broadstuff

I was struck by something Jeremiah Owyang said this morning in a series of twts:

@Scobleizer [Robert Scoble} serves a key important role in our industry, he adopts, tests, breaks, and pushes every disruptive technology.

I've known + worked with Scoble for 5 years now. He's done this for Blogs, Twitter, LiveStreaming, Facebook, Friendfeed, FourSquare, Quora

Following the Weekly Quora Quota of Silicon Valley blogs pimping a service* that many people have forgotten about (of those who tried it in The Great After Christmas Email Blitz, that is ), Mr Scoble exploded onto our screens with a renunciation of Quora. The defenders (said Silicon Valley blogs, et al) were quick to respond:

But I think Jeremiah said it well - a Social media service being Scoble-ised is equivalent to a blog being slashdotted - it will test all your systems':

- Scalability - here comes a sudden influx of many tens of thousands of people.....

- Mediability - all these people are here to read Mr Scobles voluminous output, not that of the current curated cognoscenti (and be prepered for bandwidth sucking movies, pictures etc)

- Scamability - these are partisan people, they worship their Hero - be prepared for any reputational or quality assurance systems/algorithms to be gamed to the high heavens (Update - interesting thoughts here by Robert Scoble on "Unearned Followers")

- Spamability - cometh the Scoble, cometh the Spammers who swim, lamprey-like, in his wake. Set your controls for a signal to noise ratio worse than, well...just worse than.

- Wyldeability - Oscar Wylde said that there is only one thing worse than being talked about (negatively), and that's not being talked about. You better believe it, because when he grumbles......

We wonder who will be the first System Assurance company to offer a "Scoble-Attack-In-A-Box" stress test kit....

(Update - interesting Question - why not just add a Q&A plugin to blogs - blogged here )

* Jas Dhaliwal reminds me that Kia-Ora is a juice drink - not quite Kool-Aid, but you can't have everything.

I think like many people, I felt something was rotten in the state of NGOLand when (i) I noticed that at TED in 2009 there were NFP/NGO startups popping up in all sorts of areas usually left for businesses and (ii) it later became clear that Haiti was devolving into a "more charitable than thou" situation as literally many thousands ( 3,000 - 20,000 depending on who you read) of NGOs set up shop* - and immediately started squabbling with each other - and a year later we have the unedifying lesson of NGO's declaring heroic victory whereas on the ground things are actually much worse:

In the run-up to the anniversary, some governments and many aid groups are raining a barrage of largely self-congratulatory details about their work in Haiti since the quake. Representatives reel off lists of projects approved and funded, supplies delivered, staff in-country and future plans. This jars with the view, expressed by many ordinary Haitians and a few aid groups, that a year into one of the world's biggest humanitarian and reconstruction operations, there is little to show for so many promises.

Little to show, plus the small matter of a cholera epidemic. Anyway, I started to do a bit of digging using good old Google, and it seems that that firstly huge amounts of money have gone in, but much appears goes to "go elsewhere". - Le Monde:

Following the old colonists, American and European NGO officials are in just about all the camps. With their luxury vehicles and expensive equipment contributing to the traffic snarl-up, they offer “work for wages” to more than 100,000 people employed in the clean-up. The wage, 200 gourdes (under $7 a day), is a small fortune, which in 2009 President Préval found too costly for the Haitian economy; he would not pay it despite a long struggle with the workforce. But in today’s Haiti, NGOs have more financial muscle than the state.

We calculate about 30% of the c £3.3bn of donations to Haiti has been spent, and we hope (and pray....) that the rest is due to be spent there soon - on the poor people, not the 4x4s that is - as it's clear Haiti needs a lot of help still, what with the cholera and all. In fact, the cholera was a bonus opportunity for most NGO's to re-fiill their boots again - Guardian:

It is against this [Cholera Epidemic] backdrop that many non-governmental agencies have launched fundraising appeals, even while their post-earthquake coffers remain filled. The UN's Office for the Co-ordination of Humanitarian Affairs (OCHA) has repeatedly claimed that underfunding of its $174m cholera appeal, launched primarily to benefit private groups, is hampering the response – despite the fact that Haiti is the top-funded UN appeal for 2010. As nearly a million Haitians remain homeless in the face of a full-blown public health emergency, arguments that existing funds are tied up in longer-term programmes ring hollow.

Be good if they were effective, but as The Independent notes that most of the medical care was by (un-NGO-funded) Cubans, for example:

A medical brigade of 1,200 Cubans is operating all over earthquake-torn and cholera-infected Haiti, as part of Fidel Castro's international medical mission which has won the socialist state many friends, but little international recognition.

Observers of the Haiti earthquake could be forgiven for thinking international aid agencies were alone in tackling the devastation that killed 250,000 people and left nearly 1.5 million homeless. In fact, Cuban healthcare workers have been in Haiti since 1998, so when the earthquake struck the 350-strong team jumped into action. And amid the fanfare and publicity surrounding the arrival of help from the US and the UK, hundreds more Cuban doctors, nurses and therapists arrived with barely a mention. Most countries were gone within two months, again leaving the Cubans and Médecins Sans Frontières as the principal healthcare providers for the impoverished Caribbean island.

I haven't even mentioned the whole raft of literature on how NGOs are actually just politics of imperialism or missionary societies by another name, how NGO workers drive the re-establishment of the vices (gals, gambling and golf) as much as anything else, and how Haiti is the testbed for how to reduce the global population to the New Feudalism - but I kept my linkages and writings to the reputable mainstream media articles.

So, the cost of the not-for-profit bizness may be a price not worth paying.....but I am still left with the question of why are there so many of them - after all, in every other ecosphere the eventual tendency ii consolidation and collaboration for efficiency savings (unless, of course, efficiency is not the primary driver, of course....)

In searching for a reason why this profusion of inefficient organisations all doing well out of doing good may have occurred in the first place, I came across this rather interesting paper from the Journal of Clionomics, essentially arguing that NGOs have expanded in numbers from c 800 in 1950 to c 28,000 in 2000 (an increase of 3500%, or 350-fold) whereas the number of disasters, significant issues, etc etc have stayed pretty constant, in the several tens a year (see graph above). Yet NGO expansion has been amazing, espacially in the go-go 1990's

For example, the category “women” by 2009 became the most popular issue in ECOSOC (present in 256 INGO titles). The issue was introduced in the 1940s, while 84% of INGOs addressing it were registered after 1995. Development” (mentioned 179 times) was introduced during the 1970s, but 83% of INGOs addressing this issue registered after 1995.

The conclusions:

.....the rise of enabling technology, the absence of major war and the expansion of the capitalist system – actually tell too little of the story of the great surge witnessed over the last half century to be satisfactory. We have observed that demand side factors, such as issue genesis, while they may explain organizational ‘genres’ (i.e. environment, human rights, poverty), do not explain INGO numbers or their distribution across time, genre, or in geopolitical space. The alternative explanation for the upward trend observes that cyclical demographic-structural processes have increased intra-elite competition over the last half-century. This is supported by evidence of rising credentialism, strong direct correlations with diagnostic cohorts, and indirect support of rising leadership age within IGOs.

Translated this means that the number of new countries, major global issues, disasters, wars, technology changes etc do not even begin to explain the 350-fold increase in the number of NGOs across time, type or geography. The alternative explanation is the "demographic-structural hypothesis" ( that an over-supply of elites and elite aspirants might lead to the creation of auxiliary vehicles for maintaining wealth and status – such as the INGOs). This is suported by evidence of rising credentialism (no haz MBA? - no can run NGO, sorry), direct correlations with what all the other Elites/MBAs et al are doing, and rising age of NGO leaders (a sign of oversupply and competition).

In other words, lots of little princes want little kingdoms to run, and even a 3500% increase isn't enough........ so the chances of this all getting better are pretty slim until donors start to look a bit more closely at how and where their money goes!

Update - I read that Google is finding it hard to reboot it's Philanthropy operation, if you've read the above then there will be no surprises....

* The term NGO and Charity are extremely loose in Haiti - businesses, scamsters, churches, child traffickers, nutters - you name it...

This morning (Friday 28th) I had two twitter streams going - one looking at Davos/World Economic Forum and the other about the events occurring in Egypt. It was a sad but fascinating contrast, and I can't sum it up better than Umair Haque did:

#Egypt: the young desperately fighting for a better future. #Davos: old rich dudes fighting savagely against it.

One stream was full of political and economic posturing and fairly empty promises, of PR and Meedja people excitedly hawking the latest personality on their cameras, of "tweets to let you know I'm here* ", and the 'Neterati spatting about who is more right about whether Twitter or Facebook is actually leading the revolution in Egypt (it's not the Egyptian themselves you see....). The other is about a historical wave of social change across the Arab world, not (yet) led by islamic fundamentalism, and the Egyptian government trying to stem this by shuttting down as much of the comms as they can; of riots, beatings and shootings, of young, secular people trying to architect a different future for their generation. (Update - by this evening, the revolution was in full swing - televised, not tweeted by the way)

Did I see anyything in the Davos stream about, say, protesting the US Senator Joe Liebermann's plan to introduce similar laws to shut down the Internet, or Vice President Joe Biden's support of the Egyptian regime. They may have been there, but I didn't see them in the flood of pimps, primps and blatant pumps (Linked In IPO anyone?).

The other city one is therefore minded of is Rome - as in Nero fiddling while it burned..... the Rich, as they say, are different, but to the extent that they seem to be living in a different world? (Update - this piece by the BBC says it all - enthusing about how hyperconnected Davos was - without a mention of Egypt (this is written a day after the street revolution) - and ironically not realising that self-same hyperconnectness was showing the Rest of Planet what a self-referential bubble the Davos lot were all in)

The thing that really, really worries me though is what we learned from the Wikileaks affaire in December - that one can Tut about the Egyptian government, but the activity of the US Government vs Wikileaks shows you that the reaction of an OECD Government may not be that different.

An update - CNBC summarised the huge gulf between Davos and the "Rest of Planet" well:

The WEF was started as a retreat, which is why the ski resort town of Davos is its home. Later it morphed into media event crossed with a festival. But it recaptured much of its original spirit this week. Maybe it was the weather, with overnight snow and then spectacularly sunny days. It was hard to find much doom, let akin gloom.

Some participants even felt they had to search for something negative. As one central banker told me: "People at [the WEF] are convinced they have to find something to worry about."

And as they descend the mountains from the retreat, they may find a toppling Egyptian government is what was needed to be discussed the whole time.

I suspect we will find that ignoring Egypt has probably done more to discredit Davos than a decade of protesting crusties have managed (Update on my update - looks like Esther Dyson thought the same).

Final update, I promise - UK Sunday Times had only 2 small articles on Davos in the Business section (nothing in the main papers), and this is a marvellous satire on above topic by Reuters' Felix Salmon

An aside, not a lot to do with Tech but a lot to do with #Collapsonomics:

For years, with my system dynamic modeller's hat on, I have been fascinated by the systemic forces behind the paths history takes (apparently this branch of study now has a name - Cliodynamics ) and my instinct - not provable yet, but bear with me - is that we are potentially moving towards a situation last seen before the 1930's move to Totalitarian states. To explain - the West has been moving to a point of income inequality last seen in the late 1800's (the Robber Baron era) that essentially gave birth to the Labour movement, and has for two years shown an unwillingness to tackle the worst of this New Robber Barony's excesses to date - the Banking Crisis - in fact going the opposite way and squeezing money out of the Ants to pay the Grasshoppers. Now (at Davos) they are all visibly balking at the reforms that the politicians in the 1930's were actually able to make. In 1931, the solution to "Banks too Big to Fail" was to make them smaller, in 2011 it's to double-tax the population to guarantee their continued existence. In other words, so far we are probably heading into a worse place than in the 1930's. To find those "Worst Places" you have to start looking at other times when there is:

- massive income disparity
- a political process largely in hock to the rich and powerful
- economic policies "robbing the poor to benefit the rich" (the selloff of publically owned forests in the UK for a pittance of their true value, probably to the very people the public is already bailing out, being the latest poignant example)
- and something more, a sort of "let them eat cake" ignorance that there is a problem from those insulated from it.

The #Collapsonomics group looked at the impact of >20% reductions in public spending and wealth, and the inescapable conclusion is it usually a spark to large-scale unrest and the arrival of repressive, despotic regimes who brutally leverage the general public unrest to seize power (Germany, Spain, Italy, Soviet Union in the 1930's). At the time of course (2008/9) we were scoffed at, as neither Government nor Opposition would contenance a >5% spending reduction - ridiculous, No? But I suggest y'all read a good history of the state of the Ancien Regime and the conditions leading up to the French Revolution, or the fall of the Weimar Republic for an evening's amusement.

You read it here first..... (and here second - nice post by Umair Haque on said issues)

*Sour Grapes re not being at Davos, I hear you cry! Maybe, but read the streams yourself and make your mind up.

Article in Business Week about Google's attempt to cut through its own peanut butter:

"The weekly meeting, known as Execute, was launched last summer with a specific mission: to get the near-sovereign leaders of Google's far-flung product groups into a single room and harmonize their disparate initiatives. Google co-founder Sergey Brin runs the meeting, along with new Chief Executive Officer Larry Page and soon-to-be-former CEO Eric Schmidt. The unstated goal is to save the search giant from the ossification that can paralyze large corporations. It won't be easy, because Google is a tech conglomerate, an assemblage of parts that sometimes work at cross-purposes. Among the most important barons at the meeting: Andy Rubin, who oversees the Android operating system for mobile phones; Salar Kamangar, who runs the video-sharing site YouTube; and Vic Gundotra, who heads up Google's secret project to combat the social network Facebook. "We needed to get these different product leaders together to find time to talk through all the integration points," says Page during a telephone interview with Bloomberg Businessweek minutes before a late-January Execute session. "Every time we increase the size of the company, we need to keep things going to make sure we keep our speed, pace, and passion."

If I go back to what we wrote about Yahoo's attempt to reduce the Peanut Butter in early 2008

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.

There are 3 factors weighing against this reboot:

(i) Big companies ARE big and complex - you can break it up and make all the units autonomous but they will then replicate lots of functions, not co-ordinate and even act against each other units. Keep it all together and you get a slow behemoth. Key is to differentiate complementary businesses from ones that are islands and diversions. Some of the stuff Google does is not really search (Mobile OS Software, AI Cars), and there must be an argument that those can be done in pretty independent units.

(ii) Not saying that Larry Page himself is part of the problem, but I suspect (based purely on observation of many large corporates) - in diametric disagreement with the Business Week article, that some of the old hands may be, especially if there are stovepipes runby very powerful barons..

(iii) However,the other thing I have heard from more than one friend at Google is that it has slowly filled up with corporate weasels (the people who are great at managing up, poor at leading teams, very political, and often useless - but these people can create havoc and waste a lot of other people's time). All companies have this of course, but it sounds like Google has a bad infestation right now.

And all this is in the light of "Never mind the requirements put on a a public company". Apple and IBM are the 2 companies in this space that have successfully followed a few separate "S" curves, but in both cases they had to firstly hit the buffers (the only way you typically get freedom to make the changes necessary to succeed) and secondly had to bring in new ideas and people from outside.

So what to do? On Sunday I put forward some thoughts - Fundamentals, Focus and Futures - the chances of a second home run like search is unlikely, but Search is one hell of a home run and cultivating it could drive a company for a generation.

Facebook has resurrected a scheme eerily similar to parts of Beacon, the new "Sponsored Stories". In essence, if you write "Hey I am in Starbucks", then Starbucks has the option to pay to spam all your friends with an Ad made of your Post + a Starbucks Ad (see above) in addition to the original post. More than that, it can send even data based on where you go offsite, based on "likes" you have made and/or with sites that have Facebook tie ups. So you may never know what is being recommended to whom - until too late. You also don't get the option to turn it off. This is going to be fun to watch......

Sound familiar? Yes, its a part pf good old Beacon, so roundly criticised just a few short years ago. But this time no one is turning a hair, as Peter Kafka notes:

Recall what Zuckerberg was saying less than four years ago, when he was going to “build a new kind of ad system” based on “social actions” and “information that is shared between friends.” At the time, that sounded wildly ambitious, and maybe a bit creepy....

.....

This is what Zuckerberg was talking about in 2007, right? He just needed time to get there. So did his users.

Remember that when Facebook rolled out Beacon, the site was a big deal, but not the biggest: A mere 50 million users, not 600 million. Many of those people were still trying to get a handle on how the site worked, and what they ought to do with it.

Why is that, you may ask - Kafka believes most users have made a pact with the devil already:

Now, I think, just about everyone who uses Facebook knows, more or less, what they’ve signed on for: A place that wants you to share as much of yourself, with as many people, as you can.

But that's the users. What happened to all those stalwart industry observers and bloggers who rounded on Beacon so fierceely? For that I think you need to look at the bigger point above, ie criticising Facebook when its a (mere) 50 million user startup is one thing, doing it when its a 600 million user behemoth that has a huge PR budget, massive clout in Silicon Valley (the Town where most Tech bloggers ever want to work) and an IPO in 12 months or so is another - you have to be pretty independent to take a Quixotic tilt at the windmill now.

But we are, so we will - the "interesting" ethics that made Beacon a bad idea are still here in "Sponsored Stories", so caveat emptor, as they say. And, as eConsultancy points out, the law hasn't changed:

There's just one problem with all of this -- Sponsored Stories seemingly runs afoul of the same laws that critics argued made Social Ads so problematic:

Common-law privacy torts...forbid someone from appropriating the name or likeness of another, and several states -- including New York and California -- have such laws. New York, for example, forbids the use of a person's "name, portrait, picture or voice" from being used for advertising purposes without the prior written approval from the person.

As George Washington Unversity law professor Daniel Solove noted back in 2007, "It seems as though Facebook might be assuming that if a person talks about a product, then he or she consents to being used in an advertisement for it. But such an assumption might be wrong..." Here, Facebook is doing exactly that; it assumes that a like or checkin, for instance, constitutes consent to feature a user's name and likeness in an ad.

To those who wonder "when will Facebook have jumped the Shark" the answer is clearly not till they have plastered an Ad on every available surface, and told all your friends to boot. Still, we eagerly await the Starbucks Ad at the bottom of the "At Starbucks and by Chr*st their coffee is sh*t" post*

* Sentiment being a hard thing to map by algorithm, especially Irony....

Never mind a random walk down Wall Street, far better a random scrape of Twtter - Wired:

The emotional roller coaster captured on Twitter can predict the ups and downs of the stock market, a new study finds. Measuring how calm the Twitterverse is on a given day can foretell the direction of changes to the Dow Jones Industrial Average three days later with an accuracy of 86.7 percent.

“We were pretty astonished that this actually worked,” said computational social scientist Johan Bollen of Indiana University-Bloomington. The new results appear in a paper on the arXiv.org preprint server.

Bollen and grad student Huina Mao stumbled on this computational crystal ball almost by accident. Earlier studies had found that blogs can be used to gauge public mood, and that tweets about movies can predict box office sales. An open source mood-tracking tool called OpenFinder sorts tweets into positive and negative bins based on emotionally charged words.

But Bollen wanted to build a more nuanced emotional barometer. He used a standard psychology tool called the Profile of Mood States, a quick questionnaire that is used frequently in pharmaceutical research or sports medicine.

Thats how it works, what is the correlation?

Mao compared the national mood to the Dow Jones Industrial Average. She found that one emotion, calmness, lined up surprisingly well with the rises and falls of the stock market — but three or four days in advance.

......

The algorithm did pretty well using stock market data alone, predicting the shape of the stock market with 73.3 percent accuracy. But it did even better when the emotional information was added, reaching up to 86.7 percent accuracy.

Eye opening, no? Well, the comments are always illustrative - so here are the downfalls:

- Please note that there is an out-of-sample issue with this paper. My understanding is that the authors require 20 days of future information to predict 3 to 4 days ahead. I have contacted the authors repeatedly over the last week for clarification without response. http://etf-central.com/2010/10.../

- What I think might hurt the Twitter function as a predictor is simply making it public. When someone wants to influence either a stock or the market in general and knows that Twitter is being used, all they have to do is spend hours on the keyboard to create an artificial result.

- Why publish this if it works? One article, a fleeting bit of fame, and a truck load of copycats. It would be more impressive if the article had read: "Researchers, upon discovering tweets predict the stock market, make $100mm before disclosing research to the public." No more need for University grants anymore, much more believable findings. As an aside, data analysis can be tricky. I'm pretty wary of loosely defined research objectives. For example, why is it 3 days? Why is it those 72 words? Over-fitting is a real problem with prediction based stuff.

Still...as holy grails go, this one is fairly profitable, as anyone who has read The Predictors will know.

Following on from the complete lack of any action on sorting out the banking sector despite talking vewwy tough (while selling out the public behind closed doors), planning on selling off public forests to private owners*, allowing rampant profiteering in the regulated energy and transportation markets, we now have the edifying spectacle of Her Majesty's Government giving the largest global news organisation in the world more time to come up with a reason to pwn the UK media industry, despite the express advice of the regulator in the space (Ofcom) against this - Grauniad:

Jeremy Hunt, the culture secretary, today confirmed he is taking more time to consider "undertakings" from News Corporation to allow its takeover bid for BSkyB to go ahead. Hunt said that on the evidence provided by media regulator Ofcom, he considered the merger "may operate against the public interest in media plurality" and intended to refer it to the Competition Commission. However, he added that before he does this he will consider undertakings by News Corp "which it contends could sufficiently alleviate the concerns I have such that I should accept the undertakings instead of making a reference".

It is understood that News Corp's undertakings relate to editorial guarantees for Sky News. "If this process produces undertakings in lieu which I believe will prevent or otherwise mitigate the merger from having effects adverse to the public interest, and which I propose to accept, I will then publish the undertakings in lieu and (as required under the Act) begin a formal 15 day consultation period during which time all interested parties will be able to express their views," Hunt said.

He added that he could not say how long this process would take. However, if Hunt decides to accept News Corp's undertakings and put the proposal out to a 15-day consultation, it could be a matter of weeks. If he goes ahead and refers the bid to the Competition Commission, it is likely to be about six months.

And when it is done and dusted, and the stated undertakings don't occur? Then what, given that its game over and the regulator has been emasculated, and HMG has put itself in the position of being beholden to an effective media monopoly?

Jeremy Hunt is on record of being pro News International (the irony being that this case only dropped in his lap because Vince Cable, who was handling it, was honeytrapped by journalists in mufti in saying he was not pro the deal - odd that).

Given that the UK Government and the Large Corporates are seemingly hand in glove anyway, we may as well get rid of the regulators. Why bother with all the hassle of Regulatory Capture, when you can have a Bonfire of the Regulators (after all, the Bonfire of the Quangos is going so well) and save money to boot!

* It costs us each 30p a year to keep our forests publically owned, as opposed to the the £10,000 we each have bailed out the banks by, so its clearly not economically significant. Land-grab ahoy!

Bloomberg Business Watch on the need for regulators to stay ahead of the next Tech bubble 9and the likelihood that they won't - firstly, the DotCom bubble:

When Netscape went public, according to calculations by economists John Campbell at Harvard and Robert Shiller at Yale, a cyclically adjusted price/earnings ratio, which takes into account earnings going back a decade, of the S&P 500 stood at 23.2 times. Yet by December of the following year, the ratio had climbed to 29 times—a nosebleed figure that persuaded then Fed Chairman Alan Greenspan to give his "irrational exuberance" speech at the American Enterprise Institute in December 1996. The current Campbell/Shiller p-e ratio is 23.2, up from a recent low of 19.7 in June 2010. It's on the upswing. "With the mobile-tech boom scenario, core inflation might stay low and unemployment might stay high, because it would elongate the productivity gains," muses James W. Paulsen, chief investment strategist at $354 billion Wells Capital Management in San Francisco.

That's the same Greenspan that then let it run its course and wiped out a lot of ordinary peoples' money.

Indeed, inflation was tame and productivity strong during both the dot.com boom and the real estate bubble. And the Fed—America's guardian against a debased currency—felt little pressure to make major shifts in monetary policy with inflation quiescent. Yet the toll when the bubbles burst was huge. During the Great Recession, 8.4 million workers were dropped from payrolls, household wealth plunged more than $11 trillion, and, over a 24-month period ended in June 2009, more than 167,000 businesses failed, according to Dun & Bradstreet. The accumulated human and economic price tag of allowing bubbles to run their course has convinced Mark Thoma, economist at the University of Oregon, that "there is a role for the Fed to pop bubbles."

But will lessons be learned from the Subprime bubble?

During the real estate bubble, federal regulators had plenty of tools at their disposable to cut short the widespread abuses. Edward Gramlich, the late Federal Reserve governor, repeatedly warned about abuses in the subprime mortgage market and urged that the Greenspan Fed unleash investigators on lenders trolling for customers in poor neighborhoods and examine in detail their relations with major financial institutions. The Greenspan Fed, enamored with the elixir of deregulation, ignored his advice. "Regulators didn't do their job," says Rolnick.

Indeed, the Securities & Exchange Commission should step up its scrutiny of private investors and company valuations in the growing trading market for private share offerings of such marquee high-tech companies as Facebook, Twitter, and LinkedIn. Even more important, the Fed needs to exercise the extra oversight powers it got in the Frank-Dodd financial services reform legislation last July. (And Congress should avoid watering down the rules and regulations.)

Here's the thing: Plenty of mobile Internet companies, social networking firms, and other information technology companies will get funded over the next few years. Many of them will fail. That's capitalism. Regulators need to concentrate on preventing major financial institutions from feeding the frenzy and putting the taxpayer at risk. That's regulatory prudence. Stay tuned.

And we look at Goldman Sachs' deal with Facebook - no facts backing up a high valuation, trying to dodge the regulatory rules, the ability to bet against their client and customers......

Lots of stuff on the webz about what Google (i.e. Larry Page) should do to get Google's mojo back - much of it mutually contradictory of course, or requiring too many things at once. From a strategic perspective however, the oldies are still goodies - Fundamentals, Focus and Future, via the simple action of following the money:

Fundamentals - secure the next 3 years

1. Get the core search back to the quality it was a few years ago - this is the golden goose, the bread and butter, etc etc - if this drops away then everything else is moot. Sorry, Matt Cutts, if you believe your algorithms tell you it is better than ever before, then your algorithms are wrong. If I were looking to make Google search social, a good start would be letting people sharing spam-site killing data for filters. Crap search = fewer users, fewer users = fewer Ads seen, fewer Ads = less revenues, less revenues = misery.

2. Stop f*cking around with people's privacy. In the Silicon Valley bubble, privacy may be over - but to a lot of other people out there (and their governments) it isn't. To reduce the risk of being seen as creepy, evil guys that governments want to take a very close look at, rein in the this tendency. People can walk away very fast now decent competition is emerging (see above Ads - to - Misery tale), and grumpy Governments can tie up a lot of time, cost and ultimately market access.

Those are the big things, the "A" class "Must Do's". Then there are the "B" Class things - are we going to throw more resource at them or cut our losses. The main ones are:

Focus - stop doing all the things you do, especially look at rationalising, and - er - firing:

3. Mobile - in or out? The Android value chain is as fragmented now as Olde Planet Mobile's ever was, so the value will be sucked up in the holes - and Apple will take the high ground, high rollers and high margins. Yes, the potential value is huge, but not as it is currently structured. Either take the whole market by the horns - ie get very serious, probably a major unit in its own right or even a spinout, or exit as anything more than a software house.

4. The GoogleCloud - can Google guarantee 5 '9's reliability? If not, its a pipe dream and it will fail to make money, and its probably consuming lot of resources - real time core value services do. In 5 '9's, deliver a hybrid strategy that works with partners' on-deck tools (like Mozilla for example, or even Microsoft), and exit anything bigger than cool tools for people with time on their hands (ie no need to be on the hook for real time delivery )

5. GooTube - Is it making money yet? Will it be at average unit profitability in the next 18 months? If not, kill it (or sell it to a Bigger Fool) - it's had enough time.

6. Chrome OS - Why?

7. Chrome Browser - Why? If its not at 20% market share by end 2011, kill.

8. As for the rest - the "C" class stuff - its a good time for the good old Star/Question mark/Dogs etc analysis, and anything not getting a "star" or "question mark with traction" rating gets shot straight away.

Future - where are the next things?

9. "New Search" - Yup, competition is emerging, the likely outcome in 5 years is a big No 1, smaller Nos 2 and 3, and then a small tail of niche operations. For the way to stay No. 1 for the next 5 years, see points 1 and 2 above. Prepare for the reality. "Social Search" is hyped to the nines, but if it can't make money in the medium term it will die, as did all the DotCom darlings. Traffic is not the same as money, and certainly not the same as profit. If anybody understands the economics of transaction messaging it's Google - get some smart people in a room, get them to work out what you have to believe for Facebook to make real money, and if you don't believe it, ignore them and tell all the remaining staff why it will die so they don't leave (and they will tell the press, never fear ). If you do believe it, then you have found where the leverage is, so hopefully the next Google product in the space is not the sort of things that only True Geeks can love.

10. The Next Big Thing - probably not going to be one big thing, stories like Google's original one are extremely rare. Search is Google's "big thing", the key therefore is to continuously innovate in Search.

Simples

Given Google's recent announcement that they are cleaning up the spam sites (see our article below) probably means that the "cr*p content" sites like Demand Media's ones will probably also not get top billing either, which willl significantly impact their IPO - and future profitability. Search Engine Land:

This announcement comes just as Demand Media gets set for an IPO. Demand owns eHow, LiveStrong.com, and several other properties that often get labeled as “content farms,” and is reportedly going to go public next week. AOL, with Seed.com and Yahoo, with its Associated Content purchase last year, are also in the content farm business. Those two, in fact, will be speaking on a panel called "Content Farms" Or The Smartest SEOs In the World? at our SMX West conference in March.

By cr*p I mean unhelpful given its prominence - eHow's advice is muchly of the level of the Feynman Problem Solving system

1. Write down the problem.
2. Think very hard.
3. Write Down the Solution

Still, live by the SEO, die by the SEO. It would have happened eventually. But timing, as they say, is everything.....

Update - fascinating post by eHow's original owner Josh Hannah on why Google may rate it so highly:

Google seems to weight domain-level credibility very heavily, and to not be very good at understanding if individual pieces of content are any good. And historical credibility, once earned, seems to decay very slowly.

When I co-owned eHow, it had a bunch of really high quality content, in a time where the web had much less high quality content. (There has been a content explosion -- both high quality and content farm style -- since 2004-05, when it started to be economically feasible.) For the 20,000 articles on eHow at the time, we ranked in the top 2 results for exact searches on 99% of them, and I think justly so.

When Demand Media bought eHow, they built a content machine. It is my opinion that 80%+ of eHow's "credibility" with search engines was earned prior to 2007, yet 95% of their content was created after 2007. My view is that Google's algorithm is not well architected to deal with this kind of situation, where the domain is the same, but in essence the product is entirely new.


Possible reasons why Google doesn't manually degrade eHow:

- Google is in love with the idea of a pure, algorithmic, scalable solution to problems and will invest great energy in this before manually tweaking
- eHow addresses a lot of long-tail content topics, for many of which they are probably the best answer (even if they are not a great answer). The eHow algorithm for choosing which articles to write clearly takes this into account.
- eHow generates tens of millions in AdSense revenue for Google annually. Wikipedia generates none.
- Google has more pressing quality problems in product-focused areas, where it seems like the first ten search results are dominated by garbage product spam. Whatever you think of eHow, it's generally better than that.

Tut - wash yore mouth out on that last one, you're wrong sez Google and its Fanbois