information is not a daunting task. Expect the search engines to add social/people search features. While the conventional wisdom holds that this task will naturally fall to Google, I think this is an area where AOL or Yahoo could score an unexpected win, as both companies are much more people- and community-focused.

Updates

One of the reasons Facebook is so addictive is because it is a convenient way to track the status of friends. This, too, is something that can be moved onto the open web. Anyone who wants to can publish updates, events, etc. via standard formats like RSS and iCal. Anyone who wants to monitor their friend’s updates can do so, via a feed reader, or via custom applications that have yet to be built.

We did a study of the main components of Social Nets awhile back, and as well as these we found that the following functions are also useful:

- Near-real time Chat - this is what is making Twitter popular, and drives IM usage.

- Ability to upload various media for others to use - it started in Groupware and has continued via Flickr etc

- (increasingly) some form of security / privacy - at the very least freedom from spam, abuse etc.

- User feedback - rating, recommendation, karma, voting etc - some way of getting the hive's view of the cove trying to chat to you.

But, as noted, its not exactly rocket science so we would also expect Social Networking's endgame to be more open. In Web 1.0, Sir Tim Berners Lee and Marc Andreessen et al set us free...this time round Marc A. is flogging a semi-closed Social Net (Ning), but I think Sir Tim's aim is in the right direction with the GGG.

* our analysis shows that the average broadband social net since c 2002 has a sun-spot for about 18 - 24 months before it gets overshadowed by the "new" new one. I expect Facebook's star to wane therefore toward the end of 2008

Update - Allen Stern reminded me of something missing the genre of GamesSocNets - I playe MUD's at college on Commodore's on the network, my kids play Runescape and Woreld of Warcraft, they paly as groups of friends and are busy yakking away on VoiP as they play.

W(h)ither Joost...the high profile resignation/sacking/whatever of their CTO is the tip of a "rats leaving the ship" rumourmill thats been going for a few months now, and now some are questioning whether its being sucked into the deadpool (we have no clue of the reliability of said rumours), whereas other are throwing out lifelines

And yet, and yet.....2008 is supposed to be the Year of Video, Seesmic has been launched amidst similar raptures that Joost was (about a year ago...), and others have rolled out in Qik succession. Some, like Wallstrip, have even been sold. So who is wrong, who is right?

Well, here is a bit of high level analysis, this is what we think is happening as the new video services all march in 2x2.



It's slightly tongue in cheek, but there is some method behind the mirth. Defining the 4 areas:

Low Production Values
At its lowest level its stream-of-consciousness waffle, badly recorded on low budget devices with no postproduction editing. Yes, I'm talking about some of the "videoblogging" we see. The other "low production value" angle is content with zero differentiation, ie stuff you can see in a hundred other placesIn essence the effort to produce is extremely low. Problem is, the effort to receive cr*p is actually quite high. We know that if people find the content compelling, they will put up with poor production values...but the content has to be sufficiently compelling to a large enough user base.

High Production Values
At its best its thoughtful scripting, original content, high quality capture and editing, high resolution, widescreen - you can play it on your TV comfortably. the sort of approach i-Ball has used, for example.

Low Cost of Operation
Lowest cost option is automated capture and editing of user generated content, hosted at the lowest possible service levels and at such a low resolution that you can stream it over baseband easily. Oh, and low volumes to minimise traffic costs.

High Cost of Operation
Carefully (ie costly) management of ingestion and editing, a set top box subsidy, high transport costs from big volumes and large bandwidth files, big marketing /PR expenses, sales machines etc etc all contribute to high operating costs.

So, putting these together into the 2x2 allows us to conclude that:

High Value, Low Cost businesses will make out like bandits.. Cost reduction is possible via the "free ride" over the web (ie no STB subsidy), few-to-many downloading rather than video conversations (get the users to pay for bandwidth as much as possible)

High Value, High Cost businesses are "in interesting times" as they will most likely have a high burn rate from Day 1, whereas the revenue will come later. You need deep pockets and strong stomachs - or a strategic rationale - to take this path. Their main challenge is to justify why their STB subs / Ad CPM are higher than similar quality, lower cost plays.

Low Value, Low Cost businesses have Subsistence Economics - if they can get very compelling content (niche stuff, maybe porn) and keep operating costs low via viral marketing, low bandwidth streams, minimal chatter in the system, and attract sufficient low rent Ad revenue (I doubt much of this will be subscription) or have an offset model (the moolah is made elsewhere, maybe sell-through of DVDs etc) then it can work

Low Value, High Cost - the deadpool. In essence, if they cannot justify an incremental value on the service to attract more / higher value Ads or subscriptions over low cost operators, or the model has intrinsically higher infrastructure and / or customer capture costs, they will fail.

So, where are Joost, Babelgum, Seesmic, Qik, Wallstrip, iBall, YouTube, the various IPTV plays etc on this. We leave it to you to place them relative to each other on the matrix, (or pay us some money to do it for you, or buy the report* when its out - but here are a few calibration points:

(i) You can get a lot of TV repeats for near-free
(ii) You can get a lot of UGC for free, and some of it is quite high quality
(iii) In general, any service where the producer lowers their costs by forcing the consumer to raise theirs is at a strategic disadvantage. Piracy is a real world model.

It's also worth noting that as well as competing with each other, these services are competing with text, image and audio based media which do have lower infrastructure costs, so it is worth thinking through whether they do a better job vs the nearest alternative "lower bandwidth" competitors - which incidentally tend to have more people attached to them. (Seesmic v Twitter, Joost v BBC, Wallstrip v CNN etc)

*erm...we haven't finished it yet. End Feb - promise.

Report on Ars Technica picking up on a report from the British Library, on the Google Generation - the kids born post 1993. Its a very good report in my opinion, it tallies strongly with my experience (I have Google Generation kids):

For instance, are teens better with technology than older adults? Perhaps, but they also "tend to use much simpler applications and fewer facilities than many imagine."

I can identify with this - my teenage son was with me while I was using Thunderbird (offline email client) the other day, and was astounded at its power compared to the online services (IM, Social Nets etc) that they use. Or,

Another common trope is that respect for authority on the Web is dead (with Wikipedia usually cited as an example) and that there are no more "experts" on the Internet; it's all about peer knowledge. The report calls this a "myth" as well, saying that "research in the specific context of the information resources that children prefer and value in a secondary school setting shows that teachers, relatives, and textbooks are consistently valued above the Internet."
I'd go along with this as well - it's just that they will double check you against the internet so you better know your stuff

On social networking etc......

The numbers are those who say they are extremely likely or very likely to do so (general public responses in brackets).
•
self-publish creative work: 7% (6%)
•
share ideas with about library services: 10% (7%)
•
share your photos / videos: 7% (6%)
•
participate in online discussion groups: 6% (6%)
•
meet others with similar interests: 6% (7%)
•
describe your own personal collections: 9% (6%)
•
view others’ personal collections: 12% (6%)

Thus, most college students say they are not interested. Clearly it is very early days, but these survey findings do not provide much confidence that social software, yet, has much to contribute to the rebuilding of relationships with users in an increasingly dis-intermediated environment.

My observation - my "Google Generation use Social Networks that "do something" - the current buzzphrase is that they have a "social objective" - so World of Warcraft functions as social net, VoIP and game in one.

Some other thoughts from the report that are pertinent to some of the assertions of some of our Noo Media Gurus - some myths exploded:

They have shifted decisively to digital forms of communication: texting rather than talking

Our verdict: Open. it is very difficult to see messaging as a fundamental trend, its current popularity is certainly influenced by its relatively low cost compared with voice.

My observation - the minute the kids get near broadband, the texting disappears and IM, VoIP et al take over.

They multitask in all areas of their lives*

Our verdict: Open. There is no hard evidence. However, it is likely that being exposed to online media early in life may help to develop good parallel processing skills. The wider question is whether sequential processing abilities, necessary for ordinary reading [ and complex problem solving ], are being similarly developed.

I don't see continuous Continual Partial Attention - I see them use it as one mode of behaviour, typically in relaxation time. If anything I see more adults who are in this mode.